The DWP has become Britain’s biggest debt collector.

Gordon Brown in The Guardian

Prime Minister Sunak talks about the need for “compassion” from the government this winter. But how far do social security benefits have to fall before our welfare system descends into a form of cruelty?

Take a couple with three children whose universal credit payment is, in theory, £46.11 a day. However, when their payment lands they have just £35, because around a quarter of their benefit has been deducted to pay back the loan they had to take out on joining universal credit to cover the five weeks they were denied benefit. And an extra 5% has been deducted as back payment to their utility company. According to Department of Work and Pensions (DWP) rules, money can be deducted for repayment of advance or emergency loans, and even on behalf of third parties for rent, utilities and service charge payments.

With gas and electricity likely to cost, at a minimum, £7 on cold days like today, and with a council tax contribution to be paid on top, they find that they have just £25. 80 a day left over, or £5.16 per person, to pay for food and all other essentials. Even if the Scottish child poverty payment comes their way, clothes, travel, toiletries and home furnishings remain out of reach. Parents like them are just about the best accountants I could ever meet , but you can’t budget with nothing to budget with. And that’s why so many have had to tell their children they can’t afford presents this Christmas. No wonder they need the weekly bag of food they get from the local food bank. But they also need a toiletries and hygiene bank, a clothes bank, a bedding bank, a home furnishings bank, and a baby bank.

The DWP has now become the country’s biggest debt collector, seizing money that should never have had to be paid back, from people who cannot afford to pay anyway. In fact, the majority of families on universal credit do not receive the full benefit that the DWP advertises. More than 20% is deducted at source from each benefit payment made to a million households, leaving them surviving on scraps and charity as they run out of cash in the days before their next payment. In total, 2 million children are in families suffering deductions.

Gordon Brown with workers at the Big Hoose multi-bank project, Fife, 8 November 2022. Photograph: Murdo MacLeod/The Guardian

When the money runs out, and the food bank tokens are gone, parents become desperate and ashamed that their children cannot be fed, and fall victim to loan sharks hiding in the back alleys who exploit hardship and compound it, and prey on pain and inflame it.

The case for each community having its own multi-bank – its reservoir of supplies for those without – is more urgent this winter than at any time I have known. Since the Trussell Trust’s brilliant expansion of UK food banks, creative local and national charities have pioneered community banks of all kinds offering free clothes, furnishings, bedding, electrical goods and, in the case of the national charity In Kind Direct, toiletries.

In Fife, Amazon, PepsiCo, Scotmid Fishers and other companies helped to set up a multi-bank. It’s a simple idea that could be replicated nationwide: they meet unmet needs by using unused goods. The companies have the goods people need, and the charities know the people who need them. With a coordinating charity, a warehouse to amass donations and a proper referral system, multi-banks can ensure their goods alleviate poverty.

But the charities know themselves that they can never do enough. With the state privatisations of gas, water, electricity and telecoms, the government gave up on responsibility for essential national assets. But now, with what is in effect the privatisation of welfare, our government is giving up on its responsibility to those in greatest need – passing the buck to charities, which cannot cope. Just as breadwinners cannot afford bread, food banks are running out of food.

Charities, too,are at the mercy of exceptionally high demand and the changing circumstances of donors whose help can be withdrawn as suddenly as it has been given. And so while voluntary organisations – and not the welfare state – are currently our last line of defence, the gap they have to bridge is too big for them to ever be the country’s safety net.

According to Prof Donald Hirsch and the team researching minimum income standards at Loughborough University, benefit levels for those out of work now fall 50% short of what most of us would think is a minimum living income, with their real value falling faster in 2022 than at any time for 50 years since up-ratings were introduced. And still 800,000 of the poorest children in England go without free school meals.

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I’m so cold I live in my bed – like the grandparents in Charlie and the Chocolate Factory
Marin

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When it comes to helping with heating, the maximum that any family will receive, no matter its size, is £24 a week emergency help to cover what the government accepts is the £50 a week typical cost of heating a home. From April, the extra payments will be even less – just £16 to cover nearly the typical £60 a week they now expect gas and electricity to cost. And then, as Jeremy Hunt says, help with heating will become a thing of the past.

One hundred years ago, Winston Churchill was moved to talk of the unacceptable contrast between the accumulated excesses of unjustified privilege and “the gaping sorrows of the left-out millions”. Our long term priority must be to persuade a highly unequal country of the need for a decent minimum income for all, but our immediate demand must be for the government to suspend for the duration of this energy crisis the deductions that will soon cause destitution.

Ministers have been forced to change tack before. In April 2021 the government reduced the cap on the proportion of income deducted from 30% to 25%. During the first phase of Covid, ministers temporarily halted all deductions. In April, they discouraged utility firms from demanding them, but deductions as high as 30% of income are still commonplace.

