We must tax profits now, freeze energy prices – and if necessary bring suppliers into the public sector

Without urgent action, families are seeing nothing more than pain now and pain later. There is a way through writes former PM and Chancellor Gordon Brown in The Guardian

The energy cap has to be suspended before 26 August, the date on which an approximately 80% increase in our energy bills is expected to be announced. Photograph: Peter Byrne/PA


Time and tide wait for no one. Neither do crises. They don’t take holidays, and don’t politely hang fire – certainly not to suit the convenience of a departing PM and the whims of two potential successors and the Conservative party membership. But with the country already in the eye of a cost of living storm, decisions cannot be put on hold until a changeover on 5 September, leaving impoverished families twisting in the wind.

The energy cap has to be suspended before 26 August, the date on which an approximately 80% increase in our energy bills is expected to be announced. The Department for Work and Pensions computers, which adjust universal credit and legacy benefits, have to be reprogrammed in the next few days if help is to be given to all who need it when prices rise on 1 October. Voluntary cuts in energy usage – good for our green agenda – should, as has happened in Germany and France, be agreed upon now when the weather is good if we are to prevent rationing later when the weather turns bad. And windfall profits and bonuses have to be properly taxed now before the money flees the country.


There were two great lessons I learned right at the start of the last great economic crisis in 2008: never to be behind the curve but be ahead of events; and to get to the root of the problem. And it is not tax cuts or, as yet, a wage-price inflation spiral that are the most urgent priorities for action, but dealing with the soaring costs of fuel and food: the cause of half of our current inflation.

So it is indeed urgent that the candidates to be prime minister – and the current prime minister and chancellor – meet to make not just one or two but several urgently needed decisions: to suspend and fundamentally reform the energy price cap; to agree October payments for those who will not be able to afford to turn up their heating; to home in on alternative supplies abroad and open up appropriate storage facilities at home; to agree voluntary energy reductions; and to help pay for these measures with a watertight windfall tax on energy companies and a tax on the high levels of City bonus payments. For if we could remove the opportunity to avoid or opt out, as we did when imposing the windfall tax on privatised utilities in 1997 and the banker bonus levy of 2009, we could raise not just £5bn but as much as £15bn. This would be enough, for example, to give nearly 8 million low-income families just under £2,000 each.

All these measures should be based on a clear set of principles: that the right to a warm home is a human right; that we should do most for those who have least; and that no energy retailer should be allowed to additionally profit from the crisis.

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Larry Elliott


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What’s more, British ministers – and no one has yet grasped this – should also be leading the way, as we did in 2009, in demanding coordinated international action with an emergency G20 early in September to address the fuel, food, inflation and debt emergencies. These are global problems that can only be fully addressed by globally coordinated solutions.

Tuesday’s forecast from Cornwall Insight of a £4,266 average annual energy price by January is remarkable. It means, as an immediate analysis carried out by Jonathan Bradshaw and Antonia Keung shows, that more than half of British households, 54%, will be in fuel poverty by October and two-thirds, 66%, by January. Six million households, an astonishing number, will be forced to pay an unprecedented 25% of their income in fuel costs and 4.4 million will be subject to a virtually unaffordable 30%.

So instead of allowing Ofgem to announce an increase on a scale that will send shock waves through every household, the government should pause any further increase in the cap; assess the actual costs of the energy supplies being sold to consumers by the major companies; and, after reviewing the profit margins, and examining how to make standing charges and social tariffs more progressive, negotiate separate company agreements to keep prices down. They should work with businesses to cut consumption, as is happening in France and Spain, which have imposed their own cap on energy prices, dictated more by what people can afford than the current wholesale gas price in the marketplace.

And if the companies cannot meet these new requirements, we should consider all the options we used with the banks in 2009: guaranteed loans, equity financing and, if this fails, as a last resort, operate their essential services from the public sector until the crisis is over.

With one of our main suppliers, Norway, seeking to retain its own gas for domestic use and France running into problems with its nuclear reactors, we are already running out of time to negotiate new deals with other international suppliers. And we are already missing out of additional capacity from Qatar, which has gone to mainland Europe. Over time, we can and must increase domestic production, and agree on a home insulation programme with the same urgency as our vaccination programme.

