Seumas Milne's Blog, page 15

Zero-hours contracts: in David Cameron's Britain, the dockers' line-up is back | Seumas Milne

Driven by privatisation and corporate muscle, zero-hours casualisation is disastrous for workers, jobs and real recovery

The hallmarks of David Cameron's Britain are becoming clearer: payday loans, food banks, the bedroom tax, G4S and now zero-hours contracts. Until this week, it was often claimed that zero-hours jobs – the ultimate "flexible labour market" fix where employees are tied to a company with no guarantee of work – accounted for only a tiny fraction of the workforce.

Now we know that there are about a million of them – and their numbers are escalating. For most, this is 21st-century serfdom: concentrated in low-paid sectors, delivering one-sided flexibility to the employer and insecurity to the worker, with no requirement for holiday, sick or redundancy pay, and imposing wild fluctuations in hours on an often intimidated workforce.

For a minority, they can offer genuine flexible work and even the option of turning jobs down without paying a penalty (though other forms of casual or freelance work are likely to be more attractive). For the most part, however, this is a modern version of the dockers' line-up: on-call casual contracts where employees can be barred for working for another employer and still receive no pay. It's scarcely surprising zero-hours workers complain of being "bullied" and "terrified".

Nor is this Victorian-style scheme mainly confined to small firms or seasonal work. This is about household names: McDonald's, Boots, Amazon, Abercrombie & Fitch, Cineworld, the Tate galleries and Buckingham Palace. All rely on zero-hours contracts. In the case of Sports Direct, they're used to enforce a two-tier workforce: 90% of its 23,000 workers are on zero-hours deals, while the rest are full-time employees on bonuses of up to £100,000.

Now the zero-hours culture is spreading rapidly throughout the public and voluntary sectors. There are already up to 100,000 workers on zero-hours contracts in the health service. And the large majority of home care workers are forced to operate under these standby contracts – which have also colonised colleges and universities, reducing continuity of support for students and the vulnerable into the bargain.

But zero hours are only one part of a far wider casualisation process that has accelerated since the crash of 2008 and the arrival of the Tory-Liberal Democrat coalition. Agency working, temporary work and enforced part-time working have all mushroomed: nearly half the jobs created since 2008 have been temporary, as half a million permanent jobs have been lost.

So while ministers and their supporters claim that labour flexibility has kept unemployment at a mere 2.5 million, or about 8% of the workforce, underemployment – including those on part-time or casual contracts who want to work more hours – is 10%.

It's not as if this embrace of zero-hours contracts and other forms of casualisation has simply happened spontaneously, either. The sharp intensification of privatisation or "opening up" of public services by the coalition has fuelled the process, as local authorities respond to cuts in funding by driving through ever tighter tenders on outsourced contracts.

Councils now commission home care, for instance, from a large number of contractors without guaranteed hours – who can bid online for a contract to provide care even for one elderly person. That is then translated into zero-hours contracts for hundreds of thousands of care workers.

So privatisation of public services, which has generated one scandalous failure and fraud after another and is opposed by a large majority of the public (demonstrated once again by polling for the new "We Own It" campaign) is also driving the race to the bottom in pay and conditions for Britain's workers.

Far from boosting economic recovery or employment, that's one of the factors behind the longest fall in real wages since the 1870s, as four out of five new jobs since 2008 have been created in low-wage sectors, by the TUC's reckoning. The result is a deadweight drag on demand, falling productivity and a spiral of under-investment.

The idea that an even more insecure jobs market will turn that round, and slash unemployment and underemployment, clearly doesn't stack up. The last time Britain had anything close to full employment, in the 1960s and 70s, it also had far more regulated and secure employment, as do Europe's more successful economies today.

But that is of course a long way from the Tory vision of the workplace, made clear by the party's chairman Grant Shapps last week when he complained about firms' need to be "disingenuous" about sacking people. And in case there were any doubt about who the coalition parties want to have the whip hand at work, last Monday the government introduced a prohibitive £1,200 fee for anyone going to an employment tribunal to protect their legal rights – the latest in a string of retrograde steps to load the dice still further against employees.

That's the spirit of zero-hours contracts: unfettered flexibility for capital, powerless prostration for the workforce. Under public pressure, the business secretary, Vince Cable, has now suggested "moving forward with recommendations to consult" about outlawing the most extreme zero-hours abuses; so far, Labour's frontbench hasn't gone much further.

If the balance of workplace power is even going to begin to be righted, these contracts will have to be scrapped – and regulation imposed on other schemes or bogus self-employment arrangements that might be used to replace them. That will also require stronger unions, of course – and a Labour leadership that is prepared to stand up to corporate interests.

Which will take a political and industrial fight. As elsewhere, the response of this government and its business allies to the crisis unleashed in 2008 has been to try to restore profitability at the expense of the living standards of the majority – instead of using the public sector to drive up investment and growth directly. Reducing workers' bargaining power is part of that.

What's clear is that the model of capitalism that crashed and burned five years ago – and they are now trying to resurrect – is unable to deliver secure jobs and full employment, or anything like it. If neoliberalism were just a theory of economic management, it would have been discredited by its failure. What's going on now is a reminder that it's also a system of social power.

Twitter: @SeumasMilne

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Britain's royal family: cut this anti-democratic dynasty out of politics | Seumas Milne

The monarchy embodies inequality and fosters conservatism. An elected head of state is embarrassingly overdue

As a rule, progressive Britain prefers to ignore the monarchy. First, it's embarrassing: 364 years after we first abolished it and long after most of the rest of the world dispensed with such feudal relics, we're still lumbered with one. Second, there are always more important things to confront – from rampant corporate power and escalating inequality to incessant war and the climate crisis. And last, the media and political class form such a sycophantic ideological phalanx around the institution that dissent is treated as, at best, weird and miserabilist.