There is no huge cost to the government in suspending deductions, for it will get its money back later. But this could be a lifesaver for millions now suffering under a regime that seems vindictive beyond austerity. Let this be a Christmas of compassion, instead of cruelty.

Bangladesh goes to IMF. How deep is its crisis, comparison with Sri Lanka, Pakistan & India?

 

Publicly owned energy minnows take on big six in troubled UK market

Adam Vaughan in The Guardian


A wave of new publicly owned companies is taking on the big six energy suppliers, as local authorities search out new revenue and seek to restore faith in public services and tackle fuel poverty.
Islington council last week launched a not-for-profit energy firm, London’s first municipal operator in more than a century, while Doncaster’s energy company will start early next month.

Portsmouth is also on the verge of becoming the first Conservative-controlled council to launch one, to bring down residents’ bills as well as bringing investment to the city.

The first and best-known publicly owned energy companies, Robin Hood Energy in Nottingham and Bristol Energy, started two years ago. But the growing trend came to the fore this month when Nicola Sturgeon promised to create a Scottish public energy company by 2021.

“No shareholders to worry about. No corporate bonuses to consider. It would give people – particularly those on low incomes – more choice and the option of a supplier whose only job is to secure the lowest price for consumers,” Scotland’s first minister said, in an echo of the marketing used by the councils who have already started their own energy companies.

Sturgeon’s firm will be entering an increasingly crowded space: publicly owned firms include Liverpool’s Leccy, Derby’s Ram, and Leeds’ White Rose. Councils in Sussex are clubbing together to launch Your Energy Sussex latter this year.

The driving forces for these councils stepping into the complex, heavily regulated energy space are largely twofold. One is the need to create a new revenue stream in a time of austerity, as well as rebuilding the public sphere – councils are perhaps most visible to residents when they close libraries and cut other services.

But there is also a political project afoot as well, as Labour-controlled councils such as Nottingham push an agenda that has since been picked up by Jeremy Corbyn during the last election.

There is also genuine concern over fuel poverty, and a hope that local authorities will be more trusted than the usual energy suppliers, that even Theresa May says have ripped customers off.

“It’s about councils trying to provide a trusted and better service for people to switch. We want a challenger model to the big six,” said Labour MP Caroline Flint, whose Doncaster constituency will see the launch of publicly owned Great Northern Energy on 7 November.

The flurry of such firms showed Labour’s manifesto pledge of a publicly owned energy supplier in each region was happening regardless of the party’s failure to win power in June’s snap general election, Flint said.

Tackling the growing amount of households in fuel poverty, which number 2.5 million in England and Wales, is another big motivation.

Steve Battlemuch, chair of the board of Robin Hood Energy and a Labour councillor, said: “Nottingham has a lot of fuel poverty, lot of people on prepayment meters [which people in energy debt are often moved on to]. That was what drove us: coming into the market and driving down prices for the customer.”

Like other public firms, part of his sales pitch is that there are no corporate masters to pay.

“There’s no shareholder bonuses, because there’s no shareholder apart from Nottingham city council. There’s no director bonuses. I had a cupcake on our first anniversary,” he said.

Peter Haigh, managing director of Bristol Energy, said his organisation was more inclusive than private companies, and its physical presence in the city was a big attraction.

“Customers can and do walk in, sign up and pay a bill. That often attracts customers who have never switched, people who can pop in face to face,” he said.

Part of the reason councils are getting into energy is the barriers to market are not as great as they once were.

Mark Coyle, strategy director of Utiligroup, which has provided services to most of the publicly owned energy companies, said: “We’ve been able to lower the barriers for them, without lowering compliance.”

But while the sector appears to be burgeoning, combined these companies are a minnow compared with the blue whales that are the big six firms, which between them account for 80% share of the market.

Bristol Energy is biggest publicly owned energy supplier, with about 110,000 customers; Robin Hood has just over 100,000. Both have created more than 100 jobs locally, but neither has yet recovered their start-up costs.

Moreover, while such firms appear to be proliferating, most are simply rebranding off Robin Hood rather than setting up as fully licensed suppliers which can buy energy on the wholesale market. The approach has its critics.

“Islington are doing a good thing but it’s a shame that they’ve had to go to Nottingham to buy the energy,” said Caroline Russell, a Green party London assembly member.

Sadiq Khan, London’s mayor, has promised to create an energy company for Londoners, but has been slow to deliver.

Last month he was advised by experts to piggyback off an existing supplier, rather than create his own licensed company. While cheaper and quicker to do, it would also mean he had less power and flexibility to offer something genuinely new and different compared with the 50-plus private firms already in the market.

