Absolutely shocking Tory Chancellor Phillip Hammond should resign immediately .. he just blamed this Govts failure on low productivity on disabled people.. why?? That’s awful.. and also malicious and discriminatory.. pic.twitter.com/bjrsKEJG1M
He was lying, of course. There was no evidence to even suggest that disabled people in the workforce were responsible for the growing productivity gap.
But if Brexit really is keeping that gap open, you can see why Mr Hammond would want to mislead the nation.
It goes against the “Brexit is good for you” narrative that the Tories are trying to encourage, against all sanity.
Personally, my understanding is that the productivity gap has happened because employers find it cheaper – due to Tory policies – to employ more people than to invest in more efficient machinery. Of course, if the opposite had been the case, we’d be discussing unemployment. The ideal would be the best balance between employee numbers and new machinery.
We’re not going to see that under a Tory government, though. Working people are commodities, to them. And they need Brexit in order to hammer our rights.
The uncertainty caused by Brexit is deterring companies from investing and hampering Britain’s ability to close its productivity gap with other leading developed countries, a Bank of England policymaker has warned.
Silvana Tenreyro, one of the nine members of Threadneedle Street’s monetary policy committee (MPC), which sets UK interest rates, said 75% of the decrease in growth of output per worker since the financial crisis a decade ago was due to manufacturing and financial services, but that a period of catch-up was feasible.
The MPC member said that in the three decades leading up to the 2008 financial crisis Britain’s productivity grew by 2.3% a year on average, but in the decade since had slowed to 0.4% a year. The other six members of the G7 – the US, Germany, France, Italy, Canada and Japan – had output per head 18% higher on average than the UK, leaving plenty of scope for Britain to close the gap.
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Partners in lies: Philip Hammond and Theresa May [Image: The Independent].
Isn’t this enough to justify petitions against both Philip Hammond and Theresa May for Contempt of Parliament?
We have clear evidence that Mr Hammond, giving evidence to MPs on the Commons Treasury Committee, said lower productivity was due to the presence of disabled people in the workforce.
Here is Philip Hammond, the man who determines UK budgets, blaming disabled people for hurting UK productivity and calling me part of a "marginal group" which was terrible. Attitudes – good and bad – count a lot in disability but don't trump accessibility.https://t.co/lWIGxqcKyb
Now we have clear information that Mr Hammond had no reason to make that assertion:
In answer to my parliamentary question, Chancellor @PhilipHammondUK admits there is no evidence whatsoever for his disgraceful suggestion that disabled workers are responsible for the UK’s productivity problem. He must now withdraw his remark, and apologise. @scope#equalitypic.twitter.com/IARAtshZcY
So it turns out Philip Hammond can’t provide any evidence for his claim disabled people lower Britain’s productivity. Where’s the apology? https://t.co/abmgRUzz06
And what did Theresa May have to say about it in Prime Minister’s Questions?
This:
The Chancellor did not express the views that the hon. Lady claims he expressed. This is a Government who value the contribution that disabled people make to our society and to our economy in the workplace. This is a Government who are actually working to ensure that more disabled people get into the workplace. We have had some success; there is more to do, but we will continue to work to ensure that those disabled people who want to work are able to do so.
That’s right – she lied to Parliament.
Charity leaders are furious about this – witness this extract from a Sky News report:
Mark Atkinson, chief executive of charity Scope, told Sky News: “The Chancellor did explicitly link increased participation of disabled people in the workforce with productivity.
“We wrote to the Prime Minister last week to request an explanation for these unacceptable and derogatory comments. There hasn’t been a reply.
“The Chancellor still hasn’t withdrawn his comments, or offered a full apology.
“He has to do this now, before further doubt is thrown onto the Government’s policy to get more disabled people in to work.”
Susan Daniels OBE, chief executive of the National Deaf Children’s Society said: “Given the right support a deaf person can do anything a hearing person can, yet we know that 56% of deaf people have experienced discrimination at work and 25% have left a job as a result.
“In its words and actions the Government needs to show complete commitment to breaking down the barriers to employment for deaf young people and others with disabilities.