The last few days have been par for the course. As in the case of every other royal event, the birth of a son to the heir but one to the throne has been reported in tones that wouldn't be out of place in a one party state. Newsreaders adopt regulation rictus grins. The BBC's flagship Today programme held a debate to mark the event between two royalists who fell over each other to laud the "stability", continuity" and "mystery" of the House of Windsor. The press is full of talk of "fairytales" and a "joyful nation".

But ignoring it leaves a festering anti-democratic dynasticism at the heart of our political system. As things now stand, Britain (along with 15 other former island colonies and white settler states) has now chosen its next three heads of state – or rather, they have been selected by accident of aristocratic birth. The descendants of warlords, robber barons, invaders and German princelings – so long as they aren't Catholics – have automatic pride of place at the pinnacle of Britain's constitution.

Far from uniting the country, the monarchy's role is seen as illegitimate and offensive by millions of its citizens, and entrenches hereditary privilege at the heart of public life. While British governments preach democracy around the world, they preside over an undemocratic system at home with an unelected head of state and an appointed second chamber at the core of it.

Meanwhile celebrity culture and a relentless public relations machine have given a new lease of life to a dysfunctional family institution, as the X Factor meets the pre-modern. But instead of rising above class as a symbol of the nation, as its champions protest, the monarchy embodies social inequality at birth and fosters a phonily apolitical conservatism.

If the royal family were simply the decorative constitutional adornment its supporters claim, punctuating the lives of grateful subjects with pageantry and street parties, its deferential culture and invented traditions might be less corrosive. But contrary to what is routinely insisted, the monarchy retains significant unaccountable powers and influence. In extreme circumstances, they could still be decisive.

Several key crown prerogative powers, exercised by ministers without reference to parliament on behalf of the monarchy, have now been put on a statutory footing. But the monarch retains the right to appoint the prime minister and dissolve parliament. By convention, these powers are only exercised on the advice of government or party leaders. But it's not impossible to imagine, as constitutional experts concede, such conventions being overridden in a social and political crisis – for instance where parties were fracturing and alternative parliamentary majorities could be formed.

The British establishment are past masters at such constitutional sleights of hand – and the judges, police and armed forces pledge allegiance to the Crown, not parliament. The left-leaning Australian Labor leader Gough Whitlam was infamously sacked by the Queen's representative, the governor-general, in 1975. Less dramatically the Queen in effect chose Harold Macmillan as prime minister over Rab Butler in the late 1950s – and then Alec Douglas-Home over Butler in 1963.

More significant in current circumstances is the monarchy's continual covert influence on government, from the Queen's weekly audiences with the prime minister and Prince Charles's avowed "meddling" to lesser known arm's-length interventions.

This month the high court rejected an attempt by the Guardian to force the publication of Charles's "particularly frank" letters to ministers which they feared would "forfeit his position of political neutrality". The evidence from the controversy around London's Chelsea barracks site development to the tax treatment of the Crown and Duchy of Lancaster estates suggests such interventions are often effective.

A striking feature of global politics in recent decades has been the resurgence of the hereditary principle across political systems: from the father and son Bush presidencies in the US and the string of family successions in south Asian parliamentary democracies to the Kim dynasty in North Korea, along with multiple other autocracies.

Some of that is driven by the kind of factors that produced hereditary systems in the first place, such as pressure to reduce conflict over political successions. But it's also a reflection of the decline of ideological and class politics.

Part of Britain's dynastic problem is that the English overthrew their monarchy in the 1640s, before the social foundations were in place for a viable republic – and the later constitutional settlement took the sting out of the issue.

But it didn't solve it, and the legacy is today's half-baked democracy. You'd never know it from the way the monarchy is treated in British public life, but polling in recent years shows between 20% and 40% think the country would be better off without it, and most still believe it won't last. That proportion is likely to rise when hapless Charles replaces the present Queen.

There are of course other much more powerful obstacles to social advance in Britain than the monarchy, but it remains a reactionary and anti-democratic drag. Republics have usually emerged from wars or revolutions. But there's no need for tumbrils, just elections.

It's not a very radical demand, but an elected head of state is a necessary step to democratise Britain and weaken the grip of deferential conservatism and anti-politics. People could vote for Prince William or Kate Middleton if they wanted and the royals could carry on holding garden parties and travelling around in crowns and gold coaches. The essential change is to end the constitutional role of an unelected dynasty. It might even be the saving of this week's royal baby.

Twitter: @SeumasMilne

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Miliband, Labour and Falkirk: the real problem is unions aren't influential enough | Seumas Milne

If Falkirk is used to weaken trade unionists' role in politics it can only entrench the closed circle of corporate power

We've had one political scandal after another. David Cameron's election adviser has been revealed as a lobbyist for tobacco, oil and gas companies. Ministers and civil servants are locked in a whirligig of revolving door corruption. Fifteen families or "donor groups" now account for a third of Tory funding.

But instead of turning its fire on the sleaze at the heart of the country's establishment, media and politicians have united in horror at the discovery that trade unions have been trying to influence the direction of the Labour party – as they have, with greater or usually less success, since they founded it 113 years ago.

By any honest measure, union funding is the cleanest, most transparent and accountable money in British politics, while the unions now constitute the last significant element of working class participation in British public life.

But for the past week, every clapped out cliche of anti-union propaganda – from union "barons" and "bosses" to industrial "thugs" and "dinosaurs" – has been dredged up to damn what the Sun calls Labour's "ruinous relationship" with organised labour.

The trigger for this latest outpouring of class contempt was the internal Labour row over its parliamentary selection in Falkirk, which led the national party to call in the police amid claims that Unite had been bending the rules to install its favoured candidate.

