Wages continue to plummet in the UK, as inflation rises

Barry Mason

Recent reports highlight the ongoing attack on the living standards of the working class and sections of the middle class.

The impact of years of wage cuts was revealed in a survey of 6,500 workers published in June by the Unison trade union. It found that just over half had borrowed money from family or friends.

Two out of five of those surveyed, including paramedics, teaching assistants and council workers, said they were unable to save any money. One in 10 had missed meals to feed their children.

Last month, Visa, the debit and credit card company, published its Consumer Spending Index (CSI) for the UK.

The report showed that for the first time since 2013, there was a fall in household expenditure, down 0.8 percent on the year across a wide spectrum.

Among the hardest hit sectors were transport and communication down 7.9 percent, clothing and footwear sales down 5.2 percent and household goods down 4.1 percent. Business analysts IHS Markit compiled the report on behalf of Visa.

The report quoted Annabel Fiddes, an economist at IHS Markit: “Latest data revealed a renewed fall in UK consumer spending…the first decline in spending for nearly four years. The overall reduction was driven by a fall in spending on the High Street, which declined at the quickest pace since early 2012.

“The outlook for consumer spending continues to look relatively bleak, with households facing faster increases in living costs and muted wage growth.”

Fiddes warned that with “uncertainty around the outcome of Brexit and a slowdown in UK economic growth, it’s likely we will continue to see weaker expenditure trends at least in the near-term.”

Kevin Jenkins, UK & Ireland managing director for Visa, commented, “Our index clearly shows that with rising prices and stalling wage growth, more of us are starting to feel the squeeze.”

With June’s snap general election resulting in an enormously weakened and unstable minority Conservative government tasked with completing two years of Brexit negotiations, Ben Brettell, senior economist at Hargreaves Lansdown, summed up these concerns, stating, “The UK economy faces a dangerous cocktail of political uncertainty, slowing growth and shrinking real wages.”

An article in the June 14 Independent noted that the Office for National Statistics on the UK labour market showed that while average wages increased 2.1 percent in the first quarter of the year, inflation for April was recorded as growing by 2.7 percent. This meant a fall in value in real terms wages by 0.6 percent, the biggest drop since August 2014.

Between 2007 and 2015, real wages in the UK declined enormously. Apart from Greece, the UK has the worst record on workers’ spending power of any Organisation for Economic Co-operation and Development country. The latest ONS figures put the level of average wages in real terms below even the figure for the end of 2007.

The Independent quoted the response to the ONS figures by Samuel Tombs, an economist at the economic intelligence company, Pantheon Macroeconomics. He said the wages figures were “astonishingly weak.”

“The painful experience of 2011/12, when inflation surged but wage growth weakened, appears to be repeating; firms are responding to rising raw material costs and uncertainty about the economic outlook by doubling down on pay awards,” Tombs concluded.

The significance of the fact that in real terms wages are falling, while the number in work is increasing, was highlighted in comments by Stephen Clarke, an analyst at the Resolution Foundation think tank. He concluded that wages would only decline further, stating, “The sharp contrast between our terrible record on pay and strong jobs performance shows that the currency-driven inflation we are experiencing is not feeding through into wage pressures and is simply making us all poorer instead.”

Following last year’s referendum vote to leave the European Union, the value of the pound decreased markedly. Inflation is now beginning to increase significantly. The ONS figures show inflation at its highest since June 2013, reaching 2.9 percent in May. Price increases for food and clothing helped to boost the inflation figure. Also on the rise are the costs of holidays and recreational goods such as computer games, the price of which rose by 0.9 percent in May compared to the previous month.

Some experts expect inflation to be running at 3.2 percent by the end of the year.

Last week, the Guardian cited the comments of Amit Kara of the National Institute of Economic and Social Research, who warned, “We expect inflation to rise further over the course of this year and to reach a peak in the final quarter of 2017. This spike in inflation will exert further downward pressure on real household disposable income, at a time when wage growth remains modest and in turn squeezes consumer spending.”

The impact of the fall in real wages and rising inflation is negatively affecting the retail sector, which makes up an important component of the UK economy. Analysis of footfall figures (number of people entering shops) for UK high street shops showed a 2 percent drop in May, compared to the same month last year.

As a result, big business is demanding further concessions from the government. Helen Dickinson, chief executive of the British Retail Consortium, said, “In an uncertain economic climate, retailers will be looking to the next Government to fundamentally reform business rates; to implement a more sustainable system that allows for growth and investment.”

The decline in footfall was reflected in the sharp drop in retail sales as recorded by the ONS of 1.2 percent in May. Sales levels were last at the current levels in 2013, with the decline higher than analysts had expected.

Commenting on the figures in the Guardian, Samuel Toms of Pantheon Macroeconomics explained: “Retailers have not finished yet passing on higher import prices to consumers, wage growth looks set to remain depressed and banks are reporting that they intend to restrict the supply of unsecured credit. As a result we expect quarter-on-quarter growth in households’ real spending to average just 0.2 percent in the remaining three quarters of 2017, ensuring that the overall economy continues to struggle.”

The fall in wages will be exacerbated with millions facing huge increases in mortgage payments, if the Bank of England decides to increase interest rates. Last month, it was revealed that the Bank of England’s chief economist Andy Haldane, who voted with the majority of the bank’s Monetary Policy Committee (MPC) to keep increase rates at 0.25 percent, favours an increase later this year.

This week, Bank of England governor Mark Carney appeared to support an interest rate increase in the period ahead, stating that “some removal of monetary stimulus is likely to become necessary”. He said the bank would consider a rise based on “how the economy reacts to both tighter financial conditions and the reality of Brexit negotiations. These are some of the issues that the MPC will debate in the coming months.”

Canada’s Liberal government extends participation in Mideast war to 2019

Roger Jordan

Without a parliamentary debate, let alone a vote, Justin Trudeau’s Liberal government announced last Thursday the extension and expansion of Canada’s involvement in the US-led Mideast war. The decision means that up to 850 Canadian military personnel will continue to operate in Iraq and Kuwait until the end of March 2019, assisting Washington in its reckless drive to secure unbridled dominance over the energy-rich Middle East.

The new deployment gives Chief of Defence Staff General Jonathan Vance the latitude to decide the composition of the 850-strong military force that will operate in the region. The military will also be able to determine where the forces operate and with whom. Some 200 Special Forces troops, scores of war-planning and intelligence personnel, 50 medical staff, and hundreds of members of the Royal Canadian Air Force have been engaged in the conflict since the Liberals’ March 2016 expansion of the Middle East intervention the Stephen Harper-led Conservative government launched in September 2014.

The deployment includes surveillance and refueling aircraft that operate over Syria as well as Iraq and military helicopters. A Hercules transport plane is now to be added.

Canada’s role in the latest US-led war in the Middle East is aimed both at strengthening its alliance with Washington, far and away its most important economic and military-security partner, and ensuring Ottawa has a “seat at the table” in the reordering of the region.

While touted as a war against ISIS, the current war arises out of the series of wars that US imperialism has waged in the Middle East since 1991 and has as its principal aim the overthrow of Syria’s Russian- and Iranian-backed regime.

Washington’s bloody military operations have blow-up whole societies, killing millions, rendered millions more refugees, and fanned the flames of ethno-religious sectarianism, fueling tensions between regional powers like Saudi Arabia and Iran.

