compass critique

Sun Jul 15 17:50:29 BST 2012

For the attention of Howard Reed and Neal Lawson

PLAN B  By the Labour
think tank Compass     A CRITIQUE 

“Plan B” is 
aspirational. It lacks teeth, is limited in defining the scope of the
problem,  and is  mis-informed about house supply.

Otherwise it shows promise in injecting “Good” and promoting
“Society” into the economic 

Debate.  Co mpanies,
not just banks are out of control- Pharmas, contractors, airlines ,
petrol/tobacco/softwear giants, (only) fined Euros 55m,  $35m , $100 m  £104m,  £680m    

 and that’s not to
mention the accountants fined  $50m
.  The press reports  Barclays fine of £240m and omits Citgroup
fined $2.4bn .   Plan B targets banks
omits the errant corporations  and
omits  government (HMG fined £200million
for maladministering the  Single Farm
Payment under CAP) . 

Teeth,not aspirations are needed such as the proposed
‘Renewable Termination Date’set for each corporation  and reduced for non compliance. (see the enclosed  leaflet)

matches the realism recognised by JK Galbraith (p 29)
Additionally the clause inserted into each .

Mem and Articles of Association of every company trading in
UK   “ The first aim of this company is
to increase the well-being of the citizens of 
this country”  will inject an
actionable morality requirement ,currently absent, into each  activity of each company.  

Such teeth are omitted from Plan B 

On housing  (p27) , I
contributed a criticism to the Barker Review 2004 that the Report  had overlooked the self build sector.  The OFT Survey 2008  found that Self Build was the largest
sector- 16,000 new houses 10 % market share (OFT Appx R)  Plan B speaking of construction,
construction workers sitting idle, labour intensive- contractors”  continues to mis define house supply in
terms of the   plc house-builders – yet
the future lies with self builders – even Grant Shapps has twigged.which Plan B
has missed .  Self builders are less
constrained by market expectations in times of economic downturn. plc
housebuilders’ illegal landbanks are unprosecuted by OFT because they aid the 

(anti-social) Government policy of limiting house supply to
push up prices – see below. 

The “bubble of consumer debt” p 24  which introduces the Plan B “ new investment policy for UK” is
not, in Plan B directly related to housing p27, nor to the need for reform of
city and of banks p5   these  connectionis are not made-
crucially  the point is not made that
the bubble of consumer debt is 
explicit  HM Treasury, Government
( Labour  and Con Lib  and Bank of England policy and they collectively
are therefore culpable.A paper by two academics from Exeter Uni   “Manipulating House Prices’, quoted by Kate
Barker of the MPC , and of the Barker Review of Housing  and adopted as policy at a meeting in March 1997 of Gordon
Brown and  Eddie George decided to adopt a policy of
consumer debt to stimulate high street spending of which high and rising
house  prices was the leading tool.  A shortage of new houses was the method to
bring this about.  Defining house
debts  as assets and trading them  good as well as doubtful by banks brought on
the crisis.  Plc housebuilders
obligingly complied with  policy since
their massive  landbanks’ increased
value outweighed the profits foregone on not building the desperately needed
new houses (Barker  p81)     

Job sharing, Plan B p 33, 
is a welcome idea.  But
missing  are the means to implement
this.

Farmland occupies 75% of the land area of UK and accounts
for 0.3% of jobs. One or two more workers on each of the 150k typically larger
farms of 200 acres would improve agriculture . Formerly  farming accounted for  near 1million  jobs  , now some 170,000 ,  which have been shed by deliberate HMG
policy.aided by  CAP subsidies to large
farmers os some £3billion p.a.   .
Intensive labour on intensive small holding of 20n acres carved out of mega
farms enables  very productive job
creation and much needed domestic UK vegetable 
growing Farm policy 

set aside 1million 
acres of agri land from production and for tree planting  Does that suggest a source of new jobs to
Compass-  (when combined with jobs from
200,000 self build houses   in the
countryside?  )   This was missed  by Plan B

Creating some 1 million new jobs in UK is not an option but
a necessity  as their associated pension
contributions are needed now to fund an existent  large  retired population
. Job sharing and jobs in agriculture are a necessity not an option as the
pensionable population has already increased beyond the means to pay for it. 

   ‘Growth’ in the
economy “     “growing out of
recession,” p 13  “world depends for
sustained growth”  p13  “returning to business as usual” p 19 imply
the  blind acceptance of growth as
beneficial and a necessity . This is at odds with the  welcome reminder of the negative effects of  “pushing up economic growth in a finite
planet”  p 13.                                                                                                                                                     

Crucially there  is
no condemnation in Plan B of the  hazard
of  Government systematically operating
on the basis of debt. ‘Real Money’ 
advocates Government operating solely on current and saved Revenue and a
measured use of  printing money and
injecting it into the economy. (not via commercial banks )   The example of financial responsibility set
by a democratic government is important.

This suggests  Plan C
is  needed to ensure that a debt
induced, HMG led  crisis does not repeat
again and again …..

Otherwise Plan B is welcome.                                                                                          JA

The Guardians , Think Tank, The Land is Ours 

james36armstrong at hotmail.com                     14th July 2012 

Refs.    Fines    OFT, SEC, 
www.endgame.org

            Renewable
Termination Date     paper “No
Highway”  by J Armstrong

 .              

Housing,            Review of
Housing Supply,  Barker 2004

                                       OFT Homebuilding Survey
2008   (Appx R for Self Build)

         Other
Refs on enquiry  		 	   		  
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