Tag Archives: surplus

Gordon Brown is yesterday’s man – but he still has good points to make about the Budget

Gordon Brown: his heart is in the right place but his ideas are rooted in an ideology that doesn’t work.

Does anybody care that, according to Jeremy Hunt’s own projections, by 2026 his government will have made us all much worse-off than we were in 2019?

Gordon Brown does – apparently. But the reaction he received from some people when he wrote about it in The Guardian suggests that they think he’s responsible.

Maybe it’s true that his New Labour governments didn’t make the changes that were necessary after 18 years of Thatcher and Major-style neoliberalism, and paved the way for a further 15 years in which the Tories have been able to destroy what was left of the way of life that had made the United Kingdom worth inhabiting.

But that doesn’t mean he doesn’t have anything worthwhile to say.

His factual points are all worth taking in because they contribute to a State of the Nation-style snapshot of what the UK is today. And it is horrifying:

271,000 homeless people

400,000 children who sleep without a bed of their own

14 million condemned to damp or substandard housing

7.5m UK households in fuel poverty

Food prices in the shops have risen 18% in a year, with many basic items shooting up by twice as much – baked beans up 35%, ketchup up 39%, tomato soup up 73%

9.7 million adults already skipping or cutting back on meals

Six in 10 adults unable to afford other basic essentials

A record 2.1 million people are using food banks

There are 14.4 million living in poverty, including 4.2 million children, the vast majority of whom are in families where the breadwinner is on low pay

As Brown put it at the top of his piece,

Poverty will last until doomsday if this Conservative government is all that confronts it.

The so-called “budget for growth” [is] more accurately titled the “budget for growth in poverty”

The point of his piece was that cleanliness is the next thing the Tories have rationed, with hygiene poverty leading to the rise of so-called “beauty banks” to run alongside the already-infamous food banks.

He was calling on retailers and manufacturing companies to offer up surplus goods and to consider special production-line runs of unbranded toiletries to ease the crisis.

But this is just – as current Labour leader Keir Starmer would put it – “sticking-plaster politics”. It’s putting a plaster over the wound but not healing it.

Businesses can certainly do much more to ease the crisis that the Conservatives have deliberately created to distract the young and the poor from their strategy to divert public funds into the hands of the old and the rich.

They can provide better pay and conditions, and opportunities for career growth that make it worthwhile. These tactics will reap huge rewards for them as, freed from the stress of poor health due to bad nutrition and harmful work practices, and unburdened by the mental ill-health caused by continually having to find ways to make ends meet, employees’ productivity will soar.

That is the best way out of the hole Hunt has dug for us. Indeed, it is the only way, as his government is absolutely determined not to help.

Source: Jeremy Hunt has left the UK to rot in poverty. So we must take matters into our own hands | Gordon Brown | The Guardian


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Turn again, Tories! Will your policy today be your policy tomorrow?

[Image: Left Futures.]

[Image: Left Futures.]


We all know the answer to that question: It will if it harms people on middle or low incomes, and benefit claimants. The rich will be safe.

So David Cameron’s promise not to cut tax credits was a lie that will harm the hard-working people of the UK, even as the Public Relations Prime Minister works so hard to convince them that they’re better-off under him.

“The Conservatives are the party of the workers” – what utter nonsense!

Meanwhile, George Osborne has U-turned over ‘fiscal responsibility’ laws. Here’s what he had to say about them in 2010:

That was in response to a Labour law that the Conservative-led Coalition government repealed in 2011.

Now he has a ‘fiscal responsibility’ law of his own. What does he have to say about it?

“After all that Britain has been through, it is remarkable that the proposition in this Charter for Budget Responsibility should even be contentious. It states that now the economy is growing we should be reducing our exorbitant debts, and that we should do that each year by reducing the deficit until we eliminate it altogether and run a surplus. Once we have achieved that surplus, in normal times we should continue to raise more than we spend and set aside money for when the rainy days come.”

A child’s economics.

If a government is raising more than it spends, then it is taking money out of the economy; making the economy smaller.

If the economy was growing at a substantial rate – for example, due to the style of investment that Labour is advocating – then it would be possible for a government to achieve this without causing substantial harm. But the economy isn’t doing that. Tory austerity policies have limited the economic recovery since 2010.

Actually, no. Let’s not call them austerity policies any more. Let’s use the term a Vox Political reader rightly chose to describe them: Subjugation.

Subjugation, because the Tories are using their time in office to further enrich the privileged few with tax cuts, taking money from the poor to pay for them.

Subjugation, because the Tories hold themselves unaccountable, refusing to consider any challenges against their policies.

Subjugation, because the Tories intend to use their ‘fiscal charter’ – something George Osborne ridiculed before he took office – to inflict bitter poverty on the hard-working people of the world’s fifth-largest economy.

So let’s learn our lesson – and the lesson is this:

The only Tory promises you can believe are promises made to the rich.

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Welfare is perfectly sustainable, Gideon – it’s the TAX GAP that’s the problem!

