An economy as if people mattered

Andrew Fisher's speech for People's Budget at the Southampton People's Assembly

After a minute's applause for both Tony Benn and Bob Crow, these are the notes from which I made my speech (with a few ad libs!)at the Southampton People's Assembly on 20 March, responding to the Budget and arguing for an economy as if people mattered:

Well I hope you’re grateful.

Two years ago the Chancellor was taxing your pasties – that is what you people eat isn’t it?

And taxing your caravans – that is how you people holiday?

But now look:

You’re getting tax cuts on beer and bingo (or working class culture as the Chancellor calls it). See, tax cuts aren’t just for big business and millionaires, they’re for you – the little people – too!

Budget 2014

So aside from the Tories'  lame efforts to persuade us they're on our side, what were the main things we learned in the Budget?

• No end to austerity: because it’s ideological - by 2018 public spending will be lower than at any time since 1948 - the year in which the NHS was founded. "Rolling back the state", but going further than Thatcher ever managed. And if anything austerity is being ratcheted up. Public spending has risen by less than inflation (so a real terms cut), but his estimate for 2015-18 is for cuts to public spending in absolute terms 
• ISAs – who can save £15,000? Someone working full-time on the minimum wage doesn't even earn £15,000 a year.
• And what's underpinning Osborne's forecast for more growth? The assumption is more household debt - which will rise to the levels that precipitated the crisis. There's also some utterly delusional figures for business investment rising between 8-10% year-on-year for the next three years.
• An array of green taxes were scrapped or capped in the Budget, making more of a mockery of the Coalition's "greenest government ever" rhetoric.

What the Budget didn’t address

• Pay – it did nothing for people's wages and falling living standards. As Bob Crow said: 

• The Housing crisis – nothing in there that will build the homes our country needs, nothing to tackle rising homelessness or the rising costs of paying the rent. We are back to a pre-war situation where more of us are dependent on private landlords, with not enough council housing and fewer able to afford a mortgage.

• Jobs or industrial strategy – far from being a budget for 'doers', following his 'march of the makers' budget, OBR projections show UK exports falling in future years. This is a government - to be fair, like those before them for the last 35 years - without a serious labour market or industrial strategy. The recovery in unemployment is due to low wage, insecure jobs.

• And the energy crisis – nothing to tackle the fuel poverty which disproportionately affects the poorest pensioners; and nothing to address the UK's woeful investment in renewable energy, in which we lag behind the rest  of Europe.

What sort of economy we want

While Osborne rattles on about his modest and delayed economic growth, and the 24 hour news tells us every hour how the FTSE is doing, what would an economy look like as if people mattered?

Five questions, I think would matter to most people:

1. Are we reducing poverty and inequality?
2. Is unemployment falling?
3. Are people's living standards rising?
4. Is the tax gap - the £120bn of avoided, evaded and uncollected tax - reducing?
5. Is the economy stable and environmentally sustainable?

If we want that economy, an economy that acts in our interests, then we need greater economy democracy. Tony Benn said:

And you can see how that happened, we built the NHS, the welfare state, council housing, comprehensive education, and brought the utilities under public control. And sadly we can see how that has been reversed through privatisation - anti-democratically transferring power back from the ballot to the wallet, from the polling station to the marketplace.

For me anything too important to fail should be in public ownership - if we want an economy where people matter. And we need economic rights, individually and collectively. The right to a minimum income, protection from being made redundant - why on Earth are profitable companies allowed to make people redundant - taking away people's jobs to give bigger bonuses to directors or higher dividends to shareholders?

And trade union rights restored, so that we can protect our jobs, pay, pensions and fight for better working conditions.

I hope that's a good basis for discussion. Thank you.

• Andrew Fisher is LEAP Co-ordinator and author of the forthcoming book The Failed Experiment ... and how to build an economy that works

Democratise companies to rein in excessive banker bonuses

Prem Sikka

In times of austerity, one of few things that seems to be booming is the trade in wheelbarrows. At least, company directors at major corporations will need them to collect vast amounts of remuneration they continue to award themselves, with the help of ineffective remuneration committees.

The financial dealers on Wall Street have collected about US$26.7 billion in bonus payments, the equivalent of a year’s pay for the 1.1m workers on the minimum wage. The UK is not far behind. Bonuses in the City of London have increased by 49% compared to 2012, a higher figure than for Wall Street.

