Issue 321

British Gas are ripping the profits out of us

WHAT a difference a month makes in the world of British Gas.
On 18 January they announce that gas prices are set to rise by 15 per cent for 9.7 million of their customers, and then on 21 February they unveil they’ve made a massive profit of £571million .
That translates as the energy giant making £1,086 in profit every minute throughout 2007, with profit per customer increasing sixfold from £5.93 to £36.
If ever there was an example of how companies like British Gas couldn’t give a toss about their customers it’s this.
Who cares if a quarter of Scottish households are suffering from fuel poverty, as long as the shareholders get a good dividend?
This won’t be the last price hike we see from British Gas.
They recently indicated that they’re considering introducing regional pricing for gas - a ‘postcode lottery’ policy which will see consumers paying different prices for gas based on where they live in the country.
If this occurs, other suppliers are likely to follow suit - some consumers can expect to pay close to £100 more for their energy compared with others living elsewhere in the country.
So if you live in a rural area, tough, pay-up.
The greed of these people knows no bounds, pensioners can freeze to death, but it doesn’t matter because they don’t show up on their balance sheet.
The Scottish Socialist Party stands for a Scotland where profiteering is taken out of our homes - a Scotland where people come before profits.

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Nationalisation Rocks Labour’s Third Way

by Ken Ferguson

ELSEWHERE in the Voice Raphie de Santos takes a detailed look at the Northern Rock crisis (see pages 5 & 8) and why it represents a serious blow to the entire New Labour market economic love in which has guided government policy since the 1997 triumph.
However above all the smoke, fury and hand wringing one stupendous fact towers above all else.
Baling out one badly mismanaged bank has so far cost taxpayers an almost incomprehensible £110billion with hardly a backward glance from our eagle eyed MPs.
This from a government at war with civil servants on pay and jobs, which makes pensioners live on a pittance, rations life saving drugs to the sick and presides over ever growing housing lists.
The left often says that government always finds money for wars but even the billions wasted on the imperialist adventures in Iraq and Afghanistan fade into insignificance besides the mega bucks poured into the Northern Rock disaster.
Not for the sharp suited punters in the casinos of the City any lectures about restraint in public spending. So central to the globalised financial world is the massive London gambling den that the government will pay any price to keep them supplied with cash.
So as ordinary people fork out for soaring food prices and energy costs the gamblers are bought more chips paid for with the taxes of the same ordinary people.
It is ironic indeed that our former Trotskyist Chancellor and one time Red Paper writer in number 10 now find themselves forced to exhume an apparently long dead socialist policy in order to save the bacon of the city slickers.
The truth is that Northern Rock is just the tip of an ice continent of debt resulting from the international financial chicanery which has been heaped with praise by Brown, Blair and Darling as the logo of our ‘modern’ enterprise economy.
As usual it will be the same ‘ordinary people’ who will bear the cost of the moneylenders crisis with their homes jobs and taxes and it is why breaking with the priorities of socially unjust, planet trashing capitalism is ever more urgent.
Perhaps since the Northern Rock was supposed to be about housing it might be worth considering the fact that Shelter Scotland have called for 25,000 new social houses over the next three years to tackle our housing crisis.
This programme would cost a modest £750million which is, set aside the Northern Rock bill, in the category of small change.

More ineptitude on Northern Rock

NEW Labour’s troubles with Northern Rock continue to grow. It was revealed through questions in the House of Parliament that an offshore trust, Granite, of Northern Rock is not to be nationalised.
The trust holds, as security, £40billion of the highest grade property of Northern Rock’s mortgage customers against loans it raised in the financial markets.
This means that lowest grade in terms of credit risk is offset against the tax payers’ money that the government have pumped into save the bank.
This puts our money more at risk and will make it more difficult to sell the bank back to the privates sector.
The government will have to pump into Granite several billion pounds of more tax payers’ money as customers move their mortgages elsewhere - something the new government managers are encouraging in an attempt to shrink the bank’s mortgage book.
In addition more than £5billion of Northern Rock money (now our money) is held in the trust.

Boses step up union busting

by Ken Ferguson

AS recession bites and profits come under pressure the UK’s bosses are resorting to their usual remedy - attack the workers.
In a report by the British TUC bosses are accused of hiring firms of union-busting consultants to persuade their workers against the benefits of union membership.
And the TUC has joined forces with its US sister organisation the AFL/CIO in a bid to counter the efforts of anti union bosses on both sides of the Atlantic.
The TUC report is entitled US Union Avoidance Consultants: A Threat to the Rights of British Workers, and has been written for the TUC by John Logan from the London School of Economics.
The report warns that the tactics used by union-busters are designed to frighten and intimidate workers away from any union attempt to recruit them at work.
This was the approach used recently to defeat demands for union recognition at the supposedly upmarket crisp maker Kettle Chips.
The approach, say unions is that highly paid anti union consultants are hired by employers in the US to tell the workforce that the union will start harassing them in their homes, risk their job security and cause them a loss of earnings and benefits.
Workers are also bombarded by bosses propaganda warning them that, if they join the union, they are likely to be permanently on strike and under threat of violence should they join any picket line.
Trade unionists are bluntly warned that union-busting is a multibillion-dollar business in the US and consultants from firms such as the Burke Group and Jackson Lewis have been so successful that some 60 million US citizens have been persuaded against joining a union.
TUC general secretary Brendan Barber said that the backstabbing tactics employed in the shadowy world of the union-busting consultants are proving increasingly attractive to a handful of firms in Britain.
“Good employers realise the safety, communication and training benefits of having a union at work and many actively encourage their staff to join a union,” he said.
“But there is a small minority of bosses who fear the voice a union would give their employees and will do almost anything to keep the union out.”
“This is a US export that UK workplaces could well do without.”
Report author John Logan added that, for over three decades, socalled “union avoidance consultants” have helped US employers undermine their workers’ fundamental right to organise and bargain collectively.
“It is essential that union-busting is not allowed to flourish on this side of the Atlantic,” he warned.

