Ditherer: Rishi Sunak doesn’t know how to safeguard businesses and the UK economy, or link its well-being with public health because the neoliberal dogma he learned does not accommodate phenomena like the Covid-19 pandemic.
Covid-19-related support packages for businesses are set to end soon, with no extension or replacement announced – signifying a £50 billion loss to the UK’s economy.
According to Tory plans the furlough scheme, rates holidays, tax deferrals, VAT cuts and other support packages will be closed at the end of the financial year.
But businesses are now expecting to be closed well into the spring and possibly beyond.
Tory Chancellor Rishi Sunak is not likely to announce his plans for the future of the economy until he makes his spring Budget statement on March 3 – too late for many firms, whose bosses will have to make decisions based on information currently available to them before that, if they are to be seen to be acting with responsibility to their shareholders, creditors and even employees.
Labour has demanded immediate action and, for once, Keir Starmer’s party is right.
Shadow business minister Lucy Powell also touched a raw nerve when she said Boris Johnson’s Tory government had failed to ensure that business support was integrated with public health measures.
As a result, the UK’s Covid-related recession had been the worst of any major economy.
And the longer Sunak dithers, the worst the situation will become.
Have YOU donated to my crowdfunding appeal, raising funds to fight false libel claims by TV celebrities who should know better? These court cases cost a lot of money so every penny will help ensure that wealth doesn’t beat justice.
Money, money, money: the UK government is coining it in VAT and other taxes since Brexit finally happened on January 1. And YOU are paying.
Tales of shoppers having to pay huge extra costs to have goods delivered from the EU post-Brexit are proliferating.
But that doesn’t mean we don’t have free trade!
It means our own – Tory – government is charging us extra in taxes.
It seems possible that this was the intention all along.
So in the BBC story (link below), one shopper was lumbered with a £12 extra cost for a £50 item.
UK VAT accounts for £10 of the extra £12 that Sascha was asked to pay. Sellers may also be charging higher delivery fees to cover any extra paperwork or border delays they may face.
On items costing less than £135, the charge is applied at the point of sale.
Another buyer was asked to pay £123 on top of £600 (and £25 delivery) for two designer handbags from Paris – when they arrived. This was still UK VAT, the BBC reckons, but because the items cost more than £135, the charge was applied when the items reached their destination.
A woman who received earrings as a gift, posted by a friend, was charged £28.85 by parcel handler DHL, even though they were sent before Christmas. Deliveries ran late so they arrived after January 1 – and came with the added taxes.
Gifts worth less than £39 don’t attract any extra charges… But gifts over that, like gold earrings, are eligible for VAT and (if it’s over £135) customs duties. And it’s always the recipient who receives the bill.
Import VAT applies for second-hand items as well as gifts, even if bought from a private individual.
Oh – and it works in reverse, too. A person in France, buying a £150 pair of boots from the UK, was asked to pay 88 Euros in import duty, breaking down to 43 Euros VAT, 30 Euros customs tax and a 15 Euro handling fee.
She was able to reject the delivery – but many others may not have the option as firms are
changing their terms and conditions so that customers have to cover the extra charges, even when goods are returned.
The BBC explained:
Shoppers on the continent buying from UK firms face the same rules as UK shoppers do in reverse so Jemima would have had to pay VAT and customs charges, because the boots or the materials they were made from, originated from outside the EU.
The revelations received this response on the social media:
BBC NEWS – BREXIT NOT GOOD
In a surprise development, it turns out that Brexit is not good and is actually bad, as predicted pretty much universally by people who know about such things. And now Darren with the weather. pic.twitter.com/2xkp9sCTmm
“Goods shortages, much higher prices, but at least we’ve got blue passports eh? How many still think #Brexit was a good idea? Voluntarily kicking ourselves when we’re already down,” tweeted Sheridan Webb.
Pete Franklin added: “That normal, apparently successful, people are being surprised by this gives us a clue why we are in this mess – they simply haven’t been paying attention. ”
Perhaps Steve Feasey put it best: “When Project Fear turns out to be Project Hasn’t-Everything-Got-Dear.”