I've just read the "strictly private and confidential" report on the affair which Labour has refused to publish – and given the thin gruel offered up by way of evidence, it's perhaps not hard to see why. The most significant allegations are that a handful of members were signed up without their knowledge (by family members), and that "there are discrepancies in the signatures" of four others (suggesting some may have been forged).

Unite had been running a successful recruitment campaign – notably at the Ineos oil refinery and Alexander Dennis bus-building plant – and backed one of the main candidates, but the union isn't held directly responsible in the report. Nor is the Blairite candidate Gregor Poynton, who paid the subscriptions for 11 new members, a transgression that has largely escaped media and Westminster outrage.

Miliband yesterday denounced Falkirk as the "death-throes" of a "hated machine politics". In reality, it was New Labour which deployed machine politics over two decades to parachute in croney candidates, often with the collaboration of pliant union officials.

One consequence is the hopelessly unrepresentative nature of the parliamentary Labour party, only 9% of whose members are now from a manual occupation, compared with 40% in 1979 and 4% in parliament as a whole. Unite and other unions have been trying to change that, elect more MPs who reflect public opinion rather than the elite consensus, and counter the Lord Sainsbury-funded "Progress" machine to select yet more Blairite candidates.

The right response by Labour's leadership to Falkirk would have been to freeze the contested memberships, investigate the shenanigans and continue the selection under supervision (as Labour's report comments, "it is not unusual" for such complaints to be made in selections).

Instead, there was a determined drive by Labour's resurgent Blairite diehards the Conservatives, and a relentlessly anti-union media to bounce Miliband – elected on the back of union political levy-payers' votes – into taking a self-destructive axe to Labour's union links.

Yesterday, Miliband drew back from the most damaging moves that had been pressed on him over the weekend – including any reprise of the Tories' post-1926 general strike scheme to force trade unionists to "opt in" to the political levy used to finance Labour. And he made clear he understands that it would be folly not to give more rein to the 3 million affiliated "shopworkers, nurses, engineers, bus drivers, construction workers" currently affiliated to the party.

But he now wants them to affiliate as individuals, rather than as part of a collective union relationship, along with plans for caps on spending and the introduction of primaries. That can be expected to slash Labour's affiliation income and give unions more discretion as to how they spend their political funds – one reason why Unite's Len McCluskey was relaxed about the proposals yesterday.

But they also risk laying the ground for a further hollowing out of the unions' role, which is why Tony Blair and his friends were so enthusiastic. The arcane details are going to matter.

The truth is that not only do the unions not run the Labour party, they have precious little influence in it, despite their 49% of conference votes and regular pay cheques. If Miliband were really in the unions' pockets, he would treat McCluskey with the kind of deference reserved for bankers and corporate barons, and Labour would certainly not be signing up to George Osborne's ruinous spending plans. No wonder many trade unionists think they should take their bat and ball elsewhere.

The real problem is that trade unions – by far the largest voluntary organisations in the country – aren't influential enough. Their weakness has fuelled inequality and insecurity. Far from promoting some kind of outlandish or sectarian agenda, their policies – from rights at work to opposition to privatisation – are mainstream and popular. You'd never know it from the media's Orwellian babble, but 69% of the population support the Labour-union link.

No amount of reform will ever satisfy those who want to break that link or drive unions out of politics. The real test for Miliband's plans to recast his party for the 21st century is whether they help to build a political counterweight to the closed circle of corporate power that constitutes today's political establishment – or entrench it still further.

Twitter: @SeumasMilne

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Egypt, Brazil, Turkey: without politics, protest is at the mercy of the elites | Seumas Milne

From Egypt to Brazil, street action is driving change, but organisation is essential if it's not to be hijacked or disarmed

Two years after the Arab uprisings fuelled a wave of protests and occupations across the world, mass demonstrations have returned to their crucible in Egypt. Just as millions braved brutal repression in 2011 to topple the western-backed dictator Hosni Mubarak, millions have now taken to the streets of Egyptian cities to demand the ousting of the country's first freely elected president, Mohamed Morsi.

As in 2011, the opposition is a middle-class-dominated alliance of left and right. But this time the Islamists are on the other side while supporters of the Mubarak regime are in the thick of it. The police, who beat and killed protesters two years ago, this week stood aside as demonstrators torched Morsi's Muslim Brotherhood offices. And the army, which backed the dictatorship until the last moment before forming a junta in 2011, has now thrown its weight behind the opposition.

Whether its ultimatum to the president turns into a full-blown coup or a managed change of government, the army – lavishly funded and trained by the US government and in control of extensive commercial interests – is back in the saddle. And many self-proclaimed revolutionaries who previously denounced Morsi for kowtowing to the military are now cheering it on. On past experience, they'll come to regret it.

The protesters have no shortage of grievances against Morsi's year-old government, of course: from the dire state of the economy, constitutional Islamisation and institutional power grabs to its failure to break with Mubarak's neoliberal policies and appeasement of US and Israeli power.

But the reality is, however incompetent Morsi's administration, many key levers of power – from the judiciary and police to the military and media – are effectively still in the hands of the old regime elites. They openly regard the Muslim Brotherhood as illegitimate interlopers, whose leaders should be returned to prison as soon as possible.

Yet these are the people now in alliance with opposition forces who genuinely want to see Egypt's revolution brought at least to a democratic conclusion. If Morsi and the Muslim Brotherhood are forced from office, it's hard to see such people breaking with neoliberal orthodoxy or asserting national independence, as most Egyptians want. Instead, the likelihood is that the Islamists, also with mass support, will resist being denied their democratic mandate, plunging Egypt into deeper conflict.

Egypt's latest eruption has immediately followed mass protests in Turkey and Brazil (as well as smaller upheavals in Bulgaria and Indonesia). None has mirrored the all-out struggle for power in Egypt, even if some demonstrators in Turkey called for the prime minister, Recep Tayyip Erdoğan, to go. But there are significant echoes that highlight both the power and weakness of such flash demonstrations of popular anger.

