Tag Archives: bubble

Osborne’s ‘banana republic’ plan for the UK

As he will be remembered: George Osborne.

As he will be remembered: George Osborne [Image: Steve Bright for Channel 4].

If The Guardian had its way, George Osborne would have been giving a Twilight Statement, rather than an Autumn one – as in “Twilight of his career”.

“The choice confronting the country was, [Osborne] said, whether to stick the course of a ‘long-term economic plan’ which was working, or whether instead to hand power back to a Labour party that would ‘squander the economic security’ he had painstakingly built,” mocked the paper’s editorial column, “through cavalier decisions on borrowing and public spending” [Italics mine].

Cavalier decisions, according to any dictionary, are those offhand choices that show a lack of proper concern. The Boy hasn’t been taking his job seriously.

“That proclaimed long-term plan… turned out to need a short-term rewrite,” the column continued. ”

“The resolute Mr Osborne of 2010 stated that the national debt would by now be falling, from a maximum of just below 70% of GDP, but instead it continues to march towards a peak which he now concedes will be over 80%.

“He was, he said then, on course to ‘meet our fiscal mandate to eliminate the structural current budget deficit one year early, in 2014-15’, something he now accepts will not be done until well into the next parliament.

“And the headline measure of the government overdraft, which the ‘long-term plan’ had initially pencilled in as £40bn this year, was on Wednesday revised up to £91.3bn, which represents slippage of well over 100%.”

Over 100 per cent! That should be a sacking offence – and voters should bear that in mind next May.

“Much of the shortfall in revenues can be traced back to the great stagnation of 2011 and 2012, for which Mr Osborne and his premature retrenchment bear considerable responsibility,” the article continues. “With its mandate still fresh, the coalition timetabled front-loaded cuts for political reasons, hoping to create room for giveaways later, as 2015’s date with the voters moved on to the horizon. But with decidedly unserious [cavalier?] disregard for the frailty of the economy of the time, it virtually snuffed out growth.”

How refreshing to see a representative of the mainstream press openly stating what we’ve all known for years!

“Indeed, GDP only began bouncing back in earnest after Mr Osborne silently conceded defeat on plan A, by incrementally postponing ever-more of the austerity into the next parliament.”

Interesting. Here at Vox Political the belief has been that he conceded defeat on plan A by concocting an apparent attempt at Keynsianism in his ‘Help to Buy’ scheme, that in fact proved to be another housing price bubble of the kind that caused the recession – and one that has yet to burst. Turning to Keynesian economics represented the failure of his neoliberal policies, you see, but he never openly conceded the point – even though he was clearly interfering with the markets.

“He is, reportedly, confecting a parliamentary vote this week to lock the next parliament into the same sort of fixed timetable that he failed to deliver the first time around, and to close off the same flexibility which ultimately saved his bacon. The purpose is, we must presume, to confront the opposition with an awkward dilemma, between offending its anti-austerity base and exposing itself as profligate. Such game-playing surely doesn’t qualify as serious economics.”

Certainly not – and it won’t work in any case. The next government – if not Tory, can simply disregard such a decision as no Parliament may bind the next.

Measures announced in the Autumn Statement were intended to indicate a “Tory tax-cutting route… that can, supposedly, leave everyone better off”. But this is “an illusion.

“Mr Osborne is boosting tax allowances for higher-rate taxpayers, while freezing the amount poor workers can earn before their universal credit is reduced.

“And after next year’s election… Messrs Cameron and Osborne are pretending that there will be no need for any tax rises, and that further spending cuts can do all the work… There is no serious way that this can be done.

“The OBR’s tables state that, under current plans, the day-to-day funding for all services beyond the NHS and state schools will now have to fall from £3,020 per head at the end of the last Labour government, to £1,290 by the decade’s end. That is a real-terms decline of more than half [57 per cent plus change], the bulk of which is still in prospect, for policing, justice, local government, culture and everything else besides.”

Most of the savings so far have come from cutting pay – a safe bet when private wages are stagnant, according to the article, and probably one of the reasons Osborne was embarrassed by collapsing Income Tax receipts. Nevertheless, he is raising the tax-free allowance (the amount you can earn before having to pay Income Tax) from £10,000 to £10,600 per year. Clearly he intends to have even less in the kitty next year, so the cuts can go on and on and the UK can be ultimately reduced in stature to its position in the 1930s, before the NHS and the welfare state, the only difference being we would be utterly in hock to the bankers.

His would be the first government to voluntarily turn its country into a banana monarchy. (Well, we’re not a republic, are we?)

The result? “Recruitment difficulties…malfunctioning courts, unruly jails, boarded-up youth clubs, overgrown parks, shuttered museums, perhaps even rubbish piled up on the streets.”

