Damning: The graph by the House of Commons Library, showing how earnings have plummeted since Cameron’s Coa-lamity government came into office.
David Cameron must be so proud. He wanted a return to the Victorian era and that is exactly what he has achieved.
Wages have nosedived, meaning the gap between the richest and poorest is larger than it has ever been; we already know that diseases once thought long-gone are stalking our streets once again while the National Health Service has been bled to the point of death; and the welfare state is in critical condition, with people who have paid into the system all their lives bullied out of claiming benefits when they are needed and sent back to die in their homes.
This is David Cameron’s brave new Britain.
The figures on wages are the latest blow against the public-relations Prime Minister’s credibility – they come from the respected House of Commons Library.
The graph (above) uses figures from the Office for National Statistics, the Bank of England and forecasts from Coalition poodles the Office for Budget Responsibility.
It shows that real earnings are expected to have fallen by 2.3 per cent between 2010 and 2015 – the first fall since 1922-3 when wages fell by 1.8 per cent – and the largest since 1874-80, under Conservative Prime Minister Benjamin Disraeli, when they fell by 2.6 per cent.
Firm figures for 2010-13, from the ONS, paint an even worse picture – they show a 4.6 per cent drop during the three-year period.
So, Dear Reader, if you have been doubting Labour’s claim that wages have dropped by £1,600 per year, in real terms, since the Tories and the Liberal Democrats sidled into office, doubt no more!
This factual evidence has thrown into chaos Conservative claims that the UK has returned to prosperity because our Gross Domestic Product has finally exceeded its pre-financial-crisis peak.
Vox Political was right to say GDP might be up 3.1 per cent on last year but it has nothing to do with most of the population.
What is our part-time Chancellor going to do about it? He’s done quite a lot of nose-diving himself and, considering what he has managed from his office…
Let’s hope the song isn’t ‘Gold’, because the irony would be too much to bear.
George Osborne might as well go back to prancing around a prostitute’s boudoir to a soundtrack by Spandau Ballet.
Columnist Jill Filipovic hit the nail on the head when she wrote: “I can already hear your objections: ‘But the area under my boobs doesn’t stink!’ or ‘What kind of marketing genius not only came up with the term “swoob,” but actually thought half the world’s population might be dumb enough to buy into it?’ or simply, ‘This is a dumb product aimed at inventing an insecurity and then claiming to cure it.’
“You would be correct on all three points.
“In fact, inventing problems with women’s bodies and then offering a cure – if you pay up – is the primary purpose of the multi-billion dollar beauty industry.”
The simple fact is that you don’t really need to worry about smells down there – a good old soapy flannel will cure any such problems.
That’s not the point, though. The aim is to get you thinking about it and devoting your energy to it, rather than to other matters.
Now let’s translate that to politics.
We already know that all the scaremongering about Romanian and Bulgarian immigrants storming the country from January 1 was a crock. That bastion of good statistics, The Now Show, told us last week that the total number of Bulgarian immigrants in the last couple of weeks was “around two dozen so far”, according to their ambassador. In the first three months after our borders were opened to Croatians, 174 turned up.
Yet the government wanted you to believe they would flood our immigration service in their millions, “taking benefits and yet simultaneously also taking all the jobs”.
My use of language such as “storming” and “flood” is not accidental. By far the more serious threat to the UK in the early days of 2014 was the weather – and, guess what, not only was the government unprepared for the ferocity of the storms that swept our islands, the Coalition was in fact in the process of cutting funding for flood defence.
This would have gone unnoticed if the weather had behaved itself, because we would all have been distracted by the single Romanian immigrant who was ensnared by Keith Vaz in a ring of TV cameras at Heathrow Airport.
Now the Tories are telling us that our take-home pay is finally on the rise for all but the top 10 per cent of earners, with the rest of us seeing our wages rise by at least 2.5 per cent.
The government made its claims (up) by taking into account only cuts to income tax and national insurance, using data leading up to April last year, according to the BBC News website.
“The data used … takes no account of the large benefit cuts introduced by the coalition, such as the real-terms cut in child benefit, the uprating of benefits in line with CPI inflation rather than RPI, and the cuts to tax credits,” writes the Statesman‘s George Eaton.”
He also pointed out that other major cuts such as the bedroom tax, the benefit cap, and the 10 per cent cut in council tax support were introduced after April 2013 and were not included in the Coalition figures.
Once all tax and benefit changes are taken into account, the Institute for Fiscal Studies has shown that almost all families are worse off – and the Coalition also appears to have forgotten the five million low-paid workers who don’t earn enough to benefit from the increase in the personal allowance.
Skills and enterprise minister Matthew Hancock compounded the mistake in an exchange on Twitter with Jonathan Portes, director of the National Institute of Economic and Social Research (NIESR). Asked why his analysis “ignores more than four million people in work (the self-employed)”, Mr Hancock tweeted: “Analysis based on ONS ASHE survey of household earnings data”.
Wrong – as Mr Portes was quick to show: “Don’t you know the difference between household and individual earnings?”
Apparently not. ASHE (Annual Survey of Hours and Earnings) is a survey of employed individuals using their National Insurance numbers – not of households or the self-employed.
So the Coalition – and particularly the Tories – were trying to make us all feel good about the amount we earn.
That’s the distraction. What are we supposed to be ignoring?