In the case of Turkey, what began as a protest against the redevelopment of Istanbul's Gezi Park mushroomed into mass demonstrations against Erdoğan, 's increasingly assertive Islamist administration, bringing together Turkish and Kurdish nationalists, liberals and leftists, socialists and free-marketeers. The breadth was a strength, but the disparate nature of the protesters' demands is likely to weaken its political impact.

In Brazil, mass demonstrations against bus and train fare increases turned into wider protests about poor public services and the exorbitant cost of next year's World Cup. As in Turkey and Egypt, middle-class and politically footloose youth were at the forefront, and political parties were discouraged from taking part, while rightwing groups and media tried to steer the agenda from inequality to tax cuts and corruption.

Brazil's centre-left government has lifted millions out of poverty, and the protests have been driven by rising expectations. But unlike elsewhere in Latin America, the Lula government never broke with neoliberal orthodoxy or attacked the interests of the rich elite. His successor, Dilma Rousseff – who responded to the protests by pledging huge investments in transport, health and education and a referendum on political reform – now has the chance to change that.

Despite their differences, all three movements have striking common features. They combine widely divergent political groups and contradictory demands, along with the depoliticised, and lack a coherent organisational base. That can be an advantage for single-issue campaigns, but can lead to short-lived shallowness if the aims are more ambitious – which has arguably been the fate of the Occupy movement.

All of them have, of course, been heavily influenced and shaped by social media and the spontaneous networks they foster. But there are plenty of historical precedents for such people power protests – and important lessons about why they are often derailed or lead to very different outcomes from those their protagonists hoped for.

The most obvious are the European revolutions of 1848, which were also led by middle-class reformers and offered the promise of a democratic spring, but had as good as collapsed within a year. The tumultuous Paris upheaval of May 1968 was followed by the electoral victory of the French right. Those who marched for democratic socialism in east Berlin in 1989 ended up with mass privatisation and unemployment. The western-sponsored colour revolutions of the last decade used protesters as a stage army for the transfer of power to favoured oligarchs and elites. The indignados movement against austerity in Spain was powerless to prevent the return of the right and a plunge into even deeper austerity.

In the era of neoliberalism, when the ruling elite has hollowed out democracy and ensured that whoever you vote for you get the same, politically inchoate protest movements are bound to flourish. They have crucial strengths: they can change moods, ditch policies and topple governments. But without socially rooted organisation and clear political agendas, they can flare and fizzle, or be vulnerable to hijacking or diversion by more entrenched and powerful forces.

That also goes for revolutions – and is what appears to be happening in Egypt. Many activists regard traditional political parties and movements as redundant in the internet age. But that's an argument for new forms of political and social organisation. Without it, the elites will keep control – however spectacular the protests.

• Twitter: @SeumasMilne

• The paperback edition of Seumas Milne's book The Revenge of History is available from the Guardian Bookshop

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Selling off RBS would defraud the public and damage economic recovery | Seumas Milne

Stephen Hester has been forced to leave the bank by George Osborne in his determination to accelerate privatisation

Any doubt over who calls the shots at Britain's part-nationalised banks has been dispelled by the fate of Stephen Hester. The RBS chief executive has been forced out at the behest of George Osborne.

Forget the arms-length paraphernalia of the UKFI holding company. When ministers want the bailed-out banks to do something, they do it.

That's as it should be, since the state (not the "taxpayer" as the media constantly intones) currently owns 81% and 39% of RBS and Lloyds TSB respectively. The problem is what they want to do with them – which is sell them off fast, regardless of the loss to the public purse or the damage to the economy.

The chancellor is driven by a mixture of unbending ideology and raw electoral calculation. He and David Cameron are determined to start the largest privatisations in Britain's history by the end of 2014 – just in time for a 2015 election.

The idea is to engineer a "Tell Sid" 1980s-style Thatcherite handout to the right kind of voters, while ensuring that the heresy of publicly owned banks is consigned to the nightmares of the 2008 market meltdown.

Hester, who now stands to pocket an extra £5.6m after more than 40,000 RBS workers have lost their jobs, was insufficiently gung-ho for the scale of early sell-off Osborne regards as critical to Tory fortunes. His successor will get the message.

Next week Osborne is expected to set out the kind of discounts he plans to offer for Lloyds shares. He's also toying with the rightwing thinktank Policy Exchange's plan for a wider share giveaway.

For the Tory leadership, it's a trade-off between the appearance of a public windfall and the risk of being seen again to stuff the pockets of the better-off as living standards plummet. In reality, it will be a fraud against the public and an attack on genuine economic recovery.

The Brown government paid well over the odds to prevent the collapse of RBS and Lloyds in 2008. Now, Cameron and Osborne show every sign of selling the public stakes well below them, as they did with Northern Rock. No amount of dodgy breakeven accounting will hide the billions that stand to be lost.

But even more important, returning the banks to the private sector that brought them to the brink in the first place will throw away a decisive lever to rebuild and restructure the economy for the future.

That's not the way the part-nationalised banks have been run for the past five years, of course. The overriding political concern has been to prepare them for re-privatisation. Even now, RBS and Lloyds lending to businesses is actually falling as a result.

But that's a political decision – and, as we've seen this week, it's the politicians who are in charge. RBS and Lloyds could be used now as a motor of growth and investment to reshape the economy, channelling lending to infrastructure, the sectors of the future and public housebuilding.

Private investment has as good as collapsed in Britain. But instead of using the publicly controlled banks to fill that gap, Osborne is in a frenzy to hand them back to the private sector, pumping up mortgage lending instead.