Mention of rubbish on the streets is a deliberate reference to the ‘Winter of Discontent’ (1978) that sounded the death-knell of the Labour government of the day and paved the way for 35 years of neoliberalism. How humiliating for Osborne if he became the Tory chancellor who demonstrated that the ideology his party has so slavishly followed, since Thatcher first slammed Hayek’s book down on her lectern and yelled “This is what we believe now”, had achieved nothing but the same result.

But then, as the article concludes, Osborne is “not nearly as serious as he likes to pretend”.

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Do YOU feel as prosperous as you were before the crisis?

[Image: David Symonds for The Guardian, in February this year.]

[Image: David Symonds for The Guardian, in February this year.]

Britain has returned to prosperity, with the economy finally nudging beyond its pre-crisis peak, according to official figures.

Well, that’s a relief, isn’t it? Next time you’re in the supermarket looking for bargains or mark-downs because you can’t afford the kind of groceries you had in 2008, you can at least console yourself that we’re all doing better than we were back then.

The hundreds of thousands of poor souls who have to scrape by on handouts from food banks will, no doubt, be bolstered by the knowledge that Britain is back on its feet.

And the relatives of those who did not survive Iain Duncan Smith’s brutal purge of benefit claimants can be comforted by the thought that they did not die in vain.

Right?

NO! Of course not! Gross domestic product might be up 3.1 per cent on last year but it’s got nothing to do with most of the population! In real terms, you’re £1,600 per year worse-off!

The Conservatives who have been running the economy since 2010 have re-balanced it, just as they said they would – but they lied about the way it would be re-balanced and as a result the money is going to the people who least deserve it; the super-rich and the bankers who caused the crash in the first place.

You can be sure that the mainstream media won’t be telling you that, though.

Even some of the figures they are prepare to use are enough to cast doubt on the whole process. The UK economy is forecast to be the fastest-growing among the G7 developed nations according to the IMF (as reported by the BBC) – but our export growth since 2010 puts us below all but one of the other G7 nations, according to Ed Balls in The Guardian.

And it is exports that should be fuelling the economy, according to JML chairman John Mills in the Huffington Post. He reckons the government needs to invest in manufacturing and achieve competitive exchange rates in order to improve our export ability.

“Since most international trade is in goods and not in services, once the proportion of the economy devoted to producing internationally tradable goods drops below about 15 per cent, it becomes more and more difficult to combine a reasonable rate of growth and full employment with a sustainable balance of payments position,” he writes.

“In the UK, the proportion of GDP coming from manufacturing is now barely above 10 per cent. Hardly surprising then that we have not had a foreign trade surplus balance since 1982 – over thirty years ago – while our share of world trade which was 10.7 per cent in 1950 had fallen by 2012 to no more than 2.6 per cent.”

All of this seems to be good business sense. It also runs contrary to successive governments’ economic policies for the past 35 years, ever since the neoliberal government of Margaret Thatcher took over in 1979.

As this blog has explained, Thatcher and her buddies Nicholas Ridley and Keith Joseph were determined to undermine the confidence then enjoyed by the people who actually worked for a living, because it was harming the ability of the idle rich – shareholders, bosses… bankers – to increase their own undeserved profits; improvements in working-class living standards were holding back their greed.

In order to hammer the workers back into the Stone Age, they deliberately destroyed the UK’s manufacturing and exporting capability and blamed it on the unions.

That is why we have had a foreign trade deficit since 1982. That is why our share of world trade is less than one-third of what it was in 1950 (under a Labour government, notice). That is why unemployment has rocketed, even though the true level goes unrecognised as governments have rigged the figures to suit themselves.

(The current wheeze has the government failing to count as unemployed anyone on Universal Credit, anyone on Workfare/Mandatory Work Activity and anyone who whose benefit has been sanctioned – among many other groups – for example.)

You may wish to argue that the economy is fine – after all, that’s what everybody is saying, including the Office for National Statistics.

Not according to Mr Mills: “The current improvement in our economic performance, based on buttressing consumer confidence by boosting asset values fuelled by yet more borrowing, is all to unlikely to last.”

(He means the housing bubble created by George Osborne’s ‘Help to Buy’ scheme will burst soon, and then the economy will be right up the creek because the whole edifice is based on more borrowing at a time when Osborne has been claiming he is paying down the deficit.)

Ed Balls has got the right idea – at least, on the face of it. In his Guardian article he states: “We are not going to deliver a balanced, investment-led recovery that benefits all working people with the same old Tory economics,” and he’s right.

“Hoping tax cuts at the very top will trickle down, a race to the bottom on wages, Treasury opposition to a proper industrial strategy, and flirting with exit from the European Union cannot be the right prescription for Britain.” Right again – although our contract with Europe must be renegotiated and the Transatlantic Trade and Investment Partnership agreement would be a disaster for the UK if we signed it.

But none of that affects you, does it? It’s all too far away, controlled by people we’ve never met. That’s why Balls focuses on what a Labour government would do for ordinary people: “expanding free childcare, introducing a lower 10p starting rate of tax, raising the minimum wage and ending the exploitative use of zero-hours contracts. We need to create more good jobs and ensure young people have the skills they need to succeed.”

