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Wealth – Trickling down or sucking the poor dry?

Mike Joslin was quite right (Dorset Echo letters 8th October, ‘A warning from Orwell’) in pointing out how a very few people own most of the world’s wealth, and are the ‘power behind the throne’. Whether they are fully conscious of it or not, they replace the ‘Inner Party’ of Orwell’s dystopia. In his ground breaking book ‘Capital in the 21st Century’, Thomas Picketty points out what ought to have been obvious. Owners of capital receive a return in the form of interest, dividends, rents etc., and under most conditions, far from wealth ‘trickling down’, capital sucks the poor dry. His analysis is based on an extensive historical study of the distribution of wealth and its causes, rather than relying on the poisonous and baseless doctrine of neoliberalism which the rich promote to justify their privileged position.

The tendency towards ever increasing inequality is only checked or reversed by shocks such as the two world wars and periods of exceptionally high economic growth, such as that between about 1945 and 1975. Since then income inequality has been steadily rising. Wealth inequality lags behind but has been steadily rising since the mid 1980s. So long as the return on capital remains substantially above the rate of growth – absent major ‘shocks’ or changes in taxation inequality will continue to rise.

Increasing inequality means misery for more and more people. It could suppress the overall level of economic activity because it is the poor who need to spend a greater proportion of their income. It will lead to a downward spiral. Conventional thinking argues for high growth as the way out, but as natural resources become depleted this involves extreme methods of extracting fossil fuels and minerals such as opencast mining, fracking, tar sands, dangerous deep sea drilling… As well as the obvious and visible signs of these activities and the poisoning of the oceans with CO2, there is the question of man made climate change, which few genuine scientists dispute.

So we are, it seems, caught between on the one hand an increasing fraction of the human race (including Britons) living in extreme poverty and dying of the diseases that engenders, and on the other hand making the surface of the planet virtually uninhabitable. The latter course seems to be favoured by the very rich, if their actions are anything to judge by. But do they want their offspring to have to live in underground bunkers?

There are just two ways out of this dilemma:

  • One is a dramatic reduction in the global population through disease. Few would admit to preferring this option; the Duke of Edinburgh is a possible exception.
  • The other is redistribution of income and especially wealth. The rich are determined to prevent this.

The rich use ‘manufactured consent’ to keep us in line. This includes neoliberal ideology endlessly promoted as unassailable truth by captive media, mainstream politicians, and economists working for the banks and transnational corporations; and by the endless ‘war on terror’ which just promotes more terror. Voters distrustful of mainstream politicians are moving to UKIP, but how can a party led by a banker, and whose main policies are to bash the immigrants and leave Europe, address inequality?

Powers of Attorney – Hints for Carers in Dealing with Banks

Introduction

This note is intended for people who care for a relative who is beginning to find it difficult to cope with his or her finances and wants you to take away the worry. There is a certain amount you can do informally; for example if he or she has difficulty trying to speak to a bank on the phone, you could sit beside her, get her to identify herself to the bank and to authorise the bank to speak to you. But she may find it difficult to answer the identity questions in which case she will be cut off, usually without apology. It is wise to persuade her to grant you a power of attorney. You can read about these at on the Office of the Public Guardian website https://www.gov.uk/government/organisations/office-of-the-public-guardian.

I will assume that your relative either has granted, or intends to grant, a Lasting Power of Attorney – Property and Finance (LPA). The process of creating and registering the LPA is relatively straightforward and is clearly described on the website. Just two tips here:

  • You will need to find two people who have known your relative (the ‘donor’ or grantor of the power) for at least two years and are not relatives, to certify the donor is mentally capable of granting you the power. Failing that you have to get someone acting in their professional capacity to do so. The obvious choices are GPs or solicitors. We would recommend the donor’s GP – there will be a fee of course. You may have very good friends of yours who have not known your relative but are prepared to say they have. Don’t accept their offer. You would get the power registered, but if the donor subsequently develops dementia and starts accusing you of stealing her money the validity of the LPA could be challenged and you and your friends could be in serious trouble.
  • Consider asking your relative to appoint two attorneys, yourself as carer to sign the cheques and to ask questions as necessary, and someone else who is assertive and can help you battle with the banks. That person could also take over if you are unable to continue. If you feel able to fight your own corner it might be simpler to have the second person appointed as an alternate.