Or is it the growing threat of a rise in interest rates, which may be triggered when official unemployment figures – which have been fiddled by increased sanctions on jobseekers, rigged reassessments of benefit claimants, a new scheme to increase the number of people and time spent on Workfare, and the fake economic upturn created by George Osborne’s housing bubble – drop to seven per cent?
It seems possible that the government – especially the Tory part of it – would want to keep people from considering the implications of an interest rate rise that is based on false figures.
As Vox Political commenter Jonathan Wilson wrote yesterday: “If the BOE bases its decisions on incorrect manipulated data that presents a false ‘good news’ analysis then potentially it could do something based on it that would have catastrophic consequences.
“For example if its unemployment rate test is reached, and wages were going up by X per cent against a Y per cent inflation rate which predicted that an interest rate rise of Z per cent would have no general effect and not impact on house prices nor significantly increase repossessions (when X per cent is over-inflated by the top 1 per cent of earners, Y per cent is unrealistically low due to, say, the 50 quid green reduction and/or shops massively discounting to inflate purchases/turnover and not profit) and when it does, instead of tapping on the breaks lightly it slams the gears into reverse while still traveling forward… repossessions go up hugely, house prices suffer a major downward re-evaluation (due to tens of thousands of repossessions hitting the auction rooms) debt rates hit the roof, people stop buying white goods and make do with last year’s iPad/phone/tv/sofa, major retail goes tits up, Amazon goes to the wall, the delivery market and post collapses… etc etc.
“And all because the government fiddled the figures.”
Perhaps Mr Cameron doesn’t want us thinking about that when we could be deodorising our breasts instead.
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One has to admire the Bank of England for its determined optimism in the face of all the facts. The only organisation that is even more adamant that the UK economy is going to grow is the Office for Budget Irresponsibility, and we all know how rarely that body ever gets anything right.
Today, the soon-to-be ex-governor, Sir Mervyn King, said the economy had “cause for optimism” and there was an “encouraging underlying picture”.
What makes this tragic is the timing. Today, the story appeared on the BBC’s business news web page beneath a revelation that the fashion chain Republic has become the latest High Street name to go into receivership, and an announcement that Blockbuster, which bit the bullet earlier this year, would be closing a further 164 shops – threatening 800 jobs.
Cause for optimism, Sir Mervyn? Really?
Comet has gone, Jessops has gone, HMV is hanging on by its forepaws after closing 66 stores. Now Republic. We understand more than 100 other chains are facing financial ruin.
What, in this situation, is the “encouraging underlying picture”? A resurgence in manufacturing? What good will that do, if everybody is out of work and unable to buy anything? Who will benefit?
It won’t be the people on the street. Republic had 2,500 employees; Blockbuster is likely to lose 800 staff. Those job losses follow the many hundreds in the other chains mentioned. If manufacturing does improve, it will be selling abroad, and the only beneficiaries will be company bosses.
You and I won’t see a penny of it.
One aspect of this that did make me smile was the fact that the administrators from accountancy firm Ernst & Young (itself no stranger to controversy – see the previous Vox Political article about tax avoidance for details) sacked all 150 staff at the fashion firm’s head office. All the managers lost their jobs, and quite right, too!
Government borrowing figures for August have been released and the Treasury has been talking nonsense about them. Again.
Let’s start with the facts: UK public sector net borrowing was £14.4bn in August – slightly higher than the same month last year, and therefore the biggest deficit for the month since records began. Corporation tax receipts fell by 2.1 per cent; benefit payments rose by 4.9 per cent.
Barring the effects of one-off transactions like the raid on the Royal Mail Pension Plan that I mentioned last month, borrowing from April to August increased by £12.9bn, or 22 per cent, on the same period last year – to £61.3bn.
The British Chambers of Commerce reckon that at this rate, total borrowing for 2012-13 will be £20bn+ more than estimated by the misnamed Office for Budget Responsibility at the time of the last budget.
Public sector net debt stood at £1.04 trillion at the end of August 2012, equivalent to 66.1 per cent of gross domestic product (GDP) – that’s up from 1.032tr at the end of July, or 65.7 per cent of GDP.
The BBC, reporting on its website, has stated that the figures make it more likely the government will fail to wipe out the structural budget deficit by its deadline – and I think it won’t make a difference whether that’s 2015 (already long-abandoned) or 2017.
The Treasury, on the other hand, is still telling us it is getting the deficit down. Exchequer secretary to the Treasury David Gauke said new figures showing borrowing for 2011-12 came it at £119bn, rather than the OBR’s forecast of £126bn meant the government was dealing with its debts.
This is particularly rich, coming from him. Everybody now knows that the best way for the government to pay down its debts is to tax all the rich Brits who have stashed their cash in offshore tax-havens. Mr Gauke used to work for a tax avoidance firm and his wife is a tax avoidance lawyer. He is exactly the wrong man to lecture us on getting the deficit – the difference between government spending and tax receipts – down.
Some, like Sir Mervyn King, governor of the Bank of England, are now saying that overshooting the deficit reduction target would be acceptable if the reason was slower economic growth across the world, and the government has been happy to play its ‘Eurozone Strife’ card many times in the past.
But I’m not convinced. I tend to agree with The Guardian’s summary of the Coalition’s non-achievements so far, which states: UK exports to the EU have been growing, at least until early 2012; the deepening Eurozone crisis was mainly due to the same austerity policies employed in the UK; therefore austerity should have been cut back and demand revived.
What we’re left with should be no surprise to anyone: Numbers that don’t add up and explanations that don’t make sense.
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