And how do the people respond to these workmanlike proposals?

“You intend to continue the Tories’ destructive ‘austerity’ policies.”

“The economy isn’t fixed but you broke it.”

There was one comment suggesting that all the main parties are the same now, which – it has been suggested – was what Lynton Crosby told David Cameron to spread if he wanted to win the next election.

Very few of the comments under the Guardian piece have anything to do with what Balls actually wrote; they harp on about New Labour’s record (erroneously), they conflate Labour’s vow not to increase borrowing with an imaginary plan to continue Tory austerity policies… in fact they do all they can to discredit him.

Not because his information is wrong but because they have heard rumours about him that have put them off.

It’s as if people don’t want their situation to improve.

Until we can address that problem – which is one of perception – we’ll keep going around in circles while the exploiters laugh.

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Budget fever grows but is Gideon up to the task?

Cart crash: In line with the theme explored in this article, not only is it likely that George Osborne won't even have the right vehicle to carry his budget - he'll probably crash it, too.

Cart crash: In line with the theme explored in this article, not only is it likely that George Osborne won’t even have the right vehicle to carry his budget – he’ll probably crash it, too.

Part-time Chancellor Gideon George Osborne will be having another go at delivering a budget next week; while we can all hope he does better than the last four wrecks, experience – and a voodoo poll on the ConservativeHome website – suggests the opposite.

The poll asks readers to prioritise possible policies on a scale of one to 10, where one is “low” and 10 is “high”. The policies themselves?

“Cut spending further, so that the deficit can be reduced faster”. Clearly this is nonsense. Osborne’s massive spending cuts have, so far, delivered tiny reduction in the national deficit of only £7 billion – from £118 billion to £111 billion. In four years. Clearly, he needs to change his ways.

Other possibilities include cutting the higher rates of tax (or raising the threshold for them) – helping the very rich; extending National Insurance cuts for employers taking on young workers – helping employers; cutting business rates – helping businesspeople; and privatising more state assets, such as roads – helping rich investors and penalising the poor.

Other ideas intended to harm the poor include regionalising public sector pay, extending the freeze on public sector pay rises or cutting public sector pay, lowering the benefit cap to less than the current £26,000 per family and lowering a cap on broader social security spending that is yet to be introduced (it is scheduled for 2015).

All of the measures mentioned in the above two paragraphs will harm the British economy, rather than helping it. If Osborne includes any of them, he will deserve censure (if not prosecution, although it might be hard to find an offence on which to charge him after five years of Tory/Tory Democrat tinkering with the legal system).

By now, dear readers, some of you will be sitting with your blood boiling at this insolent blogger who’s telling you your prized policy ideas won’t work. You’re probably itching to demand what I would do to address the challenge.

I would have examined the economy from a different angle. Let’s look at it metaphorically.

Imagine the British economy is a haulage lorry or, better yet, a horse and cart. Tories are pushing us back towards pre-industrialism so we might as well get used to the idea. Either way, the job in hand is to take provisions to different parts of the locality that will allow the people there to prosper – and return with a share of that prosperity, to be distributed equally for the benefit of everyone.

Firstly, you need fuel. This is where we can prove that Osborne’s austerity is completely useless. How far can a lorry travel with an empty fuel tank? How far will a horse pull a cart if you don’t feed it? Not very far at all.

Then you need to make sure you’re providing the right kind of fuel. A diesel lorry won’t go far on petrol or vegetable oil before it starts to complain; give a horse the wrong kind of food and it will develop who-knows-what kind of digestion-related illness and keel over. This is what happens to an economy that is over-reliant on – for example – a single economy sector such as finance, or an economic ‘bubble’ like the housing growth triggered by Help to Buy (although this scheme could work well with the correct controls, in the same way you can probably keep a horse working with the correct medicine).

The result in both cases – no fuel or wrong fuel – is the same: Your supplies don’t get out to your people and they suffer as a result. The last four years of Tory/Tory Democrat rule has proved this.

In non-metaphorical terms: There must be investment, and it must be the right kind.

Then, of course, there is the question of what you have in the back of your lorry (or on the cart). You must be providing your people with what they need, otherwise there’s no point in making the journey and the fuel/food in which you have invested – in fact, the whole journey – will have been wasted (like Osborne’s last four budget attempts). Your choice of supplies will depend on what your people are doing – what crops they are growing or products they are making – and on whether these can be traded with your neighbours. If they have been misled into producing wares that can’t be traded, what good is that?

Get it right and you’ll be able to make a return trip laden with goods and supplies that will – with a bit of wise distribution and trade – help build up your society, meaning that the load might not be so great on the next trip. This means less fuel/horse feed will be needed and there won’t be as large a load in goods to be redistributed on the return journey (although an expanding economy means there might be farther to travel, so this must be recognised in the amount of fuel to be used).

That’s about as simple a metaphor as I can devise at the moment.