Nigel Cornwall, founder of energy analysts Cornwall Insight, said that while he was supportive of publicly owned energy companies, it was revealing that many councils were opting to ride on Robin Hood’s coat-tails rather than set up their own licensed firm.

“This is high-risk stuff. The sector is complicated. You [the council] probably don’t have the resources. You’ve probably underestimated the costs. And that’s with costs of entry falling dramatically,” he said.

Cornwall said he was also sceptical as to whether the companies would be sustainable and would become a permanent fixture in the market – but that would not stop them trying.

Battlemuch said: “What we need to do is break through into the mass market. That’s what we’re trying to do.”

Food banks in the UK: cowardly coalition can't face the truth about them

Conservatives cannot admit a real fear of hunger afflicts thousands

• 
• • Nick Cohen
  • The Observer, Saturday 28 December 2013 18.29 GMT

Donated food at a a food bank. Photograph: Christopher Thomond for the Guardian

I went to the Trussell Trust food bank round the corner from the Observer's offices just before Christmas. If I hadn't been reading the papers, I would have assumed it represented everything Conservatives admire. As at every other food bank, volunteers who are overwhelmingly churchgoers ran it and organised charitable donations from the public.

What could be closer to Edmund Burke's vision of the best of England that David Cameron says inspired his "big society"? You will remember that in his philippic against the French revolution, Burke said his contemporaries should reject its dangerously grandiose ambitions , and learn that "to love the little platoons we belong to in society, is the first principle (the germ, as it were) of public affections". Yet when confronted with displays of public affection – not in 1790 but in 2013 – the coalition turns its big guns on the little platoons.

It would have been easy for the government to say that it was concerned that so many had become so desperate. This was Britain, minsters might have argued, not some sun-beaten African kleptocracy. Regardless of politics, it was a matter of common decency and national pride that Britain should not be a land where hundreds of thousands cannot afford to eat. The coalition might not have meant every word or indeed any word. But it would have been in its self-interest to emit a few soothing expressions of concern, and offer a few tweaks to an inhumanely inefficient benefits system, if only to allay public concern about the rotten state of the nation.

But the coalition is not even prepared to play the hypocrite. Iain Duncan Smith showed why he never won the VC when he was in the Scots Guards when he refused to face the Labour benches as the Commons debated food banks on 18 December. He pushed forward his deputy, one Esther McVey, a former "TV personality". All she could say was that hunger was Labour's fault for wrecking the economy. She gave no hint that her government had been in power for three years during which the number attending food banks had risen from 41,000 in 2010 to more than 500,000. Her remedy was for the coalition to help more people into work.

If she had bothered talking to the Trussell Trust, it would have told her that low-paid work is no answer. Its 1,000 or so distribution points serve working families, who have no money left for food once they have paid exorbitant rent and fuel bills.

But then no one in power wants to talk to the trust. As the Observer revealed, Chris Mould, its director, wrote to Duncan Smith asking if they could discuss cheap ways of reducing hunger: speeding up appeals against benefit cuts; or stopping the endemic little Hitlerism in job centres, which results in unjust punishments for trivial transgressions. In other words, a Christian charity, which was turning the "big society" from waffle into a practical reality, was making a civil request. Duncan Smith responded with abuse. The charity's claims to be "non-partisan" were a sham, he said. The Trussell Trust was filled with "scaremongering" media whores, desperate to keep their names in the papers. But he had their measure.

Oh, yes. "I understand that a feature of your business model must require you to continuously achieve publicity, but I'm concerned that you are now seeking to do this by making your political opposition to welfare reform overtly clear."

Ministers will not confess to making a mistake for fear of damaging their careers. But it is not only their reputations but an entire world view that is at stake. Put bluntly, the Conservatives hope to scrape the 2015 election by convincing a large enough minority that welfare scroungers are stealing their money. They cannot admit that a real fear of hunger afflicts hundreds of thousands. Hence, Lord Freud, the government's adviser on welfare reform, had to explain away food banks by saying: "There is an almost infinite demand for a free good."

My visit to the food bank showed that our leaders' ignorance has become a deliberate refusal to face a social crisis. Of course, the volunteers help working families and students as well as the unemployed and pensioners. Everyone apart from ministers knows about in-work poverty. As preposterous is the Tory notion that the banks are filled with freeloaders.

You cannot just swan in. You get nothing unless a charity or public agency has assessed your need and given you a voucher. The trust is at pains to make sure that the beggars – for hundreds of thousands of beggars is what Britain now has – receive a balanced diet. To feed a couple for five days, it gives: one medium pack of cereal, 80 teabags, a carton of milk, two cans apiece of soup, beans, tomatoes and vegetables, two portions of meat and fish, fruit, rice pudding, sugar, pasta and juice. That this is hardly a feast is confirmed by the short list of "treats", which, "when available", consist of "one bar of chocolate and one jar of jam".

