The Autumn Statement – no light at the end of the tunnel – Dec 2012

Cameron and OsborneCameron and Osborne


‘It has taken time but the British economy is healing,’ so announced the Chancellor of the Exchequer George Osborne in the Autumn Statement of 5 December 2012. He then proceeded to deliver data and prescribe policies that show the economy deteriorating, defying every effort to revive it.

In 2010 Osborne declared his number one rule to be that public debt as a share of national income must fall by 2015-16. This is the government’s stated justification for cuts to benefits and the public sector. In September 2010 public sector debt amounted to 57.2% of gross domestic product (GDP). At the end of October 2012, after two and a half years of public spending cuts, public sector net debt was £1,068.8 billion (excluding bank bail-out money), equivalent to 67.9% of GDP. This debt is now predicted to reach 80% of GDP in 2015-16. Two and half years ago Osborne said he needed 5 years to sort out the deficit problem, now he says he needs another 5 years and that cuts and austerity will be extended to 2018. There is no light at the end of the tunnel; capitalism has switched it off.

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Deepening poverty for the working class/FRFI 230 Dec 2012/Jan 2013

FRFI 230 December 2012/January 2013

The recent publication of the final report from the Commission on Living Standards, Gaining from growth, presents a detailed analysis of how the mass of the working class has suffered under the current crisis. It also shows, however, that downward pressure on working class living standards has existed for years, and has only been offset by a large increase in the number of women working in two-parent households, and by the system of working tax credits. With more women now facing unemployment, particularly if they work in the public sector, and eligibility for working tax credits being reduced, the outlook for many working class households is a rapid decline in real income. JACK EDWARDS reports.

The report looks at those who are on low to middle incomes, defining this group as working-age people living in households with incomes below the median but above the bottom 10%. However, it sets their situation within a context of growing inequality. From 1955 to 2001, incomes rose on average by 2.7% each year. From 2001 to 2011, however, this had collapsed to 0.6%. The ruling class has, meanwhile, grown richer: between 1997 and 2010 real income for the top 5% of earners increased by 29%, while for the top 1%, it rose by 56%. In 1979 the top 1% of earners had an income three times the average; by 2010 it had risen to 5.6 times. Share in total income for the top 20% of earners had reached 44% by 2011, more than the combined share of the bottom 60%.

By contrast, the mass of the working class has suffered stagnant or falling wages with rising costs of living, increasing unemployment and growing poverty. In 2011 weekly income for the poorest 20% was £150 – less than a fifth of the weekly income of the richest 20%. One in five workers is paid below two-thirds of the median wage, below £7.49 an hour. 21% of people – 13.1 million – live in poverty. Falling living standards have not been limited to the poorest sections of the working class, but are now affecting some of the better-off. For every £1 of UK GDP, a mere 12p now goes to wages in the bottom 50%, a fall of 25% over the past three decades. Between 2003 and 2008 – a period where the economy grew by 1.4% annually – earnings for low to middle income households grew by only 0.3% each year. Since 2008, net incomes of this stratum have fallen by 7.5%.

No end in sight

Amongst the factors which influence working class household income in this group, three are crucial. The first is income from male employment, which fell annually on average by £610 between 2002 and 2008. The second is income from women’s employment, which rose on average by £301 per annum. The third is the working tax credit system, which increased household income annually by £581 in the same period. Taking these and other factors together, it meant that these working class households on average had a very small annual increase in income of £143.

However, this is now changing. Women workers are bearing the brunt of job losses in the public sector and the replacement of full-time jobs in the private sector with part-time working. Women in public sector jobs are twice as likely as men in the same sector to lose their jobs. At the same time, by 2015/16 expenditure on working tax credits is projected to fall by £11bn compared with the previous trend. At that point it will total £26bn. Eligibility for receiving the credit has been raised from working a minimum of 16 hours per week to working 24 hours. This means that couples working part-time are finding their average income has already been reduced by more than £2,700. Reforms to child benefit mean that some 840,000 households will lose their eligibility – a £1,700 annual cut in income for two-child households.

Many households have resorted to loans in order to sustain their standard of living. By 2010 the ratio of household debt to income for low to middle income earners had reached 143%, while the burden of mortgage repayments has become significantly heavier than in the mid-1990s, despite historic lows in the base interest rate. Increasing costs of necessities have also contributed to this income squeeze, with housing, water, fuel, food and drink and transport costs accounting for 46% of expenditure for these households by 2009.

What we are witnessing is the pauperisation of the mass of the working class. By 2020 a working age household in the middle of the income distribution is expected to have a disposable income 3% lower than it had in 2008. For the bottom 10% of households a 15% decline is expected. Both estimates are made on the assumption of optimistic growth levels. The reality will be much worse and will happen much sooner. The pressure on the working class to begin to fight back seriously against austerity will become irresistible.

