Tag Archives: British Chambers of Commerce

Rising tide of protest marks start of Tory conference

Falling on deaf ears: The chorus of protest against the bedroom tax is unlikely to be heard at the Conservative Party Conference in Manchester, where delegates will be discussing how to bribe the electorate into supporting them in 2015. [Picture: Matthew Pover in the Sunday People]

Falling on deaf ears: The chorus of protest against the bedroom tax is unlikely to be heard at the Conservative Party Conference in Manchester, where delegates will be discussing how to bribe the electorate into supporting them in 2015. [Picture: Matthew Pover in the Sunday People]

Does David Cameron have any new policies that are big enough to silence the rising clamour of discontent against him?

He’ll need something big – Coalition partners the Liberal Democrats managed only a tax on plastic bags (an idea stolen from the Labour Welsh government) and a few weak cries of “Please let us stay in government after 2015”.

The married couples’ tax allowance isn’t it. It seems this is how the Tories plan to spend any money saved by imposing the bedroom tax, and people are already naming it as an election bribe – albeit a poor one at £3.85 a week.

He has set aside £700 million for the scheme, which is more than the government would have spent if it had not imposed the bedroom tax.

A brand-new ComRes poll is showing that 60 per cent of voters agree with Labour’s plan to abolish the bedroom tax – which hits 660,000 households. And one in five Liberal Democrats could vote Labour in protest at the tax.

The issue has prompted shadow Work and Pensions secretary Liam Byrne to say something with which this blog can actually – for once – agree! He said: “It is the worst possible combination of incompetence and cruelty, a mean-spirited shambles. It’s got to go.”

He added that the bedroom tax was likely to cost more than it saved – a point made by this blog many months ago.

Another hopelessly unpopular Tory policy to come from Iain Duncan Smith’s Department for Work and Pensions has been the work capability assessment for sick and disabled claimants of Employment and Support Allowance. It seems one of the first things the Tories did was alter this test so that it became almost impossible to accumulate enough points to be found in need of the benefit.

The result has been three years of carnage behind closed doors, where people with serious conditions have been forced into destitution that has either caused their death by worsening their condition, or caused the kind of mental health problems that lead to suicide. Thousands – perhaps tens of thousands – have died.

Now, the Dean of St Paul’s Cathedral has written to Cameron, urging him to end the assessments which, he wrote, can “cut short their lives”.

The Very Reverend Dr David Ison, who presided over Margaret Thatcher’s funeral, signed a campaign letter entitled ‘The Downing Street Demand’, which claims Government policies force some of the most deprived members of society to “shoulder the heaviest burden of national debt created by the super-rich”.

Some might say this is typical of broad Conservative policy: Taking from the poor to give to the rich.

The harshness of such a policy, as outlined in the letter, is appalling: “In 2010 you said, ‘I’m going to make sure no-one is left behind; that we protect the poorest and most vulnerable in our society’.

“The reality of the austerity programme is the opposite.

“Since your Government came to power, cuts have meant that disabled people are paying back nine times more than non-disabled people and those with the highest support needs are paying back nineteen times more.”

Dr Ison said: “It’s right to stand in solidarity with people from many different organisations to draw attention to the needs of some of the most deprived members of our society.

“Many disabled people feel desperate facing possible cuts in support, the bedroom tax, and in particular an inflexible and failing Work Capability Assessment scheme which can blight and even cut short their lives.

“The Government needs to respond by enabling disabled people to live with dignity and security.”

Against this background, what is Cameron doing to make his party more attractive?

He’s bringing forward the second phase of his government’s Help to Buy scheme, that helps people in England to get 95 per cent mortgages on properties worth up to £600,000 – a scheme that has been widely criticised for setting up another debt-related housing bubble.

Cameron denies this. Speaking on The Andrew Marr Show this morning (Sunday), he said that outside London and the South East the average price of homes has only risen 0.8 per cent.

But the BBC reported that, during September, house prices rose at their fastest rate in more than six years – and a report from Nationwide Building Society showed the rise was “increasingly broad-based”.

Adam Marshall, of the British Chambers of Commerce (which is normally supportive to the Conservatives), said: “With all the concern expressed about Help to Buy – rushing into it seems less than responsible on part of government.”

It is, therefore, under a barrage of scorn that the Conservative conference begins today. How is Cameron planning to rally his troops?

He would be ill-advised to use the economy – as seems likely from a BBC report today.

He wants the country to believe that “We have had to make very difficult decisions… These difficult decisions are beginning to pay off and the country’s coming through it.”

Even here, the evidence is against him. George Osborne’s economic theory was based on a very silly spreadsheet error, as was proved several months ago by an American student. Attempts by this blog to ascertain whether he had anything more solid on which to base his policy proved fruitless – all the evidence he provided was underpinned by the same discredited document.

No – we can all see what George Osborne’s policies did to the British economy: They stalled it.

We spent three years bumping along the bottom with no growth worth mentioning, which Osborne, Cameron and their cronies used as an excuse to impose policies that have hammered those of us on the lowest incomes while protecting the rich corporate bosses, bankers and hedge fund investors who caused the economic crash.