If I had to predict what will happen on Wednesday, though, I would probably expect Osborne to be demanding that we leave the lorry in the garage (or the horse in the yard), and struggle out on foot with all our burdens on our own back.

Not so much “all in it together” as “everyone for themselves” – and that’s how we’ll all be ruined.

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Prepare to sift the substance from the sewage in the Chance(llo)r’s Autumn Statement

131203autumnstatement

[Picture: Vox Political reader Al Reading]

How long has it been since Labour was deemed the party with no policies and no direction? Now it seems the Conservatives have taken up this undesirable label and applied it to themselves (excuse the choice of words) liberally.

Labour’s stand on energy prices sent the Tories scurrying away to find an answer, after they finally realised that baldly claiming nothing could be done was not going to cut any ice.

When they finally came up with something, their answer was to “Cut the green crap” and reduce the environmental levy on energy firms – a u-turn within a u-turn for the party that once proclaimed to the nation, “Vote Blue – Go Green”.

This week they have also u-turned on cigarette packaging – for a second time within a matter of months. Before the summer, the Conservative vision was to safeguard children from smoking by removing packaging for cigarette packets. Then – after coincidentally hiring fag-company lobbyist Lynton Crosby to run their campaigns for them – they decided that the packaging could stay. Now – in the face of a possibly Lords rebellion – they are reversing their position yet again.

This is the context in which Boy Chancellor George Osborne will make his Autumn Statement – and he has already put himself on a sticky wicket before going in to bat.

Remember David Cameron’s massive error of judgement at the Lord Mayor’s banquet a few weeks ago, when he stood behind a gold-plated lectern that could easily be sold off or melted down to help pay of the interest on his government’s ever-increasing borrowing burden, and said austerity was here to stay?

It seems Gideon was eager to follow in his master’s footsteps, stumping up £10.2 MILLION (including VAT at the 20 per cent level that he imposed on us all in 2010) on new furnishings for his Whitehall HQ, from exclusive designers Panik, Ferrious and Senator. One Treasury insider, according to the Daily Mirror, wondered “why we couldn’t have just bought new furniture from Ikea”.

Good question! It is also one that is especially pertinent after it was revealed that Osborne has been calling for last-minute spending cuts from the Home Office and the departments of Justice, Defence, Business and Work and Pensions (yet again), because he will not be able to fund the £2 billion of giveaways announced during the conference season without them.

These include scrapping a rise in petrol duty of almost 2p per litre, free school meals for pupils aged five-to-seven and rewarding marriage in the tax system.

It seems clear that these measures were all unfunded when they were announced, putting the lie to Conservative claims that they have any kind of plan – and ruining their claim that Osborne’s schoolboy-economist austerity idiocy has done anything to improve the UK economy.

Like him or loathe him, Will Hutton in The Guardian had it right when he wrote: “The recovery is the result of the upward swing of the economic cycle finally asserting itself, aided by policies informed by the opposite of what Osborne purports to believe.”

Hutton went on to state that Osborne decided to “borrow from the Keynesian economic locker… never admitting the scale of the philosophic shift, and then claimed victory”. In other words, Osborne is the biggest hypocrite in Westminster (and that’s a huge achievement, considering the state of them all)!

Result: “The public is misinformed – told that austerity worked and, as importantly, the philosophy behind it works too… Thus the Conservative party can be protected from the awful truth that Thatcherism fails.”

Labour MP Michael Meacher is much more scathing (if such a thing is possible). In a Parliamentary debate, quoted in his blog, he told us: “We do have a recovery of sorts, but one that has been generated in exactly the wrong way. It has been generated by consumer borrowing and an incipient bubble, and it is not — I repeat, not — a real, sustainable recovery.”

In other words, the – as Hutton describes it – “eclectic and spatchcocked Keynesianism” employed by Osborne, while superficially useful in the short-term, will cause immense damage over a longer period because he doesn’t understand it and only used it in desperation.

Both Hutton and Meacher agree that a sustainable recovery can only come from what Meacher describes as “rising investment, increasing productivity, growing wages and healthy exports”, none of which are supported by Osborne’s current behaviour.

And yet, according to the Daily Telegraph, Osborne will fulfil another of this blog’s long-standing prophecies on Thursday by telling us all that “Britain can no longer afford the welfare state”.

From a member of the most profligate snout-in-trough overspenders ever to worm their way into public office and then inflict a harm-the-defenceless agenda on the nation, that will be the biggest lie of all.

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Drug-induced? Conservative policy is to increase the national debt and make you pay

131121osborne

Isn’t it shameful that the Conservatives are attacking Labour because the Co-op Bank chief has been behaving like the Chancellor of the Exchequer?

The ex-chairman of the bank, Paul Flowers – who is a former Labour councillor, is being investigated by police after he was filmed appearing to buy drugs. How is that different from the above photograph of one G. Osborne (now Chancellor of the Exchequer), raving it up at a party with a lot of cocaine on the table (ringed in red)?

