Peter Mandelson | ukwatch.net

Gordon's Problem with Mandy

JamieSW — Tue, 21 Oct 2008 20:05:48 +0000

Britain’s beleaguered Prime Minister, Gordon Brown, who is still struggling in the domestic opinion polls and battling with the international financial meltdown, would have been cheered greatly by reading the New York Times earlier this month.

Writing in its opinion pages, Paul Krugman one of the paper’s columnists and professor of Economics and International Affairs at Princeton University, asked simply “Has Gordon Brown, the British prime minister, saved the world financial system?”

Although Krugman said it was slightly premature for the question to be answered fully, he glowingly praised Brown for “defining” the “character of the worldwide rescue effort, with other wealthy nations playing catch-up.”

Krugman argued that, despite its relatively small economy, you would not expect Britain to be playing “a leadership role” in such turbulent times. However, the “Brown government has shown itself willing to think clearly about the financial crisis, and act quickly on its conclusions. And this combination of clarity and decisiveness hasn’t been matched by any other Western government, least of all our own.” This was a ringing endorsement for Brown from an influential commentator like Krugman, who coincidentally won the Nobel Prize for Economics this week.

Others agree. One financial advisor I spoke to last week, whilst quick to point out that he was at the different end of the political spectrum from Brown, readily praised his action to try and stem the collapse of the British banking system.

But whilst Brown is keen to be seen as the key international politician solving the financial crisis, one action he has undertaken recently is likely to do just the opposite. Earlier this month he appointed the veteran Labour politician Peter Mandelson as the government’s new Business Secretary. As Mandelson is no longer a Member of Parliament, he has to be made a Lord in order to take up the appointment.

Mandelson is an almost mythical political figure: hated and admired by his critics and followers. Along with ex-UK Prime Minister Tony Blair, Mandelson and Gordon Brown are credited with creating “New Labour,” that went on to win three general elections.

He is seen as being one of the original “spin doctors” who twist and massage their message. Known for political subterfuge, he was once dubbed the “Prince of darkness” by his critics.

Mandelson is also unique in that he has already resigned from the Government twice. In the late nineties, he had to resign when it was revealed he had borrowed £373,000 for the mortgage from a millionaire Labour MP who was then subject to an investigation by Mandelson’s own government department. After he was brought back into the Labour government again by Tony Blair, Mandelson had to resign a second time, after it was alleged he had tried to intervene to get a passport on behalf of a prominent Indian businessman. Although a subsequent inquiry found that Mandelson had done nothing wrong, it was too late to save his job.

Brown explained his decision to bring Mandelson back into the cabinet as business secretary, by saying: “Serious people are needed for serious times.”

But Mandelson’s appointment by Brown stunned everyone. For the two men, although once close, have been feuding for the last fifteen years. The Conservative William Hague, who is the shadow foreign secretary, said it was a “stunning failure of judgment” by Brown. On the other end of the political spectrum, the veteran Labour left-winger, John McDonnell, called it an “extraordinary step backwards” to “reinstate possibly the most divisive figure in Labour’s recent history.”

And divisive the Mandelson – Brown split has certainly been. Their feud goes back to 1994 when Mandelson made the pivotal decision to support Tony Blair rather than Brown for the Labour leadership. The feud is graphically explored in the diaries written by Tony Blair’s former Communications Director: Alistair Campbell, which is seen as being one of the definitive books on New Labour.

Campbell describes the political and personal relationship between the two men as a “wall to wall disaster area”. Campbell’s diaries explicitly details how: the “real bane of Tony Blair’s life was Gordon Brown’s and Peter Mandelson’s inability to get on” and that the rift between them was “so deep that it was impossible to do anything much about it”. In fact Mandelson and Brown “hated each other”.

Over the last few years, the relationship between the two men is said to have thawed considerably. Although this did not stop the right-wing Telegraph pointing out that, at a recent meeting between Peter Mandelson and the Conservative Treasury spokesperson, George Osborne, that Mandelson had “dripped pure poison” about Brown to Osborne.

The interesting thing about Brown’s reappointment of Mandelson is that it is a move in the wrong direction, if his government is going to reign in the financial sector. Everyone knows argues that the current crisis means that we should move from an unregulated banking system to one that is regulated and works in the public interest, not just for the greed of city bankers.

However Mandelson is far too close to business interests generally and also to the financial industry, including accountancy firms. The role of accountancy firms in the current crisis is crucial, just as they were in the collapse of global giants Enron and World Com earlier this decade. When Enron collapsed it caused the dissolution of Arthur Andersen, at the time one of the world’s top accountancy firms, that had failed to notice the fraud at the heart of Enron.