There's a wider case for bank breakups, regional banks and mutuals to create a finance sector that supports sustainable growth. But right now, use the tools we've got. Support for turning RBS into a fully fledged public bank stretches from the TUC via Vince Cable to Margaret Thatcher's chancellor Nigel Lawson. The best hope must be that Osborne's pre-election scam fails.

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NSA and GCHQ: mass surveillance is about power as much as privacy | Seumas Milne

Western spying agencies are instruments of control, and their record is disastrous. They have to be held to account

Nothing to worry the "law-abiding", American and British politicians have assured us, in the wake of the revelations of mushrooming mass US surveillance of phone, email and internet traffic. The electronic harvesting is in fact "very narrowly circumscribed", Barack Obama insisted. The behaviour of Britain's intelligence services was, David Cameron declared, entirely "proper and fitting".

In fact, courtesy of the whistleblower Edward Snowden, we now know the US National Security Agency is collecting 200 billion pieces of intelligence a month, hoovering up the mobile records of more than 200 million Americans and helping itself to a vast quantity of emails, web searches and live chats from the world's largest internet companies via a program called Prism.

Naturally, the NSA has been sharing some of its spying catches about UK citizens with its friends at GCHQ, sparing the British authorities the tiresome need to arrange a warrant. But it was still authorised, the foreign secretary told parliament, apparently by himself. So nothing to fear there either.

Such rampant blanket surveillance of course makes a mockery of the right to privacy – guaranteed by the US constitution's fourth amendment – and that has been the focus of debate since the Guardian began publishing the leaks. However law-abiding a citizen, the dangers of manipulated phone or web "metadata" wrongly branding someone are legion and well-documented. And while interception of letters is an ancient intelligence practice, Prism is the equivalent of all letters being opened, copied and stored – in case they might be incriminating at a later date.

But this is as much about power as it is about privacy. Surveillance and intelligence are tools of control, at home and abroad. The history of their abuse by the US and British governments is voluminous, both in subverting and overthrowing foreign governments, from Iran to Chile, or in attacking civil rights at home, during the cold war and since 9/11.

The NSA and GCHQ, whose collaboration is at the heart of the US and British "special relationship", have been central to that for decades. Their global eavesdropping role is the cornerstone of the "five eyes" alliance of anglophone states (including Australia, Canada and New Zealand) which underpins US-dominated western global power. Both agencies were founded to spy on the rest of the world, but ended up also targeting their own people.

Two elements are new. The first is the sheer scale and scope of the NSA's trawling, which dwarfs what was possible in the past. The second is the central role of private corporations in the emerging global surveillance state.

Corporations have long been hand in glove with the secret state, working with the security services to this day to blacklist trade unionists and funding covert labour movement organisations during the cold war. What's changed is that communication is in the hands of the corporations. And the companies whose servers are vacuumed up by Prism are a roll call of US internet giants, from Google to YouTube.

The leaked NSA documents say the companies collaborate, which they deny. But any idea that these tax-dodging behemoths represent a new form of libertarian democratic cool has now been comprehensively exposed as yesterday's marketing guff.

But as well as technology, it's the war on terror that has driven the hyper-expansion of the new security-industrial complex. Along with the meaningless catch-all justification of "national security", terrorism is invoked to justify all manner of anti-democratic innovations. And since nobody wants to be blown up on buses or trains, it gives a veneer of credibility to formerly discredited spying organisations.

In reality, both the NSA and GCHQ, along with their sister spying outfits, are fuelling as much as fighting terrorism. It is they who provide the intelligence for drone attacks that have killed thousands of civilians in Pakistan, Afghanistan, Yemen and Somalia. A Pakistani man is currently taking a case to the court of appeal against GCHQ for allegedly providing the "intelligence" for a CIA drone strike that killed his father.

And it's the same US and British intelligence services that have been involved in widespread torture, kidnapping and other crimes in the past decade – as well as scandalous intelligence manipulation over Iraqi weapons of mass destruction – who now claim to be protecting us from some of the consequences.

At home, GCHQ and the NSA were mobilised to conduct spying and dirty tricks operations against the 1980s British miners' strike, while in the 1970s the US Senate Church committee exposed systematic abuse of US eavesdropping powers against civil rights and anti-war activists (along with assassination abroad). Senator Frank Church himself warned then that the NSA's capability "at any time could be turned around on the American people".

That is what has now happened, first in the early years of the Bush administration and now under Obama. And judging by experience, serious abuses would multiply if either state were again faced with significant political or industrial challenge.

Claims that the intelligence agencies are now subject to genuine accountability, rather than ministerial rubber stamps, secret courts and committees of trusties, have been repeatedly shown to be nonsense. But the political elites have their own priorities. Instead of drawing back from mass surveillance, British ministers are chafing to introduce new legislation to extend it.

The US and allied intelligence services are instruments of both domestic and global power and dominance, far beyond issues of terrorism. Revealingly, the state shown by the leaks to be the NSA's biggest intelligence target in Europe is the economic powerhouse of Germany – to a flurry of cautious protests from German politicians.

Democratic institutions have spectacularly failed to hold US and other western states' intelligence and military operations to account. So it's been left to a string of whistleblowers – from Cathy Massiter and Katharine Gun to Bradley Manning and Edward Snowden – to fill the gap. It's now up to the rest of us to make sure their courage isn't wasted.

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Doubts about convictions of Egyptian asylum seeker at heart of political storm

Court documents and lawyers suggest man whom Tony Abbott called a 'jihadist terrorist' was not convicted of murder

Serious doubts have arisen over claims that an asylum seeker at the centre of a political furore over immigration security was convicted of murder and the possession of explosives, Guardian Australia has learned.

Sayed Abdellatif, an Egyptian asylum seeker who arrived in Australia in May 2012, has been labelled a "convicted jihadist terrorist" by the opposition leader, Tony Abbott, and in numerous media reports. Last Thursday Australian federal police deputy commissioner Peter Drennan told a Senate estimates committee that Abdellatif had been convicted of premeditated murder and possession of explosives.