Outsourcing: destroying state welfare, creating new multinationals/FRFI 230 Dec 2012/Jan 2013

FRFI 230 December 2012/January 2013

Outsourcing of public services within Britain has become a vast business. Driving it is the need for British imperialism to create new sources of profit out of state welfare and other services. As part of this process it must foster the emergence of new monopolies capable of operating across the world, as both underdeveloped and developed capitalist countries are forced to privatise what remains of their state services. Outsourcing is therefore a new form of looting, the precedent for which was set by the wholesale privatisation of state utilities and other industries over the past 30 years; across the world these sectors are now dominated by a handful of monopolies. The corollary of outsourcing is an intensification of the war on the working class: those who are employed in the outsourced services face redundancy, lower wages and poorer working conditions, while those in receipt of services receive less and less or nothing at all. TOM VINCENT reports.

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No to One Barnet!/ FRFI 230 Dec 2012/Jan 2013

FRFI 230 December 2012/January 2013

One Barnet is a scheme Barnet Council is trying to introduce which involves gambling with £1bn of taxpayers’ money. The Tory council wants to hand 70% of our services over to private outsourcing companies. These services will include planning, highways, cemeteries and crematoria, trading standards, environmental health, council tax collection, the council’s IT, human resources, finance departments and more. Although it is claimed One Barnet will save the council money if it proceeds, it will cost Barnet residents more for public services such as cremations and burials. It is an experiment, one which other councils are seeking to follow, but one which people are worried will end up as catastrophic failure.

Under the proposals, if One Barnet goes ahead, when you contact Barnet Council, whether by phone, e-mail or even visiting the council offices, you will be dealing with a private contractor, not someone employed by the council. The council call centre might not even be in London, let alone Barnet. The contract will be run from 2013 until 2023, possibly even 2028. This means that if One Barnet goes ahead, we will be stuck with it for at least ten years, possibly more. The upshot is that Barnet residents cannot vote out One Barnet at the next election; once it begins, the contract cannot be ended democratically.

To make matters worse, if in ten years’ time people decide to end One Barnet, there would still be a huge financial bill to pay for the complex and difficult task of re-establishing local control of all our services. Two local examples prove this. One is Connaught, which was an external contractor that Barnet Council brought in to run repairs for social housing. Connaught went bust, leaving many sub-contractors out of pocket. The other is Catalyst, which was a care home provider to the council. Barnet Council signed a long contract but found out later on that circumstances had changed. To get out of this contract, Barnet Council ended up shelling out £10.5m in compensation and costs. If One Barnet proceeds, the exact same thing could happen but on a much larger scale.

Connaught and Catalyst show the dangers of outsourcing. Not only does it bring financial problems for working class people, it undermines local democracy. If One Barnet goes ahead, it will be a disaster for the people of Barnet.

Samar Barakat

Housing for the Counihan family! - No to social cleansing in Brent!/FRFI 230 Dec 2012/Jan 2013

FRFI 230 December 2012/January 2013

In a letter to The Guardian on 12 November, the Labour leader of Brent Council, Muhammed Butt, lamented that the overall benefit cap in April 2013 will mean ‘that a family struggling to make ends meet ... will have to choose between paying rent and feeding their children... in Brent, over 2,500 households will have their benefits severely cut, some by over £50 a week.’ He goes on: ‘the council simply cannot afford to house all 2,500 households in the middle of London with £10m less funding’ and concludes: ‘Moving residents away from their communities (and in many cases, families) is absolutely the last thing I want to have to do but councils have been put in a terrible catch-22 situation.’

This is sheer hypocrisy. Brent Council has already expelled working class families to Hastings in Sussex, and The Coventry Telegraph reports that Brent is planning to send more poor families to Coventry. The Counihan-Sanchez family from Kilburn were made homeless after declaring £18 a week from a plot of land they inherited after the death of their grandfather. Isabel Counihan-Sanchez and her five children were all born and raised in Brent and Anthony Counihan works as a bus driver in Cricklewood, but Brent has refused to reinstate the family’s Housing Benefit and to put them back on the social housing list. Brent sees the Counihan-Sanchez as a test case in its undeclared policy of social cleansing of working class families.

On 6 November Brent Housing instructed Apex Housing to ask the Counihans to leave their temporary accommodation by the next day. After the family solicitor contacted Brent, they admitted that they had got this wrong. The housing benefit tribunal due for 9 November was also cancelled at an hour’s notice. All this has added significantly to the family’s stress.

