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The Corruption of New Labour: Britain’s Watergate?


John Simkin
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Tony Blair has been on holiday and has been unable to carry out his peace-keeping role in the Middle-East during the Gaza crisis. However, he is now back in his office. This takes the form of the entire floor of the American Colony Hotel in Jerusalem (this costs £700,000 a year). Blair will not travel to Arab countries because he fears for his safety and therefore their leaders have to be willing to travelling to Jerusalem in order to put their case.

Blair has been constantly questioned about his commitment to his post as Middle East peace envoy for UN, USA, Europe and Russia. He has still not called for a ceasefire and his past record shows it is impossible for him to be a peace negotiator in the region. Many people in the Arab world see him as a war criminal because of the role he played in the Iraq War. Blair is also not willing to spend time on peace-talks because his speaking tours keep him very busy (it is believed they will earn him £15m by July 2009).

Blair has been an important supporter of Israel for nearly 15 years. In March, 1994, Blair was introduced to Michael Levy at a dinner party at the Israeli embassy in London. Levy was a retired businessman who now spent his time raising money for Jewish pressure-groups. After this meeting, Levy acquired a new job, raising money for Tony Blair. According to Robin Ramsay (The Rise of New Labour, page 64), Levy raised over £7 million for Blair. This was used to promote him as future leader of the Labour Party.

Levy ran the Labour Leader's Office Fund to finance Blair's campaign before the 1997 General Election and received substantial contributions from Zionists such figures as Alex Bernstein and Robert Gavron, both of whom were ennobled by Blair after he came to power. Levy was created a life peer by Blair in 1997, and in 2002, just prior to the Iraq War, Blair appointed Levy as his personal envoy to the Middle East. Levy has praised Blair for his "solid and committed support of the State of Israel" and has been described himself as "a leading international Zionist".

As a result of obtaining this money Blair joined the pressure group, Labour Friends of Israel. It is one of the most fanatical Zionists groups in the UK. Gordon Brown also joined this group before he became prime minister. The group is led by Louise Ellman, who organized the defence of Israel's actions in Gaza in the media.

In 2006, Blair was heavily criticised for his failure to call for a ceasefire in the 2006 Israel-Lebanon conflict, with members of his cabinet openly criticising Israel. Jack Straw, the Leader of the House of Commons and former Foreign Secretary stated that Israel's actions risked destabilising all of Lebanon. The Observer newspaper claimed that at a cabinet meeting before Blair left for a summit with President George Bush on 28 July 2006, a significant number of ministers pressured Blair to publicly criticise Israel over the scale of deaths and destruction in Lebanon.

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Yesterday it was revealed that a Sunday Times journalist posed as a lobbyist acting for Lou Li Jiang, a businessman in Hong Kong, who wanted to secure an exemption from the Business Rates Supplements Bill. They contacted ten members of the House of Lords. The three Conservative peers did not return his calls.

A Liberal Democrat and an Ulster Unionist both declined to help after meeting the undercover reporter. Lord Rogan replied that “it’s not right and my personal integrity would not let me do it.”

Four of the five Labour peers approached agreed to help the businessman in exchange for cash. Baron Truscott of St James (Peter Truscott was MEP for Hertfordshire between 1994 and 1999) told the reporter that his rates vary between £1,000 and £5,000 a day. He complained about the £330 a day he receives for attending House of Lords sessions. He therefore made extra money by helping clients to get legislation changed. He had been asked by a one client to intervene on the Energy Bill, a piece of legislation he had been responsible for as a minister only months earlier. He received £72,000 for that piece of work. However, he had to pay someone else to table the amendment so it could not be traced back to him. This is because the rules state that they “must never accept any financial inducement as an incentive or reward for exercising parliamentary influence.” Truscott boasted that members of the House of Lords find it far easier to amend legislation than in the House of Commons. Even if they get caught, unlike MPs, they cannot be sacked as they were appointed rather than elected. Truscott offered to talk to John Healey, the minister in charge of the legislation, in return for a consultancy fee.

The second Labour peer to agree to help the businessman in Hong Kong was Lord Taylor (Thomas Taylor served on Blackburn Council between 1954 and 1976 before being made a life peer in 1978). Taylor is a close friend of Jack Straw, the justice minister. Although a long-term member of the Labour Party, according to the Sunday Times, he worked as former education adviser to Margaret Thatcher in the 1970s and 1980s.