It’s true that Britain’s decade-long low growth, caused by low investment, has made us vulnerable to skill shortages and supply-side bottlenecks and thus higher inflation than our competitors. But most of the current rise in inflation has been generated from energy and food prices caused by the war in Ukraine and so removing the Bank of England’s independence is merely an exercise in blame shifting, as is direct criticism of the Treasury which, in my view, will take its lead from ministers.

It is the government that sets the inflation target and appoints the Bank’s main decision-makers. And it is the duty of government in a crisis to send the Bank an open letter telling it to set out a clear pathway over the coming years to return to stable prices. On the basis of an agreed inflation trajectory back to 2%, we should consider agreeing year-on-year wage settlements – starting with a flat rate of between £2-3,000 this year – so that hardworking families, especially those on the lowest incomes, can afford their energy bills without being plunged into poverty.

The truth is that without a plan the government is lurching from one crisis to another, failing to address the anxieties of families who see nothing more than pain now and pain later. But there is a way through from pain today to gain tomorrow, not just through the immediate relief I propose but in a clear strategy to move us from the 1.4% annual growth that the Conservatives have achieved back to a 2.5% trend growth rate. This is the one way to permanently end the cost of living crisis that British families have had to endure through an austerity decade.

No one can be secure when millions feel insecure and no one can be content when there is so much discontent. Churchill once said that those who build the present in the image of the past will utterly fail to meet the challenges of the future. Only bold and decisive action starting this week will rescue people from hardship and reunite our fractured country.

A Eurosceptic hero alongside sainted Maggie? It's got to be Gordon Brown

The judgments for which Gordon Brown was mocked look rather different now we've seen David Cameron in action

• 
• • Jonathan Freedland
  • guardian.co.uk, Tuesday 8 November 2011 21.00 GMT
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Gordon Brown and his wife Sarah say farewell to the German chancellor, Angela Merkel, at a meeting at No 10 on the eve of the 2009 G20 summit. Photograph: Dan Kitwood/Getty Images

Few arguments are more unfashionable than the one I am about to make: the case for Gordon Brown. Unfashionable because, 18 months after he left office having led Labour to its second worst result since 1918, Brown still arouses intense loathing. At the Conservative party conference I saw otherwise calm Tories foam with anger at the mention of the former prime minister, furiously tearing away at his every trait, personal and political. That hatred is outdone in some corners of the Labour forest by diehard Blairites still seething at the memory of how Brown thwarted their hero in Downing Street before chasing him out of it.
Illustration by Belle Mellor
With enemies on both sides, that leaves few defenders in the press, a fact compounded by the ex-PM's near-total invisibility, his appearances in the Commons rare. The torrent of memoirs from colleagues, Alistair Darling's the latest, have only damaged his reputation still further.

Not many would attempt to push aside the mountain of anecdotes detailing Brown's impossible behaviour as both colleague and boss. Even his most ardent admirers now accept that Gordon Brown was temperamentally unsuited to the job of prime minister.

And yet posterity's judgment of leaders does not rest solely in their hands. The conduct of their successors matters too: Clinton looked better after George W. History may yet have similar second thoughts about Brown, reviewing his record in the light of what has followed.

Take last week's fiasco of a G20 meeting in Cannes, which did little to solve the crises in Greece and Italy, and whose most enduring legacy may prove to be off-mic comments made by the host, Nicolas Sarkozy. Contrast that with the meeting of the same group chaired by Brown in London in April 2009, which agreed a $5tn stimulus to the world economy and was duly hailed for preventing a global recession tipping over into a global depression. A year later the highly respected Brookings Institution predicted "that in coming years, the London G20 summit will be seen as the most successful summit in history".

