Jeremy Hunt: The Coalition’s Health Secretary won’t face up to his failures.
The Conservative Party must be getting very desperate indeed.
Faced with the failure of the plan to belittle Ed Miliband, the Tories are making a belated attempt to take some of Labour’s policy ground with a promise to provide £8 billion extra, every year, for the NHS.
The Conservatives have already told us they will be squeezing the economy by (at least) £30 billion over the next five years – if they remain in office. The National Health Service is ring-fenced from those cuts, we are told, but that hasn’t prevented real-terms funding from falling during most – if not all – of the Parliament that has just ended.
The Tories had no intention of adding funds to the NHS – or at least, they didn’t until today.
Despite claims that the health service in England alone needs another £8 billion in order to cope (the shortfall is £30 billion but NHS boss Simon Stevens reckons “efficiency savings” – cuts – will cover £22 billion of it), the Conservative Party had been hoping to keep it quiet and let the public service quietly starve while private, profit-making firms strip it of its most lucrative sources of funding; the services that attract the most money.
Like the plan to attack Miliband, this was a mistake; Labour has campaigned forthrightly on the needs of the NHS and the public has responded strongly.
So the Tories have wheeled out Jeremy ‘Misprint’ Hunt to announce a funding commitment that they don’t have the ability to honour.
It is exactly the kind of fiscal ineptitude of which they were accusing Labour, before the other party publicised its fully-funded plans for government.
Asked how the Conservatives would fund the pledge, Mr Hunt said the economy had been turned around and pointed to investment in the service during the last Parliament, when the government guaranteed an above-inflation increase in funding, according to the BBC.
He said: “If you want to be sceptical about the commitment, look at the track record.”
The rows relating to changes in spending are all minus figures – meaning spending was less than intended, not more.
Mr Hunt also lied: “We inherited an economy that was shrinking and we’ve turned it around.” In fact, the Coalition Government took over an economy that was expanding, thanks to the stimulus budgets of Labour’s Alistair Darling, and killed it stone dead with the unnecessary, ideologically-motivated policy of austerity.
It seems likely the only reason the economy started improving at all is simply that it reached the bottom of its cycle and there was nowhere to go but up; this would have been nothing to do with the Conservatives or the Coalition.
What we’re seeing is fantasy funding – building castles – or rather, hospitals – in the air.
Judging the Tories on their record, they certainly won’t be improving health here on the ground.
Cor – what a big… carrot: The painting of George Osborne symbolising his empty promises by Kaya Mar [Image: www.kayamarart.com].
He was not amused.
It seems this was not what George Osborne had in mind when he hosted a boozy awayday in the Cotswolds to boost Tory spirits ahead of the Rochester by-election and the general election.
The Guardianhas reported that he was “straight-faced” when former Tory minister Sir Alan Duncan whipped out a naked portrait of him, representing Osborne’s empty policies and failed promises, during a speech at a dinner in a four-star hotel near Chipping Norton.
Apparently this is Osborne’s ‘just desserts’ for offering unfunded tax cuts to the electorate in advance of the election next year.
It seems the event – ostensibly held to strategise against the threat of UKIP – subsequently deteriorated into the usual chaos of any event attended by the Bullingdon hooligans.
The painting is by Kaya Mar, whose images of politicians in the raw can be viewed on his website.
The artist’s website had this to say: “It was reported that a stone-faced George Osborne was furious about being humiliated by Duncan, who went on to make comparisons between Kaya’s typically fat-bottomed naked politicians in his satirical paintings and the Chancellor’s own increasing waistline – a consequence, perhaps, of all those lavish breakfasts, luncheons and dinners paid for by grateful, un-prosecuted bankers and lobbyists working for corporate privateers and plunderers since he wafted into 11 Downing Street all those hundreds of billions of borrowed pounds ago.
“There is, of course, a glaringly obvious subtext to that weekend’s bad-tempered exchanges and barbs; namely the bitter acrimony felt towards David Cameron and George Osborne by a significantly large cadre of back-bench MPs, who have always disliked Cameron’s slick PR style of policy-lite governance which many feel has done the party a great deal of reputational damage.