George Osborne's most famous performance in Prime Minister's Questions, from November 2014. What was he on?

George Osborne’s most famous performance in Prime Minister’s Questions, from November 2014. What was he on?

George Gideon Osborne. Was there ever a more foolish fellow running the Exchequer?

Probably not. Did you hear him in Prime Minister’s Questions yesterday, trying to tell us that the UK’s social security bill makes up seven per cent of welfare in the whole world, and that this is “unsustainable”? What a berk.

The first question this raises is, can he prove his “seven per cent” claim?

No – he’s wrong. The claim is based on a comment by German Chancellor Angela Merkel about EU social security being 50 per cent of that in the world, making the UK’s share 7.4 per cent of the total. Unfortunately for Thick George, she was using World Bank data that only included 96 countries and excluded large economies like Canada and Mexico, where social security makes up 18 per cent and 17 per cent of each country’s GDP.

The Guardian reckons that, if all countries were taken into account, this would not seriously affect the UK’s share of the total, suggesting that it accounts for the rounding-down to seven per cent from 7.4 – but there’s no proof either way. The article also quibbles about definitions of social security spending.

What this really shows is not that the UK spends too much, but that other countries spend too little.Mr

Nearly half of the world’s population – three billion people – must try to scrape a living on around $2.50US per day – or less. Of those, 1.3 billion are in extreme poverty, having to survive on less than $1.25 per day. That’s around 80p.

The countries in which they live – mostly developing countries – don’t have social security at all; that is the scandal.

If they did, then Gideon could not quote his “seven per cent” figure – it would be much lower.

What’s stopping these developing countries? Well, the organisation most directly responsible is probably the International Monetary Fund, whose ‘Structural Adjustment Programmes’ have put these countries into a continual cycle of debt; they can’t help their populations without breaching the IMF’s rules. This is the same IMF that wants the UK to run a debt economy, by the way.

So much for Osborne’s claim that social security spending in the UK is too large a proportion of the world’s spend. What about his “unsustainable” comment?

He said: “We can either carry on on a completely unsustainable path or we can continue to reform welfare so that work pays and we give a fair deal to those on welfare and indeed a fair deal to the people, the taxpayers of this country, who pay for it.”

Ignoring for the moment the fact that those on social security are in fact taxpayers themselves, let us consider the fact that the UK government does not collect as much tax as it could, and in fact offers extremely lucrative tax avoidance opportunities to the obscenely wealthy.

Did you know that you could fit the owners of half the world’s wealth into a double-decker bus, with space to spare? Less than 80 people own more money than the other seven billion, and you can bet that the majority of those with UK citizenship aren’t paying their full whack of tax!

A report by Tax Research UK has indicated that the amount of tax being avoided is around £122 billion every year. Compare that with the UK’s current budget deficit of £107 billion per year and you will see that – in a perfect world in which it was all collected – we would be running surpluses of at least £15 billion per year.

The Conservative government, of which Osborne is Chancellor, tells us the most effective way of tackling the deficit is by cutting the public services on which many people rely. They say it is the only option without increasing taxes.

But, with more than £100 billion in taxes going uncollected, why is the government slashing funding to the HMRC investigative branch?

Over on Tax Research UK itself, Richard Murphy has taken David Gauke, the financial secretary to the Treasury, to task over his fudged claims about the tax gap.

Gauke said: “The tax gap as a percentage has been lower in every year under us than it was in any year under the Labour Government”.

Mr Murphy replied: “Percentages are the evasive politician’s favourite tool, so I think that claim can be dismissed. What remains baffling is David Gauke’s apparent inability to see just how wrong his data might be. The government claims that the tax gap is £34 billion. And then it claims that HMRC recover £26 billion a year. Or to put it another way, £60 billion of tax abuse is attempted and 40 per cent is recovered.

“Is there anyone who thinks that remotely likely?”

He goes on to completely trash Gauke’s – and the Conservative Government’s – claims, and it is strongly recommended that you read the article for the details.

Mr Murphy says HMRC’s tax gap estimates should be subject to independent economic audit to check their credibility. He says HMRC’s claim of tax recovered should be subject to independent scrutiny to ensure that it is credible. He says a review of HMRC is overdue, with a panel of independent experts including from unions and civil society being included in the task. And he says it is time we had an Office for Tax Responsibility, reporting to the Public Accounts Committee, to ensure that this most critical department of government is held to account.

He states: “A recovery of £26 billion out of more than £100 billion I could possibly accept – except to say it could be so much better. But that rate of recovery out of anything less is absurd right now – as is HMRC’s tax gap estimate.”

So, under analysis, Gideon the Towel Folder’s claims are no more than silly attempts to confuse us.

If he bothered to collect all the taxes owed him, he would be running a budget surplus tomorrow.

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When is Chuka going to stop backstabbing Labour?

Blue is the colour (of this man's politics): Chuka Umunna should be in the Conservative Party.

Blue is the colour (of this man’s politics): Chuka Umunna should be in the Conservative Party.