Part of that was good fortune on Brown's part: in 2009 the US and Germany were in broad agreement on what needed to be done. But much of it was down to Brown's own actions as chair. The very attributes that infuriated his domestic colleagues were put to their best use: he worked around the clock preparing for that summit, hectoring, manoeuvring and bullying his fellow world leaders until they had buckled to his will. These were the same behind-the-scenes methods he had used a decade earlier as he pushed fellow finance ministers to relieve developing countries' debts. It wasn't pretty, it wasn't telegenic, but it was effective.

How very different it is today. It was ironic to hear George Osborne castigate his European counterparts for simply "waiting on developments", since that's exactly what he and David Cameron do at these international powwows. One veteran of the summit circuit says that the two Brits regularly turn up with no agenda of their own, so unlike Brown and, to be fair, Tony Blair, who almost always arrived with a plan, ensuring, in the tired phrase, that Britain punched above its weight. (I'm told that, rather poignantly, Brown is still the man with a plan: he was ready with detailed proposals on jobs and global finance had Osborne not blocked him for the top post at the IMF.)

What is even harder for the Tories to stomach is that it was Brown who delivered what they themselves long insisted was the critical policy goal of the past two decades: keeping Britain out of the euro. It was Brown and his legendary five, impossible-to-meet tests that restrained the gung-ho Blair and ensured Britain stayed out of the single currency. Absurdly, Osborne has tried to give the credit for that to William Hague and his save the pound campaign, which rather forgets that both Hague and his campaign were crushed in 2001. If Eurosceptics want to have a hero whose picture they can put on the wall alongside the sainted Margaret, I'm afraid that it's got to be Gordon. That they can't is testament to a visceral hatred not only of Brown but of his chief lieutenant at the time, whose opposition to the euro was total and decisive: Ed Balls.

Least fashionable of all is the case that Brown was right on the deficit. The coalition's entire programme is predicated on the notion that Brown was incontinent with the nation's money, running up colossal debts. But the rise in borrowing from some £40bn to £170bn was not the result of a crazed spending spree. It was the consequence of the crash of 2008 and the subsequent collapse in economic activity, consisting mostly of increased welfare payments – including the dole for those thrown out of work – and declining tax revenues caused by fewer people earning wages. This was a deficit created by crisis, not by profligacy.

If Brown was not the source of the disease, what about his remedy? His preferred approach – over which he fought with, and lost to, Darling among others – was to secure the recovery first, get the economy ticking over nicely, and only then start attacking the deficit. If the economy were growing, shrinking the deficit would be less painful; tackling it too early risked sucking out demand, choking off the recovery and so, paradoxically, increasing the deficit.

Well, guess who called it right. The last quarter with Brown in charge saw growth of just over 1.1%, surpassing all expectations, with unemployment coming down. The economy appeared to be getting back on its feet. But then the deficit fetishists of the coalition took over and the economy stalled, with more growth in that last Brown quarter than in the next four Cameron quarters combined. Suddenly Brown's insistence that growth had to come first looks prescient and wise.

Indeed, there are judgments big and small for which Brown was mocked at the time but which look rather different now. As PM, he overruled Darling, preferring to increase national insurance rather than VAT. Now, thanks to Osborne, we've seen the calamitous impact of a VAT rise on both inflation and demand. More crucially, Brown realised at the start that the economy had to be central, refusing to be diverted to other projects, however worthy, including promised constitutional reform. Barack Obama may well wish he had made the same call, putting healthcare to one side and focusing exclusively on jobs.

Of course, there was much that Brown got badly wrong. Hailing the end of boom and bust was absurd; relying on City and house price bubbles to raise cash was fatal; failing to run a surplus during the good times foolhardy.

But what's intriguing is that these were mistakes made as chancellor, on which Brown's standing remains high. Perhaps a revision is in order, downgrading his record in No 11 but upgrading his performance in No 10. The Conservatives won't ever undertake such an act of revision, the historians might not do it for decades to come. But Labour, whose future prospects partly depend on knowing what to say about its recent past, should do it much sooner.