In the current crisis many people are now asking how could the accountancy firms audit the books of banks and mortgage companies and not notice that something was so terribly wrong again? Could it be that accountancy firms are part of the problem?

Prem Sikka, the Professor of Accounting at the University of Essex, has been tracking accountancy firms for decades, and also Mandelson’s relationship with them. “When he was at the Department for Trade and Industry [DTI], he started making very favourable noises to accounting firms”, argues Sikka. According to Sikka, when Mandelson was at the DTI he gave auditors greater protection from lawsuits than had existed before. He did this by introducing “proportional liability” for accountancy firms, who before had had unlimited liability. This made it harder for injured parties to get compensation from accountancy firms and gave greater protection to the accountancy firms.

Then within months of being sacked as the Minister, Mandelson had been offered a £40,000 deal with the accountancy giant Ernst and Young to carry out “executive networking.” So he had went from regulating accountancy firms to working for them.

After Mandelson lost his job a second time, he resigned from being an MP and reignited his political career as EU Trade Commissioner, in Brussels. When he arrived in 2004 to take up his job, he was heckled by protestors brandishing a giant puppet. They accused Mandelson of having “strings that are pulled by European lobby groups and multinationals”.

Mandelson was quick to annoy his critics at the European Parliament too. When the Green MEP from Italy, Vittorio Agnoletto asked a question on the close relationship between the Trade Department and business lobby groups, Mandelson dismissed the criticism. He said: “I am not conscious of any incestuous or damaging relationship.” He ignored the long list of evidence compiled by his critics.

The following year, in 2005, the corporate watchdog, Corporate Europe Observatory, submitted a complaint against the European Commission after Mandelson’s Department had started blanking out the names of industry lobbyists in documents released under EU rules to make official documents public.

After a two year investigation, in a significant rebuke to Mandelson, the European ombudsman ruled that his office had been “wrongly blanking out the names of industry lobbyists” in the documents. It said that “disclosure of names of individual lobbyists is essential”. The failure to reveal this information “would constitute an instance of maladministration by the commission”.

Since then, Mandelson has been at the forefront of removing barriers to trade and investment. He has pandered to the corporate lobbyists who want a de-regulated open financial system. As the Sunday Times once noted, Mandelson is regarded as “being close to the financial services lobbyists who are pushing for the liberalisation of rules around the world.”

For example, Mandelson was there in May 2008, when the body set up between the EU and US to foster greater economic ties and deregulation, called the Transatlantic Economic Council (TEC) met for the second time in Brussels. According to the official news release: the TEC continued its work to “eliminate barriers to transatlantic trade” and “advance capital market liberalization, and strengthen support for open investment regimes.”

By bringing back the “Prince of Darkness” to his government, Gordon Brown has signaled that whatever the short-term quick fix for the banking sector, the longer term will see more of the same. Mandelson will make sure his banking friends get a good deal. And that is bad news for everyone.

Mandelson's Return - calculated to outrage

Alex Doherty — Sun, 05 Oct 2008 09:51:16 +0000

IT is difficult to imagine a Cabinet appointment more calculated to dismay or outrage Labour supporters than that of Peter Mandelson.

The mere fact that serial embarrassment David Blunkett describes it as a “masterstroke” says all that’s necessary of this third time unlucky triumph of hope over experience.

Mr Blunkett’s bases his assessment of the rehabilitation of the architect of spin and rumour on the joyous reality that “it is embracing someone who, in the past, had been seen as being very close to Tony Blair, so it’s an inclusive measure.”

Well, three cheers for that. The tiny, unrepresentative and increasingly loathed group that is new Labour is papering over the cracks in its unity.

At the same time, trade unionists, pensioners, peace campaigners, the homeless, low-paid workers and people facing unpayable energy bills will conclude that new Labour has even less to offer them.

Those denied the chance of buying a home or facing negative equity and repossession will remember Mr Mandelson’s own alternative mortgage arrangements – his secret large loan, interest free, from a Cabinet colleague.

That should have been that for his political career, but the patronage of Tony Blair meant his speedy return to Cabinet and, after another embarrassment, reincarnation as EU trade commissioner.

What does Gordon Brown expect Mr Mandelson to bring to his government?

Is he unaware of the overwhelming negative image that Mr Mandelson projects? He is seen as vain, duplicitous, divisive, self-seeking and unscrupulous and that’s by those willing to give him the benefit of the doubt.