Canada’s expanded military presence in Iraq will only intensify the already explosive ethnic tensions in the country. Significantly, the new deployment allows for Canadian forces not only to continue their support of Kurdish Peshmerga fighters, but also to collaborate with Iraqi government forces. Many of its Shia-dominated units have been accused by aid and human rights groups like Amnesty International of systematic and widespread human rights abuses and atrocities during the recapture of Mosul, including torture, extra-judicial executions and the forced displacement of villagers. The Canadian military and government have turned a blind-eye to similar crimes perpetrated by the Peshmerga.

With ISIS territory in Iraq rapidly being recaptured, bitter feuds between warring sectarian camps could well ignite a wider conflict. The oil-rich region around Mosul, which was predominantly a Sunni city prior to the Iraqi offensive, has become the target of Shiite forces keen to extend their influence and Kurdish militia animated by the prospect of an independent Kurdistan.

Recognizing that there is little public support for Canada becoming embroiled in a Mideast war, especially one that threatens to ignite a conflict between the major powers, Trudeau’s Liberals did everything they could to bury their announcement that the Canadian Armed Forces’ mission in the Middle East is being extended to the end of March 2019. The announcement was made in a press statement released after parliament had risen for the summer and at the beginning of the Canada Day holiday weekend.

The expansion of Canada’s military intervention in the Middle East comes just three weeks after the Liberal government released its new defence policy. It pledges that the government will increase military spending by more than 70 percent over the next decade to close to $33 billion per year. The additional funds will be used to increase the number of military personnel and purchase new equipment, including a fleet of 88 fighter aircraft, 15 new warships and armed drones.

The Liberals, whose were promoted by the trade unions and various pseudo-left groups as a “progressive” alternative to Harper and his Conservatives, have sought to cloak this major military build-up behind a wave of propaganda about Canada’s “diversity” and commitment to “democracy” and “human rights.” In a speech delivered a day prior to the unveiling of the spending hike, Foreign Minister Chrystia Freeland claimed that these “Canadian values” have to be defended with “hard power,” i.e., war. In a similar vein, the new defence policy includes commitments to strengthen the “diversity” of the armed forces by increasing the percentage of women serving from 15 to 25 percent over the next decade and intensifying efforts to recruit “visible minorities” including First Nations people and immigrants.

Behind such rhetoric, the Liberals’ are seeking to ensure that Canadian imperialism has the means to aggressively assert its predatory interests around the globe. As it is, Canada is deeply implicated in the three principal military-strategic offensives of the US—in the Middle East and against Russia and China.

Earlier in June, the Liberals quietly revealed plans to expand the mandate of the Canadian Armed Forces’ training mission in Ukraine. Since 2015 and, as of the recent government announcement, until 2019, 200 Canadian soldiers are deployed to Ukraine to train army and National Guard units to fight pro-Russian separatists in the east. Under guidelines announced in June, the Canadian troops will be allowed to deploy anywhere in Ukraine, apart from Russian border areas and the frontline of the fighting, a move that significantly expands the operational area of Canadian forces and increases the likelihood of their becoming involved in combat.

Canadian forces also took center stage last month at a ceremony in Latvia to mark the commencement of operations by one of NATO’s four new “forward deployed” battalions on Russia’s border. Four hundred and fifty Canadian troops are providing the command and basic infrastructure for the Latvian-based battalion, while the United States, Britain and Germany are leading similar forces in Estonia, Lithuania and Poland.

The predatory character of Canada’s participation in the imperialist carve-up of the Middle East was underscored late last month when the political and media establishment united as one to praise a Canadian sniper who reportedly shot an ISIS militant from a distance of 3.5 kilometers. As media outlets, including the state-funded CBC, breathlessly competed to outdo each other with reports that a Canadian now held the “record” for the longest “kill shot” anywhere in the world, Trudeau told reporters that the action was “something to be celebrated.”

This explodes the Liberals’ bogus claim that Canada is no longer involved in “combat” operations in Iraq. In reality, the reorganization of Ottawa’s military forces that Trudeau announced in early 2016, including the withdrawal of Canada’s six CF-18 fighter jets, resulted in Canada becoming even more deeply implicated in the fighting. Last November, Vance acknowledged to a parliamentary committee that the Special Forces deployed to Iraq spend much of their time on or close to the front line of fighting, advising and assisting the Peshmerga, and that in certain circumstances they are authorized to initiate fighting.

Canadian troops have since entered the city of Mosul, the target of an onslaught over recent months by US-backed Iraqi forces that has claimed the lives of thousands of civilians.

The lack of any opposition from within the political establishment to the disgusting outpouring of enthusiasm for Canadian military violence shows that all of the major parties are fully behind the war drive. Responding to news of the sniper’s achievement, New Democratic Party (NDP) leader Thomas Mulcair said it was appropriate to laud the prowess of the Canadian military, but Trudeau had gone too far in urging Canadians to celebrate the death of another human being.

The NDP has endorsed every Canadian imperialist military intervention over the past two decades, from the 1999 bombing of Yugoslavia and the Afghan War, to the 2004 intervention into Haiti to depose the country’s elected president and the NATO regime-change war in Libya.

The NDP has no fundamental objection to the current deployment in the Middle East. While the party voted against the initial intervention, it supports Canada being part of the US-led Mideast war coalition and accepts the premise that Canadian military forces should be active in Iraq and Syria. The NDP merely urges that they be used to undertake “humanitarian” activities, language which has been used to justify every imperialist atrocity since the 1990s.

Cyberattack on UK parliament stokes anti-Russia campaign

Paul Mitchell 

The propaganda campaign against Russia in the UK has escalated following an apparent cyberattack on parliament last month.

According to officials, the parliamentary network was subjected to a “brute force attack”—a crude hacking operation that targeted poorly protected email accounts. A parliamentary spokesman was quick to reassure reporters that “significantly fewer than 1% of the 9,000 accounts on the parliamentary network” had been “compromised” and that this was because of “the use of weak passwords that did not conform to guidance issued by the Parliamentary Digital Service.”

Coincidentally, just hours before the attack the Times reported that emails and passwords belonging to tens of thousands of government officials, including ministers, MPs and staff working for parliament, the police and Foreign Office had been sold on Russian-speaking hacking sites. Most had originated from the 2012 hacking of the LinkedIn social networking service. According to the Times, the three most common passwords police staff used for their hacked email addresses were “police,” “password” and “police1”!

Following the LinkedIn attack, and again in 2106 when it was discovered criminal gangs were selling them, users were advised to change their passwords. But it appears some MPs and parliamentary staff did not heed the advice.

Security industry experts cautioned against allocating blame for the latest cyberattack before a proper investigation. High-Tech Bridge CEO, Ilia Kolochenko, told the specialist ITProPortal website, “At this early stage of investigation, it would be inappropriate to speculate about the identity of the attackers. Such an attack is very simple and cheap to organise, and virtually any teenager could be behind it. However, for this particular incident, I would abstain from blaming any state-sponsored hacking groups. Because with such an unacceptably-low level of security they have likely already been reading all emails for many years without leaving a trace.”

Despite such appeals for caution, politicians and the media rushed to condemn Russia. Leading the pack were Ewen MacAskill and Rajeev Syal in their Guardian piece, “Cyberattack on UK parliament: Russia is suspected culprit.”

The journalists brush aside qualms that “the investigation is at an early stage and the identity of those responsible may prove impossible to establish with absolute certainty” to declare, “Moscow is deemed the most likely culprit.”

