Not a backhander: in fact, Lord Shrewsbury seems to have been open in his dealings with the government and the firm for which he was lobbying. But the activity was not permitted and he should have known.
Crossbench peer Lord Shrewsbury may be suspended from the House of Lords for nine months after he was paid £57,000 after lobbying for the government to buy a firm’s products during the Covid-19 crisis.
What about the Tory peer who (allegedly) took £29 million under similar circumstances, then?
According to the BBC,
The Earl of Shrewsbury was found by the Lords Conduct Committee to have approached ministers on behalf of a company marketing Covid-19 sanitiser products, which he worked for.
The committee recommended he should be suspended for nine months, which is subject to a vote by the upper house.
He was paid £57,000 by healthcare company SpectrumX for his work as a consultant over a period of 19 months between 2020 and 2022.
In 2020, at the height of the Covid pandemic, the firm was seeking regulatory approval for products including hand sanitisers and a walk-in disinfectant tunnel.
The peer approached ministers, including then-Health Secretary Matt Hancock to promote the company’s tunnel in return for a £3,000 monthly retainer, the committee’s report found.
He referred himself to the commissioner following allegations about his conduct in relation to the company in the Sunday Times.
Dare we hope that this recommendation indicates the direction of travel for members of either House of Parliament who are found to have broken lobbying rules in such a way – with an increasingly-severe scale of penalties for those found to have broken the rules, depending on the amount of money they took and the effectiveness (or lack of the same) of the product they were touting?
That would be useful with regard to that other case, mentioned above.
Have YOU donated to my crowdfunding appeal, raising funds to fight false libel claims by TV celebrities who should know better? These court cases cost a lot of money so every penny will help ensure that wealth doesn’t beat justice.
James Cleverly: He was once described as “the Tories’ go-to eejit when they need someone to tweet absolute nonsense or defend the indefensible”.
James Cleverly is a gift to everyone who opposes Tories and Conservative policies.
His latest blunder was a tweet trying to claim that Labour would have failed to handle the Covid-19 crisis as well as the Conservatives – by suggesting a comparison between Westminster and the Labour-run Welsh government:
If you want to see how a Labour government would be dealing with the current COVID-19 situation just look at how they’re doing in Wales.
Cleverly does this, just when you've thought he's gone away he returns in a blaze of resounding stupidity. He's also MP for Braintree. The combination of surname and constituency always make me chuckle.
Worse still (for Cleverly), his tweet provided another Tory an opportunity to make an utter fool of himself – and by extension, his party – by trying to spread a lie about the current Welsh lockdown. Here’s the tweet:
Fortunately, there is such a thing as "Search Twitter" which reveals the entire thread, including the responses from the Welsh Government. Surely you must have seen them as well? Or is that why you just provided a screenshot? Disingenuous, mate. Jog on.https://t.co/df9qdK5kuh
I wonder if Cllr Hill, any of the other Tories who have tried to spread the lie, or Cleverly himself will ever have the courage also to apologise?
Have YOU donated to my crowdfunding appeal, raising funds to fight false libel claims by TV celebrities who should know better? These court cases cost a lot of money so every penny will help ensure that wealth doesn’t beat justice.
All the wrong choices for all the wrong reasons: The evidence fails to support George Osborne’s economic austerity policies – the only likely explanation seems to be an intention to rob this nation of everything possible before 2015.
The more we learn of the Tory-led Coalition’s policies, the wider the gap grows between what it is doing and what it should be doing.
Look at the sham psychometric tests, exposed by fellow blogger Steve Walker in a series of articles on his Skwawkbox site. It is now firmly established that the DWP – aided by the Cabinet office ‘nudge unit’ – set out to pressgang put-upon benefit claimants into taking part in a crude piece of neuro-linguistic programming – no matter what answers you provided, the test always pushed out a ridiculously upbeat appraisal of your character and then tried to get you to act according to this verdict in your jobsearching activities. The theory is that this will make a jobseeker more confident and finding a job easier. The problem is that it’s quite utterly ludicrous.
If you haven’t already, you can read the Skwawkbox exposure of this particular caper on that site – there are plenty of links to it from this one. The reason it is mentioned here is that it provides a useful set of questions with which to analyse any government activity: First, is the theory behind this activity sound? Second, if that theory is being used to support a particular course of action, is that action justifiable?