His return will recall the days when he briefed journalists on a regular basis against fellow ministers, including Mr Brown, while Mr Brown’s adviser Charlie Whelan responded in kind.

Is that the model of government that the PM would like to see return or does he believe that the crab has changed his spots?

When Mr Brown took over from Mr Blair last year, he briefly flattered to deceive, promising the catch-all quality of “change” and, more positively, an end to spin.

Change has been consigned to the dustbin and no-one could take seriously any pledge by a government that contains Mr Mandelson to finish with spin.

Indeed, the proof is there in his interview in this weekend’s New Statesman when he claims not to have given “a second’s thought” to a return to front-line politics after he discussed it with Mr Brown at Labour Party conference.

Tony Blair once said that his project of remaking the Labour Party would only be complete when the party had learned to love Peter Mandelson.

If he meant the 700,000 members that Labour boasted in 1997, that never happened and even today’s flimsy, abandoned shell of a party is deeply divided.

Despite that, Mr Mandelson is as bullish as ever, telling trade union leaders and those on the left of the party who want an end to the new Labour nightmare that they “prefer the comfort of opposition to the hard tasks of government.”

This appointment confirms new Labour’s determination to continue to reject the demands of working people and to rule in the interests of big business and the rich.

Manufactured Famine

tim — Tue, 26 Aug 2008 19:31:02 +0000

In his book Late Victorian Holocausts, Mike Davis tells the story of the famines that sucked the guts out of India in the 1870s. The hunger began when a drought, caused by El Nino, killed the crops on the Deccan plateau. As starvation bit, the viceroy, Lord Lytton, oversaw the export to England of a record 6.4 million hundredweight of wheat. While Lytton lived in imperial splendour and commissioned, among other extravangances, “the most colossal and expensive meal in world history”, between 12 and 29 million people died(1). Only Stalin manufactured a comparable hunger.

Now a new Lord Lytton is seeking to engineer another brutal food grab. As Tony Blair’s favoured courtier, Peter Mandelson often created the impression that he would do anything to please his master. Today he is the European trade commissioner. From his sumptuous offices in Brussels and Strasbourg, he hopes to impose a treaty which will permit Europe to snatch food from the mouths of some of the world’s poorest people.

Seventy per cent of the protein eaten by the people of Senegal comes from fish(2). Traditionally cheaper than other animal products, it sustains a population which ranks close to the bottom of the human development index. One in six of the working population is employed in the fishing industry; some two-thirds of these workers are women(3). Over the past three decades, their means of subsistence has started to collapse as other nations have plundered Senegal’s stocks.

The European Union has two big fish problems. One is that, partly as a result of its failure to manage them properly, its own fisheries can no longer meet European demand. The other is that its governments won’t confront their fishing lobbies and decommission all the surplus boats. The EU has tried to solve both problems by sending its fishermen to West Africa. Since 1979 it has struck agreements with the government of Senegal, granting our fleets access to its waters. As a result, Senegal’s marine ecosystem has started to go the same way as ours. Between 1994 and 2005, the weight of fish taken from the country’s waters fell from 95,000 tons to 45,000 tons. Muscled out by European trawlers, the indigenous fishery is crumpling: the number of boats run by local people has fallen by 48% since 1997(4).

In a recent report on this pillage, ActionAid shows that fishing families which once ate three times a day are now eating only once or twice. As the price of fish rises, their customers also go hungry. The same thing has happened in all the west African countries with which the EU has maintained fisheries agreements(5,6). In return for wretched amounts of foreign exchange, their primary source of protein has been looted.

The government of Senegal knows this, and in 2006 it refused to renew its fishing agreement with the EU. But European fishermen – mostly from Spain and France – have found ways round the ban. They have been registering their boats as Senegalese, buying up quotas from local fishermen and transferring catches at sea from local boats. These practices mean that they can continue to take the country’s fish, and have no obligation to land them in Senegal. Their profits are kept on ice until the catch arrives in Europe.

Mandelson’s office is trying to negotiate economic partnership agreements with African countries. They were supposed to have been concluded by the end of last year, but many countries, including Senegal, have refused to sign. The agreements insist that European companies have the right both to establish themselves freely on African soil, and to receive national treatment. This means that the host country is not allowed to discriminate between its own businesses and European companies. Senegal would be forbidden to ensure that its fish are used to sustain its own industry and to feed its own people. The dodges used by European trawlers would be legalised.