They based their conclusion on the unfounded suspicions of MPs and the regurgitation of unsubstantiated allegations about past claims of Russian hacking, which have now taken on the status of unquestionable fact for the liberal imperialist pro-war lobby. These included the assertion that “US intelligence agencies concluded that Russia hacked and leaked Democratic party communications and disseminated fake news with the aim of getting Donald Trump elected” during the 2016 US presidential campaign. Another was that “[i]n May, Russia was linked to the hacking of France’s computer systems during the presidential campaign, taking data from Emmanuel Macron’s campaign and leaking it to the public.”

In fact, the opposite is true. In January, US intelligence agencies concluded that the claims of Russian government hacking and leaking of Democratic Party emails had no foundation in fact. They were unable to substantiate the allegations made by the CIA and the director of national intelligence, James Clapper, in October that Russia illegally obtained documents from the Democratic National Committee and Hillary Clinton’s campaign chairman, John Podesta.

And following the hack of Macron’s campaign, Guillaume Poupard, the head of France’s cybersecurity agency, declared that there was “no trace” of Russian interference and that it “was so generic and simple that it could have been practically anyone.”

The continuing media offensive is aimed at whipping up public support for a more confrontational attitude toward Russia. The Guardian plays a particular role aimed at bolstering a constituency for war among privileged layers of the middle class.

The drive to confront Russia has taken on an added urgency since the humiliating defeat suffered by the US in December when Syrian government forces, backed by Russian air power and Iranian troops, recaptured the country’s largest city, Aleppo. The Syrian Army has now captured virtually all of Aleppo province and is just a few miles from neighbouring Raqqa province, where US-backed Syrian Democratic Forces are still struggling to regain control of the Islamic State’s “capital” there.

The continued survival of the Assad regime has been an acute embarrassment for the CIA, which has undertaken a six-year-long campaign for regime change in Syria, Russia’s only Arab ally in the Middle East. The election of Hillary Clinton, who had repeatedly called for the imposition of a “no fly” zone and other aggressive measures against Syria, was supposed to bolster these objectives.

However, they were upset by the surprise election of Trump, who though no less committed to militarism and war, generally speaks for a faction within the US ruling class that sees China, rather than Russia, as the more immediate enemy.

It is to put pressure on the Trump administration to shift its foreign policy objectives toward Syrian regime change and confronting Russia that the unrelenting campaign of anti-Russian hysteria has been conducted.

For its part, the anti-Russia campaign in the UK points to the existential crisis facing British imperialism in the aftermath of the June 2016 referendum vote to leave the European Union (EU), which has forced the ruling elite to restate its claim to continuing relevance for the US as its seeks to maintain its military hegemony.

Such considerations, in addition to hopes of strengthening her government’s hand in Brexit negotiations with the EU, were the prime factor in Conservative Prime Minister Theresa May’s decision to call a snap general election on June 8. A major aspect of her election campaign, backed up by outbursts by retired military figures, was to portray Labour leader Jeremy Corbyn as a feeble pro-Russian stooge.

In recent weeks Defence Secretary Michael Fallon has boasted of the centrality of Britain’s armed forces to the ongoing NATO encirclement of Russia and its unprecedented build-up on Russia’s western border.

Last week Fallon committed the UK to backing future military action in Syria after ominous claims by White House spokesman Sean Spicer that the US had “identified potential preparations for another chemical weapons attack by the Assad regime that would likely result in the mass murder of civilians, including innocent children.” An alleged April 4 chemical attack that killed dozens of civilians was the cue for Trump to order a cruise missile strike on Syria’s Shayrat air base.

Fallon also attended the launch of Britain’s largest-ever warship, the aircraft carrier HMS Queen Elizabeth. He was at pains to contrast it with what he called the “dilapidated” Russian carrier Admiral Kuznetsov, which sailed through the English Channel last year to join the Russian air campaign in Aleppo amid warnings that the Royal Navy had “ways and means” of protecting the warship from Russian intelligence gathering.

On Thursday, the Russian Defence Ministry responded that Britain’s new carrier would be a “large, convenient naval target” in the event of war. Moscow warned, “It is in the interests of the British Royal Navy not to show off the ‘beauty’ of its aircraft carrier on the high seas any closer than a few hundred miles from its Russian ‘distant relative’”

The ratcheting up of the anti-Russia rhetoric also serves the purpose of justifying further anti-democratic measures against the working class.

It was only last November that Parliament passed the Investigatory Powers Act, which US whistleblower Edward Snowden described as “the most extreme surveillance in the history of western democracy.” At the same time, the National Cyber Security Centre was created as the “public face” of the surveillance agency, GCHQ.

The May government has now signalled its intention to impose huge restrictions on what people can post, share and publish online and boasts of its plans to make Britain “the global leader in the regulation of the use of personal data and the internet.”

India-Japan: Past Trends Continue

Shamshad A Khan

At the time of the transition of government in India in 2014, the strategic community in Japan speculated whether the new government in New Delhi would accord the same priority to its bilateral relations with Japan as the UPA government had. The  wariness was a result of a history of “engagements” and “estrangements” in India-Japan relations driven mainly by the leadership’s personality. The previous Indian Prime Minister, Dr Manmohan Singh, had paid special attention to forge closer India-Japan relations and Tokyo was keen to continue this momentum in its bilateral relationship with New Delhi. Consequently, Japan invited the new Indian Prime Minister, Narendra Modi, in order to host his first prime ministerial foreign visit after assuming office. Modi however chose to first visit Bhutan as part of his ‘neighbourhood first’ policy. Nonetheless, when Modi visited Japan in August 2014, his Japanese counterpart expressed “deep appreciation” for choosing Japan as his “first destination for a bilateral visit outside India’s immediate neighbourhood.” 

The old issues in India-Japan relations - expansion of trade and economic ties, cooperation in infrastructure sector, development of rail, road and port facilities; and  civil nuclear cooperation -dominated the agenda of Modi’s week-long visit, and were reflected in the joint statement called ‘Tokyo Declaration 2014’. The new political dispensation was wise to carry forward the consultations on these issues which were identified during the Manmohan Singh government but which were not brought to fruition in terms of actual cooperation. As part of a new agenda, Prime Minister Modi proposed his dream projects including clean Ganga and developing new smart cities in India and Japan agreed to help in implementing these projects. The 2014 Tokyo Declaration was testimony that the new Indian leadership will maintain continuity rather than change the course of bilateral relations with Japan.

During Prime Minister Modi’s Japan visit in 2014, the India-Japan strategic and global partnership was elevated to a “Special Strategic and Global Partnership.” Japan is only the second country after Russia to whom India has accorded this “special” status. Granting Japan a similar status at par with India’s “time tested” and a “reliable friend” Russia, was perhaps aimed at indicating to Japan that India attaches utmost importance to its relations with the country and in coming decades Tokyo would remain on the top of New Delhi’s foreign policy priorities.

New Delhi and Tokyo have effectively used the annual summit meetings between the Prime Ministers  to take stock of developments, to identify roadblocks in implementing bilateral cooperation and to conclude protracted issues. For instance, negotiation on India-Japan civil nuclear cooperation began in 2010 but remained inconclusive till November 2016 because of Japan’s insistence for a nullification clause in the deal. In 2015, a breakthrough was reached during Japanese Prime Minister Shinzo Abe’s India visit; Abe and Modi signed a two line Memorandum of Understanding stating that the two countries will conclude the nuclear cooperation after finalising the “technical details.” The deal was concluded during Prime Minister Modi’s November 2016 visit to Japan. Tokyo has agreed to provide its civil nuclear technology to New Delhi provided India remains committed to its moratorium on nuclear testing.  The last political hurdle was passed when the Japanese Diet approved the India-Japan civil nuclear cooperation agreement on 7 June 2017. The implementation of the deal however remains a challenge given that financial crisis has hit the US nuclear reactor maker Westinghouse, in which the Japanese parent company Toshiba has major stakes.

