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New Statesman
5 days ago
- Business
- New Statesman
Labour's muddled message
Photo by Peter Byrne -. Rachel Reeves is not where she wanted to be. When the Chancellor announced winter fuel payment cuts almost a year ago they were designed to advertise her strength. In order to restore economic stability, ran the narrative, Reeves would venture where previous governments feared to tread (David Cameron repeatedly rejected Tory demands to means-test pensioner benefits). Wonks applauded her taboo-busting. Paul Johnson, the director of the Institute for Fiscal Studies, whose book, Follow the Money, Reeves is fond of, praised the move as 'sensible'. The aim, No 11 said at the time, was to display discipline not just to the bond market but to voters (who often doubt Labour's economic competence). Yet now, as Reeves' slow-motion U-turn continues, she is advertising her weakness. A government that has held office for less than a year and that has a majority of 165 seats has proved incapable of making a cut worth just 0.05 per cent of GDP (£1.4bn). The new assertion from No 10 is that an improving economy – growth of 0.7 per cent in the first quarter – has made such munificence possible. Keir Starmer doesn't quite channel Ronald Reagan by declaring that it is 'morning again in Britain' but the suggestion is that the country is turning a corner – with four interest rate cuts and three trade deals. The problem is how grim the situation remains. Debt, as Treasury aides continually point out, stands at 95.5 per cent of GDP (0.7 per cent higher than a year ago). Here is why Reeves is imposing real-terms spending cuts on unprotected departments (Angela Rayner and Yvette Cooper, defending housing and the police respectively, have yet to settle with the Chancellor). During a press conference yesterday, Reeves conceded that there were 'good things I've had to say no to'. But as a consequence, Labour critics complain, the government's message is muddled. After entering office it promised short-term pain for long-term gain. 'Things will get worse before they get better,' warned Starmer. 'If we cannot afford it, we cannot do it,' declared Reeves (an inversion of JM Keynes' 'anything we can actually do, we can afford'). Some, including cabinet ministers, were sceptical of this strategy from the start, fearing that it would fail to resonate with an austerity-weary electorate that craved hope, not despair. But it was at least coherent. It pointed towards several tax-raising Budgets and fiscal restraint before a midterm or pre-election loosening. Subscribe to The New Statesman today from only £8.99 per month Subscribe Yet now the government finds itself in a political no-man's land. It can find the money to U-turn on winter fuel payment cuts, to (most likely) abolish the two-child benefit limit and to keep its election tax pledges. But it cannot find the money to prevent renewed departmental cuts and to commit to spending 3 per cent of GDP on defence (even as Starmer speaks of the UK moving to 'war-fighting readiness'). Voters could be forgiven for being confused, and almost certainly are. Reeves will have to use this autumn's Budget to raise taxes – the only question is by how much. One former aide to Gordon Brown notes the 'madness of spending lots at the start and less at the end of a parliament'. Some in Labour believe Reeves' defining error will prove to be her refusal to increase income tax, VAT or National Insurance on employees ('that's the original sin as far as I'm concerned,' says one source). This has left the government reliant on small but often fraught revenue raisers (such as higher inheritance tax on farmers). But there's a bigger challenge for Reeves: what kind of Chancellor does she ultimately want to be? She could have been the 'Iron Chancellor' – refusing to yield on her tough choices (such as winter fuel cuts). Or she could have been the 'anti-austerity Chancellor' – raising taxes to prevent renewed cuts. Or she could have been the 'growth Chancellor' – taking big risks for big rewards. In practice, Reeves has been all of these at various points without ever settling on an identity. The Chancellor herself defines her approach as 'balanced'. But the risk is that voters simply see it as incoherent. This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here [See also: Can John Healey really afford to go to war?] Related
Yahoo
28-05-2025
- Business
- Yahoo
Italian mafia use Chinese ‘underground banks' to launder money
Italy's mafia gangs are using Chinese 'underground banks' to launder money from drug trafficking and other crimes, a new report has revealed. Mafia groups are increasingly turning to a system known as Fei Ch'ien – 'flying money' – as a clandestine way of moving vast amounts of cash around the world. An underground banking network that originated in China, it operates through brokers in money exchanges, using encrypted communication systems and minimal record-keeping to make it hard for authorities to track. 