The chief executive of the crisis-ridden Cooperative Bank, Euan Sutherland, was to receive a remuneration package of £3.5 million, but has since resigned. The state-owned Royal Bank of Scotland declared a loss of about £8 billion, but has given 11 directors a bonus package worth about £18.25m between them. At Barclays and Lloyds Bank, the chief executives could be collecting more than £7m each. Of course, wheelbarrows come in handy at other corporate boardrooms too. Despite the costs arising from the Deepwater Horizon disaster, the pay packet of the BP chief executive has tripled to US$8.7m (£5.2m).

The corporate boardrooms are addicted to bonuses, but are the bonuses justified? The claims for bonuses and excessive rewards presuppose that executives exert superhuman efforts to generate wealth. The anatomy of corporate decisions does not really support that. When a new executive arrives at an organisation, for some time s/he is likely to be managing and living off products, services and strategies already in place. So the claims of distinctive contribution are hard to sustain.

Now suppose an executive decides to launch a new product or a project; this will always take some time to develop, plan and launch. The same applies if the mission is to rescue an ailing business. The success or failure of the new projects will not be known for many months or years. Meanwhile, the company will probably incur upfront costs, with no guarantee that the outlays will be recouped. Even after the initial celebrations, the product/service may turn out to be a failure and become a costly burden, as evidenced by payment protection insurance and other financial scandals.

Even if new ventures are successful, the success will depend on the involvement of other employees. It is hard to relate the success of anything to the efforts of few superstar executives. If the success cannot easily be related to the input of one person then the idea of performance-related pay becomes highly problematic. This suggests that higher rewards are claimed simply because some individuals or groups have sufficient power and control to give themselves disproportionate rewards.

So the question then is how to control the institutionalised fat-cattery. The UK government’s preferred solution is to empower shareholders by giving them a binding vote on executive remuneration. Such a step assumes that shareholders are owners of companies and bear most of the risks, and will somehow act in the interests of broader society. The evidence for this is not persuasive.

Shareholders in UK banks have average shareholding duration of about three months. Their position is no different from that of a speculator or a trader seeking short-term gains. They don’t have strong incentives to constrain directors. The UK Parliamentary Commission on Banking Standards looked at the operations of HBOS and concluded that shareholders did not exert “the effective pressure that might have acted as a constraint upon the flawed strategy of the bank”.

The commission also noted that “shareholders failed to control risk-taking in banks, and indeed were criticising some for excessive conservatism”. Shareholders often profit from harmful practices without any personal responsibility. A company can be mandated to sell harmful products, for example, cigarettes. Shareholders can share the resulting profits, but are not personally liable for because they are shielded by the doctrine of limited liability. Thus shareholder irresponsibility is written into the system and they don’t have strong incentives to consider the social good.

Besides, shareholders don’t provide most of the risk capital either. At major UK banks, shareholders only provide between 4.22% and 7.24% of total capital. The rest is provided by savers and creditors. Therefore, it is hard to make a good case for shareholder supremacy.

The proper approach is to empower the public. In the case of banks; employees, savers and borrowers are a good proxy for the public at large. They should appoint directors and vote on their remuneration. Elsewhere, employees, consumers and suppliers could be mobilised to invigilate directors as they all have a long-term interest in the welfare of the company. In a democratised company, directors are unlikely to get high remuneration without paying attention to the interests of employees and other stakeholders.

• This article first appeared on The Conversation website

Tony Benn - a tribute

Tony Benn: "Democracy transferred power from the wallet to the ballot"



For all British socialists - and many around the world - Tony Benn was an iconic and inspirational figure. He perhaps developed the political philosophy of 'democratic socialism' more than any other Labour politician. In the video clip above, from the 2008 LEAP conference, Tony explained how democracy challenged capitalism - and how capitalism fought back against democracy.

LEAP Chair John McDonnell MP tweeted: "Tony Benn was the articulate advocate for socialism who inspired my generation and gave people hope of a fair and equal society."