Now, it seems more likely that the economy is picking up because it was always likely to. Commerce is cyclical and, when conditions merit it, business will pick up after a slump. That is what is happening now, and this is why growth figures are “stronger than expected”.

It has nothing to do with Conservative economic policies at all.

That won’t stop Cameron trying to capitalise on it. Ever the opportunist, he is already trying to pretend that this was the plan all along, and it just took a little longer than expected. We would all be fools to believe him.

And he has rushed to attack Labour plans for economic revival, claiming these would involve “crazy plans to tax business out of existence”.

In fact, Labour’s plans will close tax avoidance loopholes that have allowed businesses to avoid paying their due to the Treasury.

Besides, Conservative policy – to reduce Corporation Tax massively – has been proved to do nothing to make the UK more attractive for multinational businesses; the USA kept its taxes high and has not lost any of its own corporate taxpayers.

That country, along with Germany, adopted a policy of investment alongside a tighter tax regime and has reaped the benefits with much greater growth than the UK, which has suffered from a lack of investment and a tax policy full of holes (because it is written by the architects of the biggest tax avoidance schemes).

So what’s left?

Historically, at this time in the electoral cycle, Tory policy is to offer Middle Britain a massive bribe.

If they try it now, they’ll risk wiping out any savings they might have made over the last three years, rendering this entire Parliament pointless.

This blog stated last week that the Tories seem to want to rewrite an old saying to include the line: “You can fool most of the people, enough of the time.”

We know that millions of people were fooled by them at the last election.

Will we be fooled again?

Sunny summer was good for the economy – shock! All YOU get is a tan

130920camspeechblower

At risk of seeming to be ‘Disgusted of Tunbridge Wells’: Why, oh why, oh why is everybody making such a big fuss about the fact that the economy bounced back a little bit over the summer?

Did nobody think that, perhaps, the fact that it was more sunny than in recent years meant our tourism industry might get a much-needed shot in the arm – not least from run-down British people, desperate for relief from the constant, grinding monotony of the Conservative/Lib Dem Coa-lamity government’s austerity agenda?

Did they not recall that the holiday season is a traditional ‘lull’ period and that, therefore – unless unusual situations apply (as they have in previous years) – government spending should be less? What’s the relief to the public purse from not having any Olympic Games to stage this year? What’s the benefit of having no riots?

And, finally, for the vast majority of the British people, these figures are no reason to celebrate because they make no difference. The cost of living is going up while average real-terms earnings have plummetted. If we are seeing a recovery, it is a recovery for the rich alone.

As was always intended.

For the record, public sector borrowing for August was £13.2 billion – £1.2 billion lower than the amount recorded in August 2012. This puts the UK’s net national debt at £1.19 trillion – 74.6 per cent of Gross Domestic Product.

GDP itself grew by 0.7 per cent in the second quarter of 2013 (April-June), and tax revenues have been 2.8 per cent higher than in the same period of 2012. Total government spending has fallen by 2.2 per cent, led by a sharp drop in spending by individual departments.

You can read all this on the BBC News website and might find it pleasant enough, but then David Kern, chief economist at the British Chambers of Commerce had to ruin it by saying “Our ability to generate tax revenues will struggle to return to pre-recession levels, even when the pace of growth picks up. As a result, the government must continue to make cuts in current spending in order to reduce the deficit further.”

So he wants the madness to continue. I wonder… If his business was in trouble, would he cut investment in – say – advertising and then expect profits to improve? That would be madness. Every pound cut from public investment by the government results in a loss to the economy of £1.70-£2.20. It is the government’s own demand for austerity that is slowing the recovery!

And what does this mean for ordinary people?

It means that, after adjusting for inflation, average earnings are £1,350 per year lower than they were at the time of the 2010 General Election. The UK has suffered the biggest fall in income and living standards of any country in the G7. You are worse-off under the Conservatives and the Liberal Democrats!

By 2015, average wages are forecast to be £1,520 lower than in 2010 (based on figures from the House of Commons Library). This means working people will have lost an average of £6,660 in real terms while David Cameron has been Prime Minister – enough to support the average family’s weekly shop for one and a half years, at 2012 prices!

Inflation has been higher than in other G7 countries throughout David Cameron’s period in office, meaning that George Osborne’s claim that “rising global prices” have forced the cost-of-living increase is nonsense.

Claims like that of then-Treasury Minister Chloe Smith at the start of 2012 that lower inflation meant “the cost of living is coming down a little for families” were also rubbish – it was still increasing; just not quite as fast.

In fact, price rises have outstripped wage growth in every single month of the Coalition government – except April this year, when David Cameron cut taxes for millionaires and bank bonuses skyrocketed. Who benefited? The rich. Who lost out? The middle classes, workers, and the poor.

A YouGov survey of ordinary people has shown that 70 per cent do not believe the much-touted recent improvements in the economy have helped middle- and lower-income families. Only 10 per cent thought they had.

And 81 per cent had seen prices grow faster than household incomes, with just three per cent (and only one per cent of women) seeing income grow faster than prices.

It doesn’t matter what they say the economy is doing. You will continue to lose money as long as you have a government of millionaires, ruling in their own interests rather than the interests of the country.

It’s as simple as that.

Government borrowing: Insanity, explained with nonsense

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.