The Great London Takeover

By Ken Ferguson

THE divisions at the heart of New Labour’s response to the crisis engulfing their former Scottish fiefdom, has forced a beleaguered Gordon Brown to publicly back his Holyrood prodigy Wendy Alexander.
The ice age unionism which dominates Labour’s under employed Westminster MPs has seen a growing campaign to derail Wendy’s ‘big idea’ of a unionist party commission to examine the powers of the Holyrood parliament.
Traditionally Labour has been hostile to cross party campaigning and London based MPs, witnessing the meltdown of the Brown government, are increasingly worried by Wendy’s ‘commission’ which includes the Tories and LibDems.
Their concern is heightened by the debacle of the New Labour abstention over the SNP budget and the positive concessions won by the Tories.
This is what underlay the ill judged outburst from Scottish Office minister and Inverclyde MP, the little known David Cairns, in which he proclaimed that Holyrood’s powers were only an issue for the “McChattering classes.”
There can be little doubt that Cairns was reflecting the views of the well heeled unionist voting fodder, which populates Labour’s Westminster benches.
However his intervention posed a headache for his boss Brown in that, faced with the current Cameron onslaught, Gordon needs total loyalty from his MPs, but at the same time needs to shore up an increasingly shaky Wendy.
Thus, setting aside the cares of the imperial capital - wars, bankrupt banks, wealthy tax dodgers - the Fife MP turned his eyes North and gave the BBC an interview.
As it was supposed to, the Prime Minister’s broadcast was largely seen as putting the errant Cairns firmly in his place. It also generated the appropriate ‘Gordon backs Wendy’spin.
However a closer look tells a different tale, with Brown firmly taking a Union Jack stance, leaving little doubt that increased powers for Edinburgh might well mean Westminster taking back others.
Favourite for return to Westminster would be any aspects of security which dealt with ‘terrorism’ which might, in future, avoid unseemly rows such as that around the Lockerbie bombing.
This carefully crafted message aims to sweet talk the London MPs, while apparently supporting under fire Alexander.
Decoded it means - Wendy is a Brown loyalist, she is the best we can get from that bunch in Holyrood but I’m the British Prime Minister and Westminster will run the show.
So, as the Voice has predicted before, expect moves to distance New Labour from the increasingly confident Tories and power starved Lib Dems.
A weakened Wendy has little prospect of winning any turf wars on powers with Brown and he desperately needs to keep his MPs sweet in the increasingly stormy political seas ahead.
In this situation the campaign to win an independence referendum takes on added significance and this will be given added impetus with a conference organised by the Independence First umbrella group.
The pro referendum Peoples Petition was launched by the Scottish Independence Convention at the Scottish Parliament on 24 January and the purpose of what Independence First describe as a “working conference” is to build support for it.
Details of the conference, which takes place at the STUC building in Glasgow on 1 March, can be had from Independence First secretary Carol Roscoe at : secretary@independence1st.com.

Vote Scottish Socialist in Cambuslang

by Richie Venton

SCOTTISH Socialist Party candidate David McClemont has been pounding the streets of Cambuslang, challenging the other parties with radical socialist policies that would transform the lives of local people.
As polling day looms (6 March), David and the SSP team are raising local and national issues that other parties fear to touch.
As David says, “This is a chance for the people of Cambuslang to shake up the council. To stop them taking us for granted, neglecting our area and local services.
“Whilst other parties bang on about law and order, they say nothing about the need for vastly improved facilities for young people, to channel their energy and talents constructively.
As someone who has grown up and lived in the town all my life, I know the council’s neglect of youth facilities often leads to anti-social behaviour.
We need to invest in the town’s most precious future asset, not demonise them.”
As the SNP government announces the monstrosity of the £1billion M74 extension, the SSP has a unique track record of opposition to this anti-people, anti-health, antienvironment plan.
We oppose it because it will stir up poisonous industrial waste buried in the ground, and add to chronic levels of asthma amongst all generations through increased air pollution.
We stand by the findings of the one and only independent inquiry into the issue, which has been trampled on by both Labour and the SNP in their eagerness to build more motorways. This report showed the extension to be a costly disaster that would fail to tackle congestion, would worsen the existing climate change crisis, and do little or nothing to long-term employment prospects in the area.
David says, “The people of Cambuslang need to resist this polluting monstrosity - backed by Labour and SNP - and they can start by voting for the proenvironment socialists on 6 March.”
Whilst the SSP has nothing against the reduction of dogfouling on the pavements that other parties make central to the election, we have also raised bigger problems and bigger solutions. Uniquely, we have denounced the rampant profiteering by multi-nationals in the cost of heating and eating.
Whilst local people struggle to cope with food bills, Tesco, Asda, Sainsbury and Morrisons pile up obscene profits.
Families, pensioners, lowpaid and even middle-income families find the cost of heating their homes an unmanageable nightmare already. But now they face bills of over £1,000 a year, as Scottish Power, Scottish Gas and others hike the price of gas and electricity by 17 per cent - to feed their insatiable hunger for profits.
Scottish Power, Scottish Gas and Shell made £500m, £700m and £14billion in profits respectively in 2007. Shell’s greedy pile alone equates to £2,500 for every man, woman and child in Scotland. The SSP is the only party fighting for public ownership and democratic control of the food monopolies, gas, electricity and North Sea oil, to stop them ripping the profit out of the hard-pressed public.
David McClemont is training as a Social Care worker and works part-time in a local nursery and elderly persons’ home.
“I know first-hand about the council’s failure to invest in the services needed for all generations. For example, in the newly built local housing, they are ignoring approaches made about building nurseries.
And the SSP is also the only part that has fought for the past 10 years for free school meals for every child in Scotland, as well as for abolition of the unfair Council Tax, and its replacement by a progressive, income-based †Scottish Service Tax, where 8 out of 10 people would pay less, but the rich pay a lot more, raising extra funding for better local services.”
Local resident David Stevenson has written to the Rutherglen Reformer advocating a vote for the Scottish Socialist Party. In his published letter he writes:
“In the first 8 years of the Scottish parliament, the only party to seek to scrap the council tax and introduce a progressive tax has been the Scottish Socialist Party. The SNP paid lip service to scrapping the council tax during those 8 years yet refused to support the SSP’s proposal, giving the excuse that it was not set locally. Yet at last year’s elections they hypocritically proposed a regressive centrally set flat-rate tax.
The central difference between the SSP and SNP schemes were that the SSP sought to shift the burden away from the majority and not the wealthy minority, while the SNP seek to insulate the wealthiest in society.
Voters have the opportunity to support a socialist solution to the problems that beset our society and send a message to all the parties that see pandering to the rich as their fundamental duty that they want real change to benefit the majority - rather than weasel words from Labour or tinkering at the margins by the SNP.”
That’s the real choice - and SSP members should help spread our socialist message in the days that remain in the Cambuslang East by-election.
[1] If you can help out, ring Richie on 07828 278 093