India-Japan cooperation in the infrastructure sector has also strengthened during the last three years. In 2013, the two countries agreed to start a joint feasibility study for the high speed railway technology on the Mumbai-Ahmedabad route. . After the conclusion of the study in 2015, it was announced that construction project of the bullet train track will begin in 2017 and will be completed by 2023. India-Japan cooperation on various dedicated freight corridors, including the Delhi Mumbai Industrial Corridor, also continues. However, these projects have been delayed indefinitely. Notwithstanding delays in the implementation of these internal projects, which are aimed at improving India’s domestic infrastructure,  Japan and India have unveiled their plans to build the Asia-Africa Growth Corridor (AAGC). The announcement of this mega project linking the Asian and African continents comes close on the heels of China’s Belt and Road initiative and is seen as a counter to the Chinese project.

The huge financial investment needed for this project calls for caution on India’s part; It would be prudent to first implement the internal mega projects before leaping onto external mega projects like the AAGC. 

Right in 2006,  India and Japan had realised that the economic ties should be the “bedrock” of their bilateral cooperation and keeping this in mind the two countries had signed the Comprehensive Economic Partnership Agreement (CEPA) in 2011, after five years of deliberations. The CEPA propelled the bilateral trade volume within a year of its implementation; the bilateral trade figures reached US$18 billion in FY2011-12, from US$13 billion in the previous fiscal year. However, after delivering marginal growth in successive years, it has started decelerating and at present the bilateral trade hovers at US$13.61 billion. India and Japan must give serious thought to enhance bilateral trade, which is currently below its potential; after all Japan and India are the second and third largest economies in Asia. On the bright side,  India remains one of the most favoured destinations for business for many Japanese companies and their presence in India continues to grow.  

In summary, during the first three years of Modi government, the India-Japan relationship has deepened further, including in the areas of technology and infrastructure cooperation. Economic cooperation and trade, as well-as people-to-people relations, remain the weak links in the bilateral relations; they need special attention. Moreover, the agreed but unfinished projects also need special attention. The completion of these projects will set a benchmark and instill confidence among other partners to participate in intercontinental mega projects such as the AAGC.

Modi’s India Is Sinking

Mousumi Roy

Modi’s policies and empty promises will lead India to utter ruin. So many lynchings, protests, murders and arrests have happened this week across in India, it is hard to keep up with. In 21st century, horrendous crimes are on the rise in India. Non issues are being projected to divert attention from the daily problems with the common men. Over 3 years and the abominable cow vigilante lynchings sends shiver down the spine. In as much as I am aghast and angry about the current spate of such shameful happenings.

Of course riots have happened previously in the decades gone by, but the brutality and inhumanity is on the rise. Sad to see what the youth are going through. This is how Yemen and Pakistan and Somalia became what they are today. Now the educated middle class is being hurt so pain is noticeably higher from Media to telecom to banking to IT to Govt jobs etc. ” Make in India” will not create enough jobs for Indian engineers, MNCs will set up hugely automated factories to make in India without much of design work in India. Modi supporter’s expectations are rocket high. They have an idea that 2019 will make their Messiah a permanent Prime Minister of India. And the entire cowbelt will convert the planet vegetarian. No one feels the pain of handloom workers or diamond workers or factory export workers or farmers who are committing crimes like rapes and robberies and suicides in hundreds of thousands per decade or 50k plus per year. It’s beyond repair now and ultra sad. RSS is nothing but Taliban, Al Qaeda, Ku Klux Klan. All religious fanatics are exactly the same. They have the same modus operandi, the same objectives. Taliban was welcomed with open arms by the people of Afghanistan. So were the ayatollahs in Iran. The color changes once they have power. Modi and his followers are following on wrong route.

GST-Midnight session of the parliament on 30th June for introducing GST is another gimmick at taxpayers money again. The “previous” government has been gone for 3 years. Are we still blaming them for the current mess? GST was conceived in the last months of NDA-1, then again by UPA-1 and UPA-2, but staunchly opposed by BJP. Modi had said he will let it pass over his dead body. I hope the huge mess that GST (as it stands now) is gets cleared up very very quickly. Otherwise the economy will grind to a halt in 3 months. Why do people call it the “greatest tax reform since independence”? The transformative ones were in 1991-92 by Finance Minister Manmohan Singh & Commerce Minister Chidambaram. There have been other earth-moving ones. Like introduction of ModVAT by Finance Minister V.P.Singh, the dream budget that simplified and slashed income tax by FM Chidambaram of Deve Gowda Govt, the huge simplification and streamlining of cenVAT by Finance Minister Jaswant Singh of NDA-1. Those guys worked with rolled up sleeves, did not beat drums. In the name of GST, effective tax rates have been increased. For instance, our products carry an excise of 6% and VAT of 5.25%. We have been told this adds up to 11.6%, and therefore we fall under 12% GST. Excise is on the ex-works price and is effectively 3.6%. The effective tax is 9% which is being raised to 12%. In the guise of reducing taxes, the govt has actually increased it. That everywhere they have added up the current rates of excise and VAT and shown it as the current rate of tax. Excise is never on MRP, it is, 95% of the time, on 60% of MRP (the balance is treated as post-manufacturing expenses including multiple stages of freight from factory to C&F warehouse to distributors’ warehouses to retail shops; distributors, C&FAs and retailers’ margins and so on). A sly way of increasing taxes, perhaps to make up for the loss in tax revenue due to slow down of growth from 7.6% to 6.1% due to mismanagement of the economy, including the terribly planned and executed demonetization.

Modi is becoming a Vasal of the western Dream, no wonder the MSM keeps him in high esteem in their news series. The US, according to a report, has nearly 5 billion trade deficit with India. The US will not pass on new tech to India-No serious and powerful country is interested in the F-16 anymore, the market for these Indian jets would probably be poorer countries who have very weak militaries. They’ll probably be cheaper if produced in India because no one would probably pay for these jets if they were expensive. However, F-16 a toy compared to F-15. The much larger plane can carry a much more powerful radar, faster and longer range.The F-15SA is a completely new plane except for the frame. Everything replaced with the newest and best, radar, computer systems, engines. Basically what should be done to the F-22. The F22 weapons and avionics systems are 90s technology. But it’s still currently the best, overall.

Migration is the last remaining barrier to free movement; goods, services, capital, knowledge, enterprise have been largely freed. If human being are allowed to move freely, it will end all cultural clashes and wars. Leaders divide the world into territories. and then ignite passions, build stories, so that they can rule. Under the skin, humankind is the same. We all have the same needs & desires. Nations are fluid, borders change. The India cobbled together by Brits never existed before they came, the nation they left behind did not include Travancore-Cochin and few others. Europe has been changing borders. The two tribal conflicts that they call “world wars”, the breaking to pieces of Yugoslavia, and continuing pressures to break in UK, Spain, Italy, and even tiny Belgium. We see this in Africa too. The Soviet Union is a prime example of a super power breaking up. Nations were created by rulers to define their authority. A Modi supporter was arguing on Twitter that H1B issue doesn’t rank enough to be talked at Heads-of-Government level. If Mexican President thinks it’s relevant to raise the issue of immigration with POTUS why shouldn’t Indian PM? Trump’s and Modi’s supporters traffic in alternate facts. Both Modi and Trump have unleashed demonizing minorities.