“Anything less is unacceptable”
It isn’t merely unacceptable – it borders on hate crime.
The Conservative Party has been victimising disabled people for seven years – seven years in which people with disabilities have seen opportunities for them to gain paid employment diminish markedly – does anybody even remember that Remploy used to be an employer of disabled people? – while right-wing ‘news’ media have demonised them as scroungers and skivers, determined to spend their entire lives on benefits.
Meanwhile, the – Conservative-run – benefit system has systematically stripped away extra help intended to enable people with disabilities to get jobs. It has cut the amount of benefit payments they receive. Assessors have worked hard to push claimants off disability benefits with false claims that they are faking their disabilities – and have tried to push disabled people towards suicide.
It is in this context that the Chancellor of the Exchequer has lied to Parliament about the role of disabled people in the workplace, and the Prime Minister has lied to Parliament about his comments.
Should they face Contempt of Parliament proceedings?
Yes – of course they should.
And this is exactly the right time for such proceedings.
The government has just lost a key vote on Brexit and has been shown to be weak. A direct attack on the honesty of its two most powerful members – now – could have a far-reaching result.
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Philip Hammond: It would be fun to say he’s such an enormous coward that he’s pictured running away from the wrath of the UK’s disabled people but the truth is, he really couldn’t care less about anybody but himself [Image: Getty Images Europe].
People with disabilities just can’t get a decent chance in Tory Britain – if the DWP isn’t trying to push them into inappropriate jobs, Spreadsheet Phil is blaming them for low productivity in the economy.
The real reason for the productivity disaster is well-known – thanks to numbskull Tory policies, it is cheaper to employ people on zero-hours or part-time contracts with no holiday or sick pay than it is to invest in improved equipment.
But a workforce on insulting pay is a workforce without motivation; it is an unhealthy workforce due to stress, tiredness, and poor nutrition; it is a workforce too busy coping with its own survival to care about productivity or profit.
Spreadsheet Phil doesn’t want you to know about that, though. He needed a distraction, and people who are sick and/or disabled have served the Tories well in the past.
Absolutely shocking Tory Chancellor Phillip Hammond should resign immediately .. he just blamed this Govts failure on low productivity on disabled people.. why?? That’s awful.. and also malicious and discriminatory.. pic.twitter.com/bjrsKEJG1M
So, after demonising people on disability benefits as scroungers and skivers, the Tories are demonising disabled people in work, saying they are holding the rest of us back.
What next? Will they just go the whole hog and get the gas chambers and cremation ovens out?
Well, no – because they don’t have to. They’re already pushing disabled people to the grave with a benefit assessment system that worsens their illnesses or physical disabilities, and causes so much stress that it harms their mental health.
Result: People either die because of their disabilities, or they commit suicide – an end that the Tories find uncomfortably easy to dismiss as having no single cause, even though the “why haven’t you killed yourself yet?” question in benefit assessment interviews is a rather obvious nudge.
Labour’s Debbie Abrahams has already condemned Mr Hammond’s ignorant and inflammatory remark.
She said: “It is disgraceful that Philip Hammond is scapegoating disabled people for a productivity crisis created by the Conservatives’ failed economic policies.
“This is coming from a Government that has forced disabled people to pay the price of their failed austerity agenda, including by cutting measures that help disabled people into the workforce and scrapping their own manifesto commitment on halving the disability employment gap.
“We should be increasing disabled people’s access to employment, not denigrating their contributions. The Chancellor should apologise immediately.”
Yes he should – putting the blame for the productivity drop firmly where it belongs: On failing Tory economic policies.
Did you notice that he also seems to have slipped a whopper of a lie into his comments?
He blamed the productivity plunge on increased numbers of disabled people in the workforce but Ms Abrahams has pointed out that the Tories have cut efforts to get more people with disabilities into work, and scrapped their own manifesto commitment to halve the disability employment gap.
There cannot be both more and fewer disabled people in the workforce at the same time. Mr Hammond is caught out in a contradiction.
So I’d like to see his resignation too.
Asked about the fall in UK productivity reported in Hammond’s budget speech, the Chancellor told the Treasury Select Committee it could be down to the number of “marginal” groups in the workforce.