And some have added this to the list of disasters caused by Brexit since the EU referendum in 2016:
OK, but apart from this, what has leaving the EU ever done to us, eh? Destroyed the fishing industry Reg? BBC News – Brexit pic.twitter.com/bMsh8iWvWl
Have YOU donated to my crowdfunding appeal, raising funds to fight false libel claims by TV celebrities who should know better? These court cases cost a lot of money so every penny will help ensure that wealth doesn’t beat justice.
Barrels of port – a product exported to the UK – in a cellar in the city of Vila Nova de Gaia in Portugal [Image: Alamy].
Let’s be honest – this never crossed the minds of Boris Johnson, Michael Gove, Nigel Farage or even Arron Banks.
But what is currently a “paper exercise” will become a huge cashflow problem from UK importers, the instant Brexit comes into force, if it is allowed to happen on March 29, 2019 as Theresa May demands.
As a result of leaving the EU-VAT area – which is what hard Brexiters really, really want, remember – importers will have to pay VAT up-front on machine parts or ready-for-sale goods brought in from the EU, putting them seriously out-of-pocket.
Possible measures to avoid the issue involve staying in the Customs Union or negotiating to stay in the EU-VAT area. Neither would be tolerated by Brexiters.
This Writer wonders how many of the businesspeople affected by the change voted for Brexit. How many of their employees did?
Did they know they would be putting their livelihoods in danger? That’s the logical result of this situation; businesses may not be able to fund the deficit created by the change, with disastrous results.
Ah, but Brexit was the patriotic thing to do, wasn’t it? We had to get away from being ruled by those terrible unelected Eurocrats.
But there never were any unelected Eurocrats forcing us into anything – that was a lie. And it isn’t patriotic to lead your country into a no-win situation.
More than 130,000 UK firms will be forced to pay VAT upfront for the first time on all goods imported from the European Union after Brexit, under controversial legislation to be considered by MPs on Monday.
The VAT changes spelled out in the taxation (cross-border trade) bill – one of a string of Brexit laws passing through parliament – are causing uproar among UK business groups, which say that they will create acute cashflow problems and huge additional bureaucracy.
Labour and Tory MPs and peers said that the only way to avoid the VAT Brexit penalty would be to stay in the customs union or negotiate to remain in the EU-VAT area.
The Labour MP and former minister Chris Leslie said that the VAT hit to firms was “yet another aspect of Brexit that the Leave campaign failed to inform the public about”. He added that he would be tabling urgent amendments to ensure the UK remained in the EU VAT area – a move that would enrage pro-Brexit MPs.
UK companies that import machine parts or goods ready for sale from the EU can currently register with HMRC to bring them into the UK free of VAT. They register the VAT charge and reclaim it later, all as a paper exercise. VAT is added to the price of the product whenever it is sold to the final customer.
Without a VAT deal with Brussels, importers will have to pay the VAT upfront in cash and then recover the money later, creating a huge outflow of funds before they can be recouped.
Anyone who thinks David Cameron’s promise of a five-year ‘tax lock’ is a good idea must need psychiatric help.
Cameron promised to introduce a law banning income tax, VAT or national insurance increases in the next parliament if the Conservative Party is elected back into office, clearly in the belief that anybody on average wages or less is too stupid to know what this means.
We know better, don’t we?
We know that taxes are set according to each income group’s ability to pay. This means that people in the lowest taxable bracket pay the lowest amount, as they need most of the money they earn in order to pay their way. The amount of tax then increases by increments up to the highest earners – who take home considerably more than they need to survive, and who can therefore afford to contribute a much larger amount with no impact on their quality of life.
We also know that a five-year ‘tax lock’ will not affect the lowest-earning people at all. Nobody earning up to £10,600 pays any tax at the moment, so a freeze on nothing is still nothing.
What will it do to the people in the highest tax bracket? Well, it depends what they earn and how fast their pay increases, doesn’t it? Let’s have a look at the handy guide to average UK pay rises, created by fellow blogger Tom Pride last November:
So the director of a FTSE 100 company, paid the average amount of a mere £2.4 million, would have contributed 45 per cent in tax, or £1.08 million in the 2014-15 tax year. Over a five-year period, if that person’s income continued to rise at 14 per cent, then by 2020 – at a 45 per cent tax rate – they would pay a total of £8,138,360 in tax over the years until 2020. That’s certainly a respectable figure.