It seems Mr Umunna is even ready to sink his own credibility in order to undermine the party he still claims to represent.

He has written an article in The Independent which Oxford University macroeconomist Professor Simon Wren-Lewis has rubbished in his Mainly Macro blog.

This Writer’s only criticism is that Prof Wren-Lewis headlines his article with a claim that it is a sign of “Labour’s growing macroeconomic illiteracy” – when it is far more likely to be a sign that Chuka should cross the floor and join the Conservatives he most closely resembles.

Chuka wrote: “To be running a deficit in 2007, after 15 years of economic growth, was still a mistake. My party’s failure to acknowledge that mistake compromised our ability to rebuild trust in 2010 and in 2015. If a government can’t run a surplus in the 15th year of an economic expansion, when can it run one?”

This is the Tory line in a nutshell – and nonsense. Mainly Macro‘s response: “What Umunna is saying here is much the same as George Osborne’s proposed rule: in normal times when the economy is growing run surpluses. But Osborne is saying that in the context of the current debt to GDP ratio of 80% of GDP. Umunna is implying that policy still made sense back in 2007 when the debt to GDP ratio was below 40%, the output gap was thought to be small and no one was expecting a global financial crisis.

“I cannot remember anyone before 2008 suggesting Labour’s debt limit should fall over time. Yet Umunna says the mistake was so serious it helped lose Labour two elections.”

In other words: What a load of rubbish.

“I would love to know who the economists are that gave Umunna the advice that led to this article,” writes Prof Wren Lewis. Who says anybody did?

To prevent claims that he is over-exaggerating a couple of sentences from a larger article, the Professor again quotes Chuka: “Reducing the deficit is a progressive endeavour – we seek to balance the books because it is the right thing to do.” This claim – that it is “the right thing to do” is straight out of the Tory phrasebook.

The response: “Would he give the same advice to UK businesses: refrain from borrowing and focus on paying back your debt? Somehow I think not. The Conservatives have a kind of excuse for deficit fetishism – it is a useful device for shrinking the state. That excuse should not apply to senior Labour figures.”

This Blog can see little future for Labour if a politician with so much sympathy for Conservative policies – and so little understanding of economics – remains on Labour’s front bench. Chuka has had his day.

It’s time he chucked it in.

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Academics attack George Osborne budget surplus proposal

French economist and author Thomas Piketty has signed the letter to the Guardian that accuses the chancellor of gimmickry. Photograph: Eric Piermont/AFP/Getty Images

In a letter to the Guardian, coordinated by the Centre for Labour and Social Studies, 77 of the best-known academic economists, including French economist Thomas Piketty and Cambridge professor Ha-Joon Chang, said the chancellor was turning a blind eye to the complexities of a 21st-century economy that demanded governments remain flexible and responsive to changing global events.

Piketty, who rose to prominence last year after his book Capital became a bestseller, signed the letter alongside eminent economics professors from many of Britain’s top universities.

Other signatories of the letter include former Bank of England monetary policy committee member David Blanchflower, Diane Elson, emeritus professor of economics at the University of Essex and chair of UK Women’s Budget Group alongside professors of economics from Oxford, Leeds and London universities.

In a swipe at what they said was a “risky experiment with the economy in order to score political points”, they argued Osborne was guilty of adopting a gimmick designed to outmanoeuvre his opponents.

Source: Academics attack George Osborne budget surplus proposal | Business | The Guardian

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George Osborne’s financial plans are confused and childish

141204osbornetestfailed

Why do commentators like The Guardian think George Osborne’s plans will make life hard for his political opponents, when they are specifically designed to increase inequality and reduce prosperity across the UK?

You’d have to be an economic imbecile not to understand that his plan for permanent budget surpluses will shrink the national economy, while his tax breaks for the very rich and corporations mean the money that remains will float upwards to the very few people favoured by those changes.

If you don’t understand, think of it this way: Governments create money – they have to, otherwise you wouldn’t have any to spend or pay in taxes. The pound in your pocket had to come from somewhere, and while it may originally have been supported by precious metals or minerals of equivalent value, those days are far behind us.

So, governments create money and invest it in the national economy. If all goes to plan, the money circulates, gaining value on the way through, until it is reclaimed by the government as tax revenue. Even if the amount of tax claimed back was as much as the original value of the money, the economy should still have grown by however much extra value the money has accrued during its journey (the ‘multiplier’ effect).

Osborne wants to take back more money than his government releases. This means somebody will have to lose out – and the system of tax breaks and permitted tax avoidance for the rich (Tory Party donors) means it is going to be the people who do the actual work, who are searching for work, or who are unable to work because of illness, who will be unfairly penalised by this plan.

He can’t claim any of the credit for it, either – it was all worked out back in the 1970s by Margaret Thatcher, Keith Joseph and Nicholas Ridley. Their plan was to create insecurity among those who have to work for a living in order to increase the gap between the amount they earned and the amount their bosses earned. Thatcher lied about this, right up to her very last day as Prime Minister.