“It is almost certainly the case that by increasing participation in the workforce, including far higher levels of participation by marginal groups and very high levels of engagement in the workforce, for example of disabled people – something we should be extremely proud of – may have had an impact on overall productivity measurements.”
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Over a cliff: The Brexit bus, with all its claims of a new Golden Age for the UK, teeters on the edge. Boris Johnson, in the driver’s seat, says: “Boys? I’ve got an idea.” Then Philip Hammond walks up and pushes bus, Boris and Britain over the precipice.
Probably because there are very few people around with the economic expertise to know that outrage is the proper way to respond.
Philip Hammond’s Autumn Statement – his first real contribution to UK politics as Chancellor of the Exchequer – was a long admission that the Conservative Party has ruined the country, hidden behind an attempt to blame it all on Brexit.
No, Philip; your party’s policies are responsible.
So it seems the UK is going to have to borrow an extra £59 billion – just to cover the cost to the country of Brexit.
This means the claim on the side of the famous red Brexit bus, that we could put £350 million a week into NHS services was definitely a lie. Let’s not beat around the bush any more – it was a lie and the people who made that statement are liars who cannot be trusted with anything.
Oh – but Boris Johnson, one of the arch-liars, is now Foreign Secretary and has a huge responsibility to deliver the best possible exit from the European Union for the population of the UK. Honestly, how do you think that’s going to work out?
We now know there will be less money available for the NHS and other public services than before, due to lower productivity growth (because foreign countries aren’t buying from us) and – yes – lower immigration.
Your wages and prosperity will suffer like never before, because of this. But I bet your right-wing neighbour still thinks immigrant-bashing is a worthwhile activity.
And all as a result of the vote for a Conservative Government last year.
It is worth emphasizing, as many commentators have, the almost-complete failure to mention the National Health Service or provide any more money for it, even though it is in a funding crisis of horrifying proportions. Mr Hammond says announcements about extra funding for the service have already been made, ignoring the fact that his government has not provided enough.
Perhaps one reason for this is the pitiful increase in public investment announced by Mr Hammond, at a time when interest rates are at an all-time low. There will never be a better time to borrow money and invest it in the UK’s infrastructure, but instead we’re getting 0.3 or 0.4 per cent of GDP, in each financial year leading up to 2020 – slightly more than from New Labour in the years before the financial crisis.
This tells us – although Mr Hammond will never say it aloud – that the Conservatives are continuing their squeeze on public services, started back in the dark days of the Coalition Parliament. One might say it is all part of the plan to take everything away from public hands, as started by Margaret Thatcher and her cronies back in 1979 – if only one had the experience and understanding to see that far.
There’s more – we could discuss the hidden policy not to increase fuel duty, that throws out all the economic predictions but gives the Tories a favourable headline in their poodle press; or we could mention the new fiscal rules which set the scene for panic cuts in public investment as we approach the now-fixed (rather than rolling) date for the deficit to be cut back to a new level set by Mr Hammond.
But it is all too depressing, really.
Someone recently said that, with a May as prime minister and a Hammond as chancellor, all we need is a Clarkson for the UK’s government to emulate the former Top Gear presenting team, now relegated to internet TV on their Grand Tour. It is true that Clarkson once considered standing in the 2015 election.
Some might consider that a good idea – a brand behind which to market the UK’s flailing government.
But let’s be honest: Clarkson, Hammond and May were successful because they presented themselves as three petrol-headed idiots.
With May, Hammond and Boris Johnson in the UK’s driving seat, we don’t need any marketing.
We already know they are idiots. Sadly, we also know that their calamities won’t just be television entertainment – we’ll have to live with the consequences.
But the response to the Autumn Statement has been muted. Some have even claimed that John McDonnell was wrong to challenge it by demanding more investment.
This is because we do not – as a nation – know enough about economics. Otherwise we would be on the streets in front of Parliament, right now, demanding a change of direction – or a change of government.
Alexis Tsipras is smiling because he can tell that David Cameron is a monstrously incompetent economic illiterate [Image: Reuters].
