Having realised his decision to cut the 45p tax rate was unpopular, Kwasi Kwarteng has reversed it (alongside his prime minister, Liz Truss). He will also bring forward his budget from November 23 to this month, to address concerns that it is unfunded and unviable.
But then he ruined it all by announcing new policies that are going to send voters running to other parties. They include:
£18 billion of cuts to public services – the amount that would be raised by a rise in Corporation Tax – and this is just the start.
A real-terms cut in benefits (yet to be announced but understood to be on the way).
And he’s still:
Removing the cap on bankers’ bonuses.
Cancelling the rise in Corporation Tax.
Here’s more in-depth information:
Bear in mind what Phil Moorhouse says about the reason the Tories shaft poor people: because they don’t vote in great enough numbers to harm Conservative electoral chances. It’s only when their cruelty seems likely to affect middle-class voters (like when many of them claimed Universal Credit during Covid-19 lockdown) that they make political – not economic – decisions that are intended to placate those voters.
This is the reason Tory MPs are developing a social conscience in the face of Truss’s – and Kwarteng’s – policies; they don’t want to upset their voters.
So if you’re a benefit claimant who has been shafted by Kwarteng and his bandits time and again – but you don’t vote – I have to ask: why do you have such a death wish?
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The bank holiday weekend may be over, but this article is being produced in the period before everybody goes back to work – so I’m still putting up material that has interested me – and I hope it interests you. Make of it what you will:
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Labour MP Stella Creasy has launched a campaign to stop companies that have signed Private Finance Initiative (PFI) deals with the government from benefiting from falls in the rate of Corporation Tax.
Ms Creasy says it is important because, when these deals are signed, the rate of tax companies will pay is directly part of deciding if they represent value for money.
On her Facebook page, she explained: “If I buy a toaster and then its on offer a week later I don’t get the difference back so why should these companies get such a windfall – either they come to the table to renegotiate these contracts and the cost of them to the public sector or we should be willing to legislate. Help us secure support from more MPs for this.”
She linked to a Guardian article which elaborated:
Companies that built and run NHS hospitals under private finance initiative (PFI) contracts will have made about £190m in unexpected windfall profits by 2020 because of George Osborne and Philip Hammond’s cuts to corporation tax, research suggests.
Analysis by the Centre for Health and the Public Interest found that more than 100 PFI operators in the NHS collectively saved an estimated £84m between 2008 and 2015 and are due to gain another £106m between 2016 and 2020 because of the falling corporate tax rate.
The PFI companies are making bonus profits because the corporation tax rate has fallen from 30% when the majority of their contracts were negotiated to 19% now and is due to drop as low as 17% by 2020. Some companies may be deferring their tax liabilities to later in their contracts when the rates will be lower.
She also discusses the matter in a Twitter thread:
Pls share to help us win the case for this campaign to tackle the profits PFI companies are now making due to the… https://t.co/diYUFMsNHp
For many of us – especially those who never like the idea of PFI in the first place – this is a worthwhile cause. These companies are already making a fortune at the taxpayer’s long-term expense; why should they receive millions more – apparently in breach of their contracts – because of Tory tax changes?
But there’s a snag.
Ms Creasy’s campaign seems to have been overshadowed by her inability to answer a simple question: Whether she thinks it is acceptable for Labour MPs to be friends with – and socialise with – Conservative MPs.
Our fellow leftie blog, the Skwawkbox, raised this issue a couple of days ago after discovering that Ms Creasy had attended a gig with Tory MP Therese Coffey on December 16.
In light of Ms Creasy’s fellow Labour MP Laura Pidcock’s well-publicised belief that Labour MPs should not “hang out with Tory women” who are “no friends of mine” and “an enemy to lots of women”, Skwawkbox blogger Steve Walker asked for Ms Creasy to comment.
In response, he received a torrent of evasion – and, to be honest, abuse. See for yourself, here and here.
Her bizarre attitude has been bolstered by an article in the Huffington Post that supports her attitude of indignation that a blogger should call her out on this matter.
Isn’t this hypocritical of the HuffPost, which was quite happy to quote the Skwawkbox interview with Ms Pidcock, where she first made her comments about Labour MPs fraternising with the Tories? This Writer thinks so.
It seems the aim is to divert attention. Ms Creasy seems so desperate to avoid telling us whether she thinks it’s okay to hang out with her political enemies, she’ll try to point us at anything else.
So she has claimed Skwawkbox was attacking her taste in music, then that the blog is misogynist, and finally that the blog was trying to undermine her PFI campaign.