“The internal blood-letting and back-stabbing … signifies that fiercely partiisan rival camps for the inevitable forthcoming leadership challenge are finally emerging from the shadows, and have now spilled out into the public view.”
The site went on to suggest that the greatest threats to Cameron do not come from Osborne, but from the “polar opposites” represented by London Mayor Boris Johnson and former Education Secretary (recently demoted to Chief Whip) Michael Gove.
“Johnson is hugely popular for his well-honed theatrical ‘bumbling’, which he uses as an effective smokescreen to disguise his enormous ambition to be Prime Minister,” the site claims. “Michael Gove, with his patently ‘British Empire’ beliefs around education, crime and punishment, is well-liked by the reactionary wing of the party, for whom he represents the best chance of putting the UK’s cultural clock back 90 years.”
It may be too much to hope that this resentment will bubble up beyond symbolic gestures like this – at least, before the election – but it seems that the writing, or at least the painting, is on the wall for both George Osborne and David Cameron.
Ed Balls, take note. This is what happens when you stuff your keynote conference speech full of gibberish about continuing with austerity rather than striking out in the new direction and offering the hope that the British people so desperately need:
A poll by ICM for The Guardianhas revealed that the British people have more trust in David Cameron and George Osborne’s economic policy than in the alternative offered by Ed Miliband and Ed Balls.
Considering the results of Calamity George’s economic vandalism over the last four years (see the image above), this amounts to a national declaration of selfishness and stupidity that borders on the pathological.
The only reason for this sudden display of faith is the announcement that the Conservative Party is promising to cut taxes for 30 million people.
Nobody seems to be paying any attention to the small print. These are unfunded tax cuts. That means the Tories will have to cut public services even further than they are already planning, in order to implement them.
Furthermore, they are really only tax cuts for the very rich. The amount of relief on offer to those on middle incomes, and to the poor, is negligible in real terms and will be swallowed up by the additional costs created by the loss of public services that will have to take place in order to pay for it.
Stunningly, the ICM poll shows that the public has more faith in George Osborne than any other prominent politician. That isn’t saying much – his net approval score is exactly zero – but it’s still better than any of the others, who we rightly hold in contempt.
Perhaps it’s too much to hope that people might have realised that Osborne’s policies have dumped the UK into a quagmire. Let’s face it – his own nose looks more like a bottom but even he can’t smell what he’s been producing!*
*Vox Political apologises for the personal nature of this line. In our defence, it does seem appropriate to the situation.
How long has it been since Labour was deemed the party with no policies and no direction? Now it seems the Conservatives have taken up this undesirable label and applied it to themselves (excuse the choice of words) liberally.
Labour’s stand on energy prices sent the Tories scurrying away to find an answer, after they finally realised that baldly claiming nothing could be done was not going to cut any ice.
When they finally came up with something, their answer was to “Cut the green crap” and reduce the environmental levy on energy firms – a u-turn within a u-turn for the party that once proclaimed to the nation, “Vote Blue – Go Green”.
This week they have also u-turned on cigarette packaging – for a second time within a matter of months. Before the summer, the Conservative vision was to safeguard children from smoking by removing packaging for cigarette packets. Then – after coincidentally hiring fag-company lobbyist Lynton Crosby to run their campaigns for them – they decided that the packaging could stay. Now – in the face of a possibly Lords rebellion – they are reversing their position yet again.
This is the context in which Boy Chancellor George Osborne will make his Autumn Statement – and he has already put himself on a sticky wicket before going in to bat.
Remember David Cameron’s massive error of judgement at the Lord Mayor’s banquet a few weeks ago, when he stood behind a gold-plated lectern that could easily be sold off or melted down to help pay of the interest on his government’s ever-increasing borrowing burden, and said austerity was here to stay?