In October 2008, Lord Taylor had to make a public apology after he asked a question in the House of Lords without declaring its relevance to a paid client. Taylor is a paid consultant to seven businesses and has another four non-executive directorships. He said that some companies paid him £100,000 a year. He told the undercover reporter: “that’s cheap for what I do for them.” This included changing legislation on behalf of Experian, the credit-check company. He told the reporter he would charge £120,000 to get the Business Rates Supplements Bill amended. This would involve him arranging this with his friends, Lord Mandelson, the business secretary, and Yvette Cooper, the chief secretary to the Treasury.

Lord Moonie (Lewis Moonie was MP for Kirkcaldy for 18 years between 1987 and 2005), a former defence minister, also offered to help Lou Li Jiang for an annual fee of £30,000. In return he would contact John Healey and offered to identify people who could put down an amendment.

The fourth peer was Lord Snape. (Peter Snape was MP for West Bromwich East for 27 years between 1974 and 2001 ). He agreed to help and said the fee would be £24,000.

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The Guardian newspaper has been investigating the accounts of the UK's biggest companies and discovered a series of sophisticated tax strategies which, critics say, amount to an almost unstoppable tide of perfectly legal corporate tax avoidance.

http://www.guardian.co.uk/business/2009/fe...x-gap-avoidance

The veil of confidentiality that covers these tax avoidance schemes is so difficult to penetrate that nobody knows exactly how much tax goes missing each year. But HM Revenue & Customs estimated that the size of the tax gap could be anything between £3.7bn and £13bn. The Commons public accounts committee put it at a possible £8.5bn and the TUC said £12bn.

UK listed companies are not required to set out exactly how much UK corporation tax they actually hand over to HM Revenue & Customs. When the Guardian asked each FTSE 100 company to provide this information only two offered a response.

Similarly each company was asked what its official policy on so-called tax planning is and how this is implemented. No company was prepared to answer the question directly. However, the investigation, which we publish over coming days, has established that:

• The UK-based drinks giant Diageo plc has transferred ownership of brands worth billions of pounds, including Johnnie Walker, J&B and Gilbey's gin, to a subsidiary in the Netherlands where profits accrued virtually tax-free. Despite average profits of £2bn a year, it paid an average of £43m a year in UK tax - little more than 2% of its overall profits.

• Two major drug firms have shifted ownership of their brands to tax havens in the Caribbean. Their UK operations can then be made to pay royalties for the use of the trademarks, reducing their profits and the amount of tax due in this country.

• An internationally renowned corporation has structured itself so that it is now simultaneously a British public company, tax-resident in Amsterdam, but whose brands are Swiss-owned.

• The makers of an iconic British food product have shifted the rights in it to a tax haven in Switzerland.

• A household name has been deliberately loaded with debt so that it no longer has any profits to pay tax on.

• Top accountancy firms are charging £500,000 a time to invent tax-avoidance schemes.

• Some UK-listed companies which have moved control to Dublin to benefit from Ireland's low-tax regime appear to have little real presence there.

According to the National Audit Office, in 2006 more than 60% of Britain's 700 biggest companies paid less than £10m corporation tax, and 30% paid nothing.

Britain's top taxman, Dave Hartnett, told the Commons public accounts committee last year that 12 major corporations had "extinguished all tax liabilities in 2005-6" thanks to avoidance schemes.

Tony Blair and Gordon Brown are the two men behind these tax avoidance schemes. I imagine the two men have been well-rewarded by their financial masters. You can read the full report here:

http://www.guardian.co.uk/business/series/tax-gap

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John Hooper and Allegra Stratton The Guardian, Wednesday 18 February 2009

http://www.guardian.co.uk/politics/2009/fe...coni-bribe-case

Tessa Jowell, the Olympics minister, defended her estranged husband, David Mills, yesterday as he was sentenced to four and a half years in an Italian jail for taking a $600,000 (£400,000) bribe as a reward for withholding court testimony to help Italy's prime minister, Silvio Berlusconi.

The conviction, which Mills said he would appeal against, ends a three-year trial that nearly derailed the ministerial career of one of Tony Blair's allies.