I’m sorry, but it seems Ms Creasy has managed that, all by herself.
And it seems she has succeeded in hoodwinking people. Look at the following tweet, from another respected blogger, Tom Pride:
OK guys, I'm going to stick my neck out here. Stella's right. PFI scandal much more important than taste in music. Can people on the Left please stop attacking each other and start opposing the Tories? https://t.co/TCdt0e5Ia0
It’s whether this particular person on the Left actually has any interest in opposing the Tories.
From my point of view, there is a simple way out, of course.
It is for Ms Creasy to swallow her pride, apologise for making a mountain out of a molehill, answer the question she was asked, and clarify exactly whose side she’s on.
Then, perhaps we can all get behind her worthwhile campaign.
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He means business: Ed Miliband announces Labour’s plans for business and industry at Jaguar Land Rover in the West Midlands.
The Labour Party has announced a series of new policies intended to improve conditions for both small and large industries in the UK.
They are the latest in an apparently-unending flood of new policies to be placed before the public since the ‘long campaign’ began in earnest at the beginning of the year.
It seems likely that they follow on from a series of in-depth public consultations, such as ‘Your Britain’, that the party has always said would contribute to the shape of its 2015 manifesto.
For once, it seems, a political party was not lying!
Labour announced yesterday, “Ed Miliband will emphasise that Labour’s plan for creating wealth does not rely on just a few at the very top but on boosting productivity in every business and sector of the British economy.
“[He] will declare that Britain needs a better plan for prosperity than the Government’s failing plan which relies on allowing the most powerful and wealthy to do whatever they want.”
Crucially, the party is emphasising that “this modern industrial strategy is a different approach for Labour than in the past because it seeks to support working families not simply through tax-and-spend redistribution but by building a more inclusive prosperity.”
Here are the key points, as described by Labour:
Labour will back small businesses and new entrepreneurs who will provide the growth and jobs of the future.
· Cutting business rates
· Improving training and apprenticeships
· Promoting competition in energy and banking to ensure market efficiency, lower bills and better access to finance
· Handing more economic power to every part of the UK with £30 billion of devolved funding
Labour will back our biggest exporters which need certainty to invest:
· Staying in a reformed EU and not taking risks with our membership
· Building a strong economic foundation with a tough and balanced approach to cutting the deficit
· Guaranteeing Britain has the most competitive rate of corporation tax in the G7
· Promoting long-termism by changing the rules on takeovers
Labour will back our big employing sectors such as retail and social care by tackling undercutting, with firms coming together to raise productivity and standards:
· Industry led bodies to raise productivity, like we have now in the car industry
· Banning exploitative zero hours contracts
· Raising the National Minimum Wage closer to average earnings – £8 an hour by 2020
· Offering tax breaks to employers who adopt the Living Wage
· Making it illegal to undercut by exploiting migrant workers
Labour will back every sector of the economy by ensuring the public sector plays an active part in driving up productivity by:
· Recognising its role in supporting cutting-edge innovation and research
· Making strategic investment and procurement decisions
In a speech at Jaguar Land Rover in the West Midlands, Mr Miliband was expected to attack the current situation under the Conservative-led Coalition government: “When working people are held back, the country doesn’t prosper as it should. When families don’t have money to spend, it holds back our economy. When there is so much insecurity in the economy, businesses can’t plan for the long term. When people don’t have the chance to develop their skills and pursue a promotion, our companies become less productive and less competitive in the world.”
He was expected to promise support for both small and large businesses: “The jobs of tomorrow will come from a large number of small businesses, not simply a small number of large ones. Our plan recognises that. We will have a fairer tax system, keeping corporation tax the lowest in the G7 for large businesses, but also cutting and freezing business rates for smaller ones. We will create a British Investment Bank, supported by a network of new regional banks and more competition in business banking on the high street, to help small businesses grow. And a new Small Business Administration to co-ordinate work across government to help small businesses succeed.”
There are also plans to decentralise power, moving it away from London, and to help businesses plan for the long term.
That’s a lot of information to absorb in one go. What do you think of it?
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Let’s keep up the pressure on the BBC’s Tory Reporter – sorry, that’s Political Editor – Nick Robinson and his misreporting of Alex Salmond. Here’s Beastrabban on the subject:
The debates over Scottish independence, leading up to the referendum last Thursday, threw the BBC’s pro-government bias into sharp relief. The Corporation’s reporter, Nick Robinson, selectively edited and then completely falsified his report on a question he asked Scotland’s then-First Minister about the possible damage independence might have to the nation’s finances.