The allegations and the fact that Abdellatif had been placed under a severe "red notice" warning by Interpol since 2001, prompted Julia Gillard on Wednesday to call for an immediate review by the inspector general of intelligence and security of the way security services deal with "high-risk" asylum seekers. The furore over the case has plagued the prime minister over the past week in Canberra, with opposition politicians scathing about the fact that the immigration minister, Brendan O'Connor, was not told that Abdellatif had been housed in low-security detention up until August, when he was transferred to Villawood, a higher security detention centre in Sydney.

On Wednesday, Abbott said in question time: "Given that a convicted jihadist terrorist was held at a family facility in the Adelaide hills for almost a year through what officials call a clerical error, will the prime minister now concede that Labor's policies have made Australia less safe than it was under the former government?" He reiterated his criticism in parliament on Thursday.

But court documents seen by Guardian Australia, which appear to detail the convictions used to issue Interpol's red notice, make no record of a murder case or of any possession of explosives. The Egyptian Organisation for Human Rights (EOHR), an independent human rights body in Cairo, has verified the documents. Abdellatif's actual convictions, of being party to a criminal agreement and being a member of an illegal extremist group – under the rule of Hosni Mubarak in Egypt – were part of the "returnees from Albania" trial in Cairo in 1999, heavily criticised by Amnesty International at the time for using evidence allegedly obtained under torture.

Speaking to Guardian Australia, Abdellatif's Cairo lawyer, Muntassir al-Zayyat, said that his client was not accused or convicted of murder or bomb charges at the 1999 trial. Asked if Abdellatif had ever been accused or convicted of these offences Zayyat, who was speaking from Kuwait, said: "Not at all. The accusations were only joining a secret organisation and being party to a criminal agreement to topple the regime [of Mubarak, who was later overthrown in the 2011 Egyptian uprising]. There was no killing mentioned at all."

Zayyat's office were unaware of any other charges against Abdellatif.

A second lawyer, Majdi Salem, who also worked on the case, said that the 1999 charges against Abdellatif had been misreported.

He told Guardian Australia: "There were no bomb-making charges. This detail emerged because at the time of the case, the local media often took their information from the Egyptian security services, and the sources were intentionally orienting the details to suit their own interests."

The developments follow comments from the foreign minister, Bob Carr, that the judicial system under Mubarak should be treated with "suspicion".

He added that he would be "interested in further information that throws light on the nature of the prosecution".

"Certainly the judicial system that President Morsi's government has inherited from the Mubarak regime has got to be treated with a great deal of caution, even suspicion," he said.

The court documents, translated independently for Guardian Australia, show that Abdellatif was charged in May 1999 for "joining a group that was established against the rules of law [and] held leadership in it", and "participating in a criminal agreement". Further documents appear to show that Abdellatif successfully overturned the charges of "criminal agreement" years later. Abdellatif is understood to be challenging his conviction for being a member of an extremist group, and Guardian Australia has also seen correspondence from Abdellatif to the EOHR, which details an application for amnesty made to the current Egyptian president, Mohamed Morsi, three months ago.

Zayyat claimed that Abdellatif's 1999 trial, in which he was convicted in absentia while exiled in the UK, was a farce. Mubarak jailed thousands of Islamists in the 30 years of his presidency. "This case was a set-up," Zayyat said. "During the Mubarak era, the Egyptian authorities wanted to charge all of the exiled Islamist opposition so they can justify requests to have them handed back to Egypt. The charges are vague, like joining an organisation that was formed illegally, or criminal agreement to topple the regime. Therefore, Mubarak had the case transferred to a military court to guarantee verdicts against them. My client Mr Sayed Abdullatif is innocent."

The "returnees from Albania" trial, which saw 107 people, including the current head of al-Qaida, Ayman al-Zawahiri (in absentia), stand accused of a variety of offences in Egypt in 1999, relied heavily on evidence supplied by Ahmed Ibrahim Sayed el-Naggar, who was allegedly rendered to Egypt after being arrested for involvement in a Tirana-based network of militants. This evidence is alleged to have been obtained through torture.

Abdellatif was convicted as a member of "Jihad Tanzim" or Egyptian Islamic Jihad, an Egyptian terror group. On Friday Fairfax media revealed Abdellatif had worked as an accountant for the Kuwait-based Society of the Revival of Islamic Heritage, an organisation that was blacklisted in 2002 by the US for its links to al-Qaida. Ian Rintoul, an advocate working for Abdellatif in Sydney told Fairfax that Abdellatif had been working for the group years before it was deemed a threat.

Abdellatif came to Australia by boat from Indonesia on 11 May 2012. He was accompanied by his wife and six children. In an interview with IRIN, a humanitarian news website funded by the United Nations, conducted in February 2012, as Abdellatif arrived in Australia, he is quoted as saying: "Since leaving Egypt, I have taken my family from Albania to the UK and then onward to Iran. For years I languished in an Iraqi refugee camp there – pretending to be Palestinian lest I be found out and returned to Egypt. Later we travelled to Malaysia via India on fake passports and onward to Indonesia, again illegally. Throughout this journey, I faced repeated arrest and detention, as have members of my family.

"I arrived in Malaysia from Iran in 2010 before making my way to Indonesia in the hope of taking my family to the UK. After boarding the plane in Jakarta, we were again arrested in Singapore and sent back to Indonesia on 3 June 2010. I applied for refugee status on 30 August 2010, but almost two years on have no idea what is happening with my case.

"As a result, I have no choice but to make my way to Australia on my own."

Guardian Australia also understands that the Australian Human Rights Commission had already intervened in Abdellatif's asylum case, concerned about allegations that the continued detention of him and his family in Australia was arbitrary, and therefore in breach of article nine of the international covenant on civil and political rights.