Eco-Destruction To Take Away

Re-cycle your plastic bags to save the planet

IT’S been nearly a year since Modbury, a small, picture-postcard town in South Devon, became the UK’s first plastic bag-free town.
Last spring, all the town’s traders ceased issuing plastic carriers and instead provided reusable or biodegradable bags. As the local economy comprises only one small supermarket and forty or so independent shops, the issue of corporate plastic bag abuse did not arise, of which a little more later.
The town’s transformation began when Rebecca Hosking, a wildlife filmmaker for the BBC, returned to her home town after filming a documentary on a remote Hawaiian island, with a mission to wipe the plastic carrier bag from the face of at least this one corner of Devon.
What fired her zeal were the hundreds of dead albatrosses she had encountered during her idyllic-sounding mission in the Pacific.
These tragic birds had choked to death on the everyday detritus we throw to the winds, and seas, without a second thought: cigarette lighters, bottle tops, toys...and plastic carrier bags.
Seals, turtles and dolphins were also found washed up and choked up.
But the carnage doesn’t end there. When these creatures die, their bodies decompose but the plastic that killed them does not.
Which means it is released back into the environment to kill again.
Hosking’s subsequent film, Message In The Waves, persuaded Modbury’s shopkeepers to sign up to her plastic bag-free campaign and, within a month, the rustling carrier was suddenly nowhere to be seen.
Alternatives were provided. The butcher laid on corn and potato starch bags, while the baker went for paper.
But alternatives are not the answer - the key message is ‘re-use’.
These days, locals rarely venture out without a trusty cloth or string bag in which to bring home their purchases.
Indeed, there is a new civic pride afoot. One year on, and locals can be seen stooping to pick up litter, and there has been a renewed interest in local shopping, as opposed to the one-stop, inyer- car, out-of-town supermarket variety.
Inspired by this example, places as diverse as Harrogate, in Yorkshire, Kinross-shire in Scotland, and even Gibraltar, on the Iberian Peninsula, are gearing up for a plastic bagfree future.
But a scheme that works in small towns with a still surviving local economy may struggle in a place like, for instance, Inverness, where chainstores and supermarkets dominate.
Supermarkets and chainstores are very, very unlikely to embrace such a scheme as Modbury’s.
Plastic bags emblazoned with their logo is just too much free advertising to give up for the sake of the soppy old environment, and thus they will insist that it is consumers who demand plastic bags and consumers who resist change.
Thus, Sainsbury’s dishes out 1.7billion bags and year, with Asda squeaking ahead at 2billion. In all, we use some 10billion plastic bags a year - and that’s just counting the ones we get from supermarkets. We use each one for an average of 12 minutes before tossing it away, creating an annual plastic bag dump of 100,000 tons.
Maybe we’d be less glib if we knew that all this pointless plastic bagging costs the average UK family a staggering £470 a year. Or that only 3.5 per cent of these bags are recycled; which means that 96.5 per cent isn’t. Or that plastic bags don’t biodegrade in 10 years, or 50 years, or 100 years, but something more like a 1000.
Or that our oceans are filling up with plastic trash at such a rate that, already, we are practically eating our own plastic refuse.
Research conducted by the Algalita Marine Research Foundation found that plankton, eaten by fish, share their surface waters with minute plastic particles, created by those millions of tons of dumped plastic detritus we were just talking about. Plastic doesn’t biodegrade as such, it ‘photodegrades’, which means it breaks up into tinier and tinier pieces but never actually goes away.
A sample trawl of the North Pacific Gyre, conducted by the SEA lab of Los Angeles, found that for every 6lb of plastic particles found on surface waters, there was just 1lb of plankton. A gyre circulates water, so results would typically show a more concentrated sample than one taken from a more freeflowing area, yet similar studies conducted elsewhere confirm these results.
Our seas are literally filling up with trash; plastic in marine environments is increasing at a rate of 100 per cent every three years.
Animals don’t just choke on the big stuff, they are dying from malnutrition through ingesting rubbish in the belief that it’s food. Then there are the poisons, the Persistent Organic Pollutants (POPs), such as DDT and mercury and lead, that attach to the small stuff, the plastic particles that act like sponges when it comes to toxins.
They end up in animals that we eat; therefore, they end up in us, no doubt about it.
The big problem in relating all this stuff to a mass audience in the UK is that we don’t see where our rubbish goes. We pay people to take it away and hide it in landfill.
If we were slum-dwellers in Haiti, for example, we’d see the rubbish pile up around us in great stinking heaps. But here, rubbish is a relatively sanitised problem, and that’s our litter-strewn streets notwithstanding.
Furthermore, says Satish Kumar, editor of Resurgence Magazine, we have a false idea that “everything on earth is lifeless matter that can be used for human beings” and that our environmental crimes are somehow victimless ones.
It isn’t so, and we need to get wise. The countries that have issued an outright ban on plastic bags include, no, not Germany and Belgium and other rich, ‘green’ states, but nations struggling with the very human costs of climate change and pollution, such as Bangladesh, Pakistan, Rwanda, Tanzania, West Bengal, Ethiopia, Eritrea, Uganda and Kenya.
Italy and France intend an outright ban by 2010.
Meanwhile, in our nation of shopkeepers, the carrier bags keep on coming, and the problems mount up, for lifetimes to come.