Having got the LPA registered and having received the original back, you may think that you do not need to use it for a while and you can sit back and relax. BAD MISTAKE dealing with banks is time consuming and needs perseverance, and self belief.

Problems with Banks

Our experience together with comments on message boards such as, http://forum.alzheimers.org.uk/showthread.php?36520-Banks-and-power-of-attorney and

http://forum.alzheimers.org.uk/showthread.php?35074-Online-Banking&highlight=bank+power+att.

suggests that although banks will handle powers of attorney, they are not well set up to do so:

  • Procedures are unclear.
  • Most staff do not know how to handle a power of attorney, but are too often reluctant to admit it and may give you false advice.
  • It is difficult to get through to those who do know.
  • Branch and HQ staff will contradict each other
  • Different customers have very different experiences with the same bank.
  • banks can lose powers of attorney
  • Some banks are better than others
  • Some terms and conditions are plain wrong – e.g. they require a Lasting Power of Attorney Registered with the Court of protection, whereas in fact LPAs are registered with the Office of the Public Guardian

But you can get through this!

Step 1 – Planning

Think through all the banks etc. you need to deal with. Decide what services you need from them both as soon as possible and in the future e.g. telephone banking, power to sign cheques, use of debit cards, faster payments, on line banking, savings etc.

Step 2 – Gather the information

Never let the original LPA out of your hands for more than a few minutes at a time while it is copied. It is wise to obtain several certified copies. Copies can be certified by people such as solicitors or accountants. Most will charge a fee – shop around and try to get a discount on multiple copies.

Make sure you have proof of identity – normally valid passport or driving licence for both donor and attorney(s), but the bank where the donor has an account may not need the donor’s proof of identity. If you don’t have these forms of identity you need to contact the branch to see what options there might be.

Acquire branch phone numbers if you can, though you may find that branches never answer the phone.

Ideally acquire brochures on powers of attorney for each bank you want to deal with, either downloading them from the website or from a branch if you are nearby. These will not give you all the information your will subsequently require, but may prompt useful questions.

Step 3 – Make an appointment at a branch

Phone the branch if you can, explain what you need to do and discuss. Say you hope this will not be interrupted by a cash delivery etc. If you cannot phone the branch call in and make the appointment or you may find a way of getting HQ to make the appointment for you.

Step 4 – Meeting at the branch

Make sure you take all the documentation including your list of requirements. Offer them the original power of attorney to copy and make it clear at the outset that you will not leave the branch without it. If they say a problem has arisen and they cannot copy it now then demand the original back and offer a certified copy. If they will not accept that, then demand the original back saying you need for another appointment today, and you hope that when you call again they can copy it while you wait. Remember banks can and do lose powers of attorney. Never trust them to send it back in the mail to you.

Once they have registered the power of attorney you can discuss your requirements:

Telephone banking – we suggest you ask for this straight away. Try and get the form filled in then and there. But it is not enough to be registered; you need to know how to use it. If you phone the normal bank number and supply the account number by keying it in or talking to a machine then it is a pretty fair bet that either you will not get through the menus or if you get through to a person they will not know how to help you and probably just say you have done it wrong. You may need a special phone number and be told how to bypass the menus.

Paying Bills – it may be that all bills can be paid by cheque. All you need to know is what needs to happen in order that you as attorney can sign them. You may be told you can use the donor’s cheque book using your signature and adding the letters ‘POA'; or you might be told you need a new cheque book and that cheques signed by the donor would no longer be honoured. In the latter case you need to know what happens if the donor is temporarily disabled, say by a stroke, but then recovers and wants to sign cheques again.