It is rare for Professor Simon Wren-Lewis to make an overtly critical statement of our politicians – usually he sticks to their policies.
We may therefore conclude that he has taken extreme exception to David Cameron’s comments about the Greeks, made in Brussels a few days ago.
Cameron said: “When I first came here as prime minister five years ago, Britain and Greece were virtually in the same boat, we had similar sized budget deficits. The reason we are in a different position is we took long-term difficult decisions and we had all of the hard work and effort of the British people. I am determined we do not go backwards.”
Here’s Prof Wren-Lewis’s response: “In other words if only those lazy Greeks had taken the difficult decisions that the UK took, they too could be like the UK today. This is such as travesty of the truth, as well as a huge insult to the Greek people, that it is difficult to know where to begin.
According to OECD data, the 2010 government deficit in Greece was 11%, and in the UK 9.5%. The Prime Minister is normally well briefed enough not to tell outright lies. But look at this chart you can see why the statement ‘virtually in the same boat’ is complete nonsense.
“The real travesty however is in the implication that somehow Greece failed to take the ‘difficult decisions’ that the UK took. ‘Difficult decisions’ is code for austerity. A good measure of austerity is the underlying primary balance. According to the OECD, the UK underlying primary balance was -7% in 2009, and it fell to -3.5% in 2014: a fiscal contraction worth 3.5% of GDP. In Greece it was -12.1% in 2009, and was turned into a surplus of 7.6% by 2014: a fiscal contraction worth 19.7% of GDP! So Greece had far more austerity, which is of course why Greek GDP has fallen by 25% over the same period [all boldings mine]. A far more accurate statement would be that the UK started taking the same ‘difficult decisions’ as Greece took, albeit in a much milder form, but realised the folly of this and stopped. Greece did not get that choice.
“And I have not even mentioned the small matter of being in or out of a currency union.”
Did you take note of the comment that austerity hinders productivity?
This is very important to a United Kingdom that is struggling to increase its productivity – and therefore its competitive edge in the world marketplace. We will never succeed under the stranglehold of Tory austerity.
Prof Wren-Lewis goes on to explain why Janan Ganesh’s recent claim that George Osborne is surrounded by “monstrously incompetent adversaries” is a reversal of the facts; we have a monstrously incompetent chancellor instead.
This graph is now out of date but shows the rapid rise of the zero-hours contract. By the end of 2014, the number of people on zero contracts was 697,000, according to the ONS. [Image: Eoin Clarke.]
Number of people employed on a “zero-hours contract” in their main job was 697,000 for October to December 2014, representing 2.3% of all people in employment. In the same period in 2013, this was 1.9% of all people in employment (586,000).
The number of people saying they are employed on “zero-hours contracts” depends on whether or not they recognise this term. It is not possible to say how much of the increase between 2013 and 2014 is due to greater recognition rather than new contracts.
Number of contracts that do not guarantee a minimum number of hours where work was carried out was 1.8 million for the fortnight beginning 11 August 2014. The previously published estimate was 1.4 million for the fortnight beginning 20 January 2014.
The two estimates of contracts should not be directly compared. They cover different times of year so changes in the numbers may reflect seasonal factors.
On average, someone on a “zero-hours contract” usually works 25 hours a week.
Around a third of people on “zero-hours contracts” want more hours, with most wanting them in their current job, compared with 10% of other people in employment.
People on “zero-hours contracts” are more likely to be women, in full-time education or working part-time. They are also more likely to be aged under 25 or 65 and over.
Over half of businesses in Accommodation and Food Services and a quarter of businesses in Education made some use of no guaranteed hours contracts in August 2014.
This is at a time when the Organisation for Economic Co-operation and Development has said the UK has bounced back strongly from the recession and has one of the strongest economies in the G7 nations.
Admittedly, the OECD has said productivity – stagnant for many years now – must improve in order for living standards to rise, but this is not part of the zero-hours plan. The Conservative-led Coalition wanted to put as many people as possible into jobs of any description, in order to claim a drop in unemployment – but zero-hours contracts, while helping businesses by eliminating in-work benefits like sick pay and holiday pay, do not help productivity at all; they use more people to achieve the same result.
