Some Facts on a Wealth Tax & How Irish Times Ran Fake Story To Protect Rich

Some Facts on a Wealth Tax & How Irish Times Ran Fake Story To Protect Rich

The Irish Times headline recently ran a headline, ‘Imposing French-style wealth tax would only yield €22m.

UCD sociologist Kieran Allen asked for a right to reply but received no response to his request. Here is his exposure of how journalism sometimes functions as propaganda.

The story is based on an ESRI Working Paper entitled ‘Scenarios and Distributional Implications of a Household Wealth Tax in Ireland’. The Irish Times lifts one or two figures from the paper but fails to give any context or critically examine the report.

The study draws its data from a Central Statistics Office publication, ‘Household Finance and Consumption Survey, 2013’ 2013, however, was the year when the Irish economy was still caught in the after-effects of the crash. Since then there has been a recovery in wealth.

The data from the CSO is based on self-reporting. They took a sample of 10,552 households and asked them to provide detailed information. The response rate was just 51.5%. and this reduced the validity of the data.

The rich are even more likely to hide their assets from an interviewer. The CSO recognised this problem and gave a health warning, stating that,

‘ It is well known from research in this area that it can be very difficult to get accurate data from very wealthy household, not least because they can sometimes be physically difficult to locate or contact. While these are obviously a small percentage of household, they tend to hold significant percentages of the wealth and their absence or otherwise affect the average and aggregate data’

This health warning is not explicitly referenced in the ESRI report.

The data the ESRI used excluded key sources of wealth. Its focus was exclusively on household wealth and it ignored the wealth held by publicly traded companies

On the basis of these largely unacknowledged limitations of the Household Finance and Consumption Survey, the ESRI came up with a figure of the net worth of Irish households of just €378 billion. The ESRI authors then claims that this figure represents ‘the maximum potential wealth tax base’.

This is quite simply wrong. The purpose of the Household and Finance Survey was to identify the distribution of assets – it did not give a figure for the total assets held. It could not because of the limited nature of self-reporting in its sample.

The ESRI claimed that 47% of the €378 billion wealth base or €226 billion is derived – from the value of the ‘household main residence’, typically the family home. They also claimed that only 12% of the wealth base or just €60 billion comes from finance assets.

Yet the National Accounts of the CSO state that the total financial assets of Irish households in 2013 was € 323 billion. These refer to non-property assets such as shares or cash. In other words, the ESRI were way out.

The ESRI ran a number of scenarios of how a wealth tax might work. The main variations are the thresholds of which the tax kicks in – do they start at assets valued at €500,000 or a €1million; for example; the exemptions that might be granted; the annual tax rate.

The Irish Times story only quoted a few examples that serve its propaganda purpose.

There is a French model which uses a graduated rate of 0.5% to 1.5% on thresholds above €1 million which yields the relatively low €22 million figure. Or there is a Swiss system that imposes a 0.25% wealth tax on all assets above €49,824.

The Irish Times spin is that you can either have a wealth tax which targets a rich minority and you will only raise a very limited amount. Or you can tax the majority to capture any significant revenue.

However, there are many other variations which did not feature in the their story.

One is the Norwegian model. If this were applied to Ireland, the ESRI paper acknowledged that it would yield €774 million in tax – even though its wealth tax rate is set at only 0.85%. This would also only hit the top 12% of the richest in Irish society. They would have to make annual average payment of just €3,637 to help provide public services.

This is hardly an onerous burden. If a higher tax rate was used and if we assume a far larger wealth base than the limited one claimed in the ESRI paper, even more revenue would be raised.

Social welfare recipients are under a legal compulsion to reveal their meager assets and, if they are being means tested, their social welfare payments are systematically reduced according to these declaration. The most interesting part of the ESRI paper is the statement that these imputed reductions correspond ‘to annual net wealth rates of 5.2% on net wealth above €20,000; 10.4% above €30,000 and 21.8% above 40,000’.

Just so we are absolutely clear on this, lets translate that again.

If you are on social welfare and you declare ownership of modest assets of €40,000 plus you will be penalised with a 21.8% reduction in your social welfare.