As you might expect, Scottish Nationalists are massively unimpressed with this blatant falsification by the BBC, and there are several videos about it on Youtube. Here are some I found that make the case particularly well.
This video, The BBC Is Killing Democracy, gives footage of what really happened when Robinson asked his question. It then gives Robinson’s own highly selective report, pointing out how it has been altered and edited to present the answer Robinson wanted, rather than the one he got. It then moves on to Robinson’s final report, where he lies and states that Salmond didn’t answer the question. It then concludes with a brief resume of Robinson’s and Salmond’s careers, pointing out that Robinson was first head of the Young Conservatives in Macclesfield, and then national head of the organisation.
There were protests against the BBC’s biased reporting of the independence campaign outside the BBC’s headquarters in Scotland on the 1st and 29th June 2014. This video below, Protest Against BBC Scotland Referendum Bias shows pro-independence Scots discussing the Beeb’s bias, and their disillusionment with the Corporation.
.
One of the women speaking is actually an English person living in Scotland. She states that she is voting for independence for Scotland because she is worried about the Westminster establishment’s destruction of the NHS and tuition fees. She states her daughter will not be able to afford to go to uni, and the only people that will, will be the elite.
Robinson’s deliberate falsification of Salmond’s answer is important far beyond the immediate debate about Scots independence. Regardless of one’s personal opinion of that particular issue, it should concern everyone worried about the Beeb’s pro-establishment bias. It’s clear and undeniable evidence that the Corporation has blatantly lied in order to serve the interests of the Tory Westminster elite. It also shows how Tricky Nick Robinson really is little more than a Corporation apparatchik spouting propaganda, and that the BBC is now well and truly the establishment’s equivalent of Pravda and TASS, the state news agency in the Soviet Union or the various state-controlled newspapers and broadcasters in Nazi Germany and Fascist Italy.
Notice that the Beast singles out the Tory Westminster elite. The Tories were pulling out all the stops to make sure they could salvage something from the referendum, if only by fouling the reputation of the BBC, which they hate.
In this context, it is also easy to believe they tried to foul Labour’s good name north of the border by putting Labour representatives up as the faces of the ‘No’ campaign and then stabbing them in the back. For example, fears voiced by the ‘No’ campaign on pensions were torpedoed by the Coalition government – an organisation which was not only supposed to be part of the ‘No’ camp but should also have been, reasonably, expected to provide correct information to that group’s other representatives on any particular subject.
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Mr Os-bean: As Ed Miliband gave his response to the Budget, George Osborne had a gormless smile on his face that made him look like Mr Bean. This is not him – but it’s the closest image I could find at short notice. [Image as credited]
If a Conservative government is returned to office after the 2015 election, there will be yet more spending cuts and service cuts afflicting hard-working, low-paid families.
That was the message for most people in George Osborne’s latest attempt at a Budget speech today.
There were plenty of groan-worthy moments as the part-time chancellor trotted out the Coalition’s catchphrases: “We will fix the roof while the sun is shining” (groan. The job is taking so long, one has to question whether the contractor is Con-ning the client). “We are all in this together” (groan). Oh really?
Benefit spending is to be capped at £119 billion per year, albeit rising with inflation; public sector pay “restraint” will continue for the foreseeable future. This is from the government whose Prime Minister was confirmed, only minutes previously, as having approved 40 per cent pay rises for his special advisors!
Most significant is the fact that Osborne avoided mentioning ordinary working people for most of his speech; this was a budget for businesses, with the benefits reserved for fatcat bosses.
No major advanced economy in the World is growing faster than the UK, said Mr Osborne; more people are in work. This appears to be borne out by current employment figures (although it should be noted that this is due to a vast and questionable boom in self-employment – the number of employees has dropped by 60,000).
Where is the benefit to the British economy? Why has the deficit not been eliminated? Osborne said it stood at £157 billion in the year he came to office, and would be £108 billion this year, but in fact £39 billion was removed due to measures brought in by the previous Labour chancellor, Alistair Darling. He has cut government spending by something like £80 billion so far, but the deficit has dropped by – possibly – £10 billion. Not a good start to his speech.
There will be further investment in high-speed rail, even though there is no way of predicting whether this hugely costly investment in making train journeys 20 minutes faster will create any economic improvement.
There will be money to fund new centres for medical research – but will these be absorbed by private health firms after the public purse has paid for them?