LEAP Co-ordinator Andrew Fisher posted: "Tony Benn - inspired generations of socialists (including me) with his warmth, integrity and ideas"

John Hilary of War on Want tweeted, "RIP Tony Benn: a true internationalist, comrade in the fight for global justice and long-term friend of @WarOnWant"

Tax justice campaigner Richard Murphy, said: "Tony Benn: simply a hero. RIP"

Katy Clark MP posted on Twitter: "Very sad news about Tony Benn. A great socialist thinker who made a massive impact. A huge loss. My thoughts are with all who loved him."

Paul Mason, former Newsnight economicscorrespondent, tweeted, "At Labour conf in 1980 & heard #Benn riveting call for 1) abolish the Lords 2) industrial democracy act 3) repeal EU powers - like detonator"

Keep the corporate fat cats in check

In the week the bonus bonanza began again, Austin Mitchell MP and Prem Sikka argue that workplace democracy is the only way to curb executive excess



The Tories are now embarked on a process dear to their hearts by squeezing the poor, slashing benefits and public services and punishing the people for the crimes of the banks. Their Liberal Democrat co-conspirators are busily trying to persuade themselves that targeting women, children and the poor is somehow “fair”. Neither seems to notice the extent to which companies and those who run them are back in the greed game.

The Government preaches wage and pension cuts for public servants and demands that no one should be paid more than the Prime Minister. Yet no one has the guts to demand the same sacrifices of the private sector, even though private sector excesses are far more damaging to social cohesion.

A recent survey by Income Data Services shows that directors of FTSE 100 companies have seen their pay rise by 55 per cent to an annual average of £4.9 million each. FTSE 100 directors received average bonuses of £701,512 – more than many people collect during their entire working lives. This is an increase of 34 per cent on the previous year. Average wages for the same period rose by 3.6 per cent.

Bankers have brought the economy to its knees, but still get their executive bonuses. Barclays Bank is paying more than £2 billion in bonuses. Goldman Sachs is paying around £8.068 billion in executive pay and bonuses. The state-funded Royal Bank of Scotland has announced a third quarter pre-tax loss of £1.4 million, but will pay out £2 billion in bonuses. The gamblers – investment bankers – will receive an average bonus of £110,000. The new boss of the state-funded Lloyds Banking group is to collect an estimated package of £8.3 million. Lehman Brothers is in bankruptcy but still wants to pay out £20 million in bonuses.

All this constitutes a major scandal. Labour did all too little to check the antics of the fat cats and the resulting social inequalities. The corporate lobby has effectively bought political parties and calls to control it lead to claims that executive pay is the outcome of market forces and set by remuneration committees consisting of independent directors.

The fat cats claim to work long hours to create wealth and feel they deserve more for that. However, wealth creation is a co-operative effort involving the investment of finance, human capital, local communities and social infrastructure. Why should the fat cats gobble a disproportionately large slice of the pie?

The claims of the super-rich must be countered. Here are some pointers.

The old boys’ (and old girls’) networks effectively make the market for fat cats. There are no such things as equal opportunities or free markets when it comes to executive appointments. Workers and representatives of local communities and other stakeholders are excluded from boards. They give their blood, brawn, brains and sweat to generate profits, but have no say in how the financial pie is divided or whether the bosses are worth their large pay cheques. Even the shareholder vote on executive remuneration is only advisory and not binding on company directors.

Executive remuneration is under the control of a small, well-connected economic elite masquerading as “independent directors’ on remuneration committees. These elites are rarely elected but usually handpicked by executive directors. The remuneration handed out to their friends also pushes up their own benchmark salaries. Reckitt Benckiser supremo Bart Becht collected £90 million. His company’s four-man remuneration committee includes Graham Mackay, chief executive of SAB Miller, who took home £13 million.

The mutual back-scratching is demonstrated by Tesco’s remuneration committee, which is staffed by millionaires. These include Karen Cook, managing director of investment bank Goldman Sachs International and president of Goldman Sachs, Europe; former ITV chief executive Charles Allen, who is also chairman of Global Radio, EMI Music, and a senior advisor to Goldman Sachs; Patrick Cescau, former chief executive of Unilever; Ken Hanna, chairman of Inchcape PLC and former director of Cadbury, Dalgety, United Distillers and Avis Europe; Rodney Chase, non-executive chairman of Petrofac Limited and a non-executive director of the Computer Sciences Corporation in Los Angeles, the Nalco Company in Chicago and the Tesoro Corporation in San Antonio; Harald Einsman, a director of the Carlson Group of Companies, Harman International Industries Inc and Checkpoint Systems Inc in the United States. Einsman is also on the board of Rezidor AB in Sweden.