A genuine left government would transfer this type of punitive measure from the poor to the rich. The rich would at last be forced to make real declarations of their assets – not voluntary disclosures. A tax model would be set to target the top 10% and a policy of re-distribution of wealth would be established.

Given this approach, the readership of the Irish Times can be assured that the tax take from their wealthy friends would greatly exceed €22 million.

This is a Lockout.

This is a Lockout.

People Before Profit statement.

The Government and Minister Bruton decided to day to close over 400 secondary schools and lock out both teachers and pupils. 

The did this because they want to punish the ASTI for daring to seek equal pay for newly recruited teachers.

The ASTI are the only union to fight for immediate pay equality in the public service. All public servants recruited since 2011 are paid significantly less than their senior colleagues. New teachers can earn around 8000 euro less for doing the same work.

The Government want to stamp out the example of workers standing up and fighting for a basic union principle of equal pay for equal work.

It is Kenny and Bruton that have closed our schools, NOT the teachers. While they are willing to pay teachers in other unions for doing supervision work they expect ASTI members to do it for free.

The only sin that ASTI members are guilty of is demanding equal pay for all their members.

We must not let this Government attack on ASTI succeed.

Their tough stance toward the teacher’s simple demand is in stark contrast to their grovelling to bankers, bondholders and the troika when they paid off the banks debt by slashing public services and hiking all worker's taxes.

 Parents, pupils and all trade unionists should demonstrate their support for this fight.

People, before Profit stand 100% behind the teachers in the ASTI and the many thousands of teachers in other unions who fully support them.

Brid Smith stated last night "The cost of full equality for all teachers is estimated at about 70 million euro, the Government talks of recovery in one breadth, but then it says it can’t afford such demands. Yet they can gift tax breaks to corporations, landlords and the wealthy worth over 100 million in the recent budget, they won’t pay the teachers demand because they want the recovery to be a recovery of profits for the wealthy, not of workers’ wages"

ASTI Members Are Right

ASTI Members Are Right

to Strike for Equal Pay  

People Before Profit want to express solidarity with teachers who are on strike today.

By taking action against pay apartheid, ASTI members are doing workers everywhere an important service. Following in the wake of Luas drivers and bus workers they are paving the way for pay restoration throughout the economy.

The idea of pay apartheid was never justified. It sold out new entrants at a time when workers everywhere were being hammered. Over the course of two budgets new entrants lost an extra 10% of their wages and suffered cuts to allowances given to their older colleagues. The result is between €6,000 and €8,000 per annum, or more than €250,000 across a working life. This is incredibly unfair.

Fine Gael want to have it both ways. They proclaim their role in creating a recovery, but insist that newly qualified teachers have to wait. This suggests that any recovery is not for workers. Announcing seven days of strike action was therefore important. It signals the depth of feeling within the union and follows the tactics that succeeded for transport workers. Most Irish people recognise the justice in the struggle for equal pay, but it is important to win the propaganda battle.

The government are already getting dirty. They are trying to pit teachers against one another, whilst rolling out conservative trade unions officials to condemn ASTI for making their stand. Keeping parents and the wider public on board will therefore be vital.

One way to achieve this will be to hold public meetings in every area to make the case about equality and justice. Another is to have an ASTI leaflet go into every house in the local area.

People Before Profit are willing to help in any way that we can. Contact 087 657 4100 to let us know what we can do to help. 

Bin Charges - Environment Before Profit

Why not choose a model that works?

Back at the start of this summer, following a very successful campaign by AAA-PBP, the government were forced to reverse the outrageous plans of former minister Alan Kelly, to impose charges on Green Bin recycled waste for the first time.

Alan Kelly’s plan, which effectively removed any incentive for householders to recycle green waste, was almost certainly prompted by the Private Waste Industry, who would be the only beneficiaries of such a step. This was a retrograde step and would have done immense damage to the environment had it been enforced.

The fact that the former minister even attempted such an environmentally regressive measure reaffirms the urgent need to take all waste collection and recycling services back into full public ownership and control. It has become increasingly obvious that the private waste companies do not give a damn about recycling or the environment – they are driven only by profit.