There will be investment in faster extraction of oil from the North Sea – aiming to get as much as possible out before the Scottish referendum, in order to impoverish the Scots if they decide to go for independence?
And there will be investment in low-cost energy (finally killing the highly questionable green agenda) – meaning money for shale gas companies, and to hell with the environmental cost.
All this investment will go into businesses whose main contribution to the Treasury – Corporation Tax – has already dropped by a quarter (from 28 per cent to 21 per cent) and will go down to 20 per cent this year. This is less than the lowest level of Income Tax.
Up go the profits – down go the tax payments. Who benefits?
Council tax in England remains frozen, meaning fewer public services.
The personal tax allowance is to rise, so people may earn £10,500 before paying tax. This is nowhere near enough to offset the massive drop in living standards that has been caused by the Tory-led Coalition. The cost of living has risen for 44 out of the 45 months of this Parliament – for the whole period, if the earnings of high-paid bankers are removed from the calculation.
The threshold for payment of the 40p tax rate is to rise, so fewer people will pay the higher rate.
Savers are to be helped but – again – this is not a boost for the poor. Most working and unemployed families don’t have any spare money to put into the banks. How does it help them to know they would not pay any tax on savings up to £15,000 in an ISA, when they cannot afford to open one?
And there is a new Pensioner Bond for rich senior citizens (poorer pensioners don’t live long enough to benefit).
As Ed Miliband said in his scathing response, the Coalition can afford to give a tax cut of £200,000 per year to bankers who earn £5 million – but can’t afford £250 per year extra for nurses.
Mr Miliband said the Budget speech was more significant in what it hid than in what it actually said.
Working people are suffering under the Bedroom Tax, under cuts to their tax credits, and they are having to visit food banks if they want to eat.
This is a government that gives with one hand, but takes back much more with the other.
And the Conservatives have the bare-faced cheek to call themselves “The Workers’ Party”.
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Apologies are due to readers for the fact that new articles have been few and far between this week; Vox Political creator Mike Sivier has been occupied with other concerns including work at the Citizens Advice Bureau and campaigning to be a Labour candidate in the 2015 election. Normal service will resume (hopefully) on Monday.
In the meantime, here’s some information from a VP reader (who very kindly asked not to be credited) on some of our favourite private companies with entire fists – never mind fingers – in the public sector pie.
With around half of all public sector spending now paid to private companies, lets look at some facts about the four largest recipients – Serco, Capita, Atos and G4S.
In total, they have received more than £4 billion of taxpayers’ money in the past year, making a cumulative profit of £1.05 billion. This means that, if the work had been carried out within the public sector, the taxpayer would have saved more than a quarter of the money used. That’s a lot of money!
With Corporation Tax currently standing at 23 per cent, let’s look at how much tax they paid: £75 million (around 7.5 per cent).
But the situation is actually worse than that! This is only the tax paid by Capita and Serco.
Atos and G4S paid no tax at all.
Furthermore, none of these companies has successfully delivered the public services they were contracted to carry out, despite having been paid anyway. Did G4S successfully manage security at the 2012 Olympics, or was that the British Army? Did Capita provide adequate court translation services? Has Atos carried out work capability assessments for Employment and Support Allowance in a professional and unproblematic manner? What about Serco and out-of-hours GP services?
These firms have been content to take taxpayers’ money but avoid paying tax on it, and then provided botched services. Two of them – Serco and G4S – are currently under investigation by the Serious Fraud Office for overcharging on electronic tagging of offenders.
It seems we were paying for these companies to monitor 3,000 phantom offenders. They were charging for 18,000 while only 15,000 were being monitored.
Coalition Justice Secretary and part-time clown Chris Grayling told MPs in July that an external audit had revealed the overcharging, which included bills for tracking the movements of criminals who had moved abroad, who were back in prison, who had had their tags removed and even, in a few cases, those who had died.
Even so – and despite sanctions against the companies as a result, the scenario presented in the image (above) is still possible, thanks to the Coalition government.
Outsourcing – a good deal for taxpayers? You decide…
Smith, affectionately known as ‘RTU’ or ‘Returned to Unit’ by this blog because of doubts about his achievements in the Army, is a serial spreader of falsehood, as has been documented here many times.
It seems he missed his true vocation and should have been a farmer; he spreads muck so vigorously.
And this is the case today. The Daily Mail has reported in its usual bombastic style that RTU is angry because the BBC keeps describing his charge on social housing tenants who the government deems to be “under-occupying” their homes as a “bedroom tax”.