In the case of the UK, it seems, they have been achieving worsening results, as dipping tax receipts have made all-too-clear. George Osborne claimed a surplus in January, but this is clearly a manufactured result, formed from panic after the last few tax revenue figures became public.
So what does Labour say about all this?
Scottish Nationalists will be surprised to learn that the party Pete Wishart believes is “cuddling up to the Tories” was unequivocally critical.
“The Tories’ plan is failing working families,” said Chuka Umunna, shadow business secretary.
“While they prioritise a few at the top, for others there’s a rising tide of insecurity. Ministers have watered down every person’s rights at work and zero-hours contracts have gone from being a niche concept to becoming the norm in parts of our economy.
“The ONS’ findings today that there are now 1.8 million zero-hours contracts and that the number of people reporting they are on a zero-hours contract for their main job has risen by almost 20 per cent is yet another stark illustration of a recovery which is not working for working people.”
He said: “Labour’s Better Plan for Britain’s Prosperity would ban exploitative zero-hours contracts, prohibit employers from requiring workers to be available on the off-chance they are needed, ensure zero-hours contract workers who have shifts cancelled at short notice receive compensation and give employees who consistently work regular hours the right to a fixed-hours contract.
“Ministers have sat on their hands and opposed our plans, in the face of rising insecurity for people.”
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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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The Resolution Foundation’s predictions for government spending, based on the different parties’ declared plans.
Vox Political’s article on Nicola Sturgeon’s London speech provoked a disgruntled response from Jonathan Portes. The NIESR boss sent a message stating that the article’s fiscal arguments were out of whack.
He didn’t ask for this blog to straighten them out, but the information he sent, coupled with some other pieces he suggested – by Professor Simon Wren-Lewis and the Resolution Foundation – make it inevitable that another stab is required. If you support the SNP, you’re still not going to like it.
The first comment from Mr Portes is as follows: “1. SNP plan is slower deficit reduction than Lab/LDs, which in turn slower than Cons. All consistent with falling debt/GDP ratio. So all are sustainable. Haven’t looked at detail, but Simon WL & I both think Lab too cautious – so SNP not obviously crazy.”
Simon Wren-Lewis’s article states: “In reality what Sturgeon was proposing was still deficit and debt reduction, but just not at the pace currently proposed by Labour.”
And the Resolution Foundation adds: “The SNP would commit to delivering existing 2015-16 plans, as each of the Westminster parties have, before changing course.”
There’s a major point to make here, which all three of the sources above have missed. It’s that the SNP and its adherents have been cursing Labour from High Heaven to Low Hell for committing to Tory austerity policies because Ed Balls promised a Labour government would stick to Coalition spending – note that word, spending – limits for the first year after the general election.
Why have SNP adherents been slating Labour when the SNP has committed itself to the exact same Conservative spending limits, for the exact same period of time? Doesn’t this also make the SNP a party of austerity?
This leads us neatly to a point made by the Resolution Foundation. Ms Sturgeon wants to put a lot of space between SNP plans and those of Labour by claiming that Labour is committed to eliminating the UK’s structural deficit by 2017-18. They say Labour signed up to that when it voted to support the Charter for Budget Responsibility. You may recall there was another big fuss about Labour supporting Tory austerity, being just the same as the Tories, and there being only 17 MPs who oppose austerity (the number who voted against the CBR). Bunkum, according to the Resolution Foundation.
“The ‘Charter for Budget Responsibility’ is highly elastic: it’s not based on a firm commitment to reach balance in 2017-18,” states the Resolution Foundation article. “Instead it represents a rolling ‘aim’ of planning to reach current balance three years down the road.” The article adds: “Most economists are sceptical about how much difference it (the charter) will make.
“So what if Labour targets a current balance in 2019-20 instead? Based on current OBR assumptions this could be achieved with as little as £7 billion of fiscal consolidation in the four years to 2019-20 (including the cost of extra debt interest).”