The great Murdoch conspiracy

Peter Oborne in The Telegraph on 15 July 2011

When I went to work in the House of Commons as a lobby correspondent nearly 20 years ago, I assumed that the British constitution worked along the lines we had been taught in textbooks at school and university. Which is to say: Britain was a representative democracy; the police were reasonably honest; and the country was governed under the rule of law. I naively expected MPs to be honest and driven by a sense of duty, and ministers to be public-spirited.

During my first few years at Westminster, I came to appreciate that most of my assumptions were hardly true. In particular, it became clear that power had seeped away from the Commons, which had lost many of its traditional functions. It rarely held ministers to account, and ministers no longer made their announcements to the House, as Erskine May, the rulebook of Parliament, insisted they should; instead they were leaked out through journalists.

For a number of years I was a part of this alternative system of government. We would be fed information confidentially and behind the scenes, and treated as if we were more important than elected MPs. All this was very flattering – and professionally very useful – but I couldn’t help sensing that something was wrong. It wasn’t just that the media had taken over the function of Parliament, it also meant that the traditional checks and balances no longer operated. Above all, information could be put into the public domain privately and therefore unaccountably.

All newspapers were guilty of being part of this new system, but it was exploited in particular by the Murdoch press. I believe that when Rupert Murdoch arrived on the British scene in the 1960s, he was, on balance, a force for good. The deference that still defined a great deal of political culture was challenged by Mr Murdoch, and better still he took on and defeated the print unions, which had all but destroyed the British newspaper industry in the 1970s. But by the 1990s, Murdoch’s newspapers were starting to abuse their power. The best way of demonstrating this is perhaps by examining the career of Rebekah Brooks, the chief executive of News International who is in such trouble this week. Her professional career is, in a number of ways, a parable for the times we have lived through.

One of the greatest adventuresses of her era, she emerged on the scene when New Labour under Tony Blair was on the verge of power. During this time she was married to Ross Kemp, the EastEnders actor who was one of the most powerful defenders of New Labour. They lived in south London, emphasising the faux-proletarian credentials that were such an important, if misleading, part of the New Labour message.