This point was compounded quite alarmingly when the private companies attempted to increase charges by as much as 300% in some parts of the country. Once again, in a move that reinforced the new strength of the left in the Dáil and in the local councils, the government were forced to intervene and put a temporary stop on the increases. Meanwhile, the waste companies are to spend the next year “educating” the customers on the new charging mechanisms.

This can be taken as Fine Gael speak for “we will bamboozle the people with deliberately unclear mechanisms for measuring and charging for waste, and once we have our foot in the door we will increase prices as and when we feel like it – In other words the “Thin edge of the wedge”. Their proposals will remove any pretence of a “Polluter Pays” policy or regard for environmental protection. They want a base fee annually, regardless of what you put out and pay by weight thereafter, for all bins.

At the moment people are being deliberately confused by these privateers, with different offerings and various explanations of what they can do. Consumers are to be forced to choose between a rock and a hard place – between one rip off merchant and another. 

The issues with these waste management and bin charges are almost identical for rural and city dwellers. However there are a couple of major, additional headaches, for those in rural Ireland.

Firstly, we face a distinct lack of choice. Many rural areas are confined to one service provider only. So it’s like it or lump it on the price. If you are not directly on their “route”, you will have to transport your bins, typically 3, to a central collection point which may be a few miles away. What will happen when the private companies decide that certain areas are not economical to service? Your central collection point may end up being many, many miles away. Different parts of the country are reporting various horror stories when dealing with these companies.

History tells us that prices vary but inevitably follow an upward trend. Regulation can be difficult to enforce in the Private Sector due to the differing number of providers, tariffs etc. It is not inconceivable to see scenarios where only certain bins are collected on certain days of certain weeks. We cannot arrive at a situation where the people of Rural Ireland suffer a sub-standard service, or no service at all, simply as a consequence of where we live.

To date, privatisation of waste management services has proven to be a disaster for all but the Waste Companies profit margins: For the citizens who have incurred ever increasing charges, for the workers who face a race to the bottom on wages and for the Environment because it has driven up occurrences of illegal dumping. The privatisation of the service must be reversed and it needs to be brought back into public ownership under the control of the councils. If not, a never ending cycle of charge increases will inevitably be the result, due to the voracious desire of these companies to drive up their profits. 

The establishment will tell you “you can’t do it, it won’t work, how will you pay for this”. Well, we can, it does work, and other countries are already doing it.

Firstly, let’s make the important point that Irish people have for some years now, shown a real appetite for recycling and environmentally positive waste management. Galway City Council, for one, have proven with published figures that, given the proper encouragement and facilities, households will recycle as much as possible. Figures from the council there show they have doubled the recycling targets set by the EU.  Having said that, many EU countries are still well ahead of us on recycling and waste management and even more so on their attitudes to same. Portugal, for example, this year powered the country for 4 days entirely on renewable energy!

However, I want to focus on another country in particular, which appears to be one that’s really leading the way in this field. They have a waste model that we should strive for, with immediate effect.

Sweden has a population of 9.9 million and while you couldn’t call it a “socialist” country, it has many socialist principles and socialist thinkers running it (“Sweden leads by example in corporate social responsibility. “ is a bold statement from its own website. www.sweden.se).

Waste management in Sweden is paid for through general taxation. Bulky waste is disposed of, for free, in recycling centres. Recycling stations for everyday household waste are, as a rule, never more than 300 meters from a residential area. In rural areas, it’s a little further but every effort is made to accommodate the users.

In 1975 only 38% of household waste was recycled in Sweden.

Today 99% of all household waste is recycled as energy or materials. Renewable sources now account for 52% of Swedish energy production. An excellent example of innovative green thinking is the city of Stockholm. Every month, 993,000kg of food waste is collected by the city. The waste is turned into 115,000m3 of gas, which is used to fuel their buses and taxis.