Drawing Cash – You could simply use the donor’s card at an ATM. The bank would certainly not approve and you might get found out. You should ask how you can do this legally. The donor might be able to sign cheques but not get to an ATM.

Using the debit card at a shop – You might want to buy food for the donor at a supermarket. Ask what your options are given that the donor might occasionally want to go to a supermarket using the trolley for support, and then to pay the bill. Of course if you can make all the purchases and pay yourself back from the donor’s account by cheque some of the above requirements may be superfluous.

After the meeting – you should have been taking notes. Write a letter setting out what you have learned and get the bank to confirm your account is correct.

Have your needs been adequately addressed? - If not consider switching the account.

Step 5 – Check that telephone banking works. It does? Have a cup of tea!

Complaints

You may need to make a formal complaint. You may be encouraged to make the complaint by phone ‘to get the problem resolved quickly’. That’s as may be, but you really do need a written record of both your complaint and their response. If you complain by phone insist that they confirm the main points in writing, but keep your own notes in case they have ‘misunderstood’. If you complain in writing they may respond by phone, even if you have said that is not acceptable. Again insist on a letter setting out what they said. If you do not have an adequate written record any subsequent reference to the Financial Conduct Authority is likely to be fruitless.

GOOD LUCK!

The above advice is offered in good faith, but the author cannot accept responsibility for the consequences of relying on it. He would like to hear any comments at dhs648@hotmail.co.uk.

Treaty with Columbia – What a Farce

I have recently seen comments to the effect that Parliament has ratified a treaty. This is misleading; the following illustrates the quaint procedure actually followed.

The recently ratified bilateral investment treaty with Columbia illustrates British ‘democracy’ at its finest. The text was apparently agreed by heads of government back in March 2010, but were we told? Ratification was delayed due to the Lisbon treaty, but the Columbian government ratified the treaty in 2013 and have been pressing the UK to ratify.

It was formally laid (as Command Paper 8887) before Parliament by the Foreign Secretary on 5th June 2014. Did he get on his feet to tell MPs? Not a bit of it. In order to ascertain that it was laid you have to go to Hansard for the day in question, click on Latest Business Papers/ House of Commons Business Papers/Votes and Proceedings, select the date again, go down to the Appendix and read through it.

The NGO Tradecraft picked this up and consequently, on 24th June the House of Lords Secondary Legislation Scrutiny Committee in its 3rd report of the session reported:

“this instrument sets out the terms of a reciprocal trade agreement between the UK and the Republic of Colombia which protects investment against expropriation. A letter has been received from Traidcraft which expresses a number of concerns about the level of protection for the investor and about the effect of the agreement on the human rights of certain groups within Colombia.”

On Thurs 10th July, 21 sitting days having elapsed without challenge from the date it was laid, the treaty was deemed to have been passed by parliament and the government was free to ratify. I could find no record of this in Hansard.

On 30th July the House of Lords sitting as the Grand Committee debated the treaty in a ‘motion to take note’. Concerns were expressed but it was all a bit late. Incidentally the concern raised by Lord Stevenson of Balmacara was that the treaty was worse for Columbia’s ability to regulate foreign direct investment than the massive TTIP treaty currently being negotiated. Lord Stevenson’s remarks indicate that he knows a lot more about what TTIP is likely to contain than has been made public.

According to House of Commons Library standard note SN/IA/5855 dated 8 Feb 2011,

“Parliament now has a new statutory role in ratifying treaties.  Under part 2 of the Constitutional Reform and Governance Act 2010 the government must lay most treaties subject to ratification before Parliament for 21 sitting days before it can ratify them.  If either House objects, the government must give reasons why it wants to ratify before it can proceed, but the Commons can block ratification indefinitely.   However, there is no statutory requirement for a debate or vote, and parliament cannot
amend treaties.”