Firstly, the letter warns against the perils of losing market confidence. By this, we can see that it means we should fear any downward revision of our credit rating by the credit agencies, as “a one percentage point increase in government bond yields would add around £8.1 billion to annual debt interest payments by 2017-18”.
What’s being said is that a drop in our credit rating would mean the people and organisations that have invested in UK government debt (by buying our bonds) might move their funds to others, meaning the government could be faced with an interest rate rise, leading to increased difficulty in borrowing.
As Professor Malcolm Sawyer notes in Fiscal Austerity: The ‘cure’ which makes the patient worse (Centre for Labour and Social Studies, May 2012), “It is well-known that a government can always service debt provided that it is denominated in its own currency. At the limit the UK government can ‘print the money’ in order to service the debt: this would not take form of literally ‘printing money’ but rather the Central Bank being a willing purchaser of government debt in exchange for money.” This is what is happening at the moment. Our debt is in UK pounds, and we can always service it. Our creditors know that, so they remain happy to continue financing it.
This means that the Treasury’s next point, that “any loss of investor confidence in the UK’s fiscal position would not only affect the UK, but also the global economy” is also meaningless. There won’t be a loss of investor confidence, so there won’t be an effect on the global economy.
We move on – to the Chancellor’s claim that fiscal austerity is required to prevent the slowing of economic growth that happens when the national debt hits 90 per cent of gross domestic product (or thereabouts).
Obviously I haven’t had time to look up eight academic works to support any opposing theory I may wish to create – and I think I would be foolish to try. I don’t have any grounding in economics beyond what I’ve been able to pick up by following the national and international debates.
He writes: “Most economists are unable to conceptualize anything that someone with more standing in the profession did not already write about. This is the only reason that the Reinhart-Rogoff 90 per cent debt-to-GDP threshold was ever taken seriously to begin with.”
That prodded my curiosity to check some of the papers listed by the Treasury in support of its stance, and the three that I checked (The Real Effects of Debt, Public Debt and Growth, and How Costly Are Debt Crises?) all listed the Reinhart-Rogoff paper in their supporting references. So Mr Baker is right.
“Debt is an arbitrary number,” he continues. “The value of long-term debt fluctuates with the interest rate… The value of our debt will plummet if interest rates rise… This means that we could buy back long-term debt issued today at interest rates of less than 2.0 percent for discounts of 30-40 percent. This would sharply reduce our debt-to-GDP ratio at zero cost.
“Bonds carry a face value, meaning the amount that will be paid off when they reach maturity. This is what gets entered in our debt figure. However bonds also carry a market price, which fluctuates inversely with interest rates. The longer the term of the bond, the more its price will vary with interest rates.
“If interest rates rise, as just about everyone expects over the next three-to-five years, then the market price of the bonds we have issued in the current low interest rate environment will fall sharply. Since we count our debt at the face value of the bonds, not their market price, we could take advantage of the drop in bond prices to buy up… bonds at sharp discounts to their face value.
“The question is why would we do this, we would still pay the same interest? The answer is that the policy would make no sense for exactly this reason.
“However, if we accept the Reinhart-Rogoff 90 per cent curse, then reducing our debt in this way could make a great deal of sense. Suppose we can buy back debt with a face value of 60 per cent of GDP at two-thirds its face value, or 40 per cent of GDP. In our debt accounting we would have reduced our debt-to-GDP ratio by 20 percentage points. If this gets us below the 90 per cent threshold then suddenly we can have normal growth again.
“Yes, this is really stupid, but if you believed the Reinhart-Rogoff 90 per cent debt cliff, then you believe that we can sharply raise growth rates by buying back long-term bonds at a discount. It’s logic folks, it’s not a debatable point — think it through until you understand it.”
I found Mr Baker’s piece after asking Jonathan Portes of the National Institute for Economic and Social Research (NIESR) for his opinion on the Treasury letter. He described it as “Predictable and largely irrelevant”.
So despite my lack of economic education, we have a working theory that suggests the Treasury has built its economic castle on the sand; that its justification for austerity is unsound. What about the austerity measures themselves? Are they justifiable on any level at all?
Evidence suggests not.