The UN’s Economic Commission for Africa has described the EU’s negotiations as “not sufficiently inclusive”. They suffer from a “lack of transparency” and from the African countries’ lack of capacity to handle the legal complexities(7). ActionAid shows that Mandelson’s office has ignored these problems, raised the pressure on reluctant countries and “moved ahead in the negotiations at a pace much faster than the [African nations] could handle.” If these agreements are forced on West Africa, Lord Mandelson will be responsible for another imperial famine.

This is one instance of the food colonialism which is again coming to govern the relations between rich counties and poor. As global food supplies tighten, rich consumers are pushed into competition with the hungry. Last week the environmental group WWF published a report on the UK’s indirect consumption of water, purchased in the form of food(8). We buy much of our rice and cotton, for example, from the Indus Valley, which contains most of Pakistan’s best farmland. To meet the demand for exports, the valley’s aquifers are being pumped out faster than they can be recharged. At the same time, rain and snow in the Himalayan headwaters have decreased, probably as a result of climate change. In some places, salt and other crop poisons are being drawn through the diminishing water table, knocking out farmland for good. The crops we buy are, for the most part, freely traded, but the unaccounted costs all accrue to Pakistan.

Now we learn that Middle Eastern countries, led by Saudi Arabia, are securing their future food supplies by trying to buy land in poorer nations. The Financial Times reports that Saudi Arabia wants to set up a series of farms abroad, each of which could exceed 100,000 hectares. Their produce would not be traded: it would be shipped directly to the owners. The FT, which usually agitates for the sale of everything, frets over “the nightmare scenario of crops being transported out of fortified farms as hungry locals look on.” Through “secretive bilateral agreements,” the paper reports, “the investors hope to be able to bypass any potential trade restriction that the host country might impose during a crisis.” (9)

Both Ethiopia and Sudan have offered the oil states hundreds of thousands of hectares(10,11). This is easy for the corrupt governments of these countries: in Ethiopia the state claims to own most of the land; in Sudan an envelope passed across the right desk magically transforms other people’s property into foreign exchange(12,13). But 5.6 million Sudanese and 10 million Ethiopians are currently in need of food aid. The deals their governments propose can only exacerbate such famines.

None of this is to suggest that the poor nations should not sell food to the rich. To escape from famine, countries must enhance their purchasing power. This often means selling farm products, and increasing their value by processing them locally. But there is nothing fair about the deals I have described. Where once they used gunboats and sepoys, the rich nations now use chequebooks and lawyers to seize food from the hungry. The scramble for resources has begun, but – in the short term at any rate – we will hardly notice. The rich world’s governments will protect themselves from the political cost of shortages, even if it means that other people must starve.

References:

1. Mike Davis, 2001. Late Victorian Holocausts: El Nino Famines and the Making of the Third World. Verso, London.

2. ActionAid, 11th August 2008. SelFISH Europe. http://www.illegal-fishing.info/uploads/ActionAidSelFISHEurope.pdf

3. ibid.

4. ibid.

5. Vlad M. Kaczynski and David L. Fluharty, March 2002. European policies in West Africa: who benefits from fisheries agreements? Marine Policy, Volume 26, Issue 2, pp75-93.
doi:10.1016/S0308-597X(01)00039-2

6. Tim Judah, 1st August 2001. The battle for West Africa’s fish. http://news.bbc.co.uk/1/hi/world/africa/1464966.stm

7. UNECA, EPA Negotiations: African Countries Continental Review, African Trade Policy Centre, February 2007. Quoted by ActionAid, ibid.

8. Ashok Chapagain and Stuart Orr, August 2008. UK Water Footprint: the impact of the UK’s food
and fibre consumption on global water resources. Volume one. http://assets.panda.org/downloads/wwf_uk_footprint.pdf

9. Javier Blas and Andrew England, 19th August 2008. Foreign fields: Rich states look beyond their borders for fertile soil. Financial Times.

10. ibid.

11. Barney Jopson and Andrew England, 11th August 2008. Sudan woos investors to put $1bn in farming. Financial Times.

12. For discussions of how landrights in Africa are overruled, see:

Lorenzo Cotula, September 2007. Legal empowerment for local resource control. International Institute for Environment and Development. http://www.iied.org/pubs/pdfs/12542IIED.pdf

and:

13. Camilla Toulmin, 2006. Securing Land and Property Rights in Africa: Improving the
Investment Climate. Chapter 2.3 of the Global Competitiveness Report, World Economic Forum, Switzerland.