This merely brings into statute a convention known as the Ponsonby Rule which has existed since the 1920s. As far as I can ascertain neither House has ever objected within the 21 days.

In 1994 the UK ratified the Marrakesh (or Marrakech) Agreement which was a multilateral treaty setting up the World Trade Organisation and including agreements on trade in services, intellectual property, investment… There was a House of Commons debate within the 21 sitting days, but it was an adjournment debate so the MPs did not vote on the subject under discussion. It was also in retrospective singularly ill informed. There was no hint of controversy to come.

But them in Westminster are just puppets

Published in Dorset Echo, 2nd October under title ‘Trade Treaty Secret’

Richard Denton-White and others have called for democratic reforms, but there is one thing that Richard’s otherwise excellent letter ‘Time for Real Democracy’ (Tues 30 Sept) leaves out and that is international trade treaties. One major trade treaty has more influence on our lives than a dozen Acts of Parliament. In fact the latter are often driven by the former. Furthermore the UK ratifies a treaty (i.e. agrees it shall come into force) without parliamentary approval, and usually without parliamentary debate. This is unusual; the USA and most European nations for example require their legislators to debate and approve (or not) all treaties. Suppose for example the UK and Germany had a disagreement about some details in a treaty that was under negotiation, Angela Merkel might ask David Cameron if he couldn’t give way on that one little thing; must it be a deal breaker? Cameron might give way. But if it was the other way round then Merkel would laugh and say, “Sorry Dave; no way could I get that past the Bundestag and the Bundesrat”. So why don’t we change?
One reason is that the leadership of the major parties want to hold onto the trappings of power, but I believe the more powerful reason is that they are more beholden to their paymasters than to the people. It is a mistake to think of trade treaty negotiations as primarily a contest between national governments; rather it is a contest between them and giant trans-national corporations which show no loyalty to the state in which they happen to be registered.
The major treaty now being negotiated between the EU and the USA is the Transatlantic Trade and Investment Partnership (TTIP). It is being negotiated in the utmost secrecy and if heads of government sign up to it, MPs will have just 21 sitting days in which to read it and, if so minded (which they never are), vote to block it for another 21 days. If MPs had to vote to approve it before it could be ratified, then there might be a real debate, which who knows might even be covered on the BBC and so most people might get to know it’s happening.
If we had a proper voting system then MPs might have to pay attention to voters rather than their party bosses.

The Free Market Cannot Address Climate Change

Effective climate action is now so urgent that the free market cannot deliver it. This is the key claim in Naomi Klein’s latest book, ‘This Changes Everything: Capitalism v. the Climate’, released on 16th Sept 2014. She points out something which I had not fully realised before, that from the very outset at Rio 1992, climate change negotiators had accepted that any agreement on combating climate change had to conform all present and future trade agreements. So two decades of climate summits have been largely wasted.

Naomi Klein illustrated her points with a wealth of examples and I am totally convinced. The New York summit starts tomorrow (Tues 23rd Sept). Unfortunately the UN website points to a study (The New Climate Economy, downloadable at: http://www.un.org/climatechange/summit/2014/09/report-reducing-climate-change-need-curtail-economic-growth/ ) which purports to contradict her. I have skim read it and it looks like a piece of corporate puff to me. Read the book and the report and let us know which you believe. Another summit wasted if Klein is right.

Which is more important, that the human race survives into the second half of the 21st century, or that free market ideology continues to inform public policy? This ideology is ridden with internal logical contradictions and enjoys virtually no supporting empirical evidence. But it is used to justify the very rich holding onto almost all the wealth, and that minimum wage levels set at below subsistence level, coupled with zero hours contracts produce a healthy economy.

A New Magna Carta – but nothing too radical.

The House of Commons Political and Constitutional Reform select committee has just issued a report entitled ‘A New Magna Carta?’ , which sets out options for reform, and now seeks comments – deadline 1 January 2015. But they appear to be keen to rule out anything too radical.