Sharon Cumberbatch, who runs the centre, tells me that she is so worried that shame will deter her potential clients that she packages food in supermarket bags so no one need know its source. The clients, when I met them, reinforced her point that they were not the brazen freeloaders of Tory nightmare. They trembled when they told me how they did not know how they would make it into the new year.

Most of all, it was the volunteers who were a living reproof to a coalition that can cannot correct its errors. They not only distribute food but collect it. They stand outside supermarkets all day asking strangers to buy the tinned food they need or hand out leaflets in the streets or plead with businesses to help. Sharon Cumberbatch is unemployed but she works to help others for nothing. Her colleagues said they manned the bank because hunger in modern Britain was a sign of a country that was falling apart. Or as one volunteer, Richard Moorhead, put it to me: "I am gobsmacked that people are going hungry. I'm ashamed."

The coalition can call such attitudes political if it wants – in the broadest sense they are. But they are also patriotic, neighbourly, charitable and kind. They come from people who represent a Britain the Conservative party once claimed a kinship with, and now cannot bring itself to talk to.

Was the Petrol Price rigged too?

By Rowena Mason, Emma Rowley in The Telegraph

9:00PM BST 15 Jul 2012

Concerns are growing about the reliability of oil prices, after a report for the G20 found the market is wide open to “manipulation or distortion”.

Traders from banks, oil companies or hedge funds have an “incentive” to distort the market and are likely to try to report false prices, it said.

Politicians and fuel campaigners last night urged the Government to expand its inquiry into the Libor scandal to see whether oil prices have also been falsely pushed up.

They warned any efforts to rig the oil price would affect how much drivers pay at the pump, which soared to a record high of 137p per litre of unleaded earlier this year.

Robert Halfon, who led a group of 100 MPs calling for lower fuel prices, said the matter “needs to be looked at by the Bank of England urgently”

“We need to know whether the oil price has been manipulated in a similar way to Libor,” the MP for Harlow said. “This impacts on millions of people all round the country concerned about the price of petrol at the pumps.”

Petrol retailers use oil price “benchmarks” to decide how much to pay for future supplies.

The rate is calculated by data companies based on submissions from firms which trade oil on a daily basis – such as banks, hedge funds and energy companies.

However, like Libor – the interest rate measure that Barclays was earlier this month found to have rigged – the market is unregulated and relies on the honesty of the firms to submit accurate data about all their trades.

This is one of the major concerns raised in the G20 report, published last month by the International Organisation of Securities Commissions (IOSCO).

In the study for global finance ministers, including George Osborne, the regulator warns that traders have opportunities to influence oil prices for their own profit.

It points out that the whole market is “voluntary”, meaning banks and energy companies can choose which trades to make public.

IOSCO says this “creates opportunity for a trader to submit a partial picture in order to influence the [price] to the trader’s advantage”.

In an earlier report, the regulator concluded: “It is open to companies to report only those deals that are in their own best interests for the rest of the market to see.”

The price reporting agencies, Platts and Argus, argue they employ journalists to weed out false data submitted by oil traders.

IOSCO says reporters are “well-aware that traders have an incentive to push the market one way or another and do not generally believe everything they are told”.

However it points out this system is heavily reliant on the “experience and training” of journalists to make a judgement about what the oil price should be.

Further alarm bells are being sounded by US regulators, who have already pointed out the rate-rigging scandal could spread to the oil market.

Scott O’Malia, a top official at the US Commodities Futures Commission, has drawn attention to the “striking similarity” between the potential for manipulating oil and Libor.

British regulators carrying out the Wheatley Review into the Libor scandal have this week signalled they will look into whether other markets were skewed.

Paul Tucker, the Bank of England’s deputy governor, told MPs that Barclays’ abuse of the Libor system may be only one part of the banks’ dishonesty over crucial financial information.

Politicians last night called on the Bank of England and the Government to take heed of IOSCO’S finding about the oil market to prevent another crisis of confidence in the banks.

Lord Oakeshott, the former Liberal Democrat Treasury spokesman, said the oil price system ought to be examined in the wake of the Libor scandal.

“Clearly it’s right we must shine a light on how other crucial benchmark prices are reported, especially when they affect the cost of living for millions of motorists,” he said.

Brian Madderson, chairman of the Petrol Retailers’ Association, also called for an investigation into the “alarming” conclusions of the G20 report.

“All the petrol retailers buy their products based on Platts prices,” he said. “If IOSCO thinks the price is open to manipulation it could well be and that would affect prices on the forecourts.”