Tesco’s 2010 annual accounts show that the average salary of its 372,338 full-time equivalent employees, inflated by the inclusion of executives, was just over £16,500. The average for ordinary workers is considerably less. Many Tesco employees have to apply for tax credits and social security benefits to keep their heads above water. Yet chief executive Terry Leahy picked up £17.9 million in pay, bonuses and share options. No wonder Sir Terry can contemplate retiring at the ripe old age of 54 and seek comfort in his pension pot of £15 million. His employees do not have that luxury.

Let us suppose that, because of their genetic make-up, fat cats are somehow better endowed with creative and innovative talent. It still does not follow that they automatically deserve huge rewards. Their genetic disposition is purely due to an accident of birth, a lottery of nature. They have done absolutely nothing to create those genes. It is the outcome of centuries of social interaction and not the creation of any single individual, clan or family.

Genetic endowments are the outcome of food, healthcare, water, medicines and many other forms of social support provided by society at large. Since fat cats are not the creators of any genetic advantage, their claims to appropriate the economic benefits can’t be sustained.

Even if we concede that some fat cats have superior skills, they cannot be brought to fruition without the appropriate social arrangements. Bankers speculate on financial markets in order to make money. That is not made by their individualistic endeavours alone. They must enter into financial contracts with other companies. Through the Companies Act, the state is the ultimate creator of all companies. Without due process of the law, companies cannot be created. Corporate contracts need to be enforced with the public provision of courts, the judiciary and the police. Indeed, without particular social arrangements market contracts are not feasible.

Further, society provides education and healthcare for bankers. It provides public transport and social infrastructure to enable bankers to travel and plug their computers in. It tests food and medicines for their nourishment. It even bails out bankers who squander other people’s savings. The profits made by bankers, no matter how clever, cannot be made by them alone. So they have no moral, ethical or natural claim for appropriation of so much wealth. That right lies with society at large.

It could be argued that someone has to be energetic and far-sighted enough to spot gaps in the markets, provide innovative products and services or use social resources to generate new wealth. In recognition of that, society may be willing to give them extra rewards. Yet precisely how much extra must be a matter for public debate. It must have due regard for social welfare.

Thousands of workers are not been made better off by the telephone number salaries of executives. Ordinary people’s freedom to improve their life chances and opportunities for their families are impaired by the grossly unfair distribution of wealth.

The same fat-cattery has also impoverished the pension prospects of workers as, instead of returns to members of pension schemes, the wealth is gobbled-up by executives. Many toil in sweatshops and poor working conditions because executives prefer to collect fatter pay cheques rather than invest in health and safety. Stop excessive rewards and we benefit as customers through lower prices.

Britain’s skewed distribution of wealth damages democratic participation. The wealthy can set up think tanks, control newspapers, radio and television stations and shape public choices through donations to political parties. Apologists frequently defend excessive executive rewards by claiming that wealth will somehow trickle-down. However, no means of achieving this have been identified and managers who have made disastrous decisions continue to collect huge rewards – as happened with the banks.

Nor has any satisfactory way of measuring executive performance been devised. Directors at WorldCom and Enron reported higher corporate earnings. Subsequently these were discovered to be the product of fraud and creative accounting.

The main reason for excessive executive rewards is simple. It is the control of boardrooms by economic elites. That needs to be dismantled by democratisation of companies. Labour must seek to ensure that employee representatives are on the boards of all large companies. Executive contracts need to be publicly available.

Corporate stakeholders, including employees, should be able to vote on executive remuneration. If employees, shareholders, borrowers, depositors and others feel that directors deserve their gigantic pay cheques, then all well and good. However, unless stakeholders are getting a fair share of the wealth they are unlikely to support massive executive salaries.

Democracy may be anathema to corporate barons. But it is the only way of checking their greed and promoting social justice.

This article first appeared in Tribune

International currency war under way

The Bank of Japan’s decision yesterday to further reduce its close to zero interest rate looks suspiciously like one of the opening shots in an exchange rate war that will intensify the problems besieging the already weakened major economies.

In dropping below its lower limit of 0.1%, and looking at a small programme of quantitative easing (QE) (aka printing more money), Japan managed to get the yen to fall on currency markets. This has the effect of making its exports cheaper.