Modi is a shadow of Indira Gandhi, mostly her evil side. Her era was also devoid of opposition for a long time, and she acted like a dictator. This Modi is far more evil, he is destroying the pluralism and multi-cultural nature of our continent sized country. Perhaps we will end up like Europe which is made up of 40 countries. And larger states going the way of Yugoslavia, where what is left is made up of ethnically pure people, with the rest relegated to 2nd class citizens. Vajpayee chose to go nuclear with the intention of making Pakistan spend away to bankruptcy, but there came a black swan event. The war in Afghanistan brought in a lot of money to Pakistan and they survived, though they had to bend and borrow from IMF and Saudi to remain afloat.How do we make them pay for asymm warfare? No one has found an answer to that so far. US faced that with Vietcong, USSR with Mujahideen. We did break the Khalistan movement, but the majority of people in PB were supportive of the govt. When Modi got elected, I felt uneasy that a person who didn’t even apologise for loss of many lives under his watch (even assuming he didn’t have a role to play) was assuming the role of PM. I thought, if Muslims in Gujarat itself have moved on, and indeed voted him, perhaps it’s time to look forward to a new era and Congress being fresh from far too many scandals and dynasty rule made it look that we’ve a no nonsense man at helm, in Modi and that he will do in action (if not in words) that allays the anxieties of Muslims. My hopes lay in tatters now.

Australian unions help impose cuts to federal pay and conditions

Terry Cook 

With the assistance of the public service unions, the fragile Liberal-National government has finally imposed new enterprise agreements (EAs) that cut pay and erode working conditions in five major federal departments.

During recent weeks, agreements have been struck at several agencies where workers previously rejected government “offers” by decisive margins. These include the Australian Tax Office (ATO), the Department of the Prime Minister and Cabinet Staff, the Department of Defence, the Commonwealth Scientific and Industrial Research Organisation (CSIRO), and the Department of Agriculture and Water Resources (DAWR).

Throughout a three-year dispute over new agreements, the unions have kept workers divided department-by-department and confine them to limited stoppages and protests. They have subjected their members to ballot after ballot on offers that remain the same or contain inconsequential changes.

The unions’ aim was to wear down workers’ resistance and retain their own position at the negotiating table. The Community Public Sector Union (CPSU) and other unions repeatedly appealed to the Coalition government to “see sense” and utilise the unions’ services to continue decades of cost-cutting.

Few details of the deals at the five agencies have been made public, but it is clear they will deepen the cuts to jobs and conditions that have resulted in increased workloads and speed-ups across the public service.

All five agreements are based on the government’s “bargaining policy,” including its 2 percent annual pay ceiling, designed to keep wage increases below the inflation rate. The EAs will not be backdated to the expiry of the previous agreements in 2013. Thus, they will formalise what has been a wage freeze of more than three years that has saved the government millions of dollars.

In the lead-up to the recent ballots, the unions isolated workers at different departments, preventing a unified industrial and political struggle against the unstable Turnbull government.

At some departments, including the CSIRO and the Department of Defence, the CPSU posted pro-forma web site statements suggesting a “no vote.” At other agencies, including the ATO, the union made no recommendation, while claiming the offer was better than the government’s previous ones. At the Department of the Prime Minister and Cabinet Staff, the CPSU called for a “yes” vote.

Asked by the WSWS what the union had advocated at the CSIRO and elsewhere, CPSU media representative Simon Frazer said the union proposed a “softer no.” He said: “We provided our members with the details so they could make up their own minds.”

In other words, the union sought to ensure the passage of the agreements, while distancing itself from the regressive measures.

At a number of the departments, a substantial minority of workers nevertheless voted “no.” In Defence, 39 percent voted to reject the agreement, with 84 percent of eligible staff participating.

At the CSIRO, where last October staff voted 70 percent against a government offer, the latest agreement got through by just 57.74 percent. Some 77 percent of eligible staff voted.

At DAWR, where workers rejected four previous offers, the latest was accepted by 63 percent.

Finally, at the end of June, 16,600 workers at the ATO voted 83 percent to accept the union-negotiated agreement. No doubt the union-engineered collapse of resistance at the other agencies impacted on the resolve of the ATO workers, who had overwhelmingly rejected five earlier government offers.

Hailing the agreement last Wednesday, Commissioner of Taxation Chris Jordan declared the deal a “really positive” outcome for the ATO and praised the “collaborative approach” taken by “unions and workplace bargaining representatives.”

CPSU representatives cynically declared that the deals at the CSIRO, Defence and DAWR were “not perfect” and eroded conditions. Yet CPSU deputy national secretary Melissa Donnelly welcomed the outcome, declaring: “This bitter and protracted round of public sector bargaining may finally be headed towards a resolution.”

Donnelly made these comments despite Federal Court employees this week rejecting by 90 percent an agreement that would have capped wage increases at just 1 percent, and meant increased workloads and cuts to conditions.

The latest cost-cutting agreements come on top of 100 deals imposed across other government departments since union bargaining began. Having broken resistance at key agencies, the unions will use similar methods to try to deliver the government similar outcomes across the entire public sector.

The CPSU has already moved to neuter opposition by Department of Immigration employees, who have consistently rejected government offers abolishing multiple allowances and containing other severe cuts.

Last year these workers conducted a series of industrial stoppages that impacted on the operation of ports and airports, before the stoppages were limited by the CPSU and then called off. The union then pushed the dispute into the Fair Work industrial tribunal where an arbitrated outcome will no doubt deliver the government’s agenda.

Also in the unions’ crosshairs are the 34,000 workers at the Department of Human Services (DHS) who have overwhelmingly rejected three government offers.

In a ploy to soften up DHS workers, the CPSU claimed on June 28 it had won around 2,000 new jobs for the department. In reality, most of the “new” positions will be filled by current casual staff, so there will be no overall increase in employment levels. The so-called increase will not compensate for thousands of jobs already axed across the department or the 1,200 earmarked for shedding in the May budget.

Nor does the deal represent any drive by the unions to fight the ongoing casualisation in the public service, a process that the unions have overseen for decades.

Having stymied workers’ attempts to fight the Turnbull government’s assault, the unions are looking to steer the mounting discontent behind the election of another Labor government. In a June bulletin, the CPSU declared there was no way to change the government’s policy, so “the alternative is to wait for the next federal election and see if a new government improves on the current policy.”

However, during last year’s federal election campaign, Labor pledged to make some $33 billion in cuts, including to healthcare, education and welfare. Since the narrow return of the Liberal-National government, Labor has stressed its “bipartisan commitment” to “budget repair”—a code-word for slashing spending and thus jobs.

Italian local elections see defeat of Renzi’s Democratic Party

Marianne Arens

The Democratic Party (PD) of Matteo Renzi suffered a damaging defeat in the second round of the Italian local elections on Sunday, June 25. An electoral alliance of Berlusconi’s Forza Italia (Forward Italy), Matteo Salvini’s Lega Nord (Northern League) and the fascists of the Fratelli d’Italia (Italian Brothers) profited from Renzi’s setback.

Turnout was extremely low, reaching only 46 percent in the second round, with not even one in two voters going to the polls. The election result is a huge vote of no confidence in the governing Democratic Party and the entire so-called centre-left camp.

The term “centre-left”, which is found everywhere in the media, has long since lost all political meaning. In the past 25 years, it was primarily the successor organisations of the Italian Communist Party (PCI), which carried out the attacks on the working class, most recently with Renzi’s so-called Jobs Act. They have moved further and further to the right; the PD is the result of this process.