So how do we pay for it? We can maximise the potential for a return to the exchequer - from recycling the waste material and reducing both our reliance on imported fossil fuels and our energy bills, and as a side effect we create good public service jobs in every community through green energy initiatives, all of which feeds back into the local economy. A good number to remember is that three tons of waste contains as much energy as one ton of fuel oil… so there is a lot of energy in waste if reused properly. (source … Göran Skoglund, spokesperson for Öresundskraft, one of the Swedens leading energy companies) 

We take the “for profit” merchants out of the picture. Instead of some politically connected private entity creaming profit out at the top, an essential public service becomes self-funding and fairly available to all in society, and the environment is protected. Everyone wins. The Swedish model and many others in Europe focuses on making the essential service a success for its citizens, and not the profit making.

The inevitable response from the establishment parties will be “If it’s all publicly funded, you will have to raise taxes and everyone knows that Sweden is a high tax country”.  Relative to us at a base level, yes, it is a little higher, but they also have considerably less stealth taxes which impact the poorest people in society the hardest (https://iea.org.uk/blog/the-consumption-taxes-that-keep-people-poor). 

Also, as any Swede will tell you, their services reflect the taxes.  Their corporate tax is 22% and income from capital is taxed at 30%. Norway proposes to come in line with that 22% corporate rate by 2018. Guess what, neither country is in danger of closing down. Quite the opposite. Our government are too weak to demand even our lowly corporate rate of 12.5% be paid – in fact quite the opposite despite EU rulings!

The Swedes have shown what’s possible when waste management is freed from “for profit” speculators, is focused purely on the environment, and by treating household waste as an essential public service. This attitude is evident in all major policies - they also protect other essential public services from profiteering.  i.e. Health, Education, Housing & Transport. On the flip side, we pay for all these on top of our taxes! The Civil War parties, cheer lead by another party of little significance now, are all happy to put up the “For Sale” signs on all of our Irish services.   

We need to fight that agenda at every hands turn. 

Closures threatened

The shock news this morning on Boyletoday.com that two mental health facilities in Boyle are earmarked for closure is yet another example of the "close rural Ireland" mentality at any cost of this Government. 

Staff at Willow Grove day centre in the grounds of the Plunkett Home and Renbrack Hostel in Deerpark are understood to have been told of the closures at a meeting with HSE personnel on Wednesday.

Fears are growing over the potential closure of up to seven mental health facilities in county Roscommon.Day care centres and hostels in Boyle, Strokestown, Ballaghadereen, Athleague and Castlerea are among those set to be closed under the Vision for Change policy.

Here we have a situation where the most vulnerable in society are being used to save money.

Do the HSE have any bone of compassion at all? Do they stop to think what effect, the closure of establishments that service users have become familiar with, will have on those who use them? Do we have any compassion for the loyal staff who are also being affected?

It is sickening to see Minister Harris come to Boyle in a blaze of publicity four weeks ago to announce details of the primary care centre while less than 4 weeks later the HSE, which is under his remit, comes to the same location to inform staff that they are closing the facilities. Is there any interaction between the Minister and his departments?

While the staff may be relocated and the service users integrated into the community, the fact remains that here in Boyle we are faced once again with another closure.

How much more can we take? How much more fight is left in those who care for our town?

It would seem that rural Ireland and Boyle in particular is the forgotten child of this government.

We cannot allow this to happen and need to protest to the highest level or what will come next? Our Post Office? Our Railway Station?

Shale Gas Bulletin Ireland Information

NO to Fracking

1. US EPA report conclusions on water contamination criticised by scientific advisory board

The American EPA has been criticised by its own scientific advisers for a draft report it published in June 2015 on the potential effects of hydraulic fracturing on drinking water, report Inside Climate News and Motherboard. The study, which was mandated by Congress and took four years to complete, concluded that the "EPA did not find evidence that [fracking] mechanisms have led to widespread, systemic impacts on drinking water resources in the United States." This conclusion of the draft report, which was widely relayed by the mainstream media at the time, for example by the Wall Street Journal, National Public Radio and the Financial Times, has now been singled out for criticism by the EPA's own Scientific Advisory Board (SAB), an expert panel charged with reviewing and making recommendations on the report before the final version is published, expected by the end of this year. There has been less mainstream media coverage of the results of the year-long review of the draft, issued by the SAB on August 11.