LETTERS

Between Northern Rock and a financial crisis
Stands Our Money – all £100billion of it

by Raphie de Santos

THE nationalisation of Northern Rock is the latest evidence of the breakdown of global finance and the rule of the market.
The nationalisation has come about not to save jobs but to the prop up the global finance system of which London is the epicentre. And it is being propped up with £100billion of ordinary people’s money. The crisis in Northern Rock’s has its roots in the low interest rate environment created by the US Federal Reserve at the turn of the millennium and the new types of financial strategies which flowed from this. This was further compounded by a toothless and inept UK financial regulatory body and UK Monetary Policy Committee blindly putting UK interest rates up in the summer of 2007 immediately prior to the subprime crisis braking in the August of that summer.

Roots of the Crisis

As short-term global interest rates fell on the back of the US Federal Reserve (Fed) cutting US rates to ease the fallout from the dot.com stock bubble bursting and a recession a whole series of financial strategies were developed by the financiers.
Under normal market conditions the rate at which you borrow money becomes higher the longer the length of time of the loan. This is to compensate lenders for the greater chance that a borrower may default and fail to pay the loan back in full the longer the duration of the loan.
But the Fed drove short-term rates down so low that the spread between shortterm rates and longer term rates was very large in most western economies. Financial transactions were designed in all sectors of global finance to take advantage of this spread. We have documented these in our previous article Money Market Madness.
Northern Rock’s management came up with one of the riskiest and ill thought through strategies as we will show.

The Bet That Blew Up

The old model of mortgage lending was that a financial institution tried to attract funds from depositors and pay them a rate of interest below those the financial market rate. These deposits are for medium and long term periods. They then could take this money which was deposited with them and lend it out for long periods in the form of mortgages at an interest rate above those available in the financial markets.
Making a nice fat profit on the spread between where they borrow from depositors and where they lend to mortgage borrowers.
As long as they could keep despoilers (lenders) with them or replace them with others they could carry on making money.
Northern Rock’s strategy was based on a new model. They borrowed short-term money from the London money markets at the low rates we mentioned above and lent it out for long periods of time to home buyers at much higher rates, making huge profits. As long as the highly rated banks that are the money market in London would be willing to lend to Northern Rock and at a rate where Northern Rock could make a profit on its mortgage business things would be ok. Northern Rock could carry on renewing these short-term loans in the money markets.
But two things happened in the Spring/Summer of 2007 which stopped Northern Rock doing this.
One, the UK monetary Policy Committee started to put interest rates up to curb inflation in the UK economy which was coming from cheap money and demand for raw material and food product from the developing world, in particular China.
Two, the sub-prime mortgage crisis broke in August 2007 and the money markets dried up as the banks stopped lending to each other and to smaller banks like Northern Rock because nobody knew for certain who was credit worthy anymore or who could go bankrupt.
As Northern Rock’s short-term loans matured they could not replace them with fresh loans at rates that were still profitable or the major banks would not lend to them because of doubts about its ability to pay the loan back.

On the Brink Collapse

At this point if the banks that had leant money to Northern Rock had called in their loans to them Northern Rock would not have been able to repay them as the money had been lent out to home buyers. Defaults by Northern Rock would have had a domino effect causing a whole series of defaults and bankruptcies in the financial markets. This is when the UK government stepped in to basically pay of the banks that had loans outstanding to Northern Rock. They have had to continue to do this as Northern Rock’s loans matured.
The government has so far given up to £110billion to pay off Northern Rock’s loans. £110billion of our money.

Hub of Global Finance

London is the hub of global finance because of its geographical position between the Far East and the US. The London money markets were where Northern Rock borrowed its money. It is they key money market fro global finance. It is where global financial institutions fund their day to day activities. It is the oil which keeps the wheels of global finance turning. The Northern Rock Crisis had the potential to have created havoc in the London money markets leading to global panic in all financial markets with a complete meltdown of the whole financial system. The government stepping to save Northern Rock was nothing to do about saving the depositors money but about saving the global financial system.
Western governments basically said to the UK government you have to step in and avoid a crisis. It your responsibility, Northern Rock falls under your watch.

Why Did It Happen?

Undoubtedly the Northern Rock management bear some of the responsibility for coming up with strategy in the first place and not thinking through the consequences of the strategy and factors which could change which would make the strategy impossible to be continued.
But the major blame for the crisis lies with the New Labour government. They created a financial regulatory framework that was totally inadequate for policing global finance in the UK. The framework was the brainchild of one Gordon Brown of which its backbone was the Financial Services Authority (FSA).
It was their job to protect ordinary people’s involvement with financial products and police the financial institutions. The FSA is packed with accountants and administrators and lacks the knowledge of the workings of financial markets and the products that are created by these markets.
They were unable to spot the flaws in Northern Rock operating model. The hedge funds and investment banks had and had been selling Northern Rock’s shares since the start of 2007 expecting some sort of collapse of its business because of it flawed operating model.
The UK government and the FSA where blind to this with the government encouraging the UK monetary committee to put up interest rates prior to the whole crisis exploding which only worsened the situation.
How are the government looking at the workings of the FSA? They have asked the FSA to carry out its own internal investigation as to what went wrong!
There needs to be an independent enquiry with independent experts from the financial markets taking part in it.
Believe it or not there are plenty of people in the financial markets with a social conscience and even some socialists.

Who Are The Losers?