Banks are also calling for reform of the oil price system, amid fears that it is open to abuse by a minority of traders.

Simon Lewis, chief executive of the Global Financial Markets Association, has raised concerns about the “opaque” way the oil price is worked out.

In a letter to IOSCO, he said price reporting agencies may not be as impartial as they claim, because they take fees from banks and oil companies to provide information.

“Incentives may arise to favour those who pay greater subscriber fees or provide greater access to market information,” he said.

Some experts, such as Raymond Learsy, a former commodities trader and author of Oil and Finance, have been warning for years that the oil market is open to corruption.

“Given how important Libor is, if that can be manipulated, then why can’t oil be manipulated?” he said. “The price lends itself to manipulation. The oil price is not a true reflection of supply and demand.”

The reporting agencies have hit back at claims their prices are open to distortion. In a joint statement, Platts and Argus said there are “fundamental differences” in the way Libor and oil prices are reported.

“Independent price reporting organisations are independent of and have no vested interest in the oil and energy markets,” they said. “Their ownership is transparent, and strict internal governance separates editorial and commercial functions. Independent price reporting organisations are not market participants, nor providers of transaction execution, clearing or settlement services.”

Platts added that there are four main differences between oil prices and Libor – the quality of its data, its independence, competition between reporting agencies and the transparency of its methodology.

Civil Aviation in India

India mulls over 49% overseas share in airlinesBy Raja Murthy

MUMBAI - The Indian government on April 12 postponed to this week an eagerly awaited decision to allow foreign airlines own up to 49% stake in Indian carriers. But overseas funding alone is unlikely to rescue India’s struggling US$12 billion civil aviation industry.

It's more a case of mismanaged potential that has caused five out of the six Indian carriers, except Indigo, to have accumulated losses of nearly $2 billion in the past two years. India, the world's ninth largest civil aviation market, had passenger traffic doubling  to over 150 million in 2011, from about 73 million in 2005-06.

India aims to be among the world's top three aviation markets within a decade. In between are mountains to climb and some strange oddities to correct - such as building multi-billion dollar luxury airports in an industry dominated by low-cost airlines.

The foreign direct investment (FDI) move, if it materializes as part of the mountain climbing process, could give desperately needed survival cash and breathing time to nearly dead flying companies like Kingfisher Airlines. The Vijay Mallya-promoted carrier is drowning in a debt of $1.3 billion, with no new loans forthcoming, with over 60% of its aircraft fleet grounded and its employees receiving salaries for December 2011 only on April 9.

The state-owned carrier Air India has similar mismanagement woes, but continues to receive public money to bankroll it. On April 12, the government approved 300 billion rupees (US$5.7 billion) as bailout and part of a revival plan for Air India across the next eight years. This after Civil Aviation minister Ajit Singh informed parliament that Air India incurs losses of $1.9 million every day, or over $700 million annually.

Whether Air India would fare better without government ownership is as moot a question as whether more funding, including FDI, could only be more investment down the drain. Waiting to be surgically treated are roots of the problem such as unviable operating costs for airlines.

Unfairly high taxes on aviation fuel have long been a major complaint for India's airline industry. Aviation Turbine Fuel (ATF) continues to be over 50% costlier in India than in Singapore and Malaysia. Fuel costs contribute about 45% of the operational costs of India's airlines.

Yet India's state-owned oil companies sell jet fuel cheaper to international airlines than for domestic flights in Indian airports. Indian Oil, for instance, sells jet fuel at $1,010 per kilo liter for international airlines in Mumbai (March 1, 2012 prices), while domestic airlines pay a pre-tax cost of $1,316.77. International airlines are free from sales tax on aviation fuel, while domestic airlines pay an additional 26% sales tax that local state governments levy.

Instead of the obvious step of reducing aviation fuel taxes to reasonable levels - or to only at least 25% above international levels - the Indian government earlier this year allowed domestic airlines to directly import aviation fuel. That seems as bizarre as asking an impoverished dying patient to go overseas to buy medicine available down the street.

Even more peculiar is that India exports nearly half its production of aviation fuel. According to Ministry of Petroleum data, India exported 4.478 million tonnes of aviation fuel in 2010-2011, out of total aviation fuel production of 9.570 million tonnes,

Fuel costs are only part of the problem. Aviation infrastructure growth appears heading in a direction different from requirements for industry growth. Privatization of metropolitan airports, for instance, resulted in multi-billion dollar upgrades for the Mumbai and Delhi airports, and new airports for Bangalore and Hyderabad. The impressive new airports though are driving up operational costs for a budget airline industry that critically needs low-cost infrastructure.