The Guardian‘s article on Osborne’s Mansion House speech says that he will challenge the Labour Party “to decide whether it wants to back the proposal that tax revenues should cover spending on both infrastructure and the day-to-day running of government”.

Why? Labour does not have to accept the premise of the question. Important conditions are omitted from it.

For example, if Labour was asked to back the proposal, along with plans to ensure that minimum wages would always be able to cover the cost of living – without the government subsidising employers in tax credits, landlords in housing benefit or lenders in subsidies to the City of London, that would be a far more enticing proposition. But Osborne isn’t offering that.

If Labour was asked to back the proposal on the condition that the extra money necessary to reduce the deficit and debt came from those who could most easily afford it – the corporations and shareholders who are currently reaping the benefits of five years of Conservative economic mismanagement, that would be far more interesting. But Osborne isn’t offering that.

Furthermore, Osborne can only dictate what his government will do. He can’t tell Labour what to do if Labour wins the next election because no government can bind the next. Any claim that he can do otherwise is a lie.

But then, we have already been shown that he has been lying. He will say: “The result of this recent British election – and the comprehensive rejection of those who argued for more borrowing and more spending – gives our nation the chance to entrench a new settlement.”

This is a jab at Labour’s plan to run a surplus on day-to-day spending, but to borrow for investment projects. This is not “more borrowing and more spending”, as Osborne describes it, but investment with a view to see profits in the future. That business principle has been around since commerce began – it’s how most Tory donors operate. Osborne is a hypocrite to scorn it.

But then, Osborne has borrowed more money in five years than every Labour Chancellor put together. That’s hypocrisy on a grand scale!

The Guardian article continues: “During the election, Labour struggled to cope with the accusation that it had spent and borrowed too much in the years leading up to the financial crisis. Some of the contenders to replace Ed Miliband as opposition leader have said subsequently the public finances should have been in a healthy state in the last years of a 15-year period of economic expansion lasting from 1992 to 2007.”

This indicates confusion on the part of the article’s author. Labour did not borrow and spend too much in the run-up to the financial crisis; the nation’s finances were in a much healthier state than at any time under Conservative control in the previous 40 years – and let’s not forget that the Conservatives supported Labour’s spending plans throughout this period.

Furthermore, the crisis was caused by bankers who were too loosely regulated, granting loans irresponsibly to people who could not pay them back. At the time, the Conservative Party was pushing Labour to deregulate banks even further.

So we know that the financial crisis would have been much, much worse if the Conservatives had been in office at the time. Osborne’s criticism of Labour is in extremely poor taste.

Talking of extremely poor taste, here’s more of Osborne’s speech. It seems he wants “a settlement where it is accepted across the political spectrum that without sound public finances, there is no economic security for working people; that the people who suffer when governments run unsustainable deficits are not the richest but the poorest; and that therefore, in normal times, governments of the left as well as the right should run a budget surplus to bear down on debt and prepare for an uncertain future.”

Like all clever lies, this contains a few truths. He’s right that without sound public finances, there’s no security for working people. Osborne’s plan for the public finances is particularly unsound – and targets people who have to work for a living with particular hardship.

But it is not necessarily true that the poorest suffer most when governments run unsustainable deficits. This government has singled out the poorest for suffering because it wants to ensure rich Tory donors can continue enriching the Tory party – we are living in extremely corrupt times.

His final claim – that all governments should cut debt to prepare for “an uncertain future” would have more weight if Conservative governments had not created much of that uncertainty themselves, by dismantling the UK’s industrial base and relying instead on the financial sector that let us all down so badly.

Osborne is full of hot air – but his plan won’t fly.

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Have government finances hit a surplus because of bad billing?

[Image: The Guardian.]

[Image: The Guardian.]

There is a certain amount of scepticism running around Vox Political at the announcement that Coalition government finances hit a surplus of £8.8 billion in January due to a “better than expected” rise in tax receipts.

George Osborne was pilloried for his “worse than expected” tax receipts only a short while ago, and it seems highly likely that this has prompted him to order HMRC to do something about it.

Clearly they haven’t done anything about tax avoidance or evasion – it would be silly to expect that from Gideon.

Perhaps they have been wrongly billing people for more than they owe.

This seems more likely. Here at Vox Towers a bill for £25 hit the screen (not the mat – it was emailed). You might think that’s not a bad amount; that, clearly, this household made a little more than the £9,440 tax-free personal allowance for 2013-14 (the tax year being billed).

But Vox Political hasn’t made anything like that much money. We didn’t clear the tax-free personal allowance at all.

The government still billed us.

Now, according to the ONS, self-assessed income tax receipts were £12.3bn in January, an increase of £1.7bn, or 15.6 per cent, compared with January 2014. How can anyone at Vox Political have faith in this figure, having been billed incorrectly?

How can we have faith in any of the other figures spewed out by the Coalition government today?

We can’t.

That’s why this government has to go.

We just can’t believe a word that comes from it.