Jowell, who was culture secretary at the time, admitted signing a document crucial to the receipt of what the court in Milan yesterday ruled was a bribe. She asserted her innocence by separating from her husband after the allegations emerged.

Yesterday the Tories said they would not be making party political capital out of the conviction of the tax lawyer. In a statement yesterday, Jowell stood by Mills, saying: "This is a terrible blow to David and, although we are separated, I have never doubted his innocence."

Mills, 64, was not present in court when the judge, Nicoletta Gandus, read out her verdict, but said in a statement that he was very disappointed by the verdict and would appeal against it. "I am innocent, but this is a highly political case," he said. "I am hopeful that the verdict and sentence will be set aside on appeal, and am told that I will have excellent grounds."

Gandus said Mills would have to pay €250,000 (£220,000) in damages for the perversion of justice caused by his distorted evidence given at two trials in which Berlusconi was a defendant. She also ordered Mills to pay a further €25,000 in costs. Mills's lawyer, Federico Cecconi, told reporters afterwards: "This is a verdict based on a prosecution case that was anything but consolidated. It contravenes the logic and dynamics of the trial."

Berlusconi, indicted alongside Mills, who acted as his legal adviser on offshore dealings, is no longer a defendant. His government passed a law last year giving the prime minister and other top Italian officials immunity from prosecution.

It is thought to be the first time in Italy that someone has been found guilty of taking a bribe without the giver of the money being identified. Gandus's reasons for her verdict will be released in writing at a later date.

Mills is entitled under Italian law to two appeals and the crucial issue now is whether they can be heard before the offence, of which he has been convicted, becomes "timed out" in February next year by a statute of limitations. The prosecutor, Fabio de Pasquale, said: "It is possible, if they get a move on." The fact that Mills failed to appear at his trial was criticised by the judge.

Mills initially admitted having accepted what he had considered a gift or loan. But subsequently he retracted his statement, leaving the prosecution with the formidable task of trying to establish how the money had reached him through a chain of offshore trusts and hedge funds.

In 2000, Jowell and her husband took out a loan, securing it on their terraced house in Kentish Town, north London, and investing the proceeds in a hedge fund. The following month, the loan was repaid with the $600,000 that has been at the centre of the trial.

After the transaction came to light, Jowell said she only became aware four years later, in August 2004, that her husband had received money he "had reasonable grounds to believe was a gift". Tony Blair accepted her assurance.

The issue of Berlusconi's immunity is now being considered by Italy's constitutional court.

The Italian government recently secured Berlusconi's position further with a clause inserted in a bill to reform the judiciary. If approved by parliament, it will mean that, even if such immunity were lifted, the judge presiding over the case that ended yesterday would not be able to apply its outcome automatically to Berlusconi. She would be obliged to begin proceedings all over again.

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In an interview on the Today programme on BBC Radio 4 last Tuesday Peter Mandelson insisted that in his various meetings with Oleg Deripaska “there was no discussions of EU trade business; there was no discussion about tariffs or anti-dumping duties.”

Over the weekend the Sunday Times reported that someone who was at one of these meetings has claimed that Mandelson and Deripaska did discuss wood tariffs. As well as controlling the aluminium industry, Deripaska also owns one of Russia’s leading companies in the wood industry and is trying to persuade the EU to allow him to export wood into the European Market.

Today, it was announced that LDV van-maker has asked for a £25m loan from the UK government. The man making the decision is Lord Mandelson, the business secretary. The owner of LDV is Oleg Deripaska.

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The newspapers this morning are dominated by stories about the leaking of Damian McBride’s email about the plan to smear leading Tory politicians. It is difficult to believe that the newspapers would have run with the stories that appeared on the proposed Red Rag website. I cannot imagine any newspaper editor publishing stories about how David Cameron once had a sexually transmitted disease or that George Osborne once had a relationship with a prostitute, Natalie Rowe. These stories are not relevant to the ability of Cameron or Osborne to reach high office. The really interesting question is why the stories about the corrupt and unethical behaviour of our leading politicians do not reach the mass media.

A few years ago a senior Labour cabinet minister was accused by a junior civil servant of sexual harassment. It was not the first time that this minister was accused of this offence. However, the woman concerned accepted the promotion she was offered and the minister was allowed to keep his job. The Conservative Party of course found out about this story but did not leak it to the press. This might seem quite surprising as a cabinet minister using his position of power to sexually harass a young woman is despicable and is a good enough reason to bring the man down.