The UK taxpayer or ordinary people are the main losers. The government may not be able to get any or all of our $110bn pounds back. The Northern Rock workforce will loose out through redundancy as the government wants to scale the business down dramatically.
They need to reduce the size of the loan book to reduce how much money they have loaned to Northern Rock.
They will do this by offering unattractive rates to borrow money from them for homeowners. This will be done to discourage new borrowers and make existing borrowers move their mortgages to another bank.
This will mean staff redundancies with up to 3,000 to go immediately.
Then more to go over time as the business is slowly run down.
The individual share holders will loose out. The bank is worth nothing and shareholders will receive a few pence to zero for each share they hold. The individual share holders are a mixture of staff who received shares as part of Northern Rock’s demutualization. These shares are effectively deferred wages.
The second set of shareholders is individuals who had accounts with Northern Rock when it was a mutual organisation. Again these are ordinary people from the North East of England.
The third group to lose out are those people whose pensions and insurance policies where invested in Northern Rock through fund management and insurance companies. Again this group are ordinary working people.
The only group of Northern Rock shareholders that socialists should have no sympathy with are the hedge funds.
Two SRM Global and RAB Capital, bought between them about 20% of Northern Rock expecting the shares to recover after the UK government intervened. Do we ask these organisations for compensation when they make money out of us? You gamble, which all this type of investing is, and you win some and lose some.
Anyway plenty of hedge funds made money out of the collapse of Northern Rock’s share price.

The Future?

Initially, Darling was claiming that nationalisation was a short-term solution but already Ron Sandler, the new chairman of Northern Rock, is saying that the bank could remain nationalised for years. Highlighting Darlings complete lack of understanding of the situation. No-one is going to buy a mortgage business in the current environment of increasing defaults and a tightening credit market unless they have offered a nice sweeter or discount. Darling found this out to the further tax payers’ expense to the tune of £100million - the fees to the city for receiving advice on Northern Rock’s sell off.
A socialist government could have nationalised Northern Rock, compensating the small shareholders and turning the bank into a social bank offering low cost loans to those in real need or who were struggling with existing loans to commercial banks.
Northern Rock crisis is part of a much larger crisis in the global financial system. The problem for the financial markets and ordinary people is that nobody knows where the next rupture in the system will be. There is 23 trillion US dollars of credit insurance guaranteed by global banks - most of whom have exposure to the sub-prime loan market as well. That’s three times the gross domestic product of the US. If we go into a deep global recession we can expect to see default rates of 5 per cent to 10 per cent amongst companies. This would mean that the global banks would have to pay one to two trillion US dollars in compensation. Without doubt this would lead to several bankruptcies in the banking sector leading to turmoil in the global financial system.
Global finance has clearly failed not just the poor of the developed world but working people in the western world. The time has come for it to be replaced with a rational system based on meeting people’s needs and ending poverty.

[1] Raphie de Santos is the former head of equity derivative research and strategy at Goldman Sachs International and now works as an analyst in the fund management industry.

Democracy Cuban Style

In a week that saw Cuban President Fidel Castro announce his retirement, Thomas Swann looks at the current elections taking place on the Caribbean island. He also also looks at the opinions of Cuban youth on the future of the country.
AT a conference on democracy in Cuba, the former Presidents of the Czech Republic, Hungary, and Poland, wrote in a joint statement that ‘freedom, democracy, and prosperity in Cuba depend on the support for Cuban dissidents, the better the chances for a future peaceful transition of the Cuban society to democracy.’
In response to Václav Havel, Arpád Goncz and Lech Walesa’s comments, Venezuelan President Hugo Chavez said that ‘what you have in Cuba is a very specific model of revolution. In the grassroots in Cuba, there are constant elections that take place.’
Similarly, political scientists have taken sides on the issue with opinions of the democratic system ranging from descriptions of a dictatorship in which elections are a sham, to a proper democracy characterised by its reliance on popular participation.
What is clear in the midst of this debate is that in Cuba there exists a political system which is so radically different to those which dominate most of the world, that many find it hard to understand and articulate.
The democratic process in Cuba takes place in three stages over a period of several months. The culmination of the latest round is due to take place on Sunday the 24 February with the election of the Council of State.
This is the highest governing body in the country and is headed by the president and is composed of ministers elected by the National Assembly of People’s Power.
While it is probably unfair to compare the Cuban system with the British form of liberal democracy, the Council of State could be seen as somewhat similar to the cabinet, with the difference that its members are elected as opposed to appointed.
The National Assembly occupies a similar position as the parliament does in Britain. There are, however, significant differences between the Cuban system and the one we may be more familiar with.
The best place to begin in attempting to get a grasp of the distinctions and the workings of Cuban democracy is at the bottom.
On the 1st of September last year, the first stage of the process began, Asamblea de Rendicion de cuantas para elegin al delegado, the nominations of candidates for the Municipal Assembly.
This activity is organised on a local community level, with districts of no more than a few streets putting forward individuals who will stand in an election for the local administrative bodies.
Meetings of between 30 and 100 citizens vote openly on who among them they consider best able to represent their interests in the Municipal Assemblies.
As Maria Esther Reus, Minister of Justice and President of the National Electoral Commission, explained in Granma International, the weekly foreign language paper, “Those nomination meetings are a key moment in the island’s electoral process. Because, it is just in this period when active participations in general elections is made material, in addition to ensuring a broad scenario for the political exercise of the population.”
When I visited Cuba in September, I attended one of the nomination meetings in the town of Guayabal, around thirty kilometers West of the capital Havana. The town was split into three areas, each comprising no more than a few streets.
At 8:00 in the evening, people started to congregate around the one house in the street which had working lights; there had been a power cut since the early afternoon.
After an introductory speech was heard and the national anthem played the nominations began. By this point the power even to this one house had failed and the street was lit with a car’s headlamps. About fifty people were assembled.
The process was brief but effective with two citizens being nominated. Members of the assembled community simply shouted out the names of those they wanted to nominate. The named individuals then stepped forward before the small crowd.
A vote of hands ratified the selection and the paperwork was completed, finalising the process. One of the nominated candidates, Raul Estevez Garcia, was interviewed by two Italian journalists.
He thought he had been nominated because of the effort he had put into channelling the local community’s needs and complaints during the most recent hurricane strike on the island.
He seemed almost embarrassed to have been selected as a candidate for election, an honour individuals cannot refuse.
“More than 50,600 assemblies will take place.” Reus added. “After the last is held, the aspirants’ biographies will be made public, the sole electoral propaganda allowed by law.”
A general election by secret ballot then decides who from among those nominated by the local assemblies take seats in the 315 Municipal Assemblies.
There are around 15000 delegates elected into these positions.
These assemblies then select from amongst their ranks candidates for both the Provincial Assemblies and the National Assembly of People’s Power.
In the second of these, the National Assembly, there are 614 seats to be taken up by members selected through the process described above as well as from other blocs which include representatives of the Federation of University Students, the Women’s organisation, and the Cuban Trade Union Congress.
A slate of candidates for the National Assembly is drawn up which registers the nominations made by the Municipal Assemblies and the various other groups involved.
This slate contains one nomination for every seat and so it is not the case that voters are asked to choose between competing candidates as they are at the municipal level.
Rather, they are asked to ratify the recommendations of elected representatives. In this sense, it would be better to describe this stage of the process as a referendum given that the electorate votes to either accept or reject the slate presented.
Voters can either decide on candidates individually or opt for a ‘united vote’ where the whole slate is judged as a whole.
This stage of the democratic process took place on the 20 January.
Granma International reported that “8,231,365 Cubans cast their ballots, the equivalent of 96.89 per cent of registered eligible voters. 7,839,358 ballots cast (95.24 per cent) were valid, and 7,125,752 of these (91 per cent) responded to the appeal for a “united vote” for all candidates nominated for the National Assembly. Blank ballots cast totalled 3.73 per cent (306,791) and spoiled ballots, 1.04 per cent (85,216).”
The final stage, where the National Assembly elects the Council of State is due to take place in a number of days. This will determine Cuba’s President, Vice-President, and heads of government ministries.
Despite this process, which begins at the local level and culminates at the national, and is characterised throughout by participation and independence from state authority, critics will no doubt continue to denounce Cuba as a one-party state.
However, as the above should have made clear, this is a claim that makes little sense in the democratic system that exists there.
The Communist Party of Cuba plays no role in selecting candidates, and given that members of the various institutions of People’s Power advertise no party affiliations, talk of political parties does not appear to be coherent in the Cuban context.
Brian Pollitt has commented that during the 1990s and beyond, “despite great hardships and considerable social tensions, the regime was evidently still sustained by a sufficient body of popular support.”
This was and is because of the direct participation that is offered to Cubans in the decision making process of their country.