Comedy Prime Minister David Cameron made much of the Flowers investigation at Prime Minister’s Questions – even suggesting, after the unimpeachable Michael Meacher asked an important question about business investment, that the honourable gentleman might have “been on a night out on the town with Reverend Flowers” and the “mind-altering substances have taken effect”.

Apparently it is all right for Gideon to be a drug casualty because he is a Tory; only Labour supporters who take drugs can be bad in Cameron’s addled world.

No wonder Labour MPs chanted “Shame!” at Cameron as he slunk out of the Chamber.

His attitude seems wrong-headed because, as managed by Mr Osborne for the past three and a half years, the economy can only be regarded as improving if one has the aid of Mr Cameron’s “mind-altering substances”.

Economic figures released this week are being touted as good news, with tax revenues “boosted” by “a recovering economy and housing market”, according to the BBC.

Take a closer look at those figures and they fall down. Borrowing (excluding the cost of interventions like bank bailouts, so we’re already in the realm of made-up figures) fell by two one-hundred-and-thirds, from £8.24 billion in the same month last year to £8.08 billion in October. Less than two per cent and they’re calling it a “boost”. It might be wiped out again in November’s figures.

Also, it should be borne in mind that growth in the housing market is due to the bubble created by our formerly-substance-abusing Chancellor, while any other economic growth has nothing to do with him and, in any case, does not help the vast majority of the population.

Total public debt has risen again, to £1.207 trillion or 75.4 per cent of gross domestic product – the highest it has ever been – under the Conservatives.

The aim for the national deficit, we are told, is to keep borrowing for 2013-14 at £120 billion or below. In his ‘Emergency Budget’ of 2010, Osborne predicted that borrowing this year would be down to half that – at £60 billion, and estimates have been rising ever since.

The 2011 budget had the 2013-14 deficit at £70 billion; in 2012 it was expected to be £98 billion; and now – £120 billion. Perhaps his original estimate was a coke-fuelled fantasy?

Of course – as this blog repeated only days ago – the Conservative-led Coalition never intended to cut the national debt. This was just a claim ministers made while they changed the system to take as much money as possible from the poor while making it possible for the rich to remove their personal earnings and corporate profits from tax to the greatest extent possible.

Result: Increasing debt and lower-than-necessary tax returns, making it possible for the Tories to claim they must cut public services and the benefit system, while laughing all the way to the banks (the ones that were never penalised for burning all our money in the first place).

So much for “We’re all in it together” – unless that was another reference to “mind-altering substances”, and we didn’t understand it until now.

Coalition policy success: 80,000 children homeless for Christmas

shame

Tory politicians don’t care and Liberal Democrats don’t have any power – that’s why 80,000 children are being housed in temporary accommodation, alongside drug users and enduring threats of violence, as reported by Shelter today.

The government’s own figures show 2,090 families living in bed and breakfasts – an increase of eight per cent on 2012 and the largest number in 10 years, according to The Guardian. Of these, 760 have been living in B&Bs longer than the legal six-week limit – a 10 per cent increase on last year.

More than 43,000 other homeless households with children are in other emergency accommodation – usually privately-rented short-term flats, which are expensive. This is an increase of nine per cent on last year.

To put this into context, a Labour government commitment to halve the number of families in this kind of emergency accommodation meant the total fell between 2005 and 2010 – but it has been rising again since June 2011.

This is a human disaster created by the Coalition government.

Most families interviewed by the charity said they felt unsafe, with one child directly threatened by a man after an argument over a shared bathroom. Almost half said their children had witnessed incidents such as sexual offences, drug use and dealing.

One mother of three said: “One of the reasons we left was one of the residents trying to sell us crack cocaine.”

Most of the 25 families Shelter interviewed lived in one room; half said the children were sharing beds with parents or siblings and the family was sharing kitchen facilities with others. All but three said it was hard to find a safe place for their children to play. Three families had no cooking facilities and one reported sharing a cooker and fridge with 22 other people.

More than half had to share a bathroom or toilet with strangers, with 10 families sharing with seven or more other people; two-thirds had no table to eat on, and schoolchildren were finding it hard to do homework.

And their health is suffering: “It’s so hard to give him a balanced diet as it’s impossible to make proper meals here, let alone a Christmas dinner. He’s getting really pale and is so tired all the time. He gets so scared but it’s difficult when I’m scared myself. This is no place for a child to live,” said a mother in a Hounslow B&B.

“This shouldn’t be happening in 21st century Britain,” said Shelter’s chief executive, Campbell Robb, who described the charity’s findings as “shocking” and the conditions forced on families as “shameful”.

He said: “No child should be homeless, let alone 80,000. But tragically, with more people struggling to make ends meet and homelessness on the rise, we’re bracing ourselves for an increase in demand from families who desperately need our help.”

Housing minister Kris Hopkins couldn’t care less. “We’ve given councils nearly £1bn to tackle homelessness and to support people affected by the welfare reforms,” he sniffed.