The reason for this is that both of our two main political parties have a long list of illegal and immoral activities committed by their rivals. If for example, the Tories used this story about this minister, Labour would have leaked the story about the sexual behaviour of William Hague. This is even worse than the story about the sexual harassment of a clerical worker.

More importantly, the two main parties keep out of the press stories concerning political corruption. In this way they can appear on television and argue that we have the cleanest political system in the world. In fact, we have one of the most corrupt democracies in existence. One of the problems is that with our first past the post system is that it allows us to be ruled as a two-party state. Labour and Conservative leaders are willing to join in this conspiracy of corruption in order to maintain the status quo.

The Labour minister involved in the sexual harassment case was eventually dismissed by Blair for incompetence. Yet, every time there is talk of a leadership challenge he appears on television suggesting he might be a good future leader. I am not sure he will get the woman’s vote if his secret was revealed.

http://spartacus-educational.blogspot.com/

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The Crown Prosecution Service announced yesterday that there was not enough evidence to charge Peter Watt, Lord Triesman, Matt Carter and David Abrahams with any offence. Of course, the establishment will always go along with the idea that our political system is not corrupt. Interestingly, Peter Watt, the former Labour General Secretary, issued a statement yesterday that appeared to be warning the Labour Party he might yet have more to say in the matter: “When this matter involving contributions to the Labour Party became a story I was abandoned by the political leadership of the Labour Party without regard for the impact this would have on me and my family.”

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Parliament's moral authority has slumped to its "lowest ebb in living memory", former Archbishop of Canterbury Lord Carey has said. Lord Carey told the News of the World that recent leaked reports about MPs' expenses had shaken trust in politics. He said the revelations had exposed the "clawing greed" at the heart of Westminster's "culture of abuse". Lord Carey questioned whether public trust in politicians could ever be restored following the exposure of "systematic abuse" of the expense system. He said many MPs had come to see their allowances as a "right rather than a privilege", and contrasted the spectacle of ministers "cringingly" justifying their expenses while their constituents suffered as a result of the recession.

"It is not just the clawing greed of painstaking claims for such minor items as tampons, barbecue sets and bathrobes, but also the egregious way some have transferred allowances from one second property to another - enabling them to refurbish homes at public expense, then sell them for profit," Lord Carey added. "Coming at a time of financial crisis and political betrayal of the Gurkhas, this threatens to be the straw that finally breaks the camel's back."

The expenses system was corrupted under the leadership of Tony Blair. He showed fellow MPs the way when he used the House of Commons expenses system to help build a multi-million pounds property portfolio. Leaked documents show that he remortgaged his constituency home for £296,000 - nearly 10 times what he paid for it - just before buying a house in Connaught Square, for £3.65 million.

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It should be pointed out that if it was not for Norman Baker's campaign since January 2005 to force disclosure of the details of MPs' expenses under the Freedom of Information Act, this current political scandal would not have been exposed. It is said he is the most hated man in Parliament. It was of course Baker who published "The Strange Death of David Kelly" in 2007.

I imagine Baker is as popular in the House of Commons as Frank Serpico was in the New York Police Department. Hopefully it will force the country to reconsider our system of government.

It is clear that MPs do need second homes in London if they represent an area some distance from the capital. The best solution to this is provide accommodation for them. What about Wormwood Scrubs? This is ideally situated in the London Borough of Hammersmith. The present inmates could be distributed amongst our other prisons. An alternative solution is a prison ship moored in the Thames opposite the House of Commons.

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The Lords Privileges Committee has recommended that two Labour peers be suspended from the House for up to six months after an investigation into allegations made against them. Ex-trade minister Lord Truscott and Lord Taylor of Blackburn were accused by the Sunday Times of being willing to change laws in exchange for cash.

Labour MP Elliot Morley has been suspended from the party after he admitted claiming £16,000 expenses for a mortgage he had already paid off. According to The Telegraph, Mr Morley claimed £800 a month for a Scunthorpe property for 18 months after the mortgage ended.

In a statement, Mr Morley said: "I accept that I have made a mistake in this case and have rectified it in full. I deeply apologise for such sloppy accounting in a very loose and shambolic allowance system but there is nobody to blame but myself and I take full responsibility for this," he added.