But Labour has proposed an increase in the top rate of tax, back to 50 per cent. Under the same conditions, this would mean FTSE 100 directors earning £2.4 million in the tax year 2014-15 would pay £9,042,623.
That’s a difference of £904,263; nearly a million pounds each.
This writer doesn’t have current figures for banker salaries and cannot, therefore, work out how much tax they would pay – but you can see for yourself that the difference between the two scenarios is likely to come to several million pounds per top banker.
Those people don’t need that amount of money in order to survive. The cost of living in the UK is less than 1/50 of what the FTSE directors take home, let alone the bankers. But David Cameron wants them to keep that money.
Meanwhile the UK Treasury goes without millions of pounds that could be used to help balance the national deficit, pay off the national debt, and boost the economy.
We’re back to ‘Starve the Beast’ economics again. The nation’s finances can go to Hell, as far as Cameron is concerned. He wants to starve the Treasury with tax cuts for the rich – either actual cuts or de facto cuts like his ‘tax lock’ – and then claim that public services cost too much and will have to be scrapped or sold off to rich corporations in return for donations to the Conservative Party – as we have seen in the years of the Coalition Government (most obviously in the case of the NHS).
Unless you are a banker, an FTSE100 director, or a member of Parliament, you would be mad to support such a wasteful and selfish plan.
Don’t let the appearance of serious concern fool you – Roger Williams has done more harm than good in the last five years. Can you say that your MP hasn’t?
You can tell there’s an election on the way when the dreaded Liberal Democrat Block Graph appears in your letterbox.
“Only Roger Williams MP and the Lib Dems can stop the Tories here in Brecon & Radnorshire!” today’s leaflet screamed, while the graph pointed to a 10 per cent turnout for Labour (highlighted in orange – isn’t that the Lib Dems’ colour?) from 2010 to illustrate its point.
But 2010 was a long time ago. Since then, Roger has betrayed us all in Parliamentary votes many times.
Are you upset about the funding cuts to local government services? Roger voted for those cuts.
Struggling to pay your council tax? Roger voted strongly to make councils responsible for helping people pay – and for reducing the amount spent on that support.
Are you unemployed, sick or disabled? Roger voted strongly for cuts to welfare benefits, and for the uprating cap that means benefits don’t rise in line with prices.
He voted against investing public money in guaranteed jobs for young people who have spent a long time out of work.
He voted to increase VAT, but not to increase taxes for the immensely rich – and he fully supported cutting the rate of corporation tax, so rich firms became even richer.
Remember the bankers who caused the financial crisis? Roger voted against clawing back money from them. He refused to support the bankers’ bonus tax.
Remember the botched privatisation of the Royal Mail? Roger fully supported it.
He voted very strongly in favour of ending financial support for people aged 16-19 in training and further education.
He voted very strongly in favour of restricting access to justice so that only the rich can get a fair hearing in court, by restricting the scope of Legal Aid – and he voted for the creation of so-called ‘secret courts’.
He is in favour of the waste of money known as Police and Crime Commissioners, against restricting rises in rail fares, very strongly for selling off England’s state-owned forests and against green energy.
Oh – and he voted for the Bedroom Tax too.
He also voted very strongly in favour of the Tories’ creeping privatisation of the National Health Service.
His leaflet states: “The Tories want to cut pay for Llandrindod Wells’ nurses and teachers. Who can stop them?”
Not Roger Williams, obviously. His record shows he has been cheering them on.
This writer actually helped vote Roger Williams into his Parliamentary seat, back in 2001. Admittedly it was a tactical choice, to make sure that the constituency did not go to a Conservative candidate.
Now I know that, given the chance, Roger won’t act in the best interest of the people, but in those of whoever gives him his orders that day.
Remember when the Transparency of Lobbying, Third-Party Campaigning and Trade Union Administration Act (otherwise known as the Gagging Act) was passed, in January this year? Vox Political warned that it marked the end of free speech and free protest in the UK.
The article showed that the new law means you may no longer link up with others to protest government actions in any meaningful way – as such action may breach Liberal Democrat and Tory government-imposed spending limits. Your personal complaints will be deemed unrepresentative of the people.