Voices from Cuba

IN the current electoral process in Cuba, the government has placed a greater emphasis than ever on involving young people in the democratic system at all levels.
The elections in January resulted in an average age of elected deputies falling to 49 and more than 56 per cent of the National Assembly being born after the beginning of the Revolution in 1959.
During my recent visit, I took the opportunity to speak to a number of young people about their political involvement and their opinions of the system in Cuba.
At a formal level, the Cuban youth is represented through both the relevant wing of the Communist Party, the Young Communist League (YCL), and the Federation of University Students (FEU). FEU representatives are selected from classroom or ‘brigade’ level and councils exists at university level and higher, all the way up to the National Assembly.
The president of the FEU at the Universidad Hermanos Saiz, described the role the group plays in the university:
“The FEU is part of the directorate of the university. To be able to enjoy our studies, we must be able to follow the administration of the university.
“There can’t be arguments between the staff and the students. To avoid this, the representative of each brigade is a member of the directorate and so has a say in the structure of the university.”
The FEU celebrates its 85th anniversary this December after being founded in the 1920s by Julio Antonio Mella, also a founder of the Communist Party of Cuba.
A representative of the FEU from the Universidad de la Habana (University of Havana), Yankiet Echeuarria, outlined the federations motivations:
“The youth should be able to think for themselves without the interference of external systems.
“Our only commitments are to Julio Antonio Mella, to the Revolution, and to Cuba. We have to reflect the voices of university students in criticising and providing solutions to problems.”
Rafael Gómez Castillo, a 3rd year computing sciences student at the University of Havana, spoke of how he ‘participates in every activity - political, educational, and social.
“Despite this being true of many students, and the existence of the FEU and many organisations like it, the general feeling amongst those of university age in Cuba is one of apathy.”
Another student in Havana, a 1st year studying philosophy, painted a far more bleak picture of political engagement among Cuba’s youth. It is a picture that isn’t a million miles away from the state of democratic participation in contemporary Britain.
“Young people believe in the Revolution but there are some things that are not right.
“The transport and the prices in the supermarket. Cubans’ minds have changed in the last fifteen years. We have seen so many things.
“Young people, not all, but most, what they want is to go out with their friends and to have fun.
“They don’t want to get involved because it means more responsibility.”
Opinions on the causes of this apathy seem to be divided however.
The student quoted above blamed it on the poor performance of the bureaucratic civil service, plagued by corruption in recent years:
“There are liars. Not in the government but between the people and the government.”
Another student, from the town of Pinar del Rio, where the Univarsidad Hermanos Saiz is situated, talked differently:
“A lot of people blame Fidel for our problems but I don’t. I blame the American blockade.
“Cuba has no choice but to buy things like rice at high prices.”
Whatever the features of Cuban society that have led to such disengagement from politics are, it is clear from Cuba’s democratic structure, which permeates the lives of young people in their school, university, and social surroundings, that their direct involvement is by no means barred.
The avenues for participation remain open to young people as they do for all sectors of society. Indeed, the change that may result from the democratic system has been a topic of discussion throughout the country. On 19 February, Fidel (always referred to by his first name in Cuba), the out-going President, declared that he would not accept another term as commander in chief.
His age and recent illness means someone younger being elected to the position he has held since the mid 1970s.
In a letter printed in the Cuban edition of Granma, Fidel wrote, “it would betray my conscience to take up a responsibility that requires mobility and total devotion, that I am not in a physical condition to offer”.
“Fidel is a good man and has good intentions. He’s very, very intelligent. I think nothing will happen when he dies. He’s not been President for thirteen months.” said the philosophy student from Havana.
As for Fidel’s brother, currently acting President (a role prescribed for the Vice- President by the Cuban constitution in the event of the President being unable to fulfill his duties), “we don’t know much about Raul. He was head of the army. That is all we know”.
Some commentators have suggested Foreign Minister Felipe Perez Roque as a likely candidate for the presidency, with others tipping current acting Vice-President Carlos Large.
It would be inappropriate, however, for outsiders to make such predictions.
Ultimately, we will have to wait until Sunday to discover who the National Assembly has selected to lead the country for the next session.
Echeuarria, the FEU representative from Havana, clarified the ideological underpinnings of the Cuban Revolution and the decentralised democratic system of People’s Power that rests finally on personal responsibility. “Action is in man’s hand, not in the hand of the divine. The divine is in man’s ability to do good.”