It seems Gideon was eager to follow in his master’s footsteps, stumping up £10.2 MILLION (including VAT at the 20 per cent level that he imposed on us all in 2010) on new furnishings for his Whitehall HQ, from exclusive designers Panik, Ferrious and Senator. One Treasury insider, according to the Daily Mirror, wondered “why we couldn’t have just bought new furniture from Ikea”.
Good question! It is also one that is especially pertinent after it was revealed that Osborne has been calling for last-minute spending cuts from the Home Office and the departments of Justice, Defence, Business and Work and Pensions (yet again), because he will not be able to fund the £2 billion of giveaways announced during the conference season without them.
These include scrapping a rise in petrol duty of almost 2p per litre, free school meals for pupils aged five-to-seven and rewarding marriage in the tax system.
It seems clear that these measures were all unfunded when they were announced, putting the lie to Conservative claims that they have any kind of plan – and ruining their claim that Osborne’s schoolboy-economist austerity idiocy has done anything to improve the UK economy.
Hutton went on to state that Osborne decided to “borrow from the Keynesian economic locker… never admitting the scale of the philosophic shift, and then claimed victory”. In other words, Osborne is the biggest hypocrite in Westminster (and that’s a huge achievement, considering the state of them all)!
Result: “The public is misinformed – told that austerity worked and, as importantly, the philosophy behind it works too… Thus the Conservative party can be protected from the awful truth that Thatcherism fails.”
Labour MP Michael Meacher is much more scathing (if such a thing is possible). In a Parliamentary debate, quoted in his blog, he told us: “We do have a recovery of sorts, but one that has been generated in exactly the wrong way. It has been generated by consumer borrowing and an incipient bubble, and it is not — I repeat, not — a real, sustainable recovery.”
In other words, the – as Hutton describes it – “eclectic and spatchcocked Keynesianism” employed by Osborne, while superficially useful in the short-term, will cause immense damage over a longer period because he doesn’t understand it and only used it in desperation.
Both Hutton and Meacher agree that a sustainable recovery can only come from what Meacher describes as “rising investment, increasing productivity, growing wages and healthy exports”, none of which are supported by Osborne’s current behaviour.
And yet, according to the Daily Telegraph, Osborne will fulfil another of this blog’s long-standing prophecies on Thursday by telling us all that “Britain can no longer afford the welfare state”.
From a member of the most profligate snout-in-trough overspenders ever to worm their way into public office and then inflict a harm-the-defenceless agenda on the nation, that will be the biggest lie of all.
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‘Slimy’ Tory mouthpiece? Kris Hopkins (left), the Coalition’s new housing minister, takes tea with David Cameron on a Northampton housing estate while talking a lot of nonsense about Help to Buy. [Picture: WPA Pool/Getty Images Europe]
One of Parliament’s “slimiest, nastiest MPs” has got stuck into his new job, putting out a press release on how the hideously ill-judged ‘Help to Buy’ housing scheme is “surging ahead”.
Kris Hopkins, the Conservative MP for Keighley whose only previous claims to fame were allegations that “gangs of Muslim men were going around raping white kids” (thanks to Johnny Voidfor that one) and a Twitter spat with the odious Philip Davies, said the equity loan scheme had driven up the rate of house building and captured the public imagination with more than 15,000 reservations for new-build homes in its first six months.
Earlier this year, Hopkins called for Conservatives to unite behind David Cameron – to which Nadine Dorries responded, “pass the sick bag”. Yesterday, he at least was united behind Cameron – as they toured a Northampton housing development.
According to the press release, he said government action to restore confidence to the housing market was working, with over a third of a million new homes built over the last 3 years, including 150,000 affordable homes.
Reality check: That is a lower number than any period on record prior to the current Coalition government. It is not an achievement. It is a disaster.
Under the equity loan scheme, buyers can get mortgages on new build homes with a five per cent deposit, with the rest provided by an equity loan from the government of up to 20 per cent on properties with a value of £600,000 or less.
Yesterday (October 8), Cameron and his Chancellor, George Osborne, launched the second part of Help to Buy – the mortgage guarantee – which will also be available on existing properties worth £600,000 or less. Lenders will be able to offer a 95 per cent loan-to-value mortgage, made possible by a government guarantee to the lender of up to 15 per cent of the value of the property.