On 10 November the Counihan-Sanchez Family Campaign (CSFC) protested outside the Open Day of the new Brent Civic Centre in Wembley, condemning the council for wasting £102m on this building while claiming there is no money to house the Counihans or other families, or to keep open the seven libraries closed by Brent. Councillor Butt has recently announced that £100m – 28% of the council’s budget – will be cut by 2015.

On 12 November CSFC supporters protested at the Brent Council executive meeting after we were denied the right to speak and, for a second time, councillors abandoned their public session and scuttled off to a ‘secure location’. On 15 November Isabel Counihan was finally given an opportunity to address councillors at the Budget Scrutiny Committee. She said that her family were one of thousands of homeless families in the borough and that social services had threatened to take her children into care. She had told them how expensive that would be, particularly as some would need special needs support, compared with helping the family with their rent. Isabel concluded by saying that Brent had got its priorities wrong and backed calls for Brent to set a budget based on local people’s needs. Graham Durham of Brent Fightback also addressed the committee, arguing that a Labour council should not attack the people of Brent.

Brent Council is escalating its attacks on working class people. In response, the CSFC has gone from strength to strength. On 6 October over a hundred people marched through Kilburn, receiving tremendous public support. The campaign worked with FRFI and Liberty to resist demands by the police and council that we should give 12 weeks’ notice, pay £1,200 costs and march on the pavement. In the end we got a letter from Scotland Yard legal department saying that the threat was due to a ‘misunderstanding’ and we proudly marched down Kilburn High Road, singing: ‘You can’t kick this family out of Brent’.

On 17 October CSFC held its second public meeting on the South Kilburn Estate, attracting 60 people, many of whom are suffering directly from the cuts, such as Joe McPhillips who was denied the correct treatment for his mental health problems despite four suicide attempts. Joe has been a great worker for the campaign and now seems to be getting better care. Isabel has also worked to help the Frimpong family from Kilburn who were under threat of eviction until recently.

The CSFC will fight until the Counihan family are rehoused in Kilburn. After that we will continue to defend the poor and the vulnerable against Brent Council’s social cleansing. In the words of Sarah Counihan, aged 15: ‘We are growing and not going’.

We ask FRFI readers to join our march on Saturday 1 December demanding Housing for the Counihans! No cuts in Brent! Assemble at Kilburn tube at 1pm and march to the Peel Precinct, South Kilburn Estate. Join us on Facebook: Counihan Battlebus

Jimmy Mac

Class War On All Fronts/ FRFI 230 Dec 2012/Jan 2013

FRFI 230 December 2012/January 2013

The government’s autumn statement on 5 December 2012 will mark a vicious extension to its assault on the working class. Having announced in March 2012 that it would seek to cut a further £10bn from state welfare on top of the £18bn already planned, the measures it is now considering include:

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Business as usual for the banks /FRFI 229 Oct/Nov 2012

Fight Racism! Fight Imperialism! 229 October/November 2012

Crime wave in the City of London

Hardly a week goes by without some new revelation of fraud and corruption in the heart of the City of London: mis-selling payment protection insurance, laundering drug money, breaking sanctions on Iran, handing out bribes to Middle Eastern sheikhs – the list goes on. Profit increasingly takes a parasitic form: interest, currency exchange deals and the manipulation of financial assets. Fraud is an extension of these methods of securing a share of surplus value and is invaluable to the British ruling class. However, the City has rivals for its dominant position in world finance and the cry of ‘foul’ has gone up, with demands for penalties and regulation. ‘A sword of Damocles is hanging over London,’ said one senior City figure quoted in the Financial Times (30 July 2012). Whatever the revelations and accompanying shows of remorse we can be sure that the City’s and the government’s priority is to remove that sword and keep the profits flowing in. TREVOR RAYNE reports.

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War on the working class / FRFI 229 Oct/Nov 2012

Fight Racism! Fight Imperialism! 229 October/November 2012

During the three months to June 2012 the British economy contracted by 0.5%, with manufacturing falling by 0.9%. Now deep in a double-dip recession, the economy is currently smaller than it was in May 2010, and 4.3% below the early 2008 peak. Only Italy of the world’s leading G8 capitalist economies is performing worse. At the beginning of September, the OECD slashed an earlier forecast of 0.5% growth for 2012 to a 0.7% contraction. In November 2011 it had predicted 0.9% growth. ROBERT CLOUGH reports

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Defend the Counihans! Housing for all! / FRFI 229 Oct/Nov 2012

Fight Racism! Fight Imperialism! 229 October/November 2012

The Counihan-Sanchez family from the South Kilburn Estate in London have been made homeless by Brent council and served with two eviction orders. In 2010 the family declared £18 a week income from a small plot of land they had inherited in Ireland. They heard no more about it but 18 months later, Brent declared the Counihans had made themselves ‘intentionally homeless’ and demanded the repayment of £46,000 Housing Benefit.