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Labour must turn and fight now – or give up its electoral hopes altogether

Struggling to make an impact: Ed Miliband must reject the Tory Party's narrative about the need for austerity and bring forward a vision for the future that really does make us 'One Nation' again, rather than hanging on David Cameron's neoliberal coat-tails, as many former Labour voters believe.

Struggling to make an impact: Ed Miliband must reject the Tory Party’s narrative about the need for austerity and bring forward a vision for the future that really does make us ‘One Nation’ again, rather than hanging on David Cameron’s neoliberal coat-tails, as many former Labour voters believe.

The political debate is all about the Labour Party again today – as it has been since the Budget.

The newspapers and websites are full of advice for the party, which is now clearly seen to be struggling to gain any kind of a foothold with electors who have become disillusioned at what might best be called the Party of Very Little Opposition.

Labour “must adopt new principles” according to an alliance of thinktanks and party intellectuals who have written to The Guardian; Ed Miliband has been told “don’t play safe” with the party’s manifesto according to an article on the same paper’s site.

The BBC News site has words from left-wing MP John Mann, calling on his party leader to stop trying to be “too clever” and be “much clearer” in setting out his policies.

We can probably discount the Telegraph article by Dan Hodges, claiming that Labour is “closed for business”. It plays to right-wing readers’ prejudices just a little too much.

Will Ed pay any attention to these pleas? Evidence suggests he will not.

I should clarify from the outset that, as a Labour member, I want the Party to win in 2015 (and also to gain the lion’s share of the vote in May’s European elections).

But Miliband seems to be living in a world of his own, insulated from the rest of the Labour Party – not to mention supporters of Labour ideals who are not members – by a small group of (not-so-special) advisers who, it’s claimed, intercept any decent ideas before they get to the party leader and spin them until they turn to drivel. Whether this is true or not seems immaterial as this is the perception of the general public.

And perception is everything.

As I write this article I have just received a comment stating that “Miliband’s strategy for the next election seems to be a) to accept the Tory frame of reference for any given argument and b) to then concede the field of battle on that issue, whatever it is, without a shot being fired.” This is a common complaint, and Labour has no answer to it.

Why do Miliband, Balls, Tristram Hunt (notably), Rachel Reeves (lamentably) and all the other Labour frontbenchers blithely accept the Coalition’s terms of reference on any issue, against the wishes of their own backbenchers, their party as a whole and the public at large?

Are they really just a gang of greedy moneygrubbers, determined to screw the country for whatever they can get? That in itself would be a betrayal of Labour Party ideals and their constituency parties should deselect them if members believed that to be the case for one moment.

Are they a gang of neoliberals, their political philosophy so close to that of the Conservatives that you can’t get a credit card between them? This rings threateningly true in the cases of Oxford PPE graduats Ed Balls and Yvette Cooper, ex-Bank of England employee Rachel Reeves and Tristram Hunt. But Ed Miliband is (famously) the son of a Marxist. He, above all, should know better.

The trouble is, David Miliband is the son of the same Marxist and he was as much a part of the neoliberal New Labour Red Tory deception as Tony Blair and Gordon Brown.

Oh look – another comment has just arrived. “More people don’t bother to vote because they feel that we as a people have moved on and all we really want is people who will represent us honestly, by majority and with no hidden agendas, backhanders or lobbyists pulling the strings. I don’t see any evidence that the present government or the Labour Party are capable or willing to do just that… They should have the courage to change and become the voice of the people.”

Become the voice of the people. The meaning is clear – Labour is not currently representing anybody at all.

Is this true? Let’s look at some of the other comments on my (left-leaning, let’s not forget) blog. These are from people who are generally sympathetic to Socialism and who should, therefore, see Labour as the natural home of their vote. What do they say?

“[Is it] any wonder [that] 1. People don’t vote because they are seen as “all the bloody same”? and 2. The perceived differences have become so minuscule?”

“Until Labour wakes up and realises it is the welfare cuts that are a major concern to most of us and to anyone who has a conscience, they will lose the next election due to apathy.”

“Labour have to do something different to what they have up to now but they don’t seem to want to. Are they scared of being in government over a country in the state it is?”

“Labour have had four years to do something – anything – to fight against the welfare cuts, and to help the people they are supposed to be the party for! They’ve really done nothing when all is said and done.”

If Ed Miliband was reading this, I would be asking if he was getting the message yet (are you, Ed?) and what he proposes to do about it. You think not? Let’s have some more comments from people who should be supporting Labour – I’ve got plenty of them!

“There has been absolutely no fight in this opposition and I am ashamed of them.”

“People need a reason to apply their votes to Labour and Miliband-Balls are not providing them with one. They are sleepwalking into another hung Parliament and a very real risk of the Tories teaming up with UKIP. Then we’ll really see Nazism grip this country.”

“The would-be voters demand change and need bold new policies to blunt the Tory cutters. If the Labour Party cannot come up with policies which are radical then they don’t deserve to be in power at the next election, or ever.”