Let’s go back to our other friend in this matter, Prof Malcolm Sawyer. “Fiscal austerity and cuts in public expenditure do not work – there is a limited, if any, effect on reducing the budget deficit, and any return to prosperity is severely undermined.” We can see that this is true, using the government’s own figures. It managed to cut the deficit from £150 billion to £120 billion in 2011-12, mostly by axing large projects that invested in the UK economy. How much did it cut from the deficit in 2012-13? Less than £1 billion. The benefit cuts that created much of the fuel for this blog have not helped to cut the deficit at all.
“The reduction of the budget deficit can only come from a revival of private demand which is harmed by an austerity programme,” Prof Sawyer continues. Again, we can see that this is true. Austerity measures such as benefit cuts and the axing of infrastructure investment projects means there is less money available to the people who are most likely to spend it – the working- and middle-classes, and those who are unemployed. People with less money have to spend just about everything they receive in order to cover their costs. That money passes into circulation and the economy grows, through the fiscal multiplier effect. An attempt to explain this effect appeared on this blog within the last few days. The point is that demand increases when the people who earn the least have more to spend.
Therefore we see that Prof Sawyer’s next statement, “Deficit reduction requires investment programmes and reduction of inequality to stimulate demand”, is already proved.
So the answer is to reduce the unemployment rate by creating more jobs and closing the jobs deficit, as highlighted in this blog only a few days ago; to raise incomes by significantly increasing the minimum wage and adopting the proposed ‘living wage’, as promoted in this blog frequently; and investment in infrastructure projects.
What has Osborne done, along with his economically-illiterate chums?
He has created high unemployment.
He has depressed wages.
He has cut infrastructure projects.
He has, therefore, sucked all the demand out of the economy. What effect has this had?
Economic growth has, in the single word of Shadow Chancellor Ed Balls, “flatlined”, borrowing has remained high and the national debt is continuing to rise.
In other words, this part-time Chancellor’s strategy – a plan on which we have all been asked to judge the entire Coalition government, let’s not forget – has failed. Hopelessly.
I return you to Prof Sawyer, one last time [bolding mine]: “The austerity programme is economically irrational, socially irresponsible, and lacks credibility that it can reduce the budget deficit and secure any return to prosperity. The time has come to rebuild through investment and through a major assault on inequality.”
Clearly, the fact that a principal pillar of his faith – the work by Harvard economists Reinhart and Rogoff – has been disproved, and by a student at a rival university, should have shaken his confidence. It is also ironic for a member of the Conservative Party to realise that they would have got their sums right, if they had done them the old-fashioned way.
But we’ve had no expressions of apology or acts of contrition from the Treasury. It seems Mr Osborne is determined to keep going, no matter what damage this causes.
I don’t reckon that’s good enough. I think he should be brought to account. So I have written him a letter, asking him to justify his position.
I reproduce it below. If you agree that it is time Mr Osborne put his cards on the table, you might wish to consider using it as a template for a letter of your own.
Here it is:
The Right Honourable George Osborne MP
Chancellor of the Exchequer
Horse Guards Road
London SW1A 2HQ
Following the revelation that a fundamental justification for your austerity policy has been disproved – the paper by Reinhart and Rogoff that was based on a mistake on a spreadsheet – I am writing to ask: What other documentary evidence do you have that supports your policy of economic austerity?
It should also be noted that this aide added, “It remains the case that the majority of economists still back the government’s strategy.” I await proof to justify this statement as well. Perhaps it is worthwhile to remind you that, of the 20 economists who publicly backed the Osborne Austerity plan in 2010, only one was willing to publicly back it in August last year. Nine publicly disavowed you, and the other 10 had no comment or went on holiday (http://www.newstatesman.com/blogs/politics/2012/08/exclusive-osbornes-supporters-turn-him).
Be advised that it will not be enough for you to discount the quotations above because they come from left-wing sources. As it stands at the moment, the situation is that your policy has no evidence to support it, nor does it have the support of expert opinion that is being claimed for it. Bear in mind that even the International Monetary Fund is criticising your policy, despite having been a staunch support in 2010.
You will recall that the Coalition came into being, nearly three years ago, for the specific purpose of bringing the economy under control. Your policy is the instrument with which this was to be done.