But Tokyo didn’t start it. They just followed Brazil’s finance minister who, on Monday, took measures to hold down the value of the real. Guido Mantega warned:

'We’re in the midst of an international currency war, a general weakening of currency. This threatens us because it takes away our competitiveness.'

Both Japan and Brazil pre-empted the widely expected “return to QE2” – a sequel to the fading effects of the previous programme of money creation by the now struggling Obama administration. Washington wants the lower dollar to fall to give its exports an edge.

So the alarm bells are ringing at the International Monetary Fund, which is warning that the “recovery” has run out of steam. IMF head Dominique Strauss-Kahn told the Financial Times:

'There is clearly the idea beginning to circulate that currencies can be used as a policy weapon. Translated into action, such an idea would represent a very serious risk to the global recovery.'

It’s not long since world’s leaders in government, banking and finance came together to hammer out the agreements that enabled at least the semblance of a co-ordinated programme of measures designed to restart lending and bring about a return to growth.

Whilst the previous concerted action is credited with averting a financial and economic Armageddon, its effects are best described as a phony recovery. And that is now over. The optimism induced by unprecedented measures couldn’t and didn’t overcome the uncontrollable logic of the capitalist system of production.

The global crisis may have erupted in the financial system but its roots are elsewhere.

Throughout its short period of existence on the planet, the capitalist system has been racked by contradictory forces. Competitive pressures have obliged companies to invest in productivity enhancements which, whilst giving the front runners a temporary advantage, inevitably reduce costs, prices and profits for all.

To offset the tendency for profits to fall, greater volumes of every product have to be cranked out and sold, and the pressure for even more productivity accelerates and accentuates the growing economy.

This irresistible objective logic created the globalising corporations that came to dominate the world. And when the surging millions of cars, computers and mobile phones overwhelmed the market, a house of (credit) cards and mountains of debt were created so that consumers could buy them up. At least until we, and the rest of the economy found ourselves drowning in that very same debt.

Optimism is now being replaced with realism. Cuts in government spending to reduce the budget deficits they’ve accumulated over years of trying to keep growth on track are just one part of the story.

The phony recovery allowed manufacturers to restock their warehouses and showrooms, but there’s still not, and won’t be enough buyers. So the factories that restarted production after the 2008 collapse will go back onto short time and no time.

Competition for the remaining market will sharpen, and the intensification in the rate of exploitation will prove truly shocking, sparking social unrest to match. These are the objective laws which shape the decisions in the boardrooms and in government buildings.

Successful resistance will depend on individuals and communities creating new forms of democracy – People’s Assemblies with the power to terminate the web of contracts and property relationships that tie workers to capitalist employers and ensnare us all in debt. The system of profit-chasing growth must be torn up at its roots. Let’s compost capitalism!

Gerry Gold
Economics editor
A World to Win
http://www.aworldtowin.net/
6 October 2010

The credit rating agencies

Greek debt was downgraded to 'junk' status by the credit rating agencies earlier this week, and yesterday Spain was taken down a notch from AA+ to AA - but who are these credit rating agencies, and are they right?

One of the major credit rating agencies, Standard & Poors, describes itself as "a leader of financial-market intelligence", while another, Moody's, modestly says its "commitment and expertise contribute to stable, transparent and integrated financial markets, protecting the integrity of credit".

Cast your mind back however to the beginning of this crisis - when the 'credit crunch' euphemism was still being used. What happened? A large number of structured investment vehicles, special purpose vehicles and collateralised debt obligations were found to be worthless - bundled up packages of unrepayable sub-prime mortgages and the like.

Now why would banks have traded these disastrous investments? The answer lies in the credit rating agencies which rated these truly junk investments as AAA in many cases. And who pays credit rating agencies to give a rating? The selling bank. So if you're client comes to you, and pays you lots of money to give something it is trying to sell a rating, do you (a) please your client; or (b) give an honest assessment? The credit crunch answered that question, yet still the credit rating agencies deem themselves fit to tell the world what is a good investment or not.

