Labour propose tax avoidance crackdown, Tories balk

Despite recent backlash from big business and finance firms and lobbies, Labour are pushing ahead with a leftward shift to crack down on corporate abuses, according to The Financial Times. In addition to charging that Conservatives have “totally failed” to take sufficient action on tax avoidance loopholes generally, Labour wants to target British tax havens:

On Friday [February 6, 2015], Ed Miliband, Labour’s leader, announced plans to put the UK’s offshore financial centres on a tax haven blacklist if they did not comply with a new transparency measures. But the plan was attacked as unworkable by [Chancellor] Osborne, who seized on it as further evidence that the Labour leader was “unfit to be prime minister”.

 
Grand_Cayman_IslandWell, I don’t know about that, Mr. Osborne, but it seems like trying to do something about the problem of offshore UK/crown tax havens (full story➚) is better than doing nothing. This is, after all, creating a lot of problems for other countries (see previous link), and British governments have repeatedly pledged to the international community to rein them in — and has singularly failed to do so.

It will be interesting to see if Labour are willing to hold fast to their new position on corporate abuses — fully reasonable and sufficiently moderated positions, in my view — until the May elections or if they bend to pressure to be blindly (and fearfully) “pro-business,” as they arguably were in much of the “New Labour” years.

I say “interesting,” because I have a strong suspicion that the outcome of the internal Labour debate — between its working-class/progressive base and its City of London finance types — could prefigure the coming 2016 debates (if we have any) in the U.S. Democratic Party about whether to run on “middle class economics” or in Wall Street’s pocket.

There are certainly a lot of very clear parallels here, given the similarly outsized roles “The City” and Wall Street have taken on in both countries’ economies and politics, along with the controversial transformations of the New Democrats and New Labour led by Bill Clinton and Tony Blair respectively in the 1990s. While it may have worked in the short run, it has caused a great deal of problems for both parties in the longer run.

Moreover, in both countries, the center-left parties find themselves quickly abandoned by their respective financial districts for the conservatives — the natural home of Big Finance — when the winds change. Meanwhile, the under-served natural economic base of Labour and the Democrats drifts angrily, staying home on election day or seeking solace in fringe parties.

There is, of course, one other linkage of interest here. The tax evasion/avoidance problem — combined with various recent banking scandals — have given a new meaning to the phrase “special relationship” between the United States and the United Kingdom, given how often City and Wall Street firms seem to be tangled up in it together.

More anti-EU plans from Cameron after another UKIP win

Following the earlier first-place nationwide triumph this year by the right-wing/anti-European “UK Independence Party” (UKIP) in the 2014 European Union elections, mainstream British politics suffered another serious blow last night, as the first elected UKIP member of the UK parliament was elected in a special election. As with his response to the EU election result, Prime Minister David Cameron yet again handled the situation by immediately ratcheting up rhetoric and policy plans against the European Union (and immigrants), according to the (pro-Conservative) Telegraph:

David Cameron will unveil tough plans to restrict immigration from the European Union within weeks to stop another Ukip MP being elected following Thursday night’s by-election [in Clacton].

Douglas Carswell, a former Conservative, yesterday became the first MP elected to Parliament for Nigel Farage’s UK Independence Party following a huge swing in support.

Conservatives warned that the decision by traditional Tory supporters to vote for Ukip would allow Ed Miliband to become Prime Minister if repeated in the general election in 209 days.

Labour narrowly won a second by-election by just 617 votes [over the UKIP candidate] and Mr Miliband is also now facing a major challenge from UKIP in [Labour’s] traditional northern heartlands.

 
The party elite’s right-wing also trumpeted the defeat as a sign that the Conservatives must double-down on anti-immigrant, anti-EU policies and even break up the coalition government with the far more moderate and internationalist Liberal Democrats. While not going that far, Cameron and the ruling government did continue to recast the party toward the euroskeptic position:

The Prime Minister said: “If you vote Ukip, you’re in danger of getting a Labour government with Ed Miliband as prime minister, Ed Balls as chancellor and you’ll get no action on immigration, no European referendum, and obviously – most importantly – you won’t get a continuation of the plan that is delivering success for our economy and security for our people.”
[…]
Brandon Lewis, a communities minister, said that the Tories will put immigration “at the heart” of the renegotiation with the EU to be held before an in-out referendum scheduled for 2017.

He said: “What people are worried about though is migration from the EU, and the Prime Minister made very clear last week that has got to be one of the key things at the heart of renegotiation that we will have before that referendum which we will deliver in 2017.”