If you do not provide evidence to support its continuation, then what are we, the public, to think? That you are inflicting austerity on us – primarily upon the poorest of us – purely to shrink the state? To sell off the profitable parts to private industry, for the good of private bank balances rather than for the benefit of the nation as a whole? For spite?
If I were in that position, honour would demand an admission of the mistake and either an alteration of policy to one that is more likely to support economic growth (I understand alternatives are available) or – considering this government that was formed to fix the economy has spent three years doing the exact opposite – the dissolution of this administration and election of one that is better-equipped to make the best decisions, in the interest of the nation as a whole.
George Osborne famously shed tears at the funeral of Margaret Thatcher – but were they really for the Blue Baroness, a woman he is understood to have met only once (twice if you count Wednesday), or was it because he’d just heard that the entire theory forming the basis for his economic policy had just disappeared from under him?
The government’s principal justification for pursuing austerity lay in tatters today, after it was revealed that the economic theory behind it is based on a mistake.
The Chancellor’s entire austerity policy is based on a paper by economists Carmen Reinhart and Ken Rogoff, which is itself based on a spreadsheet concluding that public debt of more than 90 per cent of a country’s gross domestic product (GDP) slows down growth by 0.1 per cent – which is wrong.
It should have found that countries with such levels of debt see their economies grow by 2.2 per cent – but the false conclusion was used by the UK Treasury to justify the horrific austerity programme that has already caused terrible harm to many British citizens, and is expected to cause much worse harm in the future.
It means that the slaughter of innocents down at the DWP – the deaths of many thousands of people claiming Employment and Support Allowance, due to changes in the assessment regime that were based on a false theory dreamed up by an American insurance company when it needed an excuse not to pay out – have been in vain.
It means that the huge cuts to social security benefits for those who are out of work and those in work but poorly paid are totally unjustified. Here in Mid Wales, they average out at £433 per year, for everyone of working age. That’s roughly one week’s wages here – and of course much more than that in terms of benefits because, let’s remember, this government wants to make sure that work pays more than worklessness.
And it means that the Income Tax cut for the very rich, and the cuts that have reduced Corporation Tax by a quarter, were also unjustified. Let’s not forget that the Coalition government has been giving our money back to its influential friends.
Gideon George Osborne’s ridiculous plan was known as “expansionary fiscal contraction”. Just looking at those words together, anyone with an ounce of common sense knows it’s ridiculous. It implied that the economy would grow if it was starved of investment. What rubbish. How on earth can anything grow if it is being starved?
Now that plan has been exposed as “total nonsense” – which is exactly the way Ed Balls described it after hearing of the mistake.
Osborne, of course, is sticking to it. An aide said it was “absurd” that only one paper supports the Chancellor’s case for austerity – but put forward no examples of other justifications.
The aide said “the majority of economists still back the government’s strategy”.
But the International Monetary Fund doesn’t. The IMF was the main supporter of Osborne, using the same Reinhart-Rogoff paper to justify austerity schemes three years ago.
Now, both IMF chief economist Olivier Blanchard and its head, Christine LaGarde, have suggested that he should be “slowing the pace” of his cutbacks.
In fact, we all know why Osborne will continue to push austerity down our throats, and it has nothing to do with balancing the budget.
He knows it is extremely unlikely that the Conservative Party will win an election in 2015 – the damage he has already done to all our lives means that is a statistical probability on which he can rely.
But he has more ideologically-motivated changes to foist upon us, whether we want them or not. His buddy David Cameron once said he wanted to see all public services except justice and the security services privatised, and we can expect Osborne to push this agenda forward with vigour.
This government is all about taking public services and putting them into private hands, for profit and to spite the poor.
That is the real truth that was revealed by a statistical error in a spreadsheet this week.
The parallel here should be obvious to anyone who’s seen the newspapers today.
Dept. of ‘Giving Them A Taste Of Their Own Medicine’: The Daily Mail’s front page today is itself, of course, entirely vile.
It is an attempt to make us believe that every single benefit claimant in the UK is as evil as Mick or Mairead Philpott, who were convicted yesterday of killing six of their own children.
The claim is the kind of utter nonsense we have come to expect from the paper commonly dubbed the ‘Daily Heil’ or (as in the image above) the ‘Daily Fail’ – and it has sparked widespread fury.
We all know that it is ridiculous to claim that everybody on social security benefits is evil.