Is the Greek economy really more risky than a bundle of sub-prime mortgages? No - though there are problems. And what about Spain, Portugal, Italy and the UK, all highly indebted? Let's look at the effect of downgrades or the threat of downgrades:

1) It makes the interest rate on loans higher
2) It deters investors from buying debt / making further loans
3) This forces further austerity measures

The immediate effect on Greece has been further calls from creditors for more 'reform' and 'austerity measures'. This means the market taking more control through privatisation and the Greek people paying with cuts to their services, pensions and benefits. Fearing it could be downgraded to 'junk' next, Portugal announced tougher austerity measures yetserday - held at gunpoint to pay for the crisis by the very people who caused the crisis.

This is the problem of the credit markets being almost entirely unregulated and totally in private hands. Gangster capitalism is thriving

Democracy and Capitalism

A flagrant re-post from the Roe Valley Socialist blog:

I was recently reading over an excellent pamphlet published by the Left Economics Advisory Panel, a panel of economists linked to the Labour Representation Committee. The pamphlet, 'Building the new common sense: Social Ownership for the 21st century' discusses in a series of chapters the complete lack of democracy in the workplace and the disparity between the power of capital and labour.

As the pamphlet points out, citizens spend a significant period of time in their workplaces but leave their democratic rights at the door in the morning. When it comes to making serious strategic decisions about the direction of a company, decisions which could considerably affect conditions at work and even the direction of peoples' whole lives, workers are at the mercy of the tyranny of capital. Some firms obviously have a consultation process with their workforce but this is limited in the extreme; missing are the powers for workers to initiate reforms themselves, the ability to work outside an agenda already been determined by management, and the means to effectively challenge decisions short of industrial action.

Obviously, this comes down to the nature of private ownership of the means of production. Why, ask liberals, should workers have any say in what is in effect someone else's property; why, ask social democrats, should property owners wield such unaccountable power over the great majority of the population in a so-called democratic state; why, ask socialists, should production be in private hands in the first place, as private property is the foundation of this unbalance in democratic entitlements.

Beyond the micro-economics of the individual firm, the problem runs much deeper than this of course. The outcome of the next General Election might just be made by the currency markets rather than the electorate, if a Labour victory or a hung parliament is portrayed in the media to threaten the value of sterling. It might also be decided in marginal constituencies where the Tory tax-dodger and Belize-based businessman, Michael Ashcroft, is providing the cash for glossy leaflets and phonecall canvassing. On Newsnight on Tuesday, Justin Rowlatt followed a financial speculator who saw it as his rule to dictate to the Greek government how they should solve their fiscal crisis. His solutions were predictable- massive cuts and attacks on the standard of living of the Greek people. We can argue over whether this is necessary or not to ensure the survival of the Greek economy or not under capitalism but the boundaries of the debate are severely proscribed by the actions of those short-selling Greek debt. Unelected speculators have set the agenda for democratic governments; in a democracy it should be the other way around.

On an even deeper level this poses a fundamental challenge to reformist socialism. It was once the case that the state had strict controls over its currency; now, this control is shared with the financial markets who can decide to destroy any government they don't like the look of. Within the EU, fiscal policy is subject to numerous limitations, and nationalisation is technically subject to the dictates of competition law. In other words, there are great barriers to state intervention in the economic life of the country, especially when capitalism is not in crisis and capitalists resist such intervention politically through their support for neoliberalism.

Socialists must develop realistic and workable models to force democracy into the economic realm- through workers' co-operatives, trades unions and genuine democratic organs of the people. Otherwise, without redressing this balance between those who work and those who own, the latter will successfully resist any reforms which fundamentally risk the rule of capital. We saw it at Copenhagen where states came under pressure from entrenched economic interests, and during the bailout of the financial system where it was done on the banks' own terms despite their culpability in the precipitation of the economic crisis. It is a simple question of democracy and one which needs serious answers.

Inflation, the minimum wage and the TUC

Inflation figures out yesterday showed inflation had risen to 3.5% on the CPI measure and 3.7% on the RPI measure.

As LEAP research published in September 2009 showed, inflation tends to hit the poorest hardest.

All parties are threatening public sector pay freezes, and a freeze in the National Minimum Wage has been called for by the Association of Convenience Stores, British Chambers of Commerce, and by CIPD.

Let's be clear a freeze means a cut. In real terms, a freeze would be a 3.5% cut.

Thankfully, at the 2009 TUC, USDAW (not the most radical of trade unions) passed a motion calling on the Low Pay Commission (LPC) - of which the TUC is a part - to "significantly increase the National Minimum Wage". The motion also called for the full NMW to be payable from 18 (currently those aged 18-21 are paid a lower rate).