In that article, this blog asked why the government has launched its attack on free speech and free protest, and suggested the following: Perhaps it wants to control the information you receive, on which you base your voting intentions?
This week we received confirmation of that theory – or at least, some of us did.
The ‘tax statements’ being sent out to Income Taxpayers by the Treasury – on the orders of George Osborne – are nothing less than party political electioneering, being carried out using those taxpayers’ own money rather than the Tory Party’s funds. The leaflet is worded in a very carefully-chosen way that betrays a clear intention to mislead readers – most particularly about the amount of our Income Tax that is spent on ‘welfare’.
To illustrate the extent of the problem: We cannot say this is the same as social security, as – according to the terms of the leaflet – it isn’t. Apparently a quarter of our money is spent on ‘welfare’, which is then broken down into bizarre categories like ‘social protection’ – including, alongside social security, personal care services which nobody has defined as ‘welfare’ until know, and the pensions of retired mandarins, colonels and lowlier public servants who will be appalled to hear their hard-earned retirement provision re-labelled as ‘welfare’, according to The Guardian‘s editorial on the subject. David Cameron’s pension would be defined as ‘welfare’, according to this categorisation.
Meanwhile, state pensions have been defined as being paid from an entirely different source (they aren’t), in order to safeguard the Grey vote from the indignation that – clearly – this piece of politically-prompted propaganda is intended to stoke.
The fact is that – as the Mirror points out – Income Taxpayers put a lot more than 12p in every pound towards pensions, and a lot less than 24p in every pound towards working-age benefits.
Here are another couple of tricks – possibly the nastiest of the lot: Firstly, the leaflet does not make it clear that ‘welfare’ payments are made to people who have a right to them “because of family or medical circumstance, or indeed a record of national insurance contributions”. The impression foisted on the reader is of “unearned handouts to the poor”, according to the Guardian editorial.
Secondly, the leaflet as a whole does not mention the contribution of VAT payments to the national purse. This is because the government has cut Income Tax (irrationally – it has a huge deficit and debt to pay off but has reduced its own income). The thinking behind this is that people will think they have been allowed to keep more of the money they have earned. But the same government has increased VAT, meaning that – in fact – people are being taxed more heavily!
What is the intended result of all this deception? It is as Vox Political described, back in January:
“You would be led to believe that the governments policies are working, exactly the way the government says they are working.
“You would not have any reason to believe that the government is lying to you on a daily basis.
“You would be tranquillised.
What a relief that nobody believes that filthy liar Osborne – even his own backbenchers!
This is how they see him – offering empty promises as a ‘carrot’ to encourage voters to support the Tories.
Osborne’s behaviour is so appalling that this blog has started a petition, calling on the government to withdraw these propaganda sheets that pretend to be official government information – and apologise for ever releasing them in the first place.
As Ben Chu’s chart shows, most of the rise in tax revenue since the recession is due to VAT.
Record numbers of people in employment, it seems, hasn’t led to record levels of income tax.
When you break out the figures for income tax, as Michael O’Connor did earlier this week, there is a marked difference between receipts from those on PAYE and those on self-assessment.
Falling self-assessment receipts are, for the most part, a symptom of falling self-employment incomes. Around three-quarters of the employment growth since the recession has come from self employment yet between them, the self-employed are still delivering a lot less tax. We won’t see the final 2013 HMRC figures for self-employment incomes until January but these charts suggest that the spectacular fall in self-employment earnings between 2008 and 2012 hasn’t improved by much. Probably the closest estimate we have for self-employed pay since 2012 is by Laura Gardiner at the Resolution Foundation. The low tax receipts indicate that self-employed earnings may have continued to fall or are, at best, stagnating.
Things might be about to get worse for some of the self-employed. As Ben Dellot explains, the new Universal Credit system could leave many of them worse off. According to the RSA’s calculations, 37 percent of the self-employed earn less than the minimum income floor, which is set at around the full-time minimum wage. (That sounds about right. A study by the IFS found that 40 percent of the self-employed earn less than the minimum wage.) Not all the self-employed currently claim tax credits but those who do, and who fall below the income floor under the new system, will find their benefits cut. The self-employed now account for almost a fifth of tax credit claimants so this is likely to affect a lot of people.