'In relation to money laundering, there are links between Italian criminal organisations and Chinese groups who are active in underground banking,' the DIA, Italy's national anti-mafia agency, said in the report, entitled Follow the Money. The clandestine system is now being used extensively by 'big criminal organisations that want to secretly transfer money abroad to finance their criminal activities or to reinvest it', the report said. The DIA said mafia groups such as the Camorra of Naples, Cosa Nostra in Sicily and the 'Ndrangheta in Calabria were becoming increasingly adept at using digital technology to evade detection by the authorities. They employ encrypted communication channels such as EncroChat and Sky ECC, as well as messaging services such as Signal and Telegram. 'There has been a pronounced rise in the adoption of illicit financial instruments which are technologically sophisticated, including artificial intelligence models designed to elude checks,' the report said. Even when mafiosi are arrested, convicted and imprisoned, they are still able to maintain contacts with their criminal empires on the outside. The smuggling of mobile phones into prisons is commonplace and some are delivered by drone, according to the report. Meanwhile, Mafia organisations are increasingly recruiting young men from marginalised backgrounds in cities such as Naples and Rome to act as runners, lookouts and drug dealers. Such groups are known in Italy as 'baby gangs'. These are made up of bands of young delinquents and aspiring mafiosi who, armed with knives and firearms, fight each other for territorial control. Young people from areas with high unemployment are drawn to a life of crime partly by the easy money to be made but also by images that they see on social media, the DIA said. Teenage boys are attracted by 'misleading models of power and wealth' as well as 'ostentation and the promise of affirming their identities,' the report added, saying: 'The glorifying of luxury and violence, through images on social media, contributes to the creation of an image that is warped but very attractive to young people.' The DIA described the rise of 'baby gangs', fuelled by high levels of school absenteeism, unemployment and poverty, as 'particularly worrying'. The report also highlights how Mafia groups are trying to muscle in on the billions of euros swirling around Italy as the country embarks on a number of huge investment projects. They include plans to build a vast suspension bridge from Sicily – the home of Cosa Nostra – to Calabria, the territory of the 'Ndrangheta. Mafia dons have their eyes on the €200 billion of post-pandemic recovery funds that the EU granted to Italy, as well as the billions being spent in Rome to spruce up the city for this year's Jubilee, a special calendar of holy events organised by the Vatican. The crime bosses are also targeting huge amounts of money being spent on preparations for the 2026 Winter Olympics, which will be hosted by Milan and the ski resort of Cortina d'Ampezzo, in the Dolomites. Italy's different mafia groups are putting aside the bloody feuds of the past and forging collaborative links, the DIA said, with the Cosa Nostra and the Camorra forming alliances at home and abroad. 'Coexistence has fostered synergies that have progressively become structured,' said Michele Carbone, the director of the agency. 'These structures have become 'capable of absorbing overlaps, tensions and frictions'. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
24-03-2025
- Business
- Yahoo
Los Angeles Health Commission president criticizes mayor for $1-billion budget shortfall
To the editor: In the film version of "All the President's Men," the "Deep Throat" character advises investigative journalist Robert Woodward to "Follow the Money," and so should Times reporter David Zahniser ("L.A. city budget shortfall grows to nearly $1 billion, with layoffs 'nearly inevitable'," March 19). Just four years ago, as part of the American Rescue Plan, the city of Los Angeles received $1.35 billion. Where did it all go? Obviously not to healthcare. Our Health Commission has never been funded one penny in its 10-year existence. We didn't have enough firetrucks operational to handle our needs in January and we don't have a full-time physician in charge of our paramedics. Our city's budget was sound until the current administration; why do budget crises always seem to follow Mayor Karen Bass? During her tenure as Assembly speaker, our state had a budget impasse and drowned in red ink. In June 2009, California's credit rating was lowered and even President Obama wouldn't bail us out. With 80% of the city's expenses labor-related, her agreement less than one year ago to one of the largest general salary increases in the Coalition of L.A. City Unions' history — a 22% increase over a five-year span, including a 6% raise in the first year — obviously was imprudent. In more than two decades of governmental leadership, it appears that our mayor hasn't learned the basics of business math. If you spend more money than you have, you go bankrupt. Dr. Howard C. Mandel, Los AngelesThe writer is president of the Los Angeles City Health Commission .. To the editor: Oh, please! Ever since the COVID epidemic "vanished," parking enforcement has not done its job by ticketing people whose parking meters expired or when cars are parked on street-cleaning days, etc. And police officers have not been ticketing enough people for moving violations. If people would do the jobs they were hired to do, Los Angeles wouldn't be in the mess it's in. While I'm not saying the budget would be fixed, at least money would be coming in from people who break the law. Liz Brown, West Hills This story originally appeared in Los Angeles Times.