So when the TUC made its submission to the LPC what sort of significant increase did it call for? 20p. Yes the TUC - "the voice of Britain at work" - with clear Congress policy for a significant increase instead calls for the minimum wage to be increased by just 20p from £5.80 per hour to £6.00. The CBI, BCC and FSB must be laughing their arses off. We know they will call for a minimal increase and the LPC will settle somewhere in the middle.

20p by the way is 3.4% - around or slightly lower than many experts believe inflation will average this year. So the "significant increase" is a real terms freeze. And what of applying the NMW to all from 18? No, the TUC submission advocates all three age discriminating bands remain and all increase by 3.4% - so young workers won't even catch up.

Last Friday even New Labour was floating "a pledge to raise the minimum wage sharply" in the Independent. What incentive is there though for Brown to take a radical turn when even the TUC is not calling for a sharp increase?

On hearing the new inflation figures, TUC General Secretary Brendan Barber said:

"The inflation message is don't panic. The rise today has more to do with what was happening a year ago than anything new in the economy, and is likely to fall back to its target range in due course."

"Don't panic" - wasn't that the refrain of the ineffective Corporal Jones in Dad's Army?

Extra: Watch Paul Mason's piece on inflation on BBC Newsnight. It's followed by a debate between Tory spokesperson on competition John Redwood MP and PCS General Secretary Mark Serwotka over public sector pay policy

Extra 2: Unison calls for reopening of pay settlement in local government - obviously they are panicked, despite Mr Barber's reassurances ...

G20: My message to the alternative summit

John McDonnell MP

Bankers banking their bonuses, MPs fiddling their expenses, ex-ministers lining their pockets with consultancies, and the prime minister in denial about his role in creating this cesspit of greed and corruption. For most of us, what else is there to do but get out on the streets to protest and resist?

Political representation isn't working.

Democracy within the political party that was founded to transform our society has been largely closed down. Political representation within it for an alternative vision of the world has increasingly been squeezed out by internal constitutional manoeuvres and manipulated selection processes, which have now even moved on to parachuting the progeny of the New Labour hierarchy into safe seats.

Within parliament, patronage has reduced the commons chamber to a rubberstamping ritual of obsequiousness, where virtually a two-day week has evolved and where vast swathes of new laws are forced through on a guillotine without even a debate.

No10 and the government departments are populated with advisers either coming from, or going to, lucrative posts in big business. The decision over Heathrow expansion exemplifies the style of policy-making that starts with capitulation to a powerful self-interested lobby, blatantly fixes a public consultation and then drives through a policy that destroys any vestiges of green credentials the government had left.

Hardly surprising, then, that people are taking to the streets and direct action. Climate campers camping, sacked workers occupying, Heathrow villagers at vigils and peace promoters marching.

Do the so-called world leaders sitting at the summit table realise the depth of anger that is brewing up in communities across the world? Maybe, but it seems not yet as they limit their horizon to minimal reform to salvage a system that has brutalised our society and plundered our planet for profit.

Between most of them they have turned the world economy into a casino, while, for most of us, to quote Morales, "We're not willing to play anymore." The solutions required to this latest crisis of capitalism have gone beyond fiscal stimuli, bank bailouts and quantitative easing. Stabilising a system so that the next generation experiences another similar crisis in 20 years, as time continues to run out for the planet, is increasingly exposed as pointless.

Spinning a summit communiqué to create an image of co-ordinated decision-making for the home country electorate just won't wash as firms close, unemployment mounts and poverty grows across the globe. The principles underlying the signs of real change that are needed to come from this summit are hardly new:

• Democratic rights at the core of every institution and every decision
• Labour rights firmly established and enforced by organisation and mobilisation
• Equality established practically by the redistribution of wealth and power founded upon common ownership, global tax justice and fair trade
• Survival ensured by a real sense of urgency in tackling climate change by concerted and decisive global action
• Peace secured by commitment to conflict prevention and resolution underpinned by disarmament and the end of the arms trade

If the summit could only make a start in setting this agenda there might be some hope. If it doesn't, the need for mass protest and direct action will prove to be not just justified but necessary.

This article originally appeared on Comment is Free