Reality check: In English, this means the taxpayer is underwriting people’s mortgages. Osborne reckons he has put aside £12 billion for this part of the scheme but – as former Chancellor Alistair Darling recently noted – the source is unidentified. “Strange that when Labour makes promises, the Tories claim it will mean more borrowing, yet it’s fine for them to make unfunded promises,” Mr Darling wrote.
Back to the press release: “Housebuilding is growing at its fastest rate for 10 years,” it says.
Reality check: The Channel 4 article, quoted above, warns us to “take the proclamations we are getting from the government about high rates of growth in housebuilding with a hefty pinch of salt. Housebuilding completions are starting from modern record lows; the rates of growth are bound to be high.”
What does Kris Hopkins have to say about this? Not a lot, in fact. He blathers that the equity loan has “captured the imagination of the public and is boosting the supply of new homes across the country”.
Reality check: Back to Channel 4 – “The levels… show that something went wrong in 12/13. Turning the corner means going from abysmal to terrible.”
“Our policies on housing are working,” said Hopkins in the press release. “Housebuilding is growing at its fastest rate for 10 years, and the tough decisions we’ve taken to tackle the deficit have kept interest rates low and are now delivering real help to hardworking people.”
Reality check: We’ve already covered the speed at which house building is growing; he should not be pretending this is a huge success when the number of new houses being built has fallen to a record low. As for the policy on the deficit keeping interest rates low – Vox Political blew that out of the water months ago. For clarity: A government can always service its debt, if that debt is in its own currency. Our debt is in UK pounds and we can always service it. Our creditors know that, so they remain happy to continue financing it. Otherwise, with Osborne borrowing 75 per cent more than he said he would in 2010, and with the UK’s ‘AAA’ credit rating gone in a puff of agency doubt earlier this year, Osborne would have been up a certain creek without an economic lever (to mix a metaphor or two).
“I’m delighted we’ve launched the second part of Help to Buy, the mortgage guarantee, which will strengthen the package of measures that have already done so much to restore confidence in the housing market,” Hopkins concluded.
Final reality check: Michael Meacher is one of many who believe that ‘Help to Buy’ will do nothing more than create another housing price ‘bubble’, most likely leading to another debt crisis. “Even [George Osborne’s] Tory supporters believe [this] will throw oil on the fire of the already overheated surge in house prices,” he wrote.
George Osborne’s claim that his nonsense policies have magically turned the economy around, coupled with his equally-preposterous claim that the UK needs another seven years of austerity before he can balance the books – provides a fine example of the duality at the heart of Conservative economic policy.
He needs to convince you that his choices have made a difference and the nation’s fortunes are changing, but he also need to convince you that we’re in a terrible mess – or he won’t have an excuse to continue cutting more public services and selling them into the private sector so his rich friends can use them to fleece you.
The two claims are not only contradictory of each other – they are self-contradictory. The evidence shows that Osborne’s policies delayed the recovery, rather than encouraging it, and the ‘Starve The Beast’ plan he cribbed from George W Bush has long been recognised as harmful to any country’s economic health; by cutting services he is starving the economy of the liquidity that is its lifeblood.
(This is a point worth remembering: Whenever a TV news reporter says Osborne or the government want to make cuts in order to “save” money, they mean the government will be “taking money out of the economy” – which will consequently be worth less. As a result, some people will have to become poorer. Can you guess who?)
Before we congratulate Osborne in ways that are anything like as effusive as David Cameron’s endorsement earlier this week, let’s look at the facts: According to Martin Wolf in the Financial Times, in three and a half years, the UK’s economic performance has improved by just 2.2 per cent – against a prediction of 8.2 per cent by his pet Office of Budget (Ir)Responsibility. In the second quarter of 2013, Gross Domestic Product was 3.3 per cent below its pre-crisis peak and 18 per cent below its 1980-2007 trend, making this the slowest British recovery on record.