Amnesty International Australia's refugee spokesperson, Graeme McGregor, said in a statement: "We welcome the federal government's announcement of an independent review into the legitimacy of terror charges against a man identified as Sayed Abdellatif.

"However, it is vital that the review take into account the serious flaws in Mr Abdellatif's original trial by an Egyptian military court in 1999, on which the charges are apparently based.

"The trial violated some of the most fundamental requirements of international law, including the right to be tried before independent and competent judges. What's more, Amnesty representatives attended several of the mass trials of civilians before military courts, where they heard defence lawyers complain consistently that they were denied enough time to prepare their cases.

"It is vital that the case against Sayed be resolved as soon as possible so that the accusations can be addressed and so that he is not separated from his wife and children for any longer than necessary."

Red notices are issued by Interpol following a request from a member country that is passed to the Interpol secretariat for assessment and approval. They are not binding arrest warrants but are the most severe warning Interpol can issue.

Guardian Australia has contacted Interpol for clarity on the circumstances of the red notice served on Abdellatif and is awaiting a response. A public search of the Interpol wanted persons list showed no results for Abdellatif. Under Interpol's rules the country issuing the red notice is allowed to keep its listing private.

Greens Senator Sarah Hanson-Young told Guardian Australia she was "dismayed at how this matter has been handled, with the Oppostion so desperate to whip fear and hysteria in the community. That approach has made it near impossible to have all the facts of the case calmly and reasonably considered."

"The Opposition are exploiting the government's failures in this case to continue their fear mingering campaign."

A spokesperson from the Australian federal police said they stood by the evidence delivered at Senate estimates last Thursday.

A spokesman for the minister of home affairs declined to comment.

A spokesman for Tony Abbott's office said: "I refer you to the statements from the Australian federal police."

AustraliaTony AbbottAustralian politicsEgyptOliver LaughlandLouisa LoveluckSeumas Milne
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Politics Weekly podcast: Ed Miliband plans welfare cap

In a major policy speech this week Ed Miliband announced: "The next Labour government will have less money to spend ... we will have to be laser-focused on every single pound we spend."

As part of this candid new approach, Miliband singled out Britain's welfare budget for special attention. Universal benefits that ended up in the pockets of wealthy pensioners and middle-class parents would need to be re-evaluated, he said, and the welfare budget would be capped. Or at least the part of it that is deemed "structural" - the part that persists beyond the normal economic cycle.

Miliband's speech was the second part of a Labour double-header this week. Ed Balls had already prepared the ground with a speech in which he vowed to enforce an iron discipline on his cabinet colleagues.

Joining Hugh Muir in the studio to discuss all this: Guardian political columnist Seumas Milne, economics editor Larry Elliott and political blogger Hopi Sen.

We also hear how the IMF has admitted mistakes in its treatment of Greece during the prolonged bailout. The Fund confessed in a leaked report that the effects of its austerity programme were far worse in terms of unemployment and economic contraction than they'd predicted. Oops.

And finally, the latest in a long line of lobbying scandals has been the talk of Westminster this week. But it's not just the low-level skullduggery of free holidays and undeclared donations that continues to blight politics. According to Seumas Milne, the revolving doors between parliament, the civil service and big business are of far wider concern.

Leave your thoughts below.

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Corporate power has turned Britain into a corrupt state | Seumas Milne

Westminster lobbying is the least of it. Revolving-door colonisation of public life is a corrosive threat to democracy

If you're under attack, create a diversion. David Cameron and Nick Clegg have been floundering as the spectre of Westminster sleaze has returned to haunt them. Four years after the MPs' expenses scandal engulfed British politics, yet another alleged scam has been exposed. First a Tory MP and then a clutch of greedy peers were caught on camera apparently agreeing to take cash from journalists posing as representatives of foreign companies. "Make that £12,000 a month," grinned Jack Cunningham, Tony Blair's former "enforcer".

Cameron and Clegg had promised to deal with parliamentary influence-peddling, and done nothing about it. So on Monday they came up with a plan: to crack down on trade unions. Wrapped in a panic bill to set up a register of lobbyists are to be powers to police union membership lists and cut union spending in election campaigns. The first will make what is already the almost impossible task of holding a legally watertight strike ballot still harder. The second is a direct attack on Labour funding.

The contemptuous class cynicism of the coalition leaders' response takes some beating. Not only are unions the most accountable and only democratic part of the political funding system; but by including anti-union clauses in the new bill, Cameron and Clegg want to ensure Labour's opposition – all the better to change the subject and wrongfoot the opposition in the process.

Even Conservative MPs were embarrassed at the crude chicanery of it. Just as absurd is the fact that the register would have done nothing to prevent the latest lobbying scams – except help the puffed-up parliamentarians avoid getting stung in the first place. And the new law would apply only to lobbying firms, while directly employed corporate lobbyists would be exempt. Add to that the failure to bring elections to the House of Lords, and there will certainly be more jobs-for-life cronies cashing in with corporate clients in the years to come.

The truth is that parliamentary sleaze merchants are small fry in the corporate lobbying game. Before he became prime minister, Cameron predicted that secret corporate lobbying was "the next big scandal waiting to happen", adding: "We all know how it works." As a former lobbyist himself, he certainly did – and still does.

Cameron's own election adviser, the Australian Lynton Crosby, is a lobbyist – for tobacco, alcohol, oil and gas companies. Which is why the prime minister came under attack for dropping curbs on cigarette packaging and alcohol pricing. His party treasurer Peter Cruddas resigned after offering access to Cameron for a £250,000 party donation. His defence secretary, Liam Fox, resigned over his relationship with the lobbyist Adam Werritty.