His “furious” letter states that the corporation has been misleading viewers because the phrase is “innately politically and indeed factually wrong”.
Oh, is it, Iain?
Let’s have a look at his reason for saying this: “A tax, as the Oxford English Dictionary makes clear, is a ‘compulsory contribution to state revenue, levied by the government on workers’ income and business profits, or added to the cost of some goods, services and transactions’.”
That’s right – and the state under-occupation charge (to give it it’s correct title) is a compulsory contribution to state revenue, added to the cost of a service. In this case, the service is rental of a dwelling. There can be no doubt that the contribution is compulsory, and it is clearly the state that receives (or rather, keeps) the money.
It is a tax. And we can say that, since the number of spare bedrooms in a dwelling is used to apply the charge, it is a bedroom tax. It’s the same principle as was used to describe the ‘Window Tax’ of the 19th century or thereabouts.
Some pundits have stated that it cannot be a tax because it is not paid by everybody, but this is also nonsense. Does everybody pay Inheritance Tax, or Capital Gains Tax? No. Even the corporations don’t pay Corporation Tax any more, according to all the reports we hear about tax avoidance!
And it may also be stated that the BBC is simply reflecting public parlance in its use of the phrase. People do not talk about the “underoccupation charge” or the “removal of the spare room subsidy” – they talk about the Bedroom Tax.
So RTU can whine all he likes; the BBC is factually correct in using the phrase, and it also reflects public custom in doing so.
His letter continues by claiming the BBC has adopted the language of the Opposition, stating, “We do not believe it is the job of the BBC to use misleading terms and promote the views of the Labour Party.”
Again, he is wrong to claim that the BBC has a left-wing bias. You may get tired of reading this, Dear Reader, but research by Cardiff University has shown that “The BBC tends to reproduce a Conservative, Eurosceptic, pro-business version of the world, not a left-wing, anti-business agenda”. Read the report for yourself.
The Daily Mail goes on to report that former Immigration Minister Damian Green has been unhappy with the Beeb’s reporting of immigration data, saying it was “mystifying” that a 36,000 drop in migration was described as “slight”.
And Mr Green might have had a little more sympathy for the BBC report if he had bothered to read the latest information on immigration by the Office for National Statistics, which stated that a drop of 39,000 long-term migrants between December 2011 and December 2012 was “not a statistically significant fall”. This is the information used by his government.
Of course we all know the reason for this latest round of BBC-bashing – the Tories are putting out a ‘marker’ for the general election.
They are telling the BBC, in no uncertain terms: “Behave. We don’t want any trouble from you in the run-up to May 2015 – just nice stories saying how great we are. Otherwise it will go badly for you after the election.”
Considering the evidence that the BBC already has a right-wing, Conservative-supporting viewpoint, it would be perfectly understandable if any high-ranking member of the corporation, receiving that message, did the exact opposite.
These Tories are ungrateful. They should know it is impossible for the BBC to hide the vast amount of cock-ups, miscalculations and intentional harm they have inflicted on the nation in the last three years. Attempted intimidation can’t alter the facts.
But then, threats are a part of the Tory way of life – especially for Iain Duncan Smith.
That is clear to anyone who has spent a few months signing unemployed at a Job Centre.
Off-message: If Rachel Reeves had promised to get as tough on tax avoidance in her previous job as she is promising to be on benefits now, Labour might have had more credibility.
In it, she tells us (wrongly), “We are not in an environment where there is more money around,” and says that Labour will be tougher than the Tories when it comes to slashing the benefits bill. She stressed that she wanted to explode the “myth” that Labour is soft on benefit costs.
There are a few myths feeding into these statements. Firstly, the myth that millions upon millions of British citizens are living a life of luxury on benefits, which is, quite frankly, infantile nonsense. Benefits do not pay the ordinary claimant enough to afford huge luxuries and never did. They were always intended to cover the cost of survival while the recipient looked for something better. Anything else is a lie concocted by unscrupulous politicians, that you would be a fool to believe.
Then there’s the myth that the British taxpayer is being defrauded out of a fortune by benefit cheats who are (again) living a life of luxury at our expense. One look at the figures dispels that idea! The fact is that only seven people in every thousand commit benefit fraud – at a consequently small cost to the overall budget – and the amount they receive simply would not support the lifestyle our politicians are suggesting for them.
Let’s move up to a bigger myth – that people prefer to live on benefits than get a job. We’ve now moved from infantile nonsense to dangerous nonsense. The current situation, engineered by the conservatives in both Coalition parties, means there are very few jobs available – around 500,000 at any one time, with 2.5 million people chasing them.