The spectacular new Terminal 3 of New Delhi's is itself both solution and problem. Built and operated by the Delhi International Airport (P) Ltd (DIAL) - a joint venture consortium of global infrastructure company GMR Group, Airports Authority of India, Fraport and Malaysia Airports Holdings Berhad - Terminal 3 makes Indira Gandhi International Airport (IGI) one of Asia's largest public buildings and the world's second-largest integrated airport, after Beijing Capital International Airport.

The $6 billion Terminal 3, spread along 4 kilometers and with a roof area of 45 acres (18.2 hectares), serves as future investment for Delhi having the world's fastest growing airport passenger traffic. According to the Montreal-based Airport Councils International, Delhi registered passenger traffic growth of 21.77%, faster than Jakarta's 19.2% and Bangkok's 12% growth. This compares impressively to the 1.8% air passenger traffic growth in North America.

But India's airlines and passengers are being asked to pay more airport fees and taxes to recover the multi-billion dollar costs for the new airports. Both Air India and Kingfisher Airlines alone owe the Delhi airport $100.4 million in airport fees. So airport employees are also suffering salary delays.

International carriers are too feeling the pinch. Malaysia's Air Asia, the continent's leading budget airline, announced termination of its flights out of the Delhi and Mumbai airports from March 24 this year, citing excessively high airport and handling fees and aviation fuel costs at these airports. Air Asia continues to fly from five other cities in South India.

The Airports Economic Regulatory Authority has proposed a 280% increase in landing and parking charges at Delhi airport, while the airport operator DIAL wants a 700% increase. Not just low-cost airlines, but Lufthansa, Air France, KLM and British Airways have announced putting on hold expansion plans in India due to the huge hike in operational fees at IGI Terminal 3.

Such headaches were not quite anticipated when an Air Deccan 48-seater ATR turbo-prop aircraft took off from Hyderabad to Vijayawada on September 26, 2003, to unofficially launch low-cost airlines in India. Since then, a heavily loss-making Air Deccan was bought by Kingfisher in 2007, and now a heavily loss-making Kingfisher is looking to sell itself to a foreign carrier.

The pending 49% FDI decision on the governmental anvil is actually a throwback to over six decades ago. In 1951, the government bought a 49% stake in Air India, founded and owned by the Tata Group. The government retained an option to buy another 2% stake and became owner. It did so under the Air Corporations Act of 25 August 1953 that nationalized all private airlines.

Air travel was booming in India in the 1950s, with cheaply available World War II surplus aircraft and India having bountiful skilled air pilots and maintenance crews after the war. The 26-page "Official Airline Guide" of July 1952, published by the Air Transport Association of India, lists schedules for about nine domestic airlines: Air India Ltd (also called The Tata Airline), the Air Services of India (also called the Scindia Airline), Airways (India) Ltd, Bharat Airways (also called the Birla Airline), Deccan Airways, Himalayan Aviation, the Indian National Airways, Kalinga Airlines and Air India International.

In 1953, India had over 20 private airlines, with unstructured growth without proper infrastructure creating market problems similar to the current woes of some domestic airlines. JRD Tata (1904-1993), called the father of civil aviation in the subcontinent, predicated an industry disaster. One of the reasons why the government nationalized the entire airline industry in 1953 was apparently to ward off many private airlines going bankrupt.

Now with Air India saved from bankruptcy with a $5.7 billion gift of public money, the government may as well consider re-privatizing Air India, and selling 49% of the stock back to its original owners the Tata Group.

The $5.7 billion bailout and the 49% FDI decision for overseas investors have better chances of working only if the government ensures there being low-cost operational costs to support low-cost air travel.

(Copyright 2012 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

Climate Justice Requires A New Paradigm

By Vandana Shiva

02 December, 2011
Newleftproject.org

Twenty Years ago, at the Earth Summit, the world’s Governments signed the UN Framework Convention on Climate Change to create a legally binding framework to address the challenge of climate change.

Today, the Green House Gas emissions that contribute to climate change have increased not reduced.

The Climate Treaty is weaker not stronger.

The failure to reduce green house gases is linked to following the flawed route of carbon trading and emissions trading as the main objective of the Kyoto Protocol to the Climate Convention.

The Kyoto Protocol allows industrialized countries to trade their allocation of carbon emissions among themselves (Article 17). It also allows an “investor” in an industrialized country (industry or government) to invest in an eligible carbon mitigation project in a developing country in exchange for Certified Emission Reduction Units that can be used to meet obligation to reduce greenhouse gas emissions. This is referred to as the Clean Development Mechanism (CDM) under Article 12 of the Kyoto Protocol. The Kyoto Protocol gave 38 industrialized countries that are the worst historical polluter’s emissions rights. The European Union Emissions Trading Scheme (ETS) rewarded 11,428 industrial installations with carbon dioxide emissions rights. Through emissions trading Larry Lohmann observes, “rights to the earth’s carbon cycling capacity are gravitating into the hands of those who have the most power to appropriate them and the most financial interest to do so”. That such schemes are more about privatizing the atmosphere than preventing climate change is made clear by the fact that the rights given away in the Kyoto Protocol were several times higher than the levels needed to prevent a 2°C rise in global temperatures.