But lobbying doesn't begin to cover the extent of corporate influence. More than ever the Tory party is in thrall to the City, with over half its income from bankers and hedge fund and private equity financiers. Peers who have made six-figure donations have been rewarded with government jobs.

But the real corruption that has eaten into the heart of British public life is the tightening corporate grip on government and public institutions – not just by lobbyists, but by the politicians, civil servants, bankers and corporate advisers who increasingly swap jobs, favours and insider information, and inevitably come to see their interests as mutual and interchangeable. The doors are no longer just revolving but spinning, and the people charged with protecting the public interest are bought and sold with barely a fig leaf of regulation.

Take David Hartnett, head of tax at HM Revenue & Customs until last year and the man whose "sweetheart deals" allowed Starbucks and Vodafone to avoid paying billions in tax. He now works for the giant City accountancy firm Deloitte, which works for Vodafone. The two-way traffic between the big four auditing firms and government is legendary: staff are sent on secondments to HMRC and the political parties and then return to devise new loopholes for corporate clients.

Then there's Hector Sants, head of the Financial Services Authority in charge of regulating banks until last year, who joined Barclays six months later. But he's only one of a stream of regulators who have made similar moves. The same goes for the 3,500 military officers and defence ministry officials who have taken up jobs in arms companies in the past 16 years – as it does for top civil servants and intelligence officials. The cabinet secretary, Jeremy Heywood, is the living embodiment of the revolving door, having moved effortlessly from the Treasury to Blair's office to the investment bank Morgan Stanley and back to work for Cameron.

That's before you get to the politicians. City directorships in opposition used to be a Tory preserve. But after New Labour embraced corporate power it became a cross-party affair. Blair is in a class of his own, of course, raking in £20m a year from banks and autocratic governments; but he is followed closely by dozens of New Labour ministers who moved out of government into lucrative corporate jobs, often for firms hustling for contracts from their former departments.

It defies rationality to believe that the prospect of far better paid jobs in the private sector doesn't influence the decisions of ministers and officials – or isn't used by corporations to shape policy. Who can seriously doubt that politicians were encouraged to champion light touch regulation before the crash by the lure and lobbying of the banks, as well as by an overweening ideology?

Privatisation has extended the web of lubricated relationships, as a mushrooming £80bn business uses jobs and cash to foist a policy that is less accountable, lowers standards and is routinely more expensive on the public realm. When 142 peers linked to companies involved in private healthcare were able to vote on last year's health bill that opened the way to sweeping outsourcing – and the City consultancy McKinsey helped draw it up – it's not hard to see why.

Britain is now an increasingly corrupt country at its highest levels – not in the sense of directly bribing officials, of course, and it's almost entirely legal. But our public life and democracy is now profoundly compromised by its colonisation. Corporate and financial power have merged into the state.

That vice can be broken, but it demands radical change: closure of the revolving doors; a ban on ministers and civil servants working for regulated private companies; a halt to the corrosive tide of privatisation; and a downward squeeze on boardroom pay to reduce the corporate allure. It's going to need a democratic backlash.

Twitter: @SeumasMilne

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Belfast peace skills aid talks between Farc and Colombian government

Northern Ireland MPs and legislators become first international delegation to meet Farc leaders since peace talks began

A taste of Belfast came to Havana today when a cross-party group of Northern Ireland MPs and legislators became the first international delegation to meet leaders of the Farc, Colombia's main guerrilla organisation, since peace talks with the Colombian government began in November last year.

The negotiations in Cuba between President Juan Manuel Santos's government and the leftist Revolutionary Armed Forces of Colombia, which offer the prospect of bringing one of the world's longest and bloodiest conflicts to an end, led to a breakthrough partial agreement earlier this week on land reform, one of the core issues at the heart of the war.

The four-man delegation from Northern Ireland – including Jeffrey Donaldson from the Democratic Unionist Party and Sinn Fein's Conor Murphy, and representing all the main parties in the peace process – met President Santos and Colombian government negotiators in November and is pressing the case for a ceasefire and security guarantees for the opposition as essential to the success of the Colombian talks.

The conflict between the Farc and other guerrilla groups and the US-backed Colombian government, which began in the 1960s, has led to hundreds of thousands of deaths – mostly at the hands of the army and rightwing paramilitary forces. Large-scale human rights abuses include the assassination of thousands of trade unionists since the 1980s.

Colombia's president has been under attack by his predecessor Alvaro Uribe for agreeing to peace talks, and is anxious to close a deal before elections next year. He has refused the Farc's proposal for a ceasefire in the conflict, which has continued on the ground since the talks began. The Farc called a unilateral two-month ceasefire in November, but that has since lapsed.

After the initial agreement on land, negotiations are now expected to move on to integrating the 10,000-strong Farc into mainstream politics, tackling drug trafficking and providing justice for victims of the conflict. An earlier attempt at a peace settlement in the 1980s was derailed by the mass killing of opposition activists.

Speaking from Havana in a break from meetings with Farc leaders, the DUP's Jeffrey Donaldson said Northern Ireland showed the Colombian peace process would only work if it was inclusive. "We want to encourage a comprehensive ceasefire to create the right conditions for negotiation. We couldn't have achieved what we did without those key elements," he said.

He was echoed by Sinn Fein's Conor Murphy, who said the cross-party delegation – brought to Havana by the UK-based trade union-backed Justice for Colombia group – showed that "former enemies can make peace agreements stick", and the importance of security for guerrilla and political opposition leaders. "The fact we're in Cuba and not Colombia demonstrates that's still an issue for these negotiations," he said.

Farc negotiator Marco Leon Calarca told the Guardian the Irish experience was "very important for us because they're telling us their first hand experiences of a peace process that's been successful. There are differences in the conflicts of course, but also a lot of parallels."

BelfastColombiaFarcNorthern IrelandAmericasSeumas Milne
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