“Ed Balls worries me because he seems intent on copycatting Osborne. For example Osborne says he will run a surplus by the end of the next Parliament and Balls promises the same. Osborne say he will be introducing a Benefit Cap on social security spending on working age benefits (which could have devastating effects and lead to real terms cuts in benefits for years on end) and Balls says that Labour will vote with the Coalition to introduce it.”

“Surely we need some clear red water between Labour and the Tories? Surely Labour needs to differentiate itself more from the policies of the Coalition?”

“I sent an email to the Labour Party asking for its policy on TTIP (the rightly-feared Transatlantic Trade and Investment Partnership that will force employment standards down to third-world levels, or below), amongst other things. They were decidedly equivocal and I felt no reassurance at all. I think it’s about we faced facts, Labour aren’t being coy in a pre-election year to avoid frightening the horses, they really are just another pack of neoliberals.”

This is how left-wing voters (and the squeezed-middle waverers to whom Ed Miliband keeps trying to pander) see the modern Labour Party: Carbon-copy Tories with no fresh ideas who aren’t worth the effort of voting.

If any of Ed’s shadow cabinet is okay with that description, he needs to sack them and bring in someone with a clue. And he needed to do it last year.

If the Conservatives win in 2015, it seems clear that responsibility will lie as much with Labour’s failure to provide any clearly-visible alternative.

We have already seen carnage inflicted on the poor, the sick and disabled, and a Conservative-only government (or in collaboration withUKIP) would increase that bloodshed tenfold (senior citizens take note: the bribe you were given last week was a trick and if you vote Conservative, many of you will not live to rectify your error at another election).

Unless Ed Miliband sorts out his party – pronto – that blood will be on his hands as well, and the people will not forgive him.

Note that I did not say they won’t forgive Labour. I said they won’t forgive Ed Miliband.

Words cannot describe the way people feel at what has been done to them by the Coalition. If Labour reveals even the slightest element of complicity, I wouldn’t give a farthing for Miliband’s safety.

That goes for the rest of the shadow cabinet too.

Follow me on Twitter: @MidWalesMike

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Coalition drags out the pain with promise of many more cuts

140205cuts

The BBC has reported findings by the Institute for Fiscal Studies, showing that the Coalition government will be less than halfway through its planned spending cuts by the end of the current financial year (March 31).

The organisation said 60 per cent of the cuts were still to come.

This raises a few urgent questions. Firstly: This government was formed on the promise that it would balance the books by 2015, which presupposes that its entire plan for doing so would be in place long before then. We know that this ambitious claim was dismissed after years of failure, but part of the reason for this failure was that George Osborne stopped a recovery that was already taking place, and which would have led to economic growth of 20 per cent by now, if it had been allowed to continue (according to Michael Meacher MP). My question, therefore, is: Have the Conservatives been working to ensure that they would have an excuse to make more cuts, rather than to restore the economy and balance the deficit?

Secondly: We may presume that these further cuts will be inflicted over a period of years (as even the Tories know it is important to enact change gradually, rather than inflict sudden shocks on the economy that could create entirely unforeseen consequences). Are the Coalition parties assuming that they will be re-elected next year, and is it not supremely arrogant of them to believe this, considering the harm they have caused so far?

Thirdly: If the Coalition parties do want to be re-elected, it is clear that they will need to try to bring a majority of voters back on-side. Therefore we may reasonably expect to see all sorts of gifts coming our way over the next year – tax breaks or whatever else they can devise – aimed at increasing the amount of money in our pockets. However, knowing that 60 per cent of the Tory/Lib Dem cuts process is still to come, this means they will want to make even more cuts if they are returned to office. Why would we want to give them our vote, in return for presents they’ll grab back as soon as they’ve got what they want?

Fourthly: Iain Duncan Smith has inflicted £28 billion of cuts on people receiving benefits from his Department for Work and Pensions. If the IFS statement is accurate, then the total amount he’ll want to cut is a staggering £70 billion. If we consider that the amount spent on pensions (more than £100 billion) is safe, this leaves only tiny amounts for all the other benefits supplied by the DWP. Are people currently on Jobseekers’ Allowance to get nothing in the future? What about disabled people getting DLA or PIP? How about all the many, many people on Employment and Support Allowance, including those currently going through the appeal process because of wrong decisions? Mr… Smith might claim that all these benefits are being rolled into Universal Credit, but that won’t happen until 2016 or 2017 according to his own estimates, and the rest of us know that it’s not going to happen at all. Will we have any benefit system left if these cuts continue – or will the Tories try to trick us into buying duff health and employment insurance policies from their friends at Unum instead?

The BBC report said George Osborne wants a budget surplus by 2018-19, but “additional spending, population growth and extra demands on the NHS meant more cuts were needed”. This statement is not supported by any source material and we may take it this is a further sign of BBC right-wing bias.