And we all know that you don’t have to be an evil person to receive social security benefits – look at the current government!
In fact, let’s look at the Secretary of State responsible for social security benefits – he likes to call them “welfare”, possibly because it gives him a feeling of superiority over their recipients. This is interesting in itself, because he used to be one of them.
Iain Duncan Smith was on the dole for several months during 1981, after leaving the Scots Guards, where he famously enjoyed a career as a bag-carrier for a higher-ranking officer. Did he get out by finding a job? Hard to tell. What we do know is that he married the very wealthy Betsy, daughter of a very wealthy man, the following year. In other words, he got off benefits by marrying into money. That’s not evil in itself, but how many of us have that option?
“He has four children, yet argues that families with more than two children ought to be sanctioned: in 2009 he took six months paid leave without notice to care for his wife when she was desperately ill, yet has instigated changes in benefit to ensure that neither sick people nor their carers will be supported. In 1981, jobless and unqualified, he took full advantage of the welfare safety net to claim benefits for months while looking for suitable work, yet in a recession as bad as that of thirty years ago he claims graduates are “snooty” if they don’t agree to work for Poundland for free. While attending further education for two short periods, IDS gained no qualifications, and asserts that shelf-stackers are more valuable than scientists. While benefiting hugely from MP expenses, Iain Duncan Smith tells many untruths about the cost of people claiming disability and welfare benefits.
“Iain Duncan Smith has made many speeches in favour of law and order. Yet when IDS’s workfare sanctions were ruled unlawful by the courts, instead of accepting that millions taken unlawfully would have to be repaid and that people unlawfully made to work for commercial organisations for free had a claim to minimum wage for their hours (or, if determined to fight lawfully for welfare, proceding to the Supreme Court for a further appeal) IDS decided to have emergency legislation passed making his unlawful sanctions retroactively lawful.
“Iain Duncan Smith lives in a large and comfortable home which he does not own and which it’s doubtful he pays market rent for, yet has instigated the bedroom tax. The idea behind the “bedroom tax” is that the housing shortage can be remedied not by building more social housing or by preventing bankers from gambling on house price rises, but by forcing people who live in social housing and have a “spare room”, to move out into private rented accommodation of a more suitable size. This won’t save money at any level (Iain Duncan Smith calls this the ending the spare-room subsidy).”
And there remains the matter of the 73 people per week, on average (and that average was reported nearly a year ago, so it may well have risen massively since then), who are dying as a result of the pressures put on them by the merciless Employment and Support Allowance assessment regime for people who have long-term sicknesses or are disabled.
If the Philpotts are a “vile product of welfare UK”, then is Iain Duncan Smith – who admits he has been on the welfare system, equally vile?
This week, he was in the news because he claimed on the BBC’s Today programme that he could survive on £53 per week if he had to, after market trader David Bennett said the bedroom tax meant he must now live on that amount.
His reaction? “This is a complete stunt which distracts attention from the welfare reforms which are much more important and which I have been working hard to get done. I have been unemployed twice in my life so I have already done this. I know what it is like to live on the breadline.” (Quoted from the Wanstead and Woodford Guardian).
In other words, this slimeball is trying to slither out of it! Could this possibly be because he knows the benefit regime he has instigated is much harsher than the system he enjoyed in 1981 (and again in 1989) and he knows he would not fare well as a part of it?
The report of this story in The Guardian seems intentionally hilarious. It states: “The Daily Mail [that rag again] reported Duncan Smith as saying: ‘It was a shock – absolutely awful. I felt pathetic. I remember telling my wife. We looked at each other and she said: “God, what are we going to do for money?”‘”
The report continues, straight-faced: “Duncan Smith’s wife, Betsy, is the daughter of the 5th Baron Cottesloe who served as lord-lieutenant of Buckinghamshire in the 1980s and 1990s. Duncan Smith and his wife, who sent their children to Eton, moved into Lord Cottesloe’s 17th-century Old House in the village of Swanbourne in Buckinghamshire in 2002.”
What were they going to do for money, indeed!
He is a man who has played the system for all he could take and then changed it to make sure nobody else could enjoy the benefits he received. He is a man who talks a good fight but runs away from supporting his words with real action.
If ‘welfare UK’ has any ‘vile product’ at all, then it must be Iain Duncan Smith.
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