Climate activists focused exclusively on getting the Kyoto Protocol implemented in the first phase. They thus, innocently, played along with the polluters.

By the time the Copenhagen Summit took place, the polluters were even better organised and subverted a legally building outcome by having President Obama push the Copenhagen Accord.

Copenhagen and Beyond : The agenda for Earth Democracy

The UN Climate Summit in Copenhagen was probably the largest gathering of citizens and governments [ever? To do with what?]. The numbers were huge because the issue is urgent. Climate chaos is already costing millions of lives and billions of dollars. The world had gathered to get legally binding cuts in emissions by the rich North in the post Kyoto phase i.e. after 2010. Science tells us that to keep temperature rise within 2°C, an 80% cut is needed by 2020. Without a legally binding treaty, emissions of greenhouse gases will not be cut, the polluters will continue to pollute, and life on earth will be increasingly threatened.

There were multiple contests at Copenhagen, reflecting multiple dimensions of climate wars. These contests included those:

>> Between the earth’s ecological limits and limitless growth (with its associated limitless pollution and limitless resource exploitation).

>> Between the need for legally binding commitments and the U.S led initiative to dismantle the international framework of legally binding obligations to reduce greenhouse gas emissions.

>> Between the economically powerful historical polluters of the North and economically weak southern countries who are the victims of climate change, with the BASIC countries (Brazil, South Africa, India, China) negotiating with the South but finally signing the Copenhagen Accord with the U.S.

>> Between corporate rule based on greed and profits and military power, and Earth Democracy based on sustainability, justice and peace.

The hundreds of thousands of people who gathered at Klimaforum and on the streets of Copenhagen came as earth citizens. Danes and Africans, Americans and Latin Americans, Canadians and Indian were one in their care for the earth, for climate justice, for the rights of the poor and the vulnerable, and for the rights of future generations.

Never before has there been such a large presence of citizens at a UN Conference. Never before have climate negotiations seen such a large people’s participation. People came to Copenhagen because they are fully aware of the seriousness of the climate crisis, and deeply committed to taking action to change production and consumption patterns.

Ever since the Earth Summit in 1992 in Rio de Janeiro the U.S has been unwilling to be part of the UN framework of international law. It never signed the Kyoto Protocol. During his trip to China, President Obama with Prime Minster Rasmussen of Denmark had already announced that there would only be a political declaration in Copenhagen, not a legally binding outcome.

And this is exactly what the world got – a non-binding Copenhagen Accord, initially signed by five countries, the US and the Basic Four, and then supported by 26 others – with the rest of the 192 UN member states left out of the process. Most countries came to know that an “accord” had been reached when President Obama announced the accord to the U.S Press Corp. Most excluded countries refused to sign the accord. It remained an agreement between those countries that chose to declare their adherence. But it nevertheless showed the willingness of the US and others to disregard the needs of those in the global South. Arguing against the accord, Sudan’s Ambassador Lumumba Di Aping said the 2°C increase accepted in the document would result in a 3 to 5 degree rise in temperature in Africa. He saw the pact as a suicide pact to maintain the economic dominance of a few countries.

As Jeffrey Sachs noted in his article “Obama undermines UN Climate Process”:

“Obama’s decision to declare a phoney negotiating victory undermines the UN process by signaling that rich countries will do what they want and must no longer listen to the “pesky” concerns of many smaller and poorer countries – International Law, as complicated as it is, has been replaced by the insincere, inconsistent, and unconvincing word of a few powers, notably the U.S. America has insisted that others sign on to its terms – leaving the UN process hanging by a thread.”[1]

Even though the intention of the award was to dismantle the UN process, the reports of the two ad-hoc working groups on the Kyoto Protocol (AWG-KP) and the long term cooperative action (AWG-LCA) which have been negotiating for four years and two years were adopted in the closing plenary.

The Copenhagen Accord will undoubtedly interfere with the official UNFCC process in future negotiations as it did in Copenhagen. Like the earth’s future, the future of the UN now hangs in balance. There has been repeated reference to the emergence of a new world order in Copenhagen. But this is the world order shaped by corporate globalization and the WTO, not by the UN Climate Treaty. It is a world order based on the outsourcing of pollution from the rich industrialized North to countries like China and India. It is a world order based on the rights of polluters.