This is a pity because, for reasons I set out below, I believe that without radical change Britain will be a failed state within a generation.

Respondents are asked:

  • Does the UK need a codified constitution?
  • If so, which of the three options (below) offers the best way forward?
  • What changes would you like to be made to your favoured option if you have one?

The options set out in a paper written by Prof. Blackburn of Kings College London were:

  • Constitutional Code – a document that doesn’t have legal force, but which would set out the existing principles of the constitution and the workings of government.
  • Constitutional Consolidation Act – a document which would consolidate existing constitutional laws in one place.
  • Written Constitution – a document of basic law by which the UK would be governed, setting out the relationship between the state and its citizens.

Prof. Blackburn sets out a possible model constitution but apart from an elected second chamber there are no significant changes from our current uncodified arrangements. Hardly a ‘New Magna Carta’, hardly a contribution to a national debate on what we really need.

Unlock Democracy had clearly envisaged the need for radical change and had recommended:

Unlock Democracy believes that the best way of bringing about a codified constitution would be through a UK government taking office with a commitment to instigating a constitutional convention; but then taking a step back from the process. It could establish a body, preferably made-up of a balanced sample of the UK population chosen at random, charged with considering the possible content of a constitutional text and making proposals. It would be to some extent removed from the party political arena and better placed to develop decisions for the country as a whole. This convention would be provided with sufficient time and resources, such as expert advisers, to carry out its task effectively. Ideally the Government would commit itself to directly submitting the recommendations the convention made for ratification without altering or interfering with them. This ratification might involve a referendum of the UK population, or perhaps approval by the UK Parliament and all of the UK devolved legislatures.” [1]

But the committee appears to have completely ignored this advice.

‘If it ain’t broke don’t fix it.’, is often good advice. If you are a winner in the corrupt ‘winner takes all’ polity, and if you are confident that you and your children will remain winners, then this advice applies. If you are anyone else you should realise that the polity is broke, that the poor and the old middle class can only get poorer, and that civilisation will collapse within a generation.

The current situation is neatly summed up by Occupy London as follows,

” … we are ruled by an elite group of psychopaths who own the banks that control the governments and media. …and they manufacture the consent of the public through the propaganda of the media.”

How exactly does parliament fit into this picture? Perhaps the fact that senior civil servants have referred to the House of Commons as ‘the monkey house’ gives some clue. If democracy is to be restored we have to take this diagnosis seriously.

But it is not just democracy that is at stake; it is the very future of human civilisation. In a recent academic study [2]Safa Motesharrei,  Jorge Rivas, and Eugenia Kalnay, ‘Human and nature dynamics (HANDY): Modeling inequality and use of
resources in the collapse or sustainability of societies’, Ecological Economics 101 (2014) 90- 104, found at http://www.sciencedirect.com/science/article/pii/S0921800914000615%5D the authors sought a general theory to explain the collapse of past civilisations. They develop a simple systems dynamics model which explains the collapse of historic civilisations and use it to explore the conditions under which a civilisation may collapse. They conclude,

“In sum, the results of our experiments, discussed in Section 6,indicate that either one of the two features apparent in historical societal collapses – over-exploitation of natural resources and strong economic stratification – can independently result in a complete collapse. Given economic stratification, collapse is very difficult to avoid and requires major policy changes, including major reductions in inequality and population growth rates. Even in the absence of economic stratification, collapse can still occur if depletion per capita is too high. However, collapse can be avoided and population can reach equilibrium if the per capita rate of depletion of nature is reduced to a sustainable level, and if resources are distributed in a reasonably equitable fashion.”

Who are the psychopaths referred to by Occupy London? Some are real life flesh and blood human beings. These include vulture fund managers, private equity bosses, those bankers whose whole life was making money out of money and not knowing how to spend it, and top corporate lawyers who wouldn’t know justice if it hit them in the face.

“Call it the asshole effect. That is the term coined by US psychologist Paul Piff after he did some stunning new research into the effects of wealth and inequality on people’s attitudes.