The SAB found, notably, that the conclusions of the report did not accurately reflect the scientific findings in the report itself. According to the letter that accompanies the analysis, the SAB found that the report's core findings "are ambiguous and appear inconsistent with the observations, data and levels of uncertainty" detailed in the report. The SAB expresses "particular concern" about the widely-reported conclusion that the EPA did not find evidence of "widespread, systemic impacts on drinking water resources", noting that it was not supported quantitatively. The SAB recommended that "if the EPA retains this conclusion, the EPA should provide quantitative analysis" to support it in the final report, and "include modifying adjectives before the words 'widespread, systemic impact'."

The SAB further recommends the EPA "revise the major statements of findings in the Executive Summary and elsewhere in the final Assessment Report to clearly link these statements to evidence provided in the body of the final Assessment Report" and "discuss the significant data limitations and uncertainties, as documented in the body of the draft Assessment Report, when presenting the major findings".

The SAB specifically recommends that the EPA should pay more attention to local-level impacts, which "have the potential to be severe" and should "include and critically analyze...any available findings from the EPA and state investigations conducted in Dimock, Pennsylvatia; Pavillion, Wyoming; and Parker County, Texas, where many members of the public have stated that hydraulic fracturing activities have caused local impacts to drinking water resources."

DeSmogBlog reports that the EPA study has long been subject to criticism for "apparent coziness between researchers and the shale industry" and provides examples of this "coziness", which may have compromised the scope and conclusions of the study.

The American EPA has also come under fire recently from an environmental watchdog organisation, NC WARN, which has filed a federal complaint accusing the EPA of a "persistent and deliberate cover-up" of the true data related to emissions of methane, a potent greenhouse gas, from fracking operations. The complaint, based on information obtained from a whistleblower within the EPA, alleges "systematic fraud, waste and abuse by a high-ranking EPA official and possibly others in the data collection, results and process of two of the major studies used by EPA in developing policies and regulation." The complaint further alleges that the EPA's principal researcher at the time had undisclosed conflicts of interest that made him biased in favour of the oil and gas industry (which have funded his research and consulting work). NC WARN alleges that the cover-up and industry influence resulted in insufficient regulation of methane emissions from oil and gas infrastructure, which has contributed directly to climate change. The complaint notes that "methane emissions from 75% of oil and gas equipment are still not regulated" because the new EPA emissions standards (May 2016) only affect new oil and gas wells and well-site equipment.

2. NGO report evaluates total impact of fracking in the USA

The following are some of the report's main findings:

* Since 2005, more than 137,000 fracking wells have been drilled or permitted in more than 20 states.

* Wells fracked between 2005 and 2015 used at least 239 billion gallons of water, 5 billion pounds of hydrochloric acid, 1.2 billion pounds of petroleum distillates and 445 million pounds of methanol  and more than 938 other chemicals, 157 of which are known to be toxic.

• Fracking operations produced at least 14 billion gallons of toxic wastewater in 2014 alone, in selected states.
• Fracking has directly damaged at least 679,000 acres since 2005.
• Global warming pollution from well completions in 2014 (methane) was at least 5.3 billion pounds (equivalent to 22 coal-fired power plants.
• Pennsylvania regulators have confirmed at least 260 instances of private well contamination since 2005.
• Data from Pennsylvania from 2010-2012 shows a 6-7% well failure rate.
• In 2014, residents in the central and eastern US felt 659 earthquakes, compared to an average of 21 per year from 1973 to 2008.

Another broad-ranging compilation of the impacts of hydraulic fracturing in the United States is the well-known Compendium of Scientific, Medical, and Media Findings Demonstrating Risks and Harms of Fracking, produced and regularly updated by Concerned Health Professionals of New York and Physicians for Social Responsibility. The Compendium is now in its 3rd edition (October 2015).

3. UK government proposes cash payments to residents in fracking areas

The UK Independent reports that Prime Minister Teresa May has announced that residents in areas where fracking projects are approved will be eligible for cash payments, which have been qualified as "little more than bribes" by Green Party MEP Molly Scott Cato.