The Telegraph also alleges Mr Morley rented out a London flat designated as his main residence to another Labour MP, Ian Cawsey, a close friend and former special adviser. Mr Cawsey named the property as his second home, allowing him to claim £1,000 a month to cover the rent which he was charged by Mr Morley. In November 2007, the newspaper claims, Mr Morley "flipped" his designated second home from his Scunthorpe property to his London home and for four months the two men claimed expenses on the same property.

Of course, Morley is one of a large number of MPs who has been fiddling their expenses. If they did any other job they would be sacked and would face police prosecution. However, the MPs, took great care in drafting the rules in such a way that prosecution for fraud is highly unlikely. Of course, if they had been unemployed workers who had claimed money based on lies they would have ended up in prison.

Morley and most of his fellow MPs, including Gordon Brown and David Cameron, have fought like mad against Norman Baker's campaign since January 2005 to force disclosure of the details of MPs' expenses under the Freedom of Information Act. I the courts had not ruled against the House of Commons, this current political scandal would never have been exposed.

However, this is only the tip of the iceberg. When will the media tackle the fact that 28 former New Labour ministers have gained lucrative corporate jobs on the back of their Whitehall connections, and who then help bid for government contracts.

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The current political crisis in Britain concerning corruption in parliament is the greatest in my lifetime. It definitely compares to the 1929 crisis that resulted in the forming of a National Government. This enabled the ruling elite to retain control of the political system and it took a world war ten years later for the fortunes of the left to revive.

The media is reporting that the anger felt by the British people towards Parliament is greater than anytime anyone can remember. I would claim that the mood is close to being revolutionary. This mood will grow even stronger when the most important disclosure will be made – the payment politicians receive for second, third and in some cases fourth jobs. This will include details of how much those 28 former New Labour ministers have are paid for the corporate jobs that they do on the back of their Whitehall connections. The payoff for the companies is that these former ministers then help bid for government contracts. The Conservative Party will not get away from this aspect of this scandal as their MPs are already working for these companies and will therefore deliver when they expect to win the next election.

The problem is that at the moment people have no positive way to express their political anger at the ruling establishment. Our best hope is that some new anti-corruption political party, will put up candidates in the General Election. Given the current situation, I would expect this party to propose policies based on creating an equal society. If that happens, maybe we will have a successful non-violent political revolution.

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On Sunday, Tony Blair received the $1m Dan David prize for leadership at a ceremony at Tel Aviv University. The prize was awarded for “achievements having an outstanding scientific, technological, cultural or social impact on our world.” In other words, a $1m reward (bribe) for Blair’s pro-Israel foreign policy, including the invasion of Iraq.

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Despite daily revelations about the corruption of New Labour, Gordon Brown still survives. It is possible that Brown will be ousted on Monday and the party will get the opportunity to get its soul back.

It will take 72 Labour MPs to trigger a formal leadership contest. If this happens, Brown will be defeated. However, the rebels are currently over 20 names short. The current list does not include the two blocks of left-wing MPs, the Campaign Group and the Compass Group. They are unwilling to sign up to the removal of Brown because they fear they will get someone worse as leader.

This raises the question about who is actually in charge of the current government. Several months ago I was told by a colleague who I used to work under at the Daily Telegraph (he still holds a senior post at the newspaper) that Lord Mandelson would be the next prime minister. I told him that the Labour Party would never elect someone like Mandelson. However, he never mentioned the word “elected”.

Mandelson was forced out of government because of several scandals involving corruption. He was rewarded by being given a peerage. Brown brought him back into the Cabinet as Business Secretary, only weeks after being accused of corruption while being a European Commissioner. One of the features of Brown’s period as leader is the bringing in of unelected people into government. This includes Lord Drayson, who has been accused of corrupt activities with the arms industries. Bringing in Sir Alan Sugar as enterprise tsar is another blow to the democratic process. Especially as Sugar was a vocal supporter of Margaret Thatcher and a strong opponent of all traditional values of the Labour Party.

It is also significant that Bob Ainsworth is the new Defence Secretary. He is probably even worse that Brown as a TV performer. Ainsworth promotion is due to the lobbying of NP Aerospace, a military manufacturer based in his Coventry North East constituency. Since becoming a junior minister at the Ministry of Defence he has helped the company secure government contracts for NP Aerospace worth £230 million.