The additional spending was made necessary because of unintended consequences of the cuts – the Tories got their sums wrong. Population growth, if due to the EU immigration that everyone complains about, will have led to a net growth in the economy as it has been proved that migrant workers from the European Union contribute more to the Treasury than they ever take out – so this is not a cause of increased spending. If the indigenous British population has been growing faster than expected, let us remember that Child Benefit is to be restricted to the first two children in a family (Cameron has denied it so it must be true) and therefore any further growth in individual families will have no bearing on the government’s bank balance. Extra demands on the NHS are a thorny subject as the Coalition promised to inject billions of pounds into the health service but no evidence has yet appeared to show that it has. Since this money was promised many years ago, it should have been included in national budgets and should not be a burden now.

The IFS also reports that there is no evidence of a housing bubble in the UK, as a result of Osborne’s ‘Help To Buy’ scheme. This was introduced last year, when Osborne realised that his austerity programme had failed and resorted to a Keynesian ‘pump-priming’ scheme to boost the housing market. Fears that this would lead to a debt-fuelled ‘bubble’ made commenters like myself cautious about the plan.

However, if there are no signs of a debt-fuelled bubble, then we should consider this to be proof that Keynesian economics was always the way forward and austerity has led us up an economic dead-end for the past four years.

This means none of Osborne’s ridiculous cuts were necessary (barring a few to eliminate waste and corruption – but under a Conservative-led regime we have no evidence that these took place and every reason to believe the opposite to be true. Look at the current ‘cronyism’ row over the appointment of Conservative ‘yes’-people to senior quango posts).

It also means the government and the right-wing media have been lying to you for four long years – and will continue doing so in self-justifying stridence for another 14 months to come.

Let them talk.

But don’t ever let them convince you their cuts are necessary.

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The State of Osborne: a visitor’s guide

A moment of crisis for David Cameron as he realises it is unlikely that George Osborne has the faintest idea what the Autumn Statement means.

A moment of crisis for David Cameron as he realises it is unlikely that George Osborne has the faintest idea what the Autumn Statement means.

If anybody else had prattled on for 50 minutes while hardly uttering a single sensible word, they would have been consigned to a mental hospital forthwith.

But this is Coalition Britain, and the speaker was George Osborne, the man who likes to tell us all that he is in charge of the nation’s finances. Thanks to his government’s Department for Work and Pensions, nobody is allowed to have mental illnesses anymore; after this speech, it seems likely we all have an idea about the reason for that.

A 50-minute speech is a lot of verbiage, and it is certain that worthier journalists across Britain – if not the world – have already analysed it to exhaustion. Allow me to let you into a secret:

They’re probably trying too hard.

Most of the speech was about putting Labour down. The Opposition has made all the headway over the past few weeks, and we all knew Osborne was under orders to change the mood music of the nation in time for Christmas.

Did he manage it? Not really. His speeches always come across as strained events, where he’s making an effort to be clever without ever achieving it. As a result, the message gets lost. We can therefore discount the Labour-bashing.

That leaves us with what he actually said. Even here, his meaning was at times opaque. What follows is an attempt to provide a handy guide to George-speak, for anyone unfortunate enough to have heard him yesterday.

Osborne: “We have held our nerve while those who predicted there would be no growth until we turned the spending taps back on have been proved comprehensively wrong.”/Meaning: “I am lying. Austerity failed miserably and the economy flatlined. A few months ago I realised that we would have nothing to show at election time so I turned the spending taps back on, with Help To Buy and Funding For Lending. I know that these are exactly the sort of Keynesian economic levers that I preached against for three years but I’m hoping that nobody noticed.”

The hard work of the British people is paying off, and we will not squander their efforts./Osborne appears to be celebrating his three years of stagnation. He inherited growth and decided to trash it. (MagsNews on Twitter)

There was no double-dip recession./“Phew! Lucky escape there!”

At the time of the Budget in March, the Office of Budget Responsibility forecast that growth this year would be 0.6 per cent. Today, it more than doubles that forecast and the estimate for growth will be 1.4 per cent./“Please God don’t let anybody remember that three years ago, the forecast for this year was 2.9 per cent.”

Today in Britain, employment is at an all-time high… We have the lowest proportion of workless households for 17 years./These jobs have increased the numbers of the working poor. Too few are full-time; too many are part-time, zero-hours or self-employed, serving up no National Insurance contributions from employers, no holiday or sick pay, or making contractors work long hours for less than the minimum wage.

The number of people claiming unemployment benefit has fallen by more than 200,000 in the past six months—the largest such fall for 16 years./“And we have imposed sanctions on more people on Jobseekers’ Allowance than ever before, in order to produce that figure.”

By 2018-19, on this measure, the OBR does not expect a deficit at all. Instead, it expects Britain to run a small surplus. These numbers mean that the Government will meet their fiscal mandate to bring the structural current budget into balance and meet it one year early./Although of course the books were initially supposed to be balanced by 2015. (Huffington Post live blog)

This year, we will borrow £111 billion, which is £9 billion less than was feared in March./…and £41 billion more than forecast in 2010.