Starry Starry Morning

By John Haylett

WOULDN’T it be great if Scottish socialists could keep up on news about trade unionism, peace, justice, equality, anti-imperialism and the environment in between their fortnightly reading of Scottish Socialist Voice?
Well, the good news is that, from 3 March, you will be able to.
On that day, the Morning Star will once again be in the shops on the day of publication rather than on the day after or even later than that.
Many Voice readers will remember the days up to six years ago when that was the case and may wonder what happened to the daily voice of the left.
Quite simply, our paper was done in by the big business orientation of Royal Mail, which decided to axe an arrangement which allowed newspapers that were part of the Minor Titles Consortium to be carried on mail flights from English airports to Edinburgh.
The late-night flights enabled the titles to link up with Scottish wholesalers’ distribution systems and to be delivered along with the other papers to newspaper shops.
The Royal Mail decision didn’t affect only the Morning Star. It affected ethnic minority papers such as the Daily Jang and the Dziennik Polski and a number of specialist and overseas titles.
Since then, there have been numerous attempts, including by MSPs and Scottish Westminster MPs, to get the Royal Mail to reinstitute the Minor Titles Consortium delivery contracts - but to no avail.
The Morning Star was left with a choice of simply whinging about the Royal Mail board or of doing something about it.
We chose the latter, investing in new arrangements to take papers from our printers in Essex to a distribution depot in Manchester where we can transfer to lorries delivering to Scotland.
It sounds simple, but it’s also very expensive, costing over £50,000 a year in additional distribution costs, which is no small sum for a modest enterprise such as the Morning Star.
But we felt that our Scottish readers, hundreds of whom have continued to buy the Morning Star in spite of its late arrival, have been disenfranchised for too long.
We reckoned also that the generally more progressive political outlook in Scotland could result in a big increase in readership and, in time, pay for the additional costs.
And we’re hoping that Voice readers will make up a fair section of that increase.
So what will Scottish socialists get from reading the Morning Star on a daily basis?
Well, for a start, the Morning Star masthead proclaims our creed as For peace and socialism, which distinguishes our paper from the rest of a daily media that regards capitalism and war as the normal way of things.
It reports stories that never see the light of day in the big business press, penetrating the blanket of disinformation about countries such as Cuba and Venezuela and revealing the daily battles for justice and against privatisation waged by our trade union movement.
The Morning Star has consistently supported CND and other peace movements, opposing the invasions of Iraq and Afghanistan and demanding that our troops be brought home.
But it is not simply in the sphere of news reporting that the Morning Star excels.
Its features pages include regular columns headed Voices of Scotland, which include major articles by SSP members such as John McAllion and Ken Ferguson, as well as Bill Kidd MSP of the SNP, STUC general secretary Grahame Smith, Labour MSP Elaine Smith, Vince Mills of the Labour Party Campaign for Socialism, John Foster of the Communist Party of Britain and Mark Ballard of the Scottish Greens.
There are also provocative and informative articles by the likes of John Pilger, Greg Palast, Ken Livingstone, Derek Wall, George Galloway, Jeremy Corbyn and John McDonnell.
Scottish Trade Union Review editor Malcolm Burns has agreed to write a weekly analysis of news in Scotland.
The picture that ought to be taking shape in your mind is of a Morning Star that is non-sectarian, a newspaper that has set itself the goal of opening its pages to all sections of the left and which intends to offer a service to all working people.
Most left-wing parties have their own weekly, fortnightly or monthly publications and it’s fair that they concentrate on the activities of their party, but I believe that expanding the readership and influence of the Morning Star can contribute to a growing, more confident and, hopefully, more united left as a whole.
In this, the lively letters page in our paper also plays a role.
If there is activity in your area that you would like the Morning Star to cover, call our news desk on 020 8525 6983.
And, above all, take the coupon on this page to your local newsagent and order your daily Morning Star from 3 March.

The Wild Brunch
Keef Tomkinson

Keef casts his eye across life’s more leisurely pursuits in order to put a wee bit of CULTure into our lives.

The Quest For Truth

I have a shit job. I sit at a desk and do things with spreadsheets, emails and software packages so that some ungrateful prick of a financial advisor can grunt a begrudged thank you. I like to call it a Chandler job in homage of the Friends character.
If you watch that you will know that he had a similar number crunching position which nobody could describe or remember. No matter how many times I tell folk that I do not work in a call centre, somebody making conversation always asks, “You still in the call centre?”
So when I get home I want to be entertained or educated by whatever media form I am interacting with. There are some things I don’t wanna hear about. And presently at the top of the list is the inquest into Diana’s death.
I call her diana in lower case cause she was a filthy rich media hungry attention seeking waste of air, whose caring was about ego rather than some solution to end suffering. She died in a car crash. Sadly, 1000’s of people die in car related accidents and even more sadly their stories are never heard.
But we have to hear the boring, the bizarre, the paranoid, the pointless notions as to what happened the morning that Parisian road released us from her. In fact it turns out we’ve had £6million worth.
Well if we’re willing to waste taxes on that, here’s the top five inquests Scotland should hold with no expense spared, as voted by you (you as in me):
5) How much is too much irony? - Me and my friends like a good drink. As part of that the irony and sarcasm levels increase in lines with booze inhaled. After a few hours our ironic piss takes of racists becomes so dense most innocents would consider us KKK sponsors.
4) What is that smell in TK MAXX? - You know what I’m talking about. I’ve been in stores across Scotland and in New York. Moistly warm tumble dried hair with a hint of cheese and lorne sausage. Some say it’s a cleaning process, others that it’s the old socks in air conditioning and some might suggest some customers need a bath but the mystery remains.
3) Why Tennents? - Globalisation and the relaxing of economic barriers have opened Scottish drinkers to a new world of beer. San Miguel, Stella, Heineken, Budvar, Cobra. I’m currently into Tiger beer. So why is that thousands of us still willingly drink Tennents? It’s minging, but yet I, and others, wander into pubs and order it. Is it the price? National pride? Faulty taste buds that know no difference?
2) What’s with the Valentine’s double-talk? Last week hundreds of couples agreed that Valentine’s is a scam that belittles their love. Both sides agreed that they will express their mutual adoration spontaneously and not at the bidding of Hallmark. Yet hundreds of guys will have returned home after work to an expectant face demanding that little surprise. But you said!!!! Too late. Is it a global feminine conspiracy to make men uneasy or evidence of man’s chemically based inability to read the situation?
1) What is the one true religion? - Celtic or Rangers? Is there a sectarianism the fans of catholicism and protestantism linked to their beliefs in Celtic and Rangers? Should the opinion of Rangers believers be valid? Is God a green ball or an orange shin pad? What is Tommy Burns’ role in this?