Labour has made it clear that it plans to make only £7 billion of cuts. As this coincides exactly with the Resolution Foundation’s figures for a 2019-20 budget balance, logic suggests that this is most likely to be what Ed Balls is planning.
So SNP (and Green) adherents who crowed about Labour austerity being as bad as that of the Tories need to apologise – sharpish.
Now that these points are cleared up, let’s look at the substantive issue. Here’s the Resolution Foundation again: “The first minister’s headline was that she favours £180 billion of extra spending in the next parliament relative to current coalition plans… an increase in ‘departmental spending’ of 0.5 per cent a year in real terms over four years [we’ve established that the first year’s spending would adhere to Coalition-planned spending levels]. Our estimates suggest that raising departmental spending by 0.5 per cent in each of the four years after 2015-16 would indeed yield a cumulative increase in spending of around £180 billion (in 2019-20 prices, £160bn in today’s) compared to existing coalition plans. So that seems to fit.
“Another, more conventional, way of putting this is that in the final year of the next parliament, departmental spending would be around £60 billion higher in the SNP scenario than it would be under the coalition’s outline plans. This means that departmental spending would end up in roughly the same place in 2019-20 (in real terms) as it is now. We’d see £8 billion or so of departmental cuts in 2015-16 broadly cancelled out by a rise of around £7 billion across the following four years. It also means that, all else equal, there would still be a (small) UK-wide current deficit come the 2020 election.”
As you can see from the graph, the scenario that suggests a Labour balance in 2017-18 would imply a big difference with the SNP, particularly in the first half of the next Parliament – but, come 2019-20, “there would still be a £48 billion gap between Labour and the coalition plans; not that far short of the £60 billion gap that would exist between the SNP and the coalition”.
The scenario in which Labour balances its budget by 2019-20 “would in theory be consistent with spending roughly £140 billion more than coalition plans.
“The SNP proposal implies increases in total departmental spending of £1-2 billion per year over four years whereas Labour’s 2019-20 scenario implies cuts of £1-2 billion per year over the same period. This is against total departmental spending of around £350 billion. By 2019-20 this difference adds up to roughly a £14 billion gap between the two parties. Now, that’s a real difference but given the scale of the numbers involved, (and the fact that some of Labour’s consolidation may come from tax increases rather than spending cuts), it’s also a relatively modest one.”
It’s more or less the same amount the Coalition Government borrows every month, in fact.
Now let’s throw a spanner in the SNP’s works. The Resolution Foundation points out: “Fiscal discussions of this type tend to suffer from a severe case of false precision. None of the party leaders knows any better than you or I what will happen to productivity next year, never mind in 2020… Any difference between, say, the Labour and SNP spending plans would be dwarfed by the fiscal implications of even modest boosts (or dips) in productivity. Indeed, even the very large difference between the SNP (or Labour) and the coalition’s plans could be overshadowed by a significant shift in productivity trends. And, to Sturgeon’s credit, her remarks this week emphasised productivity.”
Yes – productivity. Does anybody remember that, prior to the referendum, the SNP wanted Scottish voters to believe that any borrowing that might be necessary in an independent Scotland would be offset by increased productivity? What did Simon Wren-Lewis have to say about that? Oh yes: “Governments that try to borrow today in the hope of a more optimistic future are not behaving very responsibly.”
But that is exactly what Ms Sturgeon was proposing for the whole of the UK; borrowing on the assumption of increased productivity.
Here’s a chance to put another SNP myth to bed, from the same writer. In his article about Ms Sturgeon’s speech, Professor Wren-Lewis states: “Of course this is the same person who, with Alex Salmond, was only six months ago proposing a policy that would have put the people of Scotland in a far worse fiscal position than they currently are, an argument that has been reinforced so dramatically by the falling oil price. You could say that it is a little hypocritical to argue against UK austerity on the one hand, and be prepared to impose much greater austerity on your own people with the other.”
The argument he mentions ran as follows: “Scotland’s fiscal position would be worse as a result of leaving the UK for two main reasons. First, demographic trends are less favourable. Second, revenues from the North Sea are expected to decline. This tells us that under current policies Scotland would be getting an increasingly good deal out of being part of the UK [and therefore independence would be detrimental].”