Los Angeles Times
24-03-2025
- Business
- Los Angeles Times
Los Angeles Health Commission president criticizes mayor for $1-billion budget shortfall
To the editor: In the film version of 'All the President's Men,' the 'Deep Throat' character advises investigative journalist Robert Woodward to 'Follow the Money,' and so should Times reporter David Zahniser ('L.A. city budget shortfall grows to nearly $1 billion, with layoffs 'nearly inevitable',' March 19). Just four years ago, as part of the American Rescue Plan, the city of Los Angeles received $1.35 billion. Where did it all go? Obviously not to healthcare. Our Health Commission has never been funded one penny in its 10-year existence. We didn't have enough firetrucks operational to handle our needs in January and we don't have a full-time physician in charge of our paramedics. Our city's budget was sound until the current administration; why do budget crises always seem to follow Mayor Karen Bass? During her tenure as Assembly speaker, our state had a budget impasse and drowned in red ink. In June 2009, California's credit rating was lowered and even President Obama wouldn't bail us out. With 80% of the city's expenses labor-related, her agreement less than one year ago to one of the largest general salary increases in the Coalition of L.A. City Unions' history — a 22% increase over a five-year span, including a 6% raise in the first year — obviously was imprudent. In more than two decades of governmental leadership, it appears that our mayor hasn't learned the basics of business math. If you spend more money than you have, you go bankrupt. Dr. Howard C. Mandel, Los AngelesThe writer is president of the Los Angeles City Health Commission .. To the editor: Oh, please! Ever since the COVID epidemic 'vanished,' parking enforcement has not done its job by ticketing people whose parking meters expired or when cars are parked on street-cleaning days, etc. And police officers have not been ticketing enough people for moving violations. If people would do the jobs they were hired to do, Los Angeles wouldn't be in the mess it's in. While I'm not saying the budget would be fixed, at least money would be coming in from people who break the law. Liz Brown, West Hills
Yahoo
13-03-2025
- Business
- Yahoo
Huawei named by Belgian authorities in brewing European Parliament bribery scandal
More than 100 Belgian police officers raided premises implicated in a lobbying scandal in the European Parliament on Thursday morning, with federal prosecutors later in the day naming the company at the centre of the investigation as Chinese tech giant Huawei Technologies. The Belgian Federal Prosecutor's Office said several individuals were arrested for questioning over an "active corruption" case in the parliament as well as for "forgery and use of false documents". "The corruption is said to have been practised regularly and very discreetly from 2021 to the present day, under the guise of commercial lobbying and taking various forms, such as remuneration for taking political positions or excessive gifts such as food and travel expenses or regular invitations to football matches," the office said in an update first thing Thursday. Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. "The alleged bribery is said to have benefited Huawei," the office announced later in the day. As the investigation developed, offices used by two parliamentary assistants were sealed off and European Parliament President Roberta Metsola was notified. The prosecutor's office said that the lobbying was "promoting purely private commercial interests in the context of political decisions". A joint investigation by Brussels-based news site Follow the Money, Belgian daily Le Soir and Dutch-language weekly Knack first reported Huawei as the focus of the investigation, saying the "dawn raids were part of a covert police investigation that started about two years ago after a tip-off from the Belgian secret service". Follow the Money said Huawei's EU office as well as the homes of its lobbyists were among the sites raided. Huawei did not respond to several requests for comment. The media outlets reported that "around 15 [former] MEPs are on the radar" of the investigators and that members of the European Parliament may have been offered "luxurious trips to China and even cash to secure their support of the company while it faced pushback in Europe". The prosecutor's office said an investigation into alleged money laundering was also under way. "The financial advantages linked to the alleged corruption may have been mixed up in financial flows linked to the defrayal of conference expenses, and paid to various intermediaries, with a view to concealing their illicit nature or enabling the perpetrators to escape the consequences of their actions," the office said. Huawei has been under pressure in Europe for many years, with the European Commission urging the EU's 27 member states to remove the company from telecoms networks due to security concerns. Not all states have complied. During her confirmation hearing late last year, European Union tech commissioner Henna Virkkunen said she was not satisfied with the progress. "Member states have not taken this problem seriously enough," she said. A commission spokesman said it had "no comment" on the case, but encouraged countries to cut Huawei out of Europe's 5G networks. "We're urging member states to adopt swift action. This is a recommendation, but we will continue to engage with our member states," the spokesman said. Lawmakers called for the parliament to take action. "I expect a clear and forceful response from the European Parliament president. The credibility of our institution is at stake, so no ifs or buts but clear and forceful measures should be taken," said Bart Groothuis, a centrist MEP and the former head of the Dutch government's cybersecurity agency. "Demonstrate we have learned from Qatargate, demonstrate the new measures in place are effective," he said, referring to a 2022 corruption scandal in which parliament officials, lobbyists and their families were allegedly bribed by the governments of Qatar, Morocco and Mauritania. Qatar and Morocco were added to the parliament's restricted list, limiting access to European officials. China and Iran were also on that list after they sanctioned MEPs in 2021. But the Post reported last week that the parliament has dropped all such restrictions for those four countries, leaving only Belarus and Russia out in the cold. The decision had been seen as another sign of improvement in the European Union's ties with China, driven in large part by the collapse in Europe's ties with the US. But Thursday's raid and the brewing scandal could undercut those efforts. The head of the parliament's China delegation, Engin Eroglu, said that the chamber "knows Beijing's influence operations all too well". "Even in this current geopolitical climate, China is not a partner but is a systemic rival and increasingly a security threat. #HuaweiGate," he wrote on social media. Eroglu said separately that some MEPs tried last month to block a debate on a resolution condemning Thai authorities for the deportation of 40 members of the Uygur ethnic group to China on February 27. The reason given, he said, was "because a delegation of the European Parliament was to travel to Thailand". Eight lawmakers were in Thailand while the deportations took place, but did not make any public statements on the issue. The resolution went before the parliament for debate on Wednesday night and was passed with a clear majority in a vote on Thursday. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.