Osborne and the Conservatives point proudly to the strong increase in private-sector jobs but, as Mr Wolf states, “this is hardly something to boast about”. While employment – on paper – is at an all-time high, productivity has fallen back to the level it reached in 2005. What does this say about the quality of the jobs that are being filled? Are they high-quality, long-term, well-paid careers, or are they part-time, zero-hours, throwaway fillers? We all know the answer to that. Average wages have been cut by nine per cent, in real terms, since 2010 – and they are still falling.
Even by the standards of other crisis-hit, high-income economies, the UK’s performance has been dismal, says Mr Wolf, pointing to work by Spencer Dale and James Talbot of the Bank of England. This indicates that the Eurozone has performed just as badly – but the difference is that the Eurozone countries do not have control of every economic lever that is available to them; Britain does.
Osborne claims that high global inflation and the performance of the Eurozone have impacted on the UK; Mr Wolf’s assertion is that austerity is the reason for this disappointment – and Osborne was just as much a cheerleader for austerity in Europe as he has been for it in the UK. Furthermore, as the Labour Party pointed out in its report, “David Cameron’s out of touch, you’re out of pocket” (2013), inflation in other G7 countries has been lower than in the UK, indicating that high global prices have little to do with the problem.
“Yes, but,” says Osborne, “austerity has kept interest rates down.” Did it? Did it really? In that case, interest rates would have been kept low because of the promise (in 2010) that borrowing would be brought down by 2015. When the Coalition came to power, Osborne said he expected to borrow a total of £322 billion by 2015. In March this year, that figure had risen to £564 billion – an increase of 75 per cent! Meanwhile the deadline for the national debt to start falling has slipped from 2014-15 back to 2017-18 and the level at which the debt was expected to hit its peak has jumped from 70.3 per cent of GDP to 85.6 per cent. The deficit has been stuck at £120 billion a year for the last two financial years, despite the repeated claims that it has been cut by one-third. None of this has affected long-term interest rates and neither did the loss of the UK’s AAA credit rating in February this year.
As Professor Malcolm Sawyer notes in Fiscal Austerity: The ‘cure’ which makes the patient worse (Centre for Labour and Social Studies, May 2012), “It is well-known that a government can always service debt provided that it is denominated in its own currency. At the limit the UK government can ‘print the money’ in order to service the debt: this would not take form of literally ‘printing money’ but rather the Central Bank being a willing purchaser of government debt in exchange for money.” This is what is happening at the moment. Our debt is in UK pounds, and we can always service it. Our creditors know that, so they remain happy to continue financing it.
“With interest rates at the zero bound, austerity weakened the economy relative to what might otherwise have happened,” wrote Mr Wolf.
“Nobody thought recovery would never happen under austerity, merely that it would be damagingly delayed… This has been an unnecessarily protracted slump. It is good that recovery is here, though it is far too soon to tell its quality and durability. But this does not justify what remains a large unforced error.”
Looking to the future, Osborne has reacted to the new barrage of Labour policies, all of which have been carefully costed against savings in current budget areas, with a series of rushed measures that are entirely unfunded. Remember that, next time a Conservative accuses Labour of borrowing and spending!
The married couples’ allowance, worth less than £4 per week (and less than £2 if you’re on a low income) is unfunded. The promised fuel duty freeze is unfunded. These will cost more than £2 billion and no source has been identified.
And what about the £12 billion stage two of the housing ‘Help to Buy’ scheme, that Osborne rushed forward to this month?
He has pulled £14 billion out of nowhere, but still expects us to believe he will resume his stalled deficit cuts by £35 billion by 2015, £42 billion by 2017-18 and £43 billion by 2020, in order to create a budget surplus.
All the while, he is promising “improved living standards for this generation and the next”. For whom? These cuts must come from somewhere, and they mean removing a cumulative total of £120 billion from the economy each year by 2020. That has to come from somewhere.
Look at the amount by which bosses’ pay in FTSE100 companies has increased in the last three years – 32 per cent, while average worker pay has dropped by nine per cent.
Do you really think the “Have-yachts” will be paying for these cuts?
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