We will cap overall welfare spending./But this will not include the state pension (half the social security budget) or the most cyclical jobseeker benefits./”A living wage would mean less dosh on in-work benefits; letting councils build would mean less subsidies for private landlords.” (Owen Jones on Twitter)

Pensioners will be more than £800 better off every year./But as usual he’s ignoring the VAT elephant in the room. (Mark Ferguson on Twitter)

We think that a fair principle is that, as now, people should expect to spend up to a third of their adult lives in retirement. Based on the latest life expectancy figures, applying that principle would mean an increase in the state pension age to 68 in the mid-2030s and to 69 in the late 2040s./But life expectancy depends on where you live and how much money you have, meaning the poor continue to pay more towards the pensions of the rich./”Current pensioners better off – future pensioners paying for it. What was that about “making our kids pay for current spending” George?” (Mark Ferguson of LabourList on Twitter)

Most wealthy people pay their taxes and make a huge contribution to funding our public services; the latest figures show that 30 per cent of all income tax is paid by just one per cent of taxpayers./Estimates of the amount of tax that is not collected range between £25-£120 billion per year and it is not the poor who aren’t paying up.

This year the rich pay a greater share of the nation’s income taxes than was the case in any year under the last Labour Government./Because they now have more income. Simple really. (Tom Clark of The Guardian, on Twitter)

Today we set out in detail the largest package of measures to tackle tax avoidance, tax evasion, fraud and error so far this Parliament. Together it will raise over £9 billion over the next five years./Including capital gains tax for foreign investors on sales of UK property, which has nothing to do with tax avoidance/evasion, fraud or error.

We must confront this simple truth: if we want more people to own a home, we have to build more homes… The latest survey data showed residential construction growing at its fastest rate for a decade./The rate of house building is at its lowest peacetime level since the 1920s

This autumn statement has found the financial resources to fund the expansion of free school meals to all school children in reception, year 1 and year 2, announced by the Deputy Prime Minister and supported by me./On Wednesday, the Lib Dems and Michael Gove’s education department argued over who had to pay for it.

Extra funding will be provided to science, technology, and engineering courses [in universities]. The new loans will be financed by selling the old student loan book, allowing thousands more to achieve their potential./And pushing thousands into the hands of debt collectors.

The best way to help business is by lowering the burden of tax. KPMG’s report last week confirmed for the second year running that Britain has the most competitive business tax system in the world./KPMG would know – it writes the tax system and also runs some of the larger tax avoidance schemes.

From April 2015 we will introduce a new transferable tax allowance for married couples… Four million families will benefit, many of them among the poorest working families in our country./Osborne says the Tories are backing British Families – but only ones who are married it seems. (Mark Ferguson on Twitter)/While the new tax arrangements bribe families to marry, the benefit cap will bribe big families to split up. (Tom Clark on Twitter)

We are all in this together./The biggest lie of this Parliament.

We are also helping families with their energy bills./Commence the cutting of the “green crap”. This from the “Greenest government ever”. (Mark Ferguson on Twitter)

Next year’s fuel duty rise will be cancelled./This is a cut in a tax that was never imposed in the first place.

We are going to abolish the jobs tax on young people under the age of 21. Employer national insurance contributions will be removed altogether on a million and a half jobs for young people./Young people will therefore have less chance to get contribution-based benefit. National Insurance assures people their pension contributions – except when it isn’t paid. So they will have no contributions to show for any years they worked before 21 and will have to work until their late 60s.

The cost for a business of employing a young person on a salary of £12,000 will fall by over £500./This is a bonus for businesses, not employees.

“Jobs tax” – it’s ludicrous, isn’t it? National Insurance has been a respected part of British life for more than 100 years but Osborne, living as he does in a mythical Victorian-era golden age that never actually existed, thinks it is a “jobs tax”. Either that or he’s still bruised by the fact that Labour’s labelling of the under-occupation charge as a Bedroom Tax caught on with the public.

Shadow Chancellor Ed Balls got on his feet and immediately attacked Osborne’s “breathtaking complacency” for denying the drop in living standards faced by everyone in the country, with families already £1,600 per year worse off. Osborne laughed. He thought that was funny.

The Shadow Chancellor pointed out that we are enduring the slowest recovery in a century, and that average real wages will have dropped by 5.8 per cent by the end of the Parliament (except for fatcat business bosses).

He was having a hard time getting his points across, however, because Tory MPs were heckling him very loudly. Owen Jones tweeted, appositely, “Do the Tories think that a bunch of braying MPs dripping with privilege, while ordinary people’s living standards crash, is good TV?”

Maybe they did. Maybe they thought they had the public on their side.

Let’s have a look at a few comments from the public – courtesy of the Huffington Post:

“Planning to kill more people, George?” (Robin Stacey)

“Spend more you wet lipped monkey.” (Will Moriarty)

“No one has an ounce of faith in anything you say, you parasitic pool of curdled warthog’s puke.” (Anthony Nicholas)

And finally: “Hope you end the speech with your resignation x” (Joanne Wood – and yes, she did mean to end with a kiss).

What a shame Osborne did not follow her advice.

 

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