Climate change today is global in cause and global in effect. Globalisation of the economy has outsourced energy-intensive production to countries like China, which is flooding the shelves of supermarkets with cheap products. The corporations of the North and the consumers of the North thus bear responsibility for the increased emissions in the countries of the South.

In fact, the rural poor in China and India are losing their land and livelihood to make way for an energy-intensive industrialization. To count them as polluters would be doubly criminal; corporations, not nations, are the appropriate basis for regulations atmospheric pollution in a globalised economy.

Twelve years after citizens movements and African governments shut down the WTO Ministerial in Seattle, the same contest between corporate power and citizens power, between limitless profits and growth and the limits of a fragile earth was played out in Copenhagen. The only difference was that in trade negotiations the commercial interests of corporation’s stands naked, whereas in climate negotiations corporate power hides behind corporate states. The Copenhagen Accord is in reality the accord of global corporations to continue to pollute globally by attempting to dismantling the UN Climate Treaty. It should be called the “Right to Pollute Accord”. It has no legally binding emission targets.

The COP 15 talks in Copenhagen and COP 16 in Cancun did not show much promise of an outcome that would reduce Green House Gas Emissions and avoid catastrophic climate change. And the deadlock is caused by an outmoded growth paradigm. There are series of false assumptions driving the negotiations, or rather, blocking them.

>> False assumption No. 1: GNP measures Quality of Life

>> False assumption No. 2: Growth in GNP and improvement in Quality of Life is based on increased use of Fossil Fuel

>> False assumption No. 3: Growth and Fossil Fuel use have no limits

>> False assumption No. 4: Polluters have no responsibility, only rights.

These false assumptions are stated ad nauseum by corporations, governments and the media. As stated in an article in the Times of India, “Emissions are directly related to the quality of life and industrial production, and hence economic growth also has a direct link with it”.

Assumption No. 1 is false because even as India’s GNP has risen, the number of hungry people in India have grown. In fact, India is now the capital of hunger. The growth in GNP has in fact undermined the quality of life of the poor in India. And it has concentrated wealth in the hands of a few 100 billionaires now control 25% of India’s economy.

Assumption No. 2 is false because there are alternatives to fossil fuels such as renewable energy. Further, reduction in fossil fuel use can actually improve the quality of food and quality of life. Industrial agriculture based on fossil fuels uses ten units of energy to produce one unit of food. Ecological systems based on internal inputs produce 2 to 3 units out of every unit of energy used. We can therefore produce more and better quality of food by reducing fossil fuel use.

Assumption No. 3 is false because the financial collapse of 2008 showed that growth is not limitless, and Peak Oil shows that fossil fuels will increasingly become more difficult to access and will become costlier.

Assumption No. 4 formed the basis of carbon trading and emissions trading under the Kyoto Protocol. This allowed polluters to get paid billions of dollars instead of making the polluter pay. Thus ArcelorMittal has walked away with £1 billion in the form of carbon credits. ArcelorMittal was given the right to emit 90m tonnes of CO2 each year from its plants in EU from 2008 to 2012, while the company only emitted 68m tonnes in 2008.

To protect the planet, to prevent climate catastrophe through continued pollution, we will have to continue to work beyond Copenhagen by building Earth Democracy based on principles of justice and sustainability. The struggle for climate justice and trade justice are one struggle, not two. The climate crisis is a result of an economic model based on fossil fuel energy and resource intensive production and consumption systems. The Copenhagen Accord was designed to extend the life of this obsolete model for living on earth. Earth Democracy can help us build another future for the human species – a future in which we recognize we are members of the earth family that protecting the earth and her living processes is part of our species identity and meaning. The polluters of the world united in Copenhagen to prevent a legally binding accord to cut emissions and prevent disastrous climate change. They extended the climate war. Now citizens of the earth must unite to pressurize governments and corporations to obey the laws of the Earth, the laws of Gaia and make climate peace. And for this we will have to be the change we want to see.

As I have written in Soil Not Oil, food is where we can begin. 40% emissions are produced by fossil fuel based chemical, globalised food and agriculture systems which are also pushing our farmers to suicide and destroying our health. 40% reduction in emissions can take place through biodiverse organic farming, which sequesters carbon while enriching our soils and our diets. The polluters ganged up in Copenhagen for a non-solution. We as Earth Citizens can organize where we are for real solutions.

References

[1] Economic Times, 25th December, 2009

Vandana Shiva is a philosopher, environmental activist, and eco feminist. Shiva, currently based in Delhi, has authored more than 20 books and over 500 papers in leading scientific and technical journals. She was trained as a physicist and received her Ph.D. in physics from the University of Western Ontario, Canada. She was awarded the Right Livelihood Award in 1993. She is the founder of Navdanya