He added that the Institute for Fiscal Studies, which had independently analysed the SNP figures, had made a mistake on interest rates. The IFS analysis, he wrote, “assumes that Scotland would have to pay the same rate of interest on its debt as the rUK. This has to be wrong. Even under the most favourable assumption of a new Scottish currency, Scotland could easily have to pay around one per cent more to borrow than rUK. In their original analysis the IFS look at the implications of that (p35), and the numbers are large.”
The Resolution Foundation notes that “the flipside of higher spending, all else equal, would be higher debt and higher debt interest payments”.
So the SNP plan, as this blog pointed out, could create an interest-payment problem for the next government that bites into the extra money said to be for services.
Mr Portes made two other minor points, as follows: “2. Your stuff about Lab could spend more if economy does better wrong way round. If economy worse, we need higher deficit. Over time, as income goes up, so does/should spending. But short-term macro should be countercyclical.”
When I wrote the material about Labour spending more in a better-performing economy, I was thinking of the Labour government immediately after World War II. The current Labour Party has mentioned this period in recent speeches and releases, and it seems clear that Messrs Miliband, Balls et al consider their task, if elected in May, to be similar to that faced by Mr Attlee and his party – the reconstruction of the UK after a long period of destruction.
Are we to believe the economy is likely to worsen, in which case more borrowing will be needed? It’s certainly possible that major shocks are on the horizon. This writer is in no position to speculate.
“3. Finally, stuff about credit rating agencies/bond markets/Greece is absurd propaganda. I’ve written on this many times.” He’s right; it wouldn’t have been included it if Yr Obdt Srvt had stopped to think about it, but the article was up against a deadline and this writer was throwing in all the cautionary words he could find.
So let us forget about them. Here are a few more. Simon Wren-Lewis, at the end of his article, notes: “I read a blog post recently that suggested this was an election Labour would be better off losing… A Labour government dependent on SNP support would be abandoned by the SNP at the moment of greatest political advantage to the SNP and disadvantage to Labour. However if we assume that the oil price stays low there is no way a rational SNP would want to go for independence again within the next five years. It might be much more to its long term advantage to appear to be representing Scotland in a responsible way as part of a pact with Labour.”
Is the SNP rational? All the evidence available so far suggests it isn’t.
It put forward arguments that were deceptive about an independent Scotland’s economic future.
Its representatives and followers spread lies about Labour economic policy.
All indications suggest the SNP will try to create the conditions required for Scottish independence at the earliest opportunity, and then leave the rest of the UK hanging.
The original article on Ms Sturgeon’s speech ended by saying the SNP would be hard to trust.
After the findings of this one, it is nigh-on impossible to do so.
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More respect, please: If company bosses stop trying to wring every last ounce of profit out of workers while paying them a pittance, and start treating them well instead, they’ll be surprised at how well their firm starts to perform, according to a new report.
The nice folk at NIESR have produced a new report that supports something this blog has been saying for many years – that businesses make more profit if they take better care of their workforce.
The report is headed Happier workers, higher profits? and states: “We found those workplaces with rising employee job satisfaction also experienced improvements in workplace performance, while deteriorating employee job satisfaction is detrimental to workplace performance.
“Employee job satisfaction was found to be positively associated with workplace financial performance, labour productivity, the quality of output and service and an additive scale combining all three aspects of performance.
“Workplaces experiencing an improvement in non-pecuniary job satisfaction… also experience an improvement in performance.
“By contrast, there was no robust association between job-related affect (measured in terms of the amount of time feeling tense, depressed, worried, gloomy, uneasy and miserable) and workplace performance, nor pay satisfaction and workplace performance.”
The conclusion is that “these findings are consistent with the proposition that employers who are able to raise employees’ job satisfaction may see improvements in workplace profitability (financial performance), labour productivity and the quality of output or service [bolding mine, for reasons that will become apparent].
“Although we cannot state definitively that the link between increasing job satisfaction and improved workplace performance is causal, the findings are robust to tests for reverse causation and persist within workplaces over time, so that we can discount the possibility that the results are driven by fixed unobservable differences between workplaces.