In November 2015, under the previous government, George Osborne established a Shale Wealth Fund worth up to £1 billion to be offered to communities accepting shale gas projects from the expected profits of gas extraction. The new government proposes to extend eligibility for these payments to individual residents as well as local authorities However, critics of the plan have been quick to point out that, as the fund depends on shale gas profits (up to ten percent of future profits), local councils and residents are not assured of receiving any payment at all, even if shale gas extraction goes ahead. This blog post points out that, "if the US experience is anything to go by...councils and householders are going to get a ten percent share of a big fat zero!" and notes that in the US surplus income above operating costs has gone to service the enormous debt contracted by the companies in order to finance their operations. As the Greenpeace Energy Desk argues, the point of the proposed payments appears to be to win support for shale exploration, but the payments would only come from "full-on commercial extraction" which may or may not occur in the same areas as exploration. Greenpeace also notes that the plan depends on the government receiving £10 billion in tax from shale gas, "which could politely be described as optimistic", given the UK's generous tax regime for oil and gas companies, the declining profitability of firms operating in the North Sea, and the number of US fracking companies declaring bankruptcy (leaving communities with cleanup costs). The prospect of significant tax revenues, according to Greenpeace, is further diminished by the fact that fracking companies in the UK will be able to offset their costs against their tax liability. Indeed, the UK taxpayer is likely to have to pay oil companies losing money in the North Sea up to £1 billion annually up to 2021 to help them cover their losses and decommissioning costs.

The Fermanagh Herald reports that local people opposed to fracking have rejected the suggestion that local communities and individuals could profit under the government's proposed scheme. Tom White, Chairman of Belkoo Frack Free had this comment: "We're in a situation with North Sea Oil and Gas where the tax receipts are going to be negative by a billion in the upcoming years, so there is no money. There won't be any money."

Local SDLP assembly member Richard McPhillips, cited by the Herald, commented: "This proposal is clear evidence that the British government are getting desperate to reverse public opinion on fracking. Local residents will not put a price on their health or that of their children or the land that they leave behind for future generations." Tanya Jones, Green Party representative for Fermanagh South Tyrone, said: "Effectively bribing local people to accept fracking is not an effective use of resources. Fracking threatens our health, our economy and our landscape. It is entirely unacceptable."

Leprechaun Economics

Leprechaun Economics or Tax Haven Capitalism?

Last month the Irish government posted GDP growth figures of 26.1%. This figure is unheard of in Western economies which usually register no more than 3% growth. The cause of this miraculous expansion was a new set of accountancy rules that shifted €300 billion of foreign owned assets into Ireland as economic growth.

For example, AerCap registered its fleet of International aircraft to Ireland, increasing the value of Irish ‘owned’ assets by €35 billion.

Why would foreign companies want to do such a thing?

Because Ireland allows these multinationals to do commercial activity in other countries before paying minimal taxes on it here. To put this more simply – Ireland is a glorified Tax Haven for the rich and powerful.

At the start of the year, the leaked Panama Papers showed the effects of such tax dodging on vulnerable citizens. Instead of resources being used to fund social services they are moved around the global to avoid any taxes.

To put the scale of this problem in context, the Tax Justice Network estimates that between $21 and $32 trillion has been stashed away globally without paying tax.

If the global rich were made to pay even 20% on this vast fortune, it would amount to more than €4,000 billion – or enough to solve world hunger for every person for roughly 135 years.

The fact that the Irish elites are so willing to play this role speaks volumes about their solidarity with the global poor. It also has an important effect here, as the state has to pay an extra €280 million to the EU next year as Ireland has become richer on paper.

This GDP increase may be an accountancy trick, but the cost is real. The €280 million could be used to hire more than 13,000 nurses or 11,000 teachers for example.

Tax Inversions

One way that foreign companies get to register for tax in Ireland is through so-called ‘Inversions’. These involve foreign companies buying Irish assets to register here for tax purposes.

Back in April, Pfizer, the US pharmaceutical giant, called off its merger with Dublin based Allergan after the US authorities changed their own rules to block the transaction. The deal would have relocated Pfizer’s headquarters to Ireland, shaving billions off its tax bill there and adding a tiny bit to it here.