As we ponder Joe Hockey’s budget and his division of the world into “leaners” and “lifters”, as we learn from Oxfam that the richest 1% of Australians now own the same wealth as the bottom 60%, we would do well to consider the implications of Piff’s studies. He found that as people grow wealthier, they are more likely to feel entitled, to become meaner and be more likely to exploit others, even to cheat.”[2]

The others are artificial creations, the corporations. The first corporations were created to serve a human purpose, but gradually through man’s folly they have become monsters, which like the machines in ‘Terminator’, have come to dominate us. We have to fight back.

One of our biggest follies was to give these creatures human rights. This started in the USA, but this doctrine has become part of the common law on both sides of the pond, so much so that when the European Convention on Human Rights was drafted by British lawyers after the second world war it was not thought necessary to define who or what was to enjoy these rights. British courts in particular have assumed that corporations enjoy these rights. Corporations need some rights but should have only those needed to carry out their functions and these should not be entrenched. In order to strip corporations of these ‘rights’ it  may be necessary, temporarily, for the UK to withdraw from the Convention, and draw up a British Bill of rights. However in the meantime the UK should negotiate with other nations in the Council of Europe to amend the Convention.

Having stripped corporations of entrenched rights, then it is necessary to take other measures to curb their malign influence. One would be to stop any body corporate from making any political donations, limit the size of individual donations and provided more state funding.

The current position whereby ministers can use the Royal Prerogative to ratify treaties must be ended. Ratification must involve the consent of both House of Parliament and any attempt by ministers to ‘fast  track’ this would be a treasonable offence. But it is also essential that treaty negotiations be as open as possible; otherwise treaties will continue to be in the interest of corporations not peoples. To this end ministers must not be permitted to enter treaty negotiations without the approval by Parliament of the negotiation procedure, even if this means that the UK might have to withdraw from the EU.

The corporate ownership of the media must be broken up. All print media distributed in the UK must be by workers co-0peratives. In the transition phase any news title distributed in the uk must be hived off into a subsidiary run by a board appointed by the workers. No representative of a creditor or of an advertiser shall be permitted to join the board.

As regards broadcast media, the BBC is a particular disappointment, its coverage of current affairs being very unbalanced, favouring the powers that be. All connection with government must be severed. The management board should be elected by the workers. There should be a supervisory board, randomly selected from the population and  charged with ensuring that heterodox views on all all important issues are covered. However a power of popular recall should exist in case the supervisory board goes off the rails. The level of the licence fee should be set by a formula set by primary legislation and variable within limits through referendum.

The major political parties have become a mechanism for the corporate agenda to be imposed on parliament. In order to break this stranglehold, the House of Commons should be elected in 4 or 5 member constituencies by STV.

References:

[1]written evidence to The Political and Constitutional Reform Committee inquiry into ‘Mapping the path to codifying—or not codifying—the UK’s constitution’. Item CDE 07

[2]Safa Motesharrei,  Jorge Rivas, and Eugenia Kalnay, ‘Human and nature dynamics (HANDY): Modeling inequality and use of
resources in the collapse or sustainability of societies’, Ecological Economics 101 (2014) 90- 104, found at http://www.sciencedirect.com/science/article/pii/S0921800914000615

[3]Anne Manne, ‘The age of entitlement: how wealth breeds narcissism’, The Guardian, 7 July 2014, http://www.theguardian.com/commentisfree/2014/jul/08/the-age-of-entitlement-how-wealth-breeds-narcissism?CMP=fb_gu

Post Office Reward Saver Account IS a safe Product

In June I suggested that the Post Office Reward Saver Account was an unsafe product for those who might lose mental capacity in the future. This arose from a technical error in their terms and conditions which they have now recognised and will correct. They do in practice recognise a Finance Lasting Power of Attorney registered with the Office of the Public Guardian.

If the OPG has been just a bit more proactive this issue would have been resolved months ago.

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