“There is therefore a prima facie case for employers to consider investing in the wellbeing of their employees on the basis of the likely performance benefits.”
This ties in very closely with Vox Political‘s many comments on the Living Wage. The relationship is obvious: Pay somebody enough that they don’t need to ask for State benefits and their sense of self-worth increases hugely.
Here’s what this blog said on the subject back in April last year: “If a person receives enough, in return for their work, to pay their way in the world without having to take state benefits, several things happen.
“They feel valued in their position, and try harder. The quality of their work improves, along with that of the other workers in the company who also receive the living wage, and as a result, the employer is likely to benefit from improved orders. The company flourishes [increased productivity] and is able to take on more employees.
“As a result of this, the firm and its employees are able to pay more taxes and National Insurance contributions – not as a result of an increase imposed by an oppressive government, but because more people are employed there [and profits are higher]. The government therefore has more cash to fund public services; it has less need to borrow money and will not have to pay as much in social security benefits – in-work benefits will be unnecessary because working people will be receiving enough to put them above the threshold for that support, and fewer people will be claiming out-of-work benefits.
“The government can then pay off its debts and deficit more quickly, after which it can cut tax rates. This means everyone will have more money in their pockets – including employers, who can plough the extra cash back into the firm with infrastructure improvements and more employment.
“You see how this works?
“Contrast this with what happens when you employ somebody on the minimum wage, or abolish it.
“People on the absolute minimum do not feel valued. They consider their employers to be taking more than their fair share of the profits generated by the company where they all work together. They feel undervalued – and demeaned by the fact that they have to claim state benefits in order to survive. Their health may be put at risk, because they may find themselves having to work ridiculously long hours, just to make ends meet. Their work starts to suffer, and they may end up unemployed, either for health reasons or because the company is suffering (as a result of workers turning in substandard work).
“The company makes cutbacks. Its bosses don’t want to take a pay cut so they cut corners elsewhere. The workforce diminishes and the quality of the product suffers. In time, the firm’s contribution to the national economy dwindles – if it doesn’t go to the wall altogether. Its tax and National Insurance contribution plummets.
“The government finds itself paying in-work benefits for increasing numbers of people, and unemployment figures skyrocket. Employers and workers do not provide enough money in taxes and National Insurance to pay the bill for public services, so these are cut back and borrowing increases. The nation goes into a debt spiral.
“That is the current situation.
“Which of the above would you rather have?”
That remains the current situation, no matter what George Osborne may be saying today. The government would not be considering slashing the amount paid to ESA claimants if it didn’t consider the number of people claiming the benefit to be too high. We all know the number of people claiming in-work benefits has rocketed and that Osborne is facing a huge shortfall between the amount of tax he expected to receive this year and the actual amount. What is it – £5 billion? That’s not small change!
There have been huge arguments with right-wingers who have made spurious claims that employers can’t afford to pay more than the minimum wage – or that there is no incentive to do so.
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The European Union has told David Cameron that, since the UK has record numbers of people in work and the British economy is said to be doing so much better than any other EU country (0.7 per cent improvement in the last quarter alone), his government needs to pay more into the EU membership pot.
Cameron has responded like a spoilt child who has been told to pay for something rather than being given it on a platter. He reckons the EU is out of order. But is it merely calling his bluff?
If so many more of us are in work, then logically – and this is what the Europeans clearly believe – the UK tax take must be higher. In fact it is lower. Productivity has hardly changed at all. But the very rich are twice as rich now as they were in 2009-10.
In such circumstances, it seems illogical even to have to ask where the money is going – but it does seem a good time to test one of the Conservative Party’s principle claims; that people are better-off in work.
This poll is just for those of you with jobs. We’ll confine answers to a choice between ‘yes’ and ‘no’; you ought to know whether you’ve got more money or not.
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![Alexis Tsipras is smiling because he can tell that David Cameron is a monstrously incompetent economic illiterate [Image: Reuters].](https://i1.wp.com/voxpoliticalonline.com/wp-content/uploads/2015/03/150323CameronTsiprasReuters.jpg)
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