Responding to the move, President Obama said Ireland is providing “one of the most insidious tax loopholes out there.”

Michael Noonan is not nearly so concerned. Writing in the Sunday Business Post, Noonan suggested that “our laws simply cannot prevent tax inversions”. He went on to state that any attempt to stop them would “have unintended consequences for substantive Irish operations” and that “these transactions are entirely driven by tax issues in other jurisdictions”.

None of this is remotely plausible. When the elites here feel that their interests are being threatened they move heaven and earth to fight their own corner. The example of Apple is a case in point. An EU investigation into Apple’s tax deal with the Irish state could reveal between $8 and $19 billion in underpaid taxes.

Any decent government would be falling over itself to claim these resources, but the Irish rich really don’t want them. To accept this money would be to accept the charge of being a tax haven, potentially scaring off new international business. Unlike Bermuda or the Cayman Islands, Ireland’s unique selling point as a ‘tax haven’ rests on the mirage that it really isn’t one.

Once this pretence is rumbled there will be little advantage remaining for a global elite who can stash their cash in off shore accounts for less than half the price that Ireland charges. .

For this reason the Irish state has already spent €670,000 disputing the fact that we might be owed anything. As Enda Kenny repeatedly suggests – this is a great little country in which to do business

CORBYN: LEFT IN BRITAIN IS ON THE MOVE

Last week, nearly 10,000 people attended an outdoor rally in Liverpool to support Jeremy Corbyn’s bid to retain the leadership of the labour Party. The day before 2,000 turned up in Leeds and before that again another 3,000 attended a rally in Hull. Membership of the British Labour Party has shot up to nearly 600,000.

All of this is a testimony to the appeal that real left wing politics has today. In the nineties the Labour Party was captured by Tony Blair’s ‘Third Way’ politics which proclaimed that the ‘class war was over’ and that the party had to adopt an overt pro-market position. In short, the type of politics which still dominates the Irish Labour Party and its main union backer, SIPTU.

(Labour’s new leader, Brendan Howlin has criticised Corbyn while its former TD, Pat Rabbitte has denounced him as ‘essentially Trotskyist in his disposition’. Meanwhile SIPTU’s President, Jack O’ Connor, claimed that unions should not be an ‘antagonistic voice’ to management but should rather seek to ‘minimise employer hostility’.)

Corbyn represents a shift away from this type of failed policy and that is why he is so popular with Labour Party members. He campaigns on policies that are not entirely dissimilar to People Before Profit’s own platform.

• He will bring in legislation to force companies with more than 250 workers to both recognise and automatically negotiate with unions.
• He will raise corporation tax to fund the abolition of student fees. Currently, the average student in Britain leaves college with £44,000 in debt after paying annual fees of £9,000.
• He will establish a national investment fund to help create jobs.
• He wants to ban zero hour contracts and change company law to stop directors taking out huge sums for their pensions while sacking workers.

But having a political programme is one thing – having the means to carry it out is another.
Jeremy Corbyn’s big problem is the apparatus of the Labour Party. The vast majority of its MPs hate him, precisely because he represents a break with the political consensus that upholds the British elite. The full time officials in the party have done everything to gerrymander the vote on the leadership election by disbanding local branches that are too radical and excluding members who joined in the last seven months before voting.

They want to replace Corbyn with Owen Smith, a former lobbyist for Pfizer and a figure who uses a mild left rhetoric to cover his more right wing instincts. For example Smith’s programme to address the concerns of those who voted for Brexit is to suggest that there are too many immigrants in some areas.

This is why the re-election of Corbyn will only be the first step in the revitalisation of left wing politics in Britain. It may lead to a split off of the Blairite wing of the Labour Party – or, if they remain, a continual campaign to undermine Corbyn.

Moreover, if Corbyn’s is facing such opposition before coming to office, one can only imagine the difficulties that stand in his way if he was ever Prime Minister. The BBC and even the supposedly soft left newspapers like the Guardian and Mirror are already running a smear campaign against him. If he ever got to lead a government, the full might of British capitalism would be deployed to undermine his policies.

This is why the advance of the left will need to move beyond the Labour Party membership to engage the mass of workers and encourage them to fight for themselves. This will mean the creation of a different type of party to the current Labour Party.