“I am very clear that they should be fully able to meet their legal responsibility to house families in suitable accommodation.”

Let us be very clear on this: the problem is not that Tories like Hopkins don’t understand. This is exactly the result that they wanted; they just won’t acknowledge it because it is electorally damaging.

Look at the policies that created this problem: The bedroom tax; the ‘Pickles Poll Tax’, otherwise known as the Council Tax reduction scheme; the benefit cap that so many people in this country seem to support without understanding any of its implications.

Vox Political reported back in January what they would mean: “There will be a rise in rent and mortgage arrears… affordable housing will be less available and landlords less able or willing to rent to tenants on benefits… Private sector rental may become less attractive to landlords if tenants aren’t paying the rent. This will lead to a growth in homelessness. Councils have statutory duties and may see an increasing burden.”

But increases to the Discretionary Housing Payment fund have been entirely insignificant compared with the extra burden councils have faced. They received £150 million between them; Durham County Council had £883,000 and spent it all within eight weeks.

We have seen the start of the social cleansing predicted by this blog back in August 2012, when we noted that at least one council would use these measures to “clear out the poor and set up shop as a desirable residence for the rich”.

The housing bubble created by George Osborne with his ‘Help To Buy’ scheme will accelerate this process.

So don’t let a Tory tell you it’s nothing to do with them. They wanted this. In fact, 80,000 homeless children at Christmas is probably not enough for them.

If the economy is in recovery, why does it still feel like recession?

Path to prosperity? If the economy has been growing for the last nine months, why has food bank use tripled during the last year?

Path to prosperity? If the economy has been growing for the last nine months, why has food bank use almost tripled during the last year?

No doubt Gideon George Osborne will spend the next few days (if not weeks and months) crowing about the figures from the Office for National Statistics that say the British economy has grown for a third successive quarter.

He has already tweeted, “This shows that Britain’s hard work is paying off & the country is on the path to prosperity.”

The construction industry has grown by 2.5 per cent on the previous quarter, with house builders buoyed up by Gideon’s Help to Buy scheme, which offers (unsupported) mortgage guarantees to buyers and lenders. He has promised to divert £12 million to this, but has not said where he will find the money.

Critics have warned that this is simply creating another housing-fuelled debt bubble that will burst in a couple of years’ time, leaving even more people in debt than after the financial crisis hit us all.

Has this growth generated work for electricians, plumbers, plasterers, roofers? If so, are they being paid fairly? These are the people who will take their disposable income back into the wider economy, for the benefit of other businesses.

Production (including manufacturing) and services are both on the up as well. The BBC report says nothing about retail. But if this good news is true, why is the Department for Work and Pensions determined to expand its Workfare scheme, as laid out in a Conservative conference announcement and by an article reblogged here.

Shadow Chancellor Ed Balls welcomed the signs of growth in the ONS report but warned: “For millions of people across the country still seeing prices rising faster than their wages, this is no recovery at all.”

He is right, of course. Look at the rise and rise of food banks, which have seen a massive rise in attendances from even working people – whose wages simply don’t cover the cost of living. Benefits are, of course, being cut back by our “compassionate” Conservative-led government.

They say there’s no money for it but – if the economy is surging back into growth – where are all the tax receipts from the big corporates that are profiting?

Oh yes – they’re safely closeted in the tax havens that Mr Osborne kindly opened up for them. Ordinary, working, and poor people have to use their own limited funds to pay off a Conservative-run national deficit, presumably because Tories think the rich, who caused the problem, shouldn’t have to pay for services they don’t use.

And the Institute of Directors’ chief economist, Graeme Leach, warned that there are “strong headwinds” restricting the possibility of further growth, including “debt and inflation” which are “rising faster than earnings”.

That’s right. Only yesterday, Yr Obdt Srvt was talking with a gentleman who – despite having a full-time job – has fallen so severely into debt that he has had to cut his expenditure down to nothing but taxes, the vital utility bills (water but not heating), and rent. He has no budget for food and faces the possibility of having his belongings, such as his car, repossessed – and even eviction.

Is he on the path to prosperity, Mr Osborne? Of course not. This report is merely further proof that you were lying when you said, “We’re all in it together” – as you did (again) at the Conservative conference.

It’s prosperity for the greedy few, and austerity for the rest of us.

Maybe you have a different opinion, but ask any average worker on the street and they will tell you that continued wage depression and price inflation, the expansion of the Workfare regime that gives free employment to firms that don’t need it while the workers themselves have to survive on benefits, massive growth in food bank use, and the threat faced by thousands of eviction and the repossession of their belongings are not milestones on the path to prosperity.

‘Slimy’ minister talks up unfunded housing scheme while 50,000 face eviction

'Slimy' Tory mouthpiece? Kris Hopkins (left), the Coalition's new housing minister, takes tea with David Cameron on a Northampton housing estate while talking a lot of nonsense about Help to Buy.