The council has refused to reinstate Housing Benefit or find social housing for the family, ignoring doctors’ letters stating that long journeys to school are having a disastrous effect on the youngest of the five Counihan-Sanchez children, four-year-old Vinny, who has autism. Brent is refusing to take responsibility for the family or for all the mistakes that it has made, and is blaming government cuts. It seems that the council is pursuing a policy of social cleansing of working class families, pushing them out of the borough to save money. Brent housing department has told the family they should go and live in an empty field in the west of Ireland without sanitation, from where Anthony could apparently commute to his job as a bus driver in Cricklewood, west London.

After months of inaction from the council, the family decided to launch a public campaign. A public meeting on 14 August agreed to establish an open campaign to support the family and others fighting the cuts in Brent. It was also agreed that there was a need for direct action, including the occupation of council offices, to force Brent to act. The Counihans and their local supporters have been to the fore in taking direct action, such as a spontaneous march on the Kilburn High Road, protests at a meeting with Glenda Jackson MP (who had told the family that they should move to Wales) and an occupation of the council chamber on 10 September. To date they have had no support from Labour Party councillors or MPs, although Conservative MP for Ealing, Angie Bray, has written to Brent on their behalf.

There is a marked contrast between the response of the working class families from the estate and that of some ‘left’ organisations in Brent. Brent Fightback (BF) is the ‘official’ anti-cuts organisation in Brent, sponsored by Brent TUC. Although the campaign has had great support from some individuals in BF, the strategy of the leadership seems to be to seek deals with the same councillors who have implemented a massive programme of cuts in Brent to the tune of £41m. The BF organisers seem to think they can work with Brent Council to selectively oppose some cuts, while giving it an easy ride on others. For instance BF invited cutter-in-chief, Brent, council leader Muhammed Butt, as a main speaker at their rally against the closure of the A&E at Central Middlesex Hospital on 15 September.

The Socialist Party and Brent TUSC had opposed the invitation to Butt but were defeated by the Socialist Workers Party and their supporters who insisted that he should speak, despite his appalling record which includes closing seven public libraries and sending in the bailiffs to stop campaigners keeping Kensal Rise library open. On the day of the rally there was a fawning attitude from the organisers to Brent and Harrow councillors, who were all given speaking rights but made no firm commitments to fight the cuts and were not challenged on the massive package of cuts that they have implemented locally.

However, the photo opportunity for Muhammed Butt to pose as an opponent of cuts was destroyed by the questions that Isabel Counihan asked him from the platform. Butt was forced to respond and for a while could not articulate any words, finally coming out with the whopper that he had agreed an action plan with Isabel Counihan and your correspondent Jimmy Mac. This is completely untrue. There has been no action from Brent and no action plan agreed with the Counihan campaign.

The Counihan Family Campaign is organised on the basis of three aims:

1. We demand that Brent Council house the Counihans in South Kilburn.

2. We aim to provide a platform for other people affected by the cuts in Brent.

3. The campaign is open to anyone or any organisation which opposes all cuts in Brent. No selective deals on the cuts.

The campaign has also called on Brent Council to abandon its cuts budget and instead put together a budget to meet the needs of the people of Brent. This could be the basis for a mass campaign involving community groups, political organisations and unions to fight central government for the additional funding required to implement the ‘needs budget’.

FRFI supporters in the campaign are happy to get support for the Counihan family from any quarter but we are among those actively resisting any attempt to allow the campaign to be restricted to alliances with the Labour Party or trade unions. The Counihan family and the anti-cuts movement in Brent can win by mobilising the working class people affected by the cuts in Brent and by working with young people like 15-year-old Sarah Counihan, who have become involved in this political battle. The women of the South Kilburn Estate such as Isabel, Pat, Donna, Tricia, Carol, Tracy and many others, are prepared to use flexible and spontaneous tactics to fight for a better future for our youth. These are the people who can force Brent Council to reverse its cruel attacks on the Counihans and hundreds of other families in Brent.

Housing for the Counihans!

Housing for all!

Jimmy Mac

Forthcoming events include a benefit fundraiser at the Falcon Pub in Queen’s Park on 29 September and a march in Kilburn on Saturday 6 October – assemble Kilburn Square 2.30pm calling for ‘Housing for the Counihans! Housing for all!’

Housing Nightmare

Housing NightmareHousing NightmareIn London average private sector rents are now £1,038 per month (46% above the UK average) and the average rental price of a three-bedroom home in London is over £20,000 per year. The average London house price is £388,000 (72% higher than the UK average). In the last ten years, house prices have increased by 94%, while wages have only risen by 29%.

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