As New Labour’s star waned, Rebekah Brooks changed course. She ceased to be the cool, metropolitan figure favoured by New Labour. She moved to Oxfordshire, took up riding and became the central figure in the now notorious Chipping Norton set. Meanwhile, her titles changed their allegiance. The political editor of the Sun might have been deemed to lack the impeccable social credentials demanded by an incoming Tory government. He was replaced by an Old Marlburian.
The identical transfiguration took place at The Times, where Phil Webster, one of the few remaining journalists in Fleet Street who has come up the hard way, was removed. Webster, who had been a favourite of the Blair government, found himself replaced as political editor by Roly Watson, who had been a member of Pop, the exclusive club at Eton, at the same time as David Cameron. A pattern was clear. Rebekah Brooks (like all the News International insiders) attached herself like glue to whichever political party held the ascendancy.
During the Blair years, News International executives, Mrs Brooks among them, would attend the annual Labour Party conference, but they were scarcely treated as journalists. When Tony Blair gave his leadership speech, they would be awarded seats just behind the cabinet, as if they had been co-opted into the Government. Arguably they had. The first telephone call that Blair made after he had escaped from the conference hall was routinely to Rupert Murdoch himself. And when ministers who had been favoured by the Murdoch press left office, they would be rewarded. David Blunkett and Alastair Campbell were both given columns on News International publications.
A version of this process repeated itself when Gordon Brown became prime minister, with Rebekah Brooks attending Sarah Brown’s cringe-making “pyjama party” at Chequers. It may not suit Mr Brown, who made such a passionate speech in the Commons yesterday, to remember it but he, too, was part of the Murdoch system of government. And so was David Cameron, who last October threw a party for his closest friends to celebrate his 44th birthday. Reportedly everyone present had known the Prime Minister all his adult life – with the exception of Mrs Brooks.
There was a very sinister element to these relationships. At exactly the same time that Mrs Brooks was getting on so famously with the most powerful men and women in Britain, the employees of her newspapers (as we now know) were listening in to their voicemails and illicitly gaining access to deeply personal information.
One News of the World journalist once told me how this information would be gathered into dossiers; sometimes these dossiers were published, sometimes not. The knowledge that News International held such destructive power must have been at the back of everyone’s minds at the apparently cheerful social events where the company’s executives mingled with their client politicians.
Let’s take the case of Tessa Jowell. When she was Culture Secretary five years ago, News International hacked into her phone and spied on her in other ways. What was going on amounted to industrial espionage, since Ms Jowell was then charged with the regulation and supervision of News International, and the media group can scarcely have avoided discovering commercially sensitive information, even though its primary purpose was to discover details about Ms Jowell’s private life.
Yet consider this: Ms Jowell was informed of this intrusion at the time and said nothing. More curious still, she retained her friendship with Rebekah Brooks and other News International figures. Indeed, Ms Jowell appears to have been present at the Cotswolds party thrown by Matthew Freud, son-in-law of Rupert Murdoch, only 10 days ago.
James Murdoch, heir apparent to the Murdoch empire, was also present. These parties were, in effect, a conspiracy between the British media and the political class against the country as a whole. They were the men and women who governed Britain and decided who was up and who was out. Government policy was influenced and sometimes created. I doubt very much whether Britain would have invaded Iraq but for the foolhardy support of the Murdoch press.
The effect on government policy was wretched. Decisions were determined by consideration of the following day’s headlines rather than sound analysis. Furthermore, private favours were dispensed; Blair when prime minister spoke to his Italian counterpart Silvio Berlusconi about one of Murdoch’s business deals in Italy. Of course it was all kept secret, though details did sometimes leak out. All recent prime ministers have insisted that their meetings with Murdoch were confidential and did not need to be disclosed, as if they were somehow private affairs. Mercifully, Cameron – who has partially emerged from the sewer thanks to his Commons statement – has put an end to this concealment.
It has taken the horror of the revelations concerning the targeting by the Murdoch empire of the family of Milly Dowler, terrorist victims and even relatives of British war dead to bring this corrupt, complicit, and conspiratorial system of government to light.
The process of exposure has taken far too long, but there is at last hope. Two years ago, Rebekah Brooks contemptuously turned down an invitation to give evidence to MPs about how she operated. Next week, Rupert Murdoch, his son James and the reluctant Brooks will all be dragged before them.
The system of collaboration between an over-mighty press and timorous politicians is being exposed. There is hope that we can return to a more decent system of government; that Parliament can reassert its rights, and that ministers will make their decisions for the right reasons and not simply to ingratiate themselves with Murdoch and his newspaper editors. Perhaps the sickness that has demeaned and distorted British politics for the last two decades is at last being challenged and confronted.

This media is corrupt – we need a Hippocratic oath for journalists

Our job is to hold power to account. Instead, most of the profession simply ventriloquises the concerns of the elite