 
And after its own close shave in the other by-election, the Labour Party leader also made rumblings of rethinking Labour’s immigration policy:

Mr Miliband conceded that Labour now needs to address “specific concerns” about immigration and denied that he was “complacent”.

 
Miliband is undoubtedly keeping in the back of his mind the situation in France and elsewhere, where traditional far-left, working class communities have gradually abandoned the leftist parties in favor of ultra-right-wing nationalist parties that vow to halt immigration and restore protectionist industrial policies that once helped those workers. Labour is significantly more economically centrist than it once was.
Read more

Guest Post: Our hung parliament

Matt is currently a university student in Britain, but he attended high school in the US with the co-editors of Starboard Broadside*, and he has provided us with his reaction to the inconclusive results of yesterday’s general election.

Well, Nick Clegg has said he won’t be giving any more speeches today, and after those of us who weren’t shut out of the poll station at 10 p.m (which wouldn’t have been a problem but for the bloody Labour government having all pubs shut at 11p.m.), there’s a prevailing feeling that our votes were denied a definite result. One generally expects when they go out to vote to know who’s running the country the following day. However, as exciting (read: worrying) as the results are, they were far from unpredictable. The “yellow tide” of Cleggmania may have fell short of a tsunami, but that’s only because of the very electoral system which Clegg has been critiquing from the start.

The system in the UK is confusing even to us, but to put it simply for American readers, the Lib Dems did do well for a third party, achieving 23% of the national vote (only 6% less than Labour), but the only thing that matters is the amount of seats that are won. In this “First Past the Post” system, whoever gets the most votes in each particular constituency goes to Parliament and the rest of the votes are thrown away. This is how the Liberal Democrats have only 2 million less votes than Labour but 200 less seats in the House of Commons, and this is why Clegg has been demanding electoral reform from the start. The reason this election is so exciting is because of the very issue of electoral reform which it has brought to the forefront, and which will play a decisive role in how the new government is formed.

Indeed, the chairwoman of the Electoral Commission has described the current system as “Victorian” and demanded an overhaul. While we claim with great pride that the voter turnout increased massively, the country was unable to handle this, and polling stations shut voters out after 10 p.m., leading to sit-ins at polling stations around the country, and even demands for another vote to be held.

The anxiety over the current state (or non-state, rather) of the UK government has negatively affected the British economy, with sterling falling from $1.4732 to $1.4678 during Cameron’s speech – this could not have been more badly timed given the current economic happenings. The fact of the matter is that while this country is currently in need of a strong government, we are now left with a minority one that will rely on either small-scale policy compromises between two parties who’s manifestos are on polar opposites, or something even scarier and more revolution-worthy such as a Labour coalition (and we grow tired of Mr. Brown) or a defunct parliamentary minority. While we may wonder who it was that the country really voted for, we can guarantee it was not a Conservative-Lib Dem quasi-coalition. This election’s most defining aspect is that it has disproved the reliability of our current system, and Britons are demanding change.

From his speech given this afternoon, Cameron is in no way proposing an official coalition, but rather, to use his own words, a government which will “try to find new ways in which Liberal Democrats can contribute” – i.e. making the coffee. Expect a cartoon to surface on the internet within a few days of (forgive the cheeky British banter) Clegg with a big “57” painted on his chest kneeling down and doing rude things to a wryly grinning Cameron sporting an even larger “305,” with a caption somewhere along the lines of “Cameron spurns coalition, opts for ‘special arrangement’ instead.” No one expects this government to last for more than a year (in the UK elections can be called at any time, there are no fixed terms). Cameron has, however, said that he will sate the appetite for electoral reform with an all-party Electoral Inquiry Committee, but anyone who has been following Conservative agenda knows that his only desire is to have constituency borders proportional to population size, which – while still progressive – does not address the issues posed by this election.

And if that prospect doesn’t seem uninspiring enough, we are all faced with the fact that Gordon Brown is still in office! In the situation where there is no clear majority, it is up to the prime minister to tender his resignation to HM the Queen and it is Her role to then invite a new prime minister to form a government. This might mean that if the politicians can’t sort it out themselves, then Buckingham Palace will have to make its own decision.

All in all, between a resurgent monarchy and a weak coalition, the results (or, as of yet, lack there-of) of this election have confirmed our anger with the electoral system and lead the way to a United Kingdom that is even less able to deal with either the ongoing or the impending financial crises.
Read more