However, back to Mandelson. He was the key figure in decided membership of the cabinet on Thursday night and Friday morning. Mandelson was made “first secretary of state” the post formerly held by the previous deputy leader of the party, John Prescott. Mandelson of course has a lot more power that Prescott. As one ministerial aide pointed out: “He is not only the deputy prime minister. He has become the real prime minister. With Gordon paralysed by indecision, it is Peter who will be calling the shots.” Is this the man that left-wing MPs want to run the country?

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Guest Stephen Turner
Despite daily revelations about the corruption of New Labour, Gordon Brown still survives. It is possible that Brown will be ousted on Monday and the party will get the opportunity to get its soul back.

It will take 72 Labour MPs to trigger a formal leadership contest. If this happens, Brown will be defeated. However, the rebels are currently over 20 names short. The current list does not include the two blocks of left-wing MPs, the Campaign Group and the Compass Group. They are unwilling to sign up to the removal of Brown because they fear they will get someone worse as leader.

This raises the question about who is actually in charge of the current government. Several months ago I was told by a colleague who I used to work under at the Daily Telegraph (he still holds a senior post at the newspaper) that Lord Mandelson would be the next prime minister. I told him that the Labour Party would never elect someone like Mandelson. However, he never mentioned the word “elected”.

Mandelson was forced out of government because of several scandals involving corruption. He was rewarded by being given a peerage. Brown brought him back into the Cabinet as Business Secretary, only weeks after being accused of corruption while being a European Commissioner. One of the features of Brown’s period as leader is the bringing in of unelected people into government. This includes Lord Drayson, who has been accused of corrupt activities with the arms industries. Bringing in Sir Alan Sugar as enterprise tsar is another blow to the democratic process. Especially as Sugar was a vocal supporter of Margaret Thatcher and a strong opponent of all traditional values of the Labour Party.

It is also significant that Bob Ainsworth is the new Defence Secretary. He is probably even worse that Brown as a TV performer. Ainsworth promotion is due to the lobbying of NP Aerospace, a military manufacturer based in his Coventry North East constituency. Since becoming a junior minister at the Ministry of Defence he has helped the company secure government contracts for NP Aerospace worth £230 million.

However, back to Mandelson. He was the key figure in decided membership of the cabinet on Thursday night and Friday morning. Mandelson was made “first secretary of state” the post formerly held by the previous deputy leader of the party, John Prescott. Mandelson of course has a lot more power that Prescott. As one ministerial aide pointed out: “He is not only the deputy prime minister. He has become the real prime minister. With Gordon paralysed by indecision, it is Peter who will be calling the shots.” Is this the man that left-wing MPs want to run the country?

Machiavelli could learn something from Peter mandelson. I have though for a long time now that he must hold a lot of secrets close to his chest, and that this explains his remarkable, Lazarus like career.

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Gordon Brown struggles on in power. Despite the fact that several government ministers have resigned in protest against his leadership, the disastrous local and European election results, the rules of the party make it difficult to actually oust him from power. In many ways, the historically low poll-ratings of the Labour Party, helped to ensure his survival. One of the reasons why the public has turned against Brown is that he has never been endorsed as prime minister of the electorate (he even replaced Tony Blair without facing a contest in the Labour Party). Brown argues that any new leader of the party, unlike him, will have to call a General Election to get the approval of the British population. The polls suggest that the party would be decimated in any election.

The members of Parliamentary Labour Party have sensibly allowed him to hold onto office. I image they will overthrow him early in 2010. The new leader will then announce that a General Election will take place in three months time. He will then announce the ended of the ID scheme, PFI, the cancelling of Trident, an end to MPs having second jobs, and a fully elected House of Lords. He will also propose a form of Proportional Representation for elections to both houses. This will be part of a referendum on constitutional change on General Election day. David Cameron and the Tories will be forced to campaign against these changes as they know that they will find it impossible to win a general election under such a system. However, it will also help to ensure that the Tories are not the largest party in the election. I say this because I expect the economy to be showing signs of recovery and that the new Labour leader will be benefiting from the poll boost that comes during the “honeymoon” period of government. Labour will not have an overall majority but they will have little difficulty forming a coalition with the Liberal Democrats in return for the introduction of PR that would have been endorsed in the referendum.

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