• 
• • George Monbiot
  • guardian.co.uk, Monday 11 July 2011 21.30 BST
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Is Murdoch now finished in the UK? As the pursuit of Gordon Brown by the Sunday Times and the Sun blows the hacking scandal into new corners of the old man's empire, this story begins to feel like the crumbling of the Berlin Wall. The naked attempt to destroy Brown by any means, including hacking the medical files of his sick baby son, means that there is no obvious limit to the story's ramifications. Illustration by Daniel Pudles The scandal radically changes public perceptions of how politics works, the danger corporate power presents to democracy, and the extent to which it has compromised and corrupted the Metropolitan police, who have now been dragged in so deep they are beginning to look like Murdoch's private army. It has electrified a dozy parliament and subjected the least accountable and most corrupt profession in Britain – journalism – to belated public scrutiny. The cracks are appearing in the most unexpected places. Look at the remarkable admission by the rightwing columnist Janet Daley in this week's Sunday Telegraph. "British political journalism is basically a club to which politicians and journalists both belong," she wrote. "It is this familiarity, this intimacy, this set of shared assumptions … which is the real corruptor of political life. The self-limiting spectrum of what can and cannot be said … the self-reinforcing cowardice which takes for granted that certain vested interests are too powerful to be worth confronting. All of these things are constant dangers in the political life of any democracy." Most national journalists are embedded, immersed in the society, beliefs and culture of the people they are meant to hold to account. They are fascinated by power struggles among the elite but have little interest in the conflict between the elite and those they dominate. They celebrate those with agency and ignore those without. But this is just part of the problem. Daley stopped short of naming the most persuasive force: the interests of the owner and the corporate class to which he belongs. The proprietor appoints editors in his own image – who impress their views on their staff. Murdoch's editors, like those who work for the other proprietors, insist that they think and act independently. It's a lie exposed by the concurrence of their views (did all 247 News Corp editors just happen to support the invasion of Iraq?), and blown out of the water by Andrew Neil's explosive testimony in 2008 before the Lords select committee on communications. The papers cannot announce that their purpose is to ventriloquise the concerns of multimillionaires; they must present themselves as the voice of the people. The Sun, the Mail and the Express claim to represent the interests of the working man and woman. These interests turn out to be identical to those of the men who own the papers. So the rightwing papers run endless exposures of benefit cheats, yet say scarcely a word about the corporate tax cheats. They savage the trade unions and excoriate the BBC. They lambast the regulations that restrain corporate power. They school us in the extrinsic values – the worship of power, money, image and fame – which advertisers love but which make this a shallower, more selfish country. Most of them deceive their readers about the causes of climate change. These are not the obsessions of working people. They are the obsessions thrust upon them by the multimillionaires who own these papers. The corporate media is a gigantic astroturfing operation: a fake grassroots crusade serving elite interests. In this respect the media companies resemble the Tea Party movement, which claims to be a spontaneous rising of blue-collar Americans against the elite but was founded with the help of the billionaire Koch brothers and promoted by Murdoch's Fox News. Journalism's primary purpose is to hold power to account. This purpose has been perfectly inverted. Columnists and bloggers are employed as the enforcers of corporate power, denouncing people who criticise its interests, stamping on new ideas, bullying the powerless. The press barons allowed governments occasionally to promote the interests of the poor, but never to hamper the interests of the rich. They also sought to discipline the rest of the media. The BBC, over the last 30 years, became a shadow of the gutsy broadcaster it was, and now treats big business with cringing deference. Every morning at 6.15, the Today programme's business report grants executives the kind of unchallenged access otherwise reserved for God on Thought for the Day. The rest of the programme seeks out controversy and sets up discussions between opponents, but these people are not confronted by their critics. So what can be done? Because of the peculiar threat they present to democracy there's a case to be made for breaking up all majority interests in media companies, and for a board of governors, appointed perhaps by Commons committee, to act as a counterweight to the shareholders' business interests. But even if that's a workable idea, it's a long way off. For now, the best hope might be to mobilise readers to demand that journalists answer to them, not just their proprietors. One means of doing this is to lobby journalists to commit themselves to a kind of Hippocratic oath. Here's a rough stab at a first draft. I hope others can improve it. Ideally, I'd like to see the National Union of Journalists building on it and encouraging its members to sign. 'Our primary task is to hold power to account. We will prioritise those stories and issues which expose the interests of power. We will be wary of the relationships we form with the rich and powerful, and ensure that we don't become embedded in their society. We will not curry favour with politicians, businesses or other dominant groups by withholding scrutiny of their affairs, or twisting a story to suit their interests. "We will stand up to the interests of the businesses we work for, and the advertisers which fund them. We will never take money for promulgating a particular opinion, and we will resist attempts to oblige us to adopt one. "We will recognise and understand the power we wield and how it originates. We will challenge ourselves and our perception of the world as much as we challenge other people. When we turn out to be wrong, we will say so." I accept that this doesn't directly address the power relations that govern the papers. But it might help journalists to assert a measure of independence, and readers to hold them to it. Just as voters should lobby their MPs to represent them and not just the whips, readers should seek to drag journalists away from the demands of their editors. The oath is one possible tool that could enhance reader power. If you don't like it, suggest a better idea. Something has to change: never again should a half a dozen oligarchs be allowed to dominate and corrupt the life of this country.