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Nicaragua and zero hunger

By Sam Gordon

THE Nicaraguan media recently had a forty eight hour field day.
The country’s Sandinista President Daniel Ortega appeared on Venezuelan TV alongside that country’s President Hugo Chavez.
In itself that was enough to irk some of Nicaragua’s establishment.
Then Chavez suggested that countries of the Bolivarian Alternative for the Americas (ALBA) should set up a joint defence strategy, integrating their armed forces and intelligence services because they all faced the same enemy - the US Empire. The blue torch paper had been lit.
Economic and cultural integration of the ALBA countries has been smouldering away for some time.
But not every country in this continent shares Chavez’s vision of a new socialism for the 21st century.
Political, economic and military life all feel the chill of nationalist rivalry.
The Nicaraguan press need not get too agitated about this particular squib.
There are plenty of impediments to this type of integration. But it is a sign of changed times that such notions make it to the headlines.
Sharing Ideas and Experience Trading in natural resources, products, and services helps build the confidence to tackle common problems.
Latin America is sharing its ideas and experiences.
In 2003 President Lulu of Brazil initiated a programme of Zero Hunger.
This piece of social policy is aimed at tackling the continuous cycle of poverty that reproduces itself every generation.
Does that sound a bit like the Scottish experience?
At its core is the question of availability of food and targeting the supply of food to the most vulnerable in Brazil. It is similar to the Progressa Programme launched in Mexico in 1997 which prioritised education, health and food consumption.
Last year Nicaragua took a leaf from Brazil’s book and launched its own Zero Hunger programme. Again food security at house holds level was at the core.
In Nicaragua an estimated 50 per cent of the population live below poverty, 15 per cent in extreme poverty. The cities are growing as people leave the countryside.
Ironically, this country is rich in fertile land but the rural areas are home to many of the poorest.
The Zero Hunger programme has started to donate cows, pigs and chickens to poor families in the countryside. Seeds are supplied for maize and other staples. Biodigesters are also available. These help produce fuel from organic waste.
Traditionally cooking fires use wood cut from trees so this fuel supplement ought to have a positive impact on the environment. But any sort of material donation has the capacity to damage an already vulnerable imbalance.
With this in mind the programme provides technical assistance and training in animal and crop care. A mother-infant health measure brings the health ministry into play. It is estimated that 100 000 families will benefit over the next five years with an initial cost of US$ 50million.
A decision by the Inter-American Development Bank to cancel Nicaragua’s debt freed up some money for this. Other contributions came from the United Nations World Food Program, the World Bank and donor countries.
The idea is that families become more self sufficient in putting food on their plates with something over to sell and raise some extra income.
This programme has not the same revolutionary ring to it as the Agrarian Reform Programme of the Sandinista government during the 1980s.
Then big, unproductive farms were taken from the land owners and distributed to the rural landless who had worked there for generations.
Not all the political forces of the 80s are at play today but for many the social conditions continue to be dire.
And Zero Hunger has its critics too; from the right, left and centre.
Climate change will certainly affect the final outcome as will the use of fertile land to harvest crops to produce diesel fuel.
Some say too much is being spent on administrations costs such as salaries with no official information on compliance with programme targets.
Others just get into a state when Hugo Chavez talks with any other Latin American leader.
Another media field day is looming.

Musharaff defeated

By Voice Reporter

PAKISTAN’S military strong man General Musharaff’s Muslim League Q party has conceded defeat in the country’s general election.
The result throws into doubt not only the future of the dictator but also the entire role of Pakistan as a key US ally in the so called “war on terror”
The result is the more stunning given the widespread belief that there would be serious attempts to rig the election and that major forces - including the Left - boycotted the poll.
Accepting defeat Pakistan Muslim League-Q leader Chaudhry Shujaat Hussain said that “we accept the results with an open heart” and “will sit on opposition benches” in the new parliament.
The message for Musharraf from former prime minister Nawaz Sharif to the humiliated general was blunt . He should consider the verdict of the voters and stand aside.
Several close political allies of General Musharraf were also election casualties.
The chairman of the ruling party, the foreign minister and railways minister were among those who lost seats in Punjab.
Significantly religious parties also fared badly and are set to lose their control of the North West Frontier province.
As the Voice went to press Musharaff was stubbornly clinging to office but as the assassinated Beanzir Bhutto’s Pakistan Peoples Party - the major winner in the poll - indicated it was open to coalition the votes needed to force him out were stacking up.

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Venezuela resists Exonmobil’s blackmail

by Kiraz Janicke

[1] Article originally published the Australian Green Left Weekly, Kiraz Janicke is a member of the GLW bureau in Caracas

“THIS is pure judicial terrorism”, Venezuelan energy minister Rafael Ramirez told reporters in Caracas on 8 February, in response to court injunctions obtained by US-based ExxonMobil Corp. - the world’s largest oil corporation - in January.
The injunctions froze more than US$12billion worth of assets of the Venezuelan state-owned oil company PDVSA in Britain, the Netherlands