And what kind of jobs are they? How many are zero-hours contracts? How many are part-time? These jobs do not pay more than benefits (“Making Work Pay” – another Tory lie) so anyone taking them will be out-of-pocket.
Meanwhile, the Tories in power have rigged the system so that anyone who does not spend the entire working week pestering local businesses for jobs that they aren’t offering will be sanctioned and will lose their benefit for a period of up to three years! It is entirely disproportionate, considering the state of the economy, and may cost jobseekers a lot more than a few quid a week in the long run.
But this is how the benefits bill will be slashed – by the Conservatives and by Labour, if Rachel Reeves is to be believed. Ministers of any party, living in the la-la land of made-up statistics, will sanction people for failing to work hard enough at securing jobs that don’t exist!
Ms Reeves says Labour’s jobs guarantee will ensure that those jobs do exist but we don’t know that for sure. We do know that she intends to continue Tory policy on sanctions – blindly.
That’s seven times more than the national bill for JSA, and more than 29 times the estimated cost of all benefit fraud. But wait – it gets better! This is only an estimate and it has long been believed that the true cost of the so-called “tax gap” is £120 billion – equal to each year’s national deficit, 24 times the cost of JSA or 100 times the cost of benefit fraud.
Why isn’t our government going after these criminals? Why hasn’t Labour promised to go after them if the Tories won’t?
Simple: Both main parties have been re-writing tax law to make it easier for rich individuals and large corporations to avoid paying tax, and ignoring flaws in tax laws that make avoidance possible.
So for example: In the late 1990s, the then-Labour government removed the tax on dividends that meant companies had to pay tax on profits if they wanted to pay them out to the owners. So for example Arcadia boss Philip Green’s wife Tina, who is technically the owner of the company and lives in Monaco, received a tax-free £1.2 billion dividend in 2005; if this tax had been in place, £300 million of that would have gone to the UK Treasury.
Gordon Brown slashed Capital Gains Tax from 40 per cent to 10 per cent in 2000, meaning income that his friends in private equity managed to engineer into capital gains would be taxed at a lower rate than was paid by their cleaners. Not the finest hour for the Party of the Worker!
And towards the end of its term, New Labour started dismantling the rules that guarded against industrial-scale tax avoidance by British multinationals, meaning profits returned to the UK from overseas subsidiaries would be exempt from tax. This created a substantial incentive for firms to send their income offshore.
Before the 2010 election, our old friend David Gauke made a lot of noise about stopping the limitless tax deductibility of interest payments, that had been used by Boots (the chemist) to slash its tax bill. Six months after the election, when he was in a position to do something about it, he was telling everybody the rules would not be altered because business considered them a competitive advantage.
The Coalition brought in tax exemptions for companies’ tax haven branches and for profits parked in tax haven subsidiary companies. Meanwhile, tax breaks for the cost of funding these offshore set-ups, from the UK, are also provided.
Corporation Tax will drop to 21 per cent by 2014, even though there is no evidence that cutting the rate will make the UK any more competitive in world business.
The Treasury’s mission is now to adjust the framework of tax laws to suit big business. The ‘Big Four’ accountancy firms are now well-entrenched in writing our tax laws for us – and they run the most popular tax avoidance schemes. Consultations have descended into a process of agreeing laws demanded by big businesses.
There are clear and irrefutable arguments that reversing these legislative idiocies and closing every other tax avoidance loophole will do far more for the economy than flogging the unemployed to death, looking for jobs that don’t exist.
But I don’t think former Bank of England economist Rachel Reeves will be interested in that. In 1975, an appalled taxpayer wrote to then-Chancellor Denis Healey, complaining that an employee of the Bank (which is supposed to work on preventing tax avoidance) had been giving advice on how to avoid tax. “I wonder if this is really part of the Bank of England’s duties,” the correspondent wrote.
The behaviour of Ms Reeves, the former Shadow Chief Secretary to the Treasury, suggests that she believes it is.
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”.
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.
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.
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 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.
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![Mr Os-bean: As Ed Miliband gave his response to the Budget, George Osborne had a gormless smile on his face that made him look like Mr Bean. This is not him - but it's the closest image I could find at short notice. [Image as credited]](https://i0.wp.com/voxpoliticalonline.com/wp-content/uploads/2014/03/140319budget2.jpg)
![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]](https://i0.wp.com/voxpoliticalonline.com/wp-content/uploads/2013/09/130929risingtide-matthew-pover.jpg)