‘Slimy’ Tory mouthpiece? Kris Hopkins (left), the Coalition’s new housing minister, takes tea with David Cameron on a Northampton housing estate while talking a lot of nonsense about Help to Buy. [Picture: WPA Pool/Getty Images Europe]

One of Parliament’s “slimiest, nastiest MPs” has got stuck into his new job, putting out a press release on how the hideously ill-judged ‘Help to Buy’ housing scheme is “surging ahead”.

Kris Hopkins, the Conservative MP for Keighley whose only previous claims to fame were allegations that “gangs of Muslim men were going around raping white kids” (thanks to Johnny Void for that one) and a Twitter spat with the odious Philip Davies, said the equity loan scheme had driven up the rate of house building and captured the public imagination with more than 15,000 reservations for new-build homes in its first six months.

Reality check: House building is at its lowest level since the 1920s. In the 2012-13 financial year, only 135,117 new homes were completed – the lowest number on record.

Earlier this year, Hopkins called for Conservatives to unite behind David Cameron – to which Nadine Dorries responded, “pass the sick bag”. Yesterday, he at least was united behind Cameron – as they toured a Northampton housing development.

According to the press release, he said government action to restore confidence to the housing market was working, with over a third of a million new homes built over the last 3 years, including 150,000 affordable homes.

Reality check: That is a lower number than any period on record prior to the current Coalition government. It is not an achievement. It is a disaster.

Under the equity loan scheme, buyers can get mortgages on new build homes with a five per cent deposit, with the rest provided by an equity loan from the government of up to 20 per cent on properties with a value of £600,000 or less.

Yesterday (October 8), Cameron and his Chancellor, George Osborne, launched the second part of Help to Buy – the mortgage guarantee – which will also be available on existing properties worth £600,000 or less. Lenders will be able to offer a 95 per cent loan-to-value mortgage, made possible by a government guarantee to the lender of up to 15 per cent of the value of the property.

Reality check: In English, this means the taxpayer is underwriting people’s mortgages. Osborne reckons he has put aside £12 billion for this part of the scheme but – as former Chancellor Alistair Darling recently noted  – the source is unidentified. “Strange that when Labour makes promises, the Tories claim it will mean more borrowing, yet it’s fine for them to make unfunded promises,” Mr Darling wrote.

Back to the press release: “Housebuilding is growing at its fastest rate for 10 years,” it says.

Reality check: The Channel 4 article, quoted above, warns us to “take the proclamations we are getting from the government about high rates of growth in housebuilding with a hefty pinch of salt. Housebuilding completions are starting from modern record lows; the rates of growth are bound to be high.”

What does Kris Hopkins have to say about this? Not a lot, in fact. He blathers that the equity loan has “captured the imagination of the public and is boosting the supply of new homes across the country”.

Reality check: Back to Channel 4 – “The levels… show that something went wrong in 12/13. Turning the corner means going from abysmal to terrible.”

“Our policies on housing are working,” said Hopkins in the press release. “Housebuilding is growing at its fastest rate for 10 years, and the tough decisions we’ve taken to tackle the deficit have kept interest rates low and are now delivering real help to hardworking people.”

Reality check: We’ve already covered the speed at which house building is growing; he should not be pretending this is a huge success when the number of new houses being built has fallen to a record low. As for the policy on the deficit keeping interest rates low – Vox Political blew that out of the water months ago. For clarity: A government can always service its debt, if that debt is in its own currency. Our debt is in UK pounds and we can always service it. Our creditors know that, so they remain happy to continue financing it. Otherwise, with Osborne borrowing 75 per cent more than he said he would in 2010, and with the UK’s ‘AAA’ credit rating gone in a puff of agency doubt earlier this year, Osborne would have been up a certain creek without an economic lever (to mix a metaphor or two).

“I’m delighted we’ve launched the second part of Help to Buy, the mortgage guarantee, which will strengthen the package of measures that have already done so much to restore confidence in the housing market,” Hopkins concluded.

Final reality check: Michael Meacher is one of many who believe that ‘Help to Buy’ will do nothing more than create another housing price ‘bubble’, most likely leading to another debt crisis. “Even [George Osborne’s] Tory supporters believe [this] will throw oil on the fire of the already overheated surge in house prices,” he wrote.

Meanwhile, at the other end of Britain’s housing market, 50,000 people are facing eviction because of the Bedroom Tax.

Cameron’s speech: The false claims of a failing politician

Don't you think he looks old?

Don’t you think he looks old?

Was that really it?

After the barrage of new policy plans from the Labour Party last week, David Cameron’s big revelation, at the end of the most disappointing Conservative conference since – well – the last one, is a hint that the Tories want to take benefits away from anyone under 25 who isn’t in work or education, if they win in 2015?

More repression, then. In a speech that we’re asked to believe is about making the UK a land of opportunity, of aspiration? A “land of hope and Tory”?

Land of hopeless Tories, more like!