In the past Labour occasionally adopted a left rhetoric while staying ever loyal to the power structures of British capitalism and its imperialist ambitions.

That no longer fits with the current situation. What is now needed is a party rooted in struggle, promoting ‘people power’ and workers action as the way to win. How such a radical left party will emerge in Britain will become a key question after this leadership election is over.

FINE GAEL'S 'NEW POLITICS'? JUST AS NASTY BUT WEAK

The last two weeks have told us everything we needed to know about the government’s so called new politics.

Since April FG ministers have spoken endlessly about the transparency and accountability of their new minority government, but behind all of their flowery language they still believe in the same old nasty right-wing politics.

Take the commission on water charges as an example. Having lost the election on the issue of water, FG are now desperately trying to introduce charges through the back door.

With more than 90 TD’s elected on an explicitly anti-water charges platform, FG know they will lose a straight vote on the issue. T

They also know that the charges are deeply unpopular, but rather than listen to the will of the people they have established a supposedly expert panel crammed full of establishment elites.

Last week the proposed chair, Joe O’ Toole, gave an interview to the Irish Examiner in which he stated that AAA-PBP members are “completely and utterly wrong on the issue”.

He also admitted that he fundamentally believes in the governments “polluter pays principle” and that those campaigning against the charges are “talking utter nonsense” - hardly the kind of independent voice needed to gain the confidence of the public.

He has quite rightly been forced to step down.

The commissions other eight members are no more satisfactory. Peter Peacock is Chair of the Customer Forum for a private water company in Scotland; Xavier Le flaive works as an environmental consultant for the ultra-capitalist OECD;

Brendan O’ Mahony is the Chair of the National Federation of Irish Group Water Schemes – a group that already pays for water. None of the members comes out of the struggle to abolish the charges. Instead they are establishment lackeys cherry picked to report on the technical benefits of paying for water.

The entire commission is completely biased and must be disbanded.

All of this shows that Fine Gael’s politics haven’t changed one iota. What has changed, however, is the context in which they are governing.

For the first time in the history of the state neither Fine Gael nor Fianna Fail came out of the general election with any possibility of forming their own majority government.

Traditionally, Irish governments have used parliament to ram through legislation regardless of the opposition.

This made the rest of the Dail into little more than a talking shop. Largely because of the water movement this proved impossible this time around.

Neither of the right wing parties got anywhere near the 79 TD’s needed to form a majority administration. Instead Fine Gael formed a minority government with their own 50 TD’s and a rump of independents- with the support of Fianna Fáil who are playing at being government and opposition at the same time!

This has left them considerably weakened, particularly in the face of people power mobilisation. Above almost everything the government wants to stop the left from gaining any further momentum.

Since April they have therefore rowed back on linking social welfare payments to school attendance. They have also been forced to retreat on the issue of charging for recycling and on the proposed hikes to the standing charges for ordinary waste collection.

Now Joe O’ Toole has been forced to resign under pressure from the opposition parties in the Dail. For the left this sends out a powerful message. The government can be forced back repeatedly if we can mobilise people to fight for their interests. This makes the next R2W protest on the 17^th of September extremely important. Big numbers can bury water charges, once and for all and set the scene for future victories by working people.

Now is not the time to become complacent, however. Despite the government taking in an extra €750 million in taxes since the start of the year, Minister for Public Expenditure, Pascal O’ Donoghue still insists that the public finances remain in a state of emergency.

On the one hand, the government boasts that they are responsible for the fastest recovery in the whole of Europe.

On the other hand, they insist that they are not in a position to restore the pay and conditions of public sector workers. Given their vulnerability the government could be forced back on this issue too, but the public sector unions have by and large accepted the new regime of lower pay and worse conditions.

Because of this the Financial Emergency Measures in the Public Interest (FEMPI) has been rammed through the Dail without any debate. To reverse this decision workers should follow the lead of the Association of Secondary School Teachers who have refused to sign up to endless reductions in their terms of employment. This government is extremely weak but they will only reveal the extent of this weakness when working people take to the streets and strike back.