In total, more than a thousand cities and municipalities participated in the two election rounds. A run-off election took place on Sunday in 111 municipalities. The local elections are the last important test before national parliamentary elections, which must take place no later than May 2018.

In the 25 regional capitals and large cities where elections were held this year, the government camp lost 9 out of 15 cities to right-wing parties. These include Genoa, La Spezia, Pistoia, Como, L’Aquila, Asti and Rieti. In Rome, Turin, Milan and Naples, elections had already taken place last year.

In the port city of Genoa, where the mayor’s office has traditionally been held by the PCI, the Socialist Party and, most recently, the PD, the non-party manager Marco Bucci won, standing on the list of the Lega Nord. The same was true of La Spezia, a town traditionally regarded as “left-wing”. Here, a former functionary of the Christian Democratic Union CISL won, also with the support of the Lega Nord.

In the Milanese suburb of Sesto San Giovanni, a traditional industrial and working-class city, the 39-year-old journalist Roberto di Stefano won. For the first time since 1945—i.e., for 72 years—a candidate supported by an alliance of right-wing parties has become mayor.

The election results evince a veritable collapse of the government camp. Dissatisfaction with the PD government and the numerous, supposedly “left-wing” mayors has reached a huge scale; the country is like a social powder keg. Millions of Italians stayed away from the polls on the 11th and again on the 25th of June, because they no longer see the possibility of influencing political developments via the ballot box.

This is especially true for the younger generation. Young people increasingly reject all parties equally. This was shown by a survey of 2,000 young people aged 20-34 years. When asked which party they preferred, 34.6 percent answered: “None at all”. The “Generation What” survey by the European Broadcasting Agency (EBU) found that 65 percent of 18-34-year-olds were prepared to participate in a major uprising. Italy came second (67 percent) after Greece.

Five years ago, Beppe Grillo’s Five Star Movement (M5S) had benefited from the general dissatisfaction. Hurling loud insults against the “corruption of the politicians”, Grillo appeared as a kind of popular tribune against the establishment parties. In reality, he sought to incite angry layers of the petty bourgeoisie against foreigners by means of a nationalist policy.

Just a year ago, the Five Star Movement had captured the cities of Rome and Turin. This proved to seal the fate of M5S, after Rome Mayor Virginia Raggi became embroiled in corruption and was accused of links to the Mafia.

As a result, Beppe Grillo’s candidates suffered enormous losses in the municipal elections for the first time. M5S was able to win only a few municipalities in the first round. In a total of 158 municipalities with over 15,000 inhabitants, M5S now holds the mayor’s office in only 8. In Parma, the city of its first great victory five years ago, Federico Pizzarotti, following his expulsion from M5S, won the election against Grillo.

It was above all the Lega Nord, Forza Italia and the fascists who could benefit from the poor results of the M5S, especially as they relied on largely unknown, non-partisan candidates in many places. But the most important feature of these elections is the crisis of Matteo Renzi’s governing party.

The overwhelming dissatisfaction with the right-wing policies of the PD was already expressed on December 4, 2016, in the defeat of Renzi’s constitutional referendum. As a result, Renzi had to resign. In the spring, his party broke into several parts when a wing of former PCI officials split off and founded the Movement of Democrats and Progressives (DP).

Since then, Renzi’s successor, Paolo Gentiloni, has continued his right-wing course in the interest of the banks and corporations. This was demonstrated by the bankruptcy of national airline Alitalia, the imposition of Renzi’s Jobs Act and the recent bank rescue.

The same Sunday on which the runoff election took place, the Gentiloni government tabled an emergency decree providing support for the ailing banks. Once again, the state has intervened to save the banks at the expense of the population. It is paying over €5 billion to the Intesa Sanpaolo bank, which is to take over the “healthy” parts of the Veneto Banca and Banca Popolare di Vicenza. A “bad bank”, which will take over the bad loans, is being secured by a further €12 billion in taxpayers’ money. Six-hundred bank branches will be closed and 4,000 jobs destroyed.

The interchangeability of the establishment parties also manifested itself in the alliance of the four largest parties, recently agreed by the old and new PD party chairman Renzi. Together with Silvio Berlusconi, Matteo Salvini and Beppe Grillo, he agreed to a new electoral law and early elections. However, the election reform, which was supposed to raise the hurdle for election into parliament from 3 to 5 percent, failed shortly before the vote in the House of Representatives.

A section of the Italian and European bourgeoisie would rather do without elections altogether and carry through the planned, drastic cost-cutting measures against the working class in silence. Italy’s debt is almost €2.3 trillion, or 133 percent of gross domestic product, the second highest debt rate in Europe after Greece. The European Union (EU) is demanding Rome impose cuts of up to €30 billion in government spending.

The working class is willing to fight against these attacks; ferocious strikes against job cuts, privatisation and wage dumping are increasing. For example, a national 24-hour strike of railway workers, bus drivers, airport workers and transport drivers took place between the two polls.

But the perspective of the rank-and-file trade unions that lead most strikes is just as nationalist and bankrupt as those of the mainstream CGIL, CISL, and UIL trade unions. Like Rifondazione Comunista (Communist Refoundation), Sinistra Italiana (Italian Left) and other pseudo-left parties, they also advocate a “new political project” within the framework of capitalism, essentially based on the model of Syriza in Greece.

Report: UK low-income families cannot afford basic requirements to live

Alice Summers

Many low-income families in the UK are unable to afford the basic necessities to live, a new survey by debt advice charity Christians Against Poverty (CAP) reveals.

The charity, which last year helped roughly 21,000 indebted low-income families and individuals, reported that from its survey of 1,200 clients, more than a tenth (11 percent) did not have a bed to sleep in, as they could not afford one. Another 6 percent of clients revealed that they were renting their bed, often through punitive rent-to-buy schemes by which customers pay costly weekly contributions over a set period.

A third of CAP clients could not afford basic necessities such as beds, refrigerators, washing machines or sofas. Eight percent of CAP’s clients were renting a sofa, while 12 percent were forced to rent a fridge freezer. Almost a third of the charity’s clients could not afford a washing machine, with 17 percent thereby going without and 15 percent renting one.

One CAP client, Chris, who was evicted from his home after a death in his family forced him to give up work to look after his children, reported that he and his two young children had to sleep on bin bags stuffed with clothes, with a coat for a blanket, as he could not afford a bed. He also relied on emergency food handouts from food banks to feed himself and his children. After being evicted from his home, Chris was rehoused by his local council in an unfurnished house, living on only £7 a week while facing a seven-week wait for benefit payments to come through. He and the children were forced to live in these appalling conditions for three months.

The CAP survey links these shocking levels of poverty with rocketing personal debt. The latest CAP figures show that more than 6 in 10 (63 percent) of their clients are living below the poverty line, with low income the most common reason cited for debt problems.

The CAP survey reveals that the average “priority debt” owed by their clients has tripled in the last decade, from £1,412 per person in 2006 to £4,582 last year. Priority debt refers to costs such as mortgage repayments, rent, utility bills and council tax, which can have serious consequences including eviction, imprisonment and gas, water or electricity shutoffs if not repaid.

Forty-seven percent of CAP clients reported that they had fallen behind with rent or mortgage repayments, while 43 percent had not been able to pay their council tax and 40 percent had unpaid debt from gas or electricity bills.

While the average total debt of CAP clients has declined slightly since 2006, it remains at a staggeringly high £14,298, and the proportion of priority debt owed by clients has ballooned from 9 percent of the total in 2006 to 32 percent last year.

The survey provides a snapshot of a wider problem affecting many more people than CAP’s 21,000 clients.