Let’s look at those options. Put someone aged between 16 and 25 back into education and you put them into debt (unless they have very rich parents) – we have the Liberal Democrats to thank for that, after they betrayed their own manifesto promise and supported a massive increase in student fees.

Force them into work and its an employer’s market, isn’t it? They can hire or fire under any conditions they like – and the minimum wage will be no problem. You don’t like zero-hours contracts? Too bad – it’s a choice between being listed as employed but unlikely to get any paying work, or losing the pittance you live on anyway. Part-time wages putting you into debt? You’ll be homeless a lot faster without any benefits!

Whatever happens, of course, the benefit bill comes down and fewer people are classed as unemployed.

Just like George Osborne’s plan to put the long-term jobless on indefinite Workfare, this will falsify the employment figures to make it seem the Conservatives have improved the economy when in fact they are making matters worse.

The rest of it was a web of lies and waffle. It has been suggested that Cameron wanted to re-use his speech from last year, rewriting it minimally in the hope that nobody would notice, and that it would be worth finding out if this is true – but that would not get to the heart of the matter, which is that the Conservative Party has completely run out of momentum.

They’re at a dead stop and all they have to support them is falsehood.

Cameron’s speech started with a claim that the Tories are on the side of “hardworking” (it’s hard-working, David – learn some English) people. While he waffled, I had a look at some of the Tory slogans and tried to match some facts to the claims. So we have:

“A tax cut for 25m people” – but they put the cost of living up and wages down so “hardworking” people are worse-off.

“The deficit down by a third” – two years ago. It has been years since they made any notable progress.

“More private sector jobs” – that don’t pay “hardworking” people a bean because they’re part-time or zero-hours. They have also cut the public sector – and given those jobs to people on Workfare.

“Welfare capped” – so poor people are forced towards destitution or suicide

“Crime down” – because police are discouraged from recording crimes against “hardworking” people?

“Immigration down” – because the UK isn’t attractive to “hardworking” foreign people any more.

To these, Cameron added:

“Helping young people buy their own home” – by creating a debt bubble and asking the taxpayer to foot the bill.

“Getting the long-term unemployed back to work” – in order to falsify employment statistics.

“Freezing fuel duty” – and doing nothing about the huge, unjustified, price increases demanded by energy companies.

“Backing marriage” – with less than 20p a day for the poor.

“Creating wealth” – for whom?

“We are clearing up the mess that Labour left” – Labour didn’t leave a mess. Bankers left the mess. Why have the bankers not been cleaned up? Why has Mr Cameron thrown money at them instead?

He referred to the fact that Theresa May (finally managed to have Abu Qatada deported. She wants to get rid of the Human Rights Act, claiming it is necessary if the government is to be able to – among other things – deport suspected terrorists, right? So her action has proved that repealing an Act that protects the rights of British citizens isn’t necessary.

“Who protected spending on the NHS? Not Labour – us.” Wrong. At last count, spending on the NHS under the Conservative-led coalition was down. The plan was to spend £12.7 billion more by May 2015, but by December last year this meant the government needed to find more than £13 billion for this purpose.

He referred to the Mid Staffs hospital scandal as a Labour disaster – look to the Skwawkbox blog for the facts (hint: it’s not as clear-cut as Cameron pretended).

“When the world wanted rights, who wrote Magna Carta?” he said in all hypocrisy. Is he telling us the British people – who demanded those rights in the first place – are now demanding that he divest us of those same rights by repealing the Human Rights Act?

“When they looked for compassion, who led the abolition of slavery?” Fine words from a man whose lieutenant, Iain Duncan Smith, has been working hard to restore slavery for the unemployed, sick and disabled – even going to the lengths of pushing through a retrospective law, after his rules were found to be illegal.

“Whose example of tolerance – of people living together from every nation, every religion, young and old, straight and gay – whose example do they aspire to?” Perhaps someone should point him to his Home Secretary’s advertising vans, which preached intolerance of anyone who wasn’t demonstrably white and British by encourage people on the street to tell anyone else to “go home” in what Owen Jones called the language of knuckle-dragging racists.

His plea for Scotland to remain in the UK must have seemed particularly hypocritical, as the man who has passed more divisive policies than any other Prime Minister, possibly in British history, called for “Our Kingdom – United”.

There was more, much more – and if you have the stomach for it, you can find it here.

The underlying theme was that he wanted to appeal to British citizens to let the Conservatives back into office with a majority government in 2015, so they could “finish the job”.

If we let his party finish the job, we’ll be left with a ruined country, a wrecked system of government, and an elite ruling class laughing all the way to the offshore bank.

I made my opinion clear in a message to the BBC’s ‘live coverage’ page (which of course wasn’t used). I’ll repeat it here:

This speech is really distressing.

Cameron has learned nothing from the last three years, in which his policies have caused suffering to millions of hardworking people.

There is nothing in his words for hardworking people to support.

No growth, no hope, no health…

No future.

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?