According to research carried out by the Trades Union Congress (TUC), total unsecured debt in the UK reached an all-time high of £349 billion in the three months to the end of September 2016. Unsecured debt includes credit card debt, payday loans and student loans, but not mortgages. Based on figures from the Office for National Statistics (ONS), the findings suggest an average household debt of £12,887—that is, a 27.4 percent share of average household income.

Low income and debt have been cited as key reasons for the massive increase in food bank usage. A record 1.2 million emergency food parcels were handed out in the last year by the Trussell Trust food bank charity, with low income (26.45 percent) and debt (7.78 percent) cited as major reasons for reliance on food banks by large percentages of users. The most prominent causes of crisis situations faced by Trussell Trust clients were delays or changes to their welfare benefits payments, with nearly 43 percent of the charity’s users reporting that this was the reason they could not afford food.

Similarly, 50 percent of CAP clients reported that they had run up debt due to benefits delays or sanctions. Other clients reported that their financial situation had deteriorated after having to take up caring duties or pay funeral costs.

Nearly all (89 percent) of CAP clients have incomes that are lower than the national average, with 63 percent living below the poverty line.

Poverty levels are rocketing across the UK. After nearly a decade of pay stagnation and freezes, the prevalence of zero-hour contracts—amid a mushrooming of the lowly paid and highly exploitative “gig economy”—one third of the UK population is now officially below the poverty line, while more than half of all households depend upon state benefits.

Millions more only manage to stay afloat by relying on savings, credit cards and loans. Credit card borrowing is on the rise, while by the end of 2016, the amount of savings held by British households hit a record low.

This UK-wide phenomenon is reflected in the CAP report. The large majority (90 percent) of CAP clients had taken out loans, run into their overdrafts or relied on credit cards to pay everyday domestic bills. The proportion of clients using credit cards to stay afloat has increased each year, from 49 percent in the 2015 to 64 percent last year.

As with the Trussell Trust report, which indicated that one in four food banks found that problems associated with Universal Credit benefits payments had led to an increase in mental health difficulties, the CAP survey found that debt and low income had had an adverse effect on their clients’ mental health. More than a third of CAP clients reported that they had considered suicide, with three quarters having visited a doctor for debt-related problems. Over half of those surveyed had subsequently been prescribed medication or therapy.

While the media often attempts to demonise the indebted and poverty-stricken and present their problems as self-inflicted due to “laziness” or being careless with money, the CAP report stresses that this is not the case. Matt Barlow, CAP chief executive, explained: “It’s easy to say that people get into debt because they are thoughtlessly overspending. That view is now not only lacking in compassion, it’s thoroughly out-dated.”

He continued: “We know the downward spiral most commonly begins with low income and that fragile situation only needs hours to be cut, a relationship to break down or even something as mundane as a broken washing machine, and that person’s finances are in free fall.”

Barclays PLC charged with fraud by UK Serious Fraud Office

Jean Shaoul

The UK’s Serious Fraud Office (SFO) has charged Barclays PLC with conspiracy to commit fraud and the provision of unlawful financial assistance during the financial crisis in 2008.

The prosecution has absolutely nothing to do with the criminal and reckless banking behaviour that precipitated the crash—the bank's lending practices, the selling of worthless mortgage-backed securities, false valuation and rating of debt instruments, abuse of loan foreclosure procedures, misrepresenting its financial position or any other forms of financial skulduggery.

Instead, the prosecution relates to Barclays’ rescue.

While the Royal Bank of Scotland and Lloyds Bank sought refuge in the tender arms of the British government—with billions of pounds seized from the public purse to bail them out—Barclays sought to evade nationalisation and the possibility of sanctions or restrictions by the UK government on its activities, and instead raised equity from Qatar. It was thus able to meet the higher capital requirements set by regulators as the financial crisis became more acute.

The fraud charges relate to Barclays’ arrangements for loans totalling £12 billion with Qatar Holding LLC and Challenger Universal Ltd in June and October 2008, and an apparent £3.5 billion “loan” from Qatari and Abu Dhabi investors in November 2008.

The SFO charges Barclays with failure to properly disclose the so-called “advisory services agreements” (ASAs) struck in 2008 that involved payments totalling £322 million over five years to the Qatari investors. Barclays said at the time the fees were for advice. The SFO’s charges imply that Barclays made corrupt payments to secure Qatar’s support for the cash injection.

The second set of charges of unlawful financial assistance relates to the £3.5 billion in “loans.” The SFO is arguing that, contrary to the way Barclays represented the transaction as a loan from Qatar, it had loaned Qatar money, which was then used to buy shares in Barclays as part of the rescue deal. In other words, Barclays was using its own money to buy up its own shares in a circular and illegal operation.

In an unusual move, the SFA brought charges against not only Barclays, but also against its top executives, including John Varley, the chief executive at Barclays between 2004 and 2011. This is the first time that the chief of a global bank has faced criminal charges arising out of the 2008 crash.

Three others face prosecution: Roger Jenkins, the executive chairman of investment banking and investment management in the Middle East and North Africa, who was paid £40 million a year, Thomas Kalaris, chief executive of Barclays’ wealth and investment management, and Richard Boath, European head of the financial institutions group.

Barclays and the four executives have been charged with a conspiracy to commit fraud by false representation in relation to the June 2008 capital raising. Barclays, Varley and Jenkins face the same charges in relation to the October 2008 capital raising. Barclays, Varley and Jenkins have also been charged with unlawful financial assistance. If convicted, they face jail terms of up to 10 years. The first hearing is set for July 3.

The four men are the most senior UK banking chiefs charged since the financial crisis. While Jenkins’ lawyer said his client would “vigorously defend against these charges,” Boath issued a statement saying he “was not a decision-maker and had no control over what the bank did in 2008.” Varley and Kalaris have declined to comment. Boath added, “I repeatedly raised concerns about the decisions taken by the bank with both senior management and senior lawyers and was reassured that those decisions were lawful.”

The SFO also investigated Chris Lucas, the bank’s group finance director, but apparently decided against pressing charges because of his health. It also investigated Bob Diamond, a former CEO, and former senior Barclays’ lawyers--Mark Harding, Judith Shepherd and Matthew Dobson--but again decided not to file charges against them.

The Financial Conduct Authority (FCA) is also reviewing the Qatar deals, having re-opened its inquiry earlier this year after more documents surfaced. The FCA fined Barclays £50 million in 2013 for failing to disclose some of the fees paid to Qatar Holding, but following Barclays’ appeal, it put the case on hold.

The Stock Exchange shrugged it off, with shares in Barclays down only slightly after the announcement. The announcement was not unexpected, with Barclays acknowledging that it had anticipated that charges would be brought.

There should be no illusions that there has been some kind of “cultural transformation” among Britain’s regulators. The SFO has not changed its spots and is not in hot pursuit of the banks. The SFO, which the Conservative Party’s election manifesto pledged to fold into the National Crime Agency--emasculating what was an already puny agency--opened its probe in 2012. It has postponed the charging decision at least twice since missing a promised March deadline.

It is pertinent to consider the fact that Barclays did not immediately protest its innocence. Instead, it issued a statement saying that it was “considering its position in relation to these developments.”

This is because, once again, the authorities have acted with kid gloves to protect Barclays from the full impact of a possible criminal conviction, revealing how both the corporate structure and the regulatory system work to safeguard the financial institutions.

The SFO has charged Barclays PLC, the holding company that owns Barclays Bank, not Barclays Bank, apparently out of concern for the damage a conviction would cause. This could lead Barclays to plead guilty and accept a fine of several hundred million pounds so as to continue its operations without hindrance, particularly in the US, where a criminal conviction would preclude it from operating. Such fines, so much loose change for the banks, have become part of the costs of the banking business and are simply passed on to customers in innumerable charges.

Pleading guilty presumably means abandoning their former top executives to their fate.

However, the decision is likely to depend upon whether the SFO also charges Barclays Bank, as well as what the US Department of Justice and the US Securities and Exchange Commission decide to do over Barclays’ cash injections from Qatar and Abu Dhabi and its alleged mis-selling of mortgage-backed securities. The SFO told Barclays that it has not made a decision as to whether it will also bring charges against Barclays Bank PLC.

Furthermore, Barclays faces a £750 million civil claim for unpaid fees from PCP Capital Partners’ Amanda Staveley and PCP International Finance Limited, which the bank is defending.

Staveley was the advisor on the purchase of Barclays’ shares on behalf of Abu Dhabi’s Sheikh Mansour bin Zayed Al Nahyan in October 2008. The case, to be heard next January, has already played a crucial role in unravelling Barclays’ version of the share purchase as a loan, making it difficult for the authorities to avoid a prosecution.

The evidence thus far rebuts any notion that Barclays in 2008 was in an any less penurious state than the other banks, which only survived because of the government bailout.

Furthermore, far from saving the British taxpayer the cost of bailing out Barclays, as some commentators have claimed, Barclays, like all the other banks, has benefited enormously from the £1 trillion provided by the taxpayer, including more than £500 billion of quantitative easing that has created the biggest government bond bubble in history.

Barclays, like the other banks, has robbed millions if not billions of people around the world via its criminal fixing of the London Interbank Offered Rate (Libor) and Forex market.

US provocatively approves major arms sale to Taiwan

Peter Symonds

The Trump administration’s decision on Thursday to approve a major arms deal with Taiwan, along with the announcement of penalties on Chinese companies and individuals over trade with North Korea, is a deliberate slap in the face to Beijing. It sets the stage for a confrontational meeting when Trump meets his Chinese counterpart Xi Jinping for their second summit on the sidelines of next week’s G20 meeting in Hamburg, Germany.

The $1.4 billion weapons sale to Taiwan is the Trump administration’s first and the first since December 2015. The package, which includes MK-48 torpedoes, high-speed anti-radiation missiles and early-warning radar surveillance technical support, will significantly enhance Taiwan’s military.

China is particularly sensitive to the arms deal with Taiwan, which it regards as a renegade province. Beijing has threatened to take military action should Taiwan’s government ever declare formal independence. Taiwanese President Tsai Ing-wen, who was elected last year, is a member of the Democratic Progressive Party, which favours a more independent stand from China.

The Chinese government has routinely protested against US arms sales to Taiwan, which Washington justifies under the 1979 Taiwan Relations Act as necessary to prevent the forcible Chinese takeover of the island. This week’s deal will reignite fears in Beijing that Trump is reverting to more belligerent US support for Taiwan.

In an inflammatory and unprecedented step last December, Trump took a phone call from President Tsai, ostensibly for Tsai to congratulate him on winning the US election. This symbolic move was followed by Trump tweets and comments suggesting he would tear up the “One China” policy that has been the foundation of US-Chinese relations for nearly four decades.

Under the One China policy, successive US administrations have recognised Beijing as the legitimate government of China, including Taiwan, and have no formal diplomatic ties with Taipei.

While Trump formally upheld the One China policy before meeting Xi in April, his administration includes top officials, such as chief of staff Reince Priebus, who have had close relations with Taiwan. Taiwanese Foreign Minister David Lee described Priebus’s appointment as “good news” for the island.

The Chinese embassy in Washington declared on Friday that “the Chinese government and Chinese people have every right to be outraged” over the arms deal.

Chinese Foreign Ministry spokesman Lu Kang yesterday called on the US to stop the sale, saying it would hurt Chinese sovereignty and ran contrary to Washington’s commitment to the One China policy. Lu said Beijing had begun to make “solemn representations” to the US over the arms deal, which he stated went against the consensus reached by Trump and Xi in April.

In his meeting with Xi, Trump backed away from his more provocative remarks in a bid to secure tough Chinese measures against North Korea to force Pyongyang to abandon its nuclear and missile programs. Beijing has taken steps to pressure North Korea to accept US demands, including a freeze on coal imports from the country and, according to some reports, a reduction in energy sales to North Korea.

Trump, however, declared yesterday at the White House that the “era of strategic patience with the North Korean regime has failed”—a reference to the policies of the previous Obama administration, which sought to ratchet up sanctions on North Korea to force it to halt its nuclear and missile tests.

By declaring that “patience is over,” Trump leaves few options other than the use of military strikes against North Korea. His national security adviser, Gen. H. R. McMaster, warned on Thursday that the threat from North Korea is “much more immediate now.” He said Trump had directed his officials to “prepare a range of options, including a military option.”

While McMaster declared that nobody wants to take the military option, the Pentagon has been preparing just such a plan. Three aircraft carrier strike groups have been stationed in the vicinity of the Korean Peninsula, together with an unspecified number of nuclear submarines. The US military can also call on its huge military forces based throughout the region, including in Japan and South Korea.

Trump made his menacing comments alongside newly elected South Korean President Moon Jae-in, who has indicated a willingness to ease tensions with North Korea. The US president, however, used the opportunity to publicly berate Pyongyang, claiming that the small, poverty-stricken country posed an imminent threat to the US.

Trump’s remarks also indicate that time has run out for China to bully North Korea into line. In a tweet over a week ago, the US president declared that while he appreciated Beijing’s efforts, “it has not worked out.” The US decision to take punitive action against Chinese entities and individuals is a clear message that the Trump administration will adopt a more aggressive stance against China.

Treasury Secretary Steven Mnuchin announced sanctions on Thursday to cut off the Bank of Dandong from US financial markets, alleging that it had been the means for funneling millions of dollars into North Korea. US citizens also will be prohibited from doing business with two Chinese business executives accused of operating front companies on behalf of North Korea, and with Dalian Global Unity Shipping, which is charged with transporting freight between China and North Korea.

Mnuchin absurdly declared that the US is “in no way targeting China with these actions” and that it looked forward “to continuing to work closely with the government of China to stop the illicit financing in North Korea.” China’s ambassador in Washington, Cui Tiankai, reacted by declaring that China opposed any US use of domestic laws to impose “long-arm jurisdiction.”

The imposition of secondary US sanctions on China is particularly galling to Beijing as, in line with agreements reached in April with Trump, it has lifted a longstanding ban on the import of US beef, ostensibly imposed over concerns about mad cow disease. In fact, as the Trump administration announced its sanctions, the US ambassador to China, Terry Branstad, Agriculture Secretary Sonny Perdue and assorted American cattlemen were gathered in a luxury Beijing hotel to celebrate the end of the ban.

During a bilateral meeting between US and South Korean officials yesterday, the director of the National Economic Council, Gary Cohn, signaled a return to the anti-Chinese demagogy that marked Trump’s presidential campaign. He criticised China’s “predatory practices" on trade and said the US hoped to work with South Korea to tackle alleged Chinese trade abuses.

The shift in the Trump administration’s approach to China will not be limited to trade. The bellicose US stance toward North Korea has always been indirectly aimed against Beijing and exploited as a means for a huge US military build-up throughout the Asia-Pacific in preparation for conflict with China, which Washington regards as the chief obstacle to its dominance of the region.