Not the whole story: But it seems unemployed people claiming they are self-employed may still be part of it. [Image: Ros Asquith in The Guardian]
It seems a surge in the number of people who say they are self-employed is not (solely) due to a DWP wheeze that gets people off the unemployment statistics after all.
Instead, Flip Chart Fairy Taleswarns that a lot of people are staying in self-employment rather than becoming employees again or retiring.
This suggests that either they have not been able to reach their target in terms of pensions, or there are no jobs available for people of their particular expertise or experience. The latter seems likely to Yr Obdt Srvt, who is currently trying to make Vox Political a workable concern in order to make a buck or two.
FCFT warns that “this is old-timers seeing their business shrink, rather than newbies trying to find their feet, under-charging and messing things up”.
The figures also show an increase in the number of self-employed tax credit claimants, lending credence to Vox Political‘s long-held belief that Job Centre Plus advisors have been telling jobseekers to pretend they are self-employed in order to get them off the books – let’s not write off that idea too quickly.
And a steady rise in non-VAT-paying businesses not only tells us “a lot of low-profit and low-turnover businesses are hanging on in there, or a lot more of them have become low-profit and low-turnover businesses since 2008”, it tells us that George Osborne will have a nasty surprise in January, when their tax returns come in.
If they are not paying VAT, they are not clearing the earnings threshold that would make such payments necessary. This mitigates against their earnings having increased significantly since the disasters of 2008-2012, when self-employed earnings fell by £8 billion.
So it seems our dancing Chancellor (see yesterday’s post) will find that either the music stops or the tune will change significantly…
Less ‘Gold’ by Spandau Ballet; more ‘I Don’t Need This Pressure On’.
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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Leading us down the garden path: Cameron wants us to believe the economy is growing but, like a bad gardener, he hasn’t fertilised it, and has allowed it to be overrun with weeds. [Image: Andy Davey www.andydavey.com]
“The week before the autumn statement, and the right honourable gentleman [Ed Miliband] cannot ask about the economy because it is growing. He cannot ask about the deficit because it is falling. He cannot ask about the numbers in work because they are rising. People can see that we have a long-term plan to turn our country around.”
What a shame he chose to give Parliament bluster instead of facts.
Does he think that the economy is growing because of the housing price bubble engineered by his deranged Chancellor via his ‘Help to Buy’ scheme? It is massively increasing the cost of housing in London but will inevitably lead to a crash and the loss of serious amounts of money for both buyers and the government (as mortgage underwriter). The Bank of England has revealed that it has no power of veto and can only advise on whether the scheme should continue – it is for the Conservative-led government to decide how long it will last.
Gideon’s ‘Help to Buy’ offers unsupported mortgage guarantees to buyers and lenders. He has not said where he will find the money for it. Critics have warned that this is simply creating another housing-fuelled debt bubble that will burst in a couple of years’ time, leaving even more people in debt than after the financial crisis hit us all.
Michael Meacher has read the £130 billion scheme right – as we can see from his blog: “Where does that sort of money come from when the public accounts are under extreme pressure to make enormous cuts? State-subsidised mortgages for the well-off (houses valued at up to £600,000) seems, even for Osborne, a strange decision when some of the poorest tenants in the country are at the same time being expelled from their homes by the bedroom tax.
“It can only be explained by Osborne panicking at the time of the March budget this year that the economy showed no sign of recovery in time for the 2015 election, made worse by his mistaken increase in VAT and big cuts in capital spending. He chose a big artificial stimulus of the mortgage market to kick-start the moribund economy, repeating the mistake of every previous boom triggered by consumer borrowing and a pumped-up housing market, an inevitable forerunner eventually of yet another round of boom and bust.”
Does Cameron really think the deficit is falling fast enough to revitalise the nation’s economy? In October, borrowing (excluding the cost of interventions like bank bailouts, so we’re already in the realm of made-up figures) fell by two one-hundred-and-thirds, from £8.24 billion in the same month last year to £8.08 billion.
We are told the aim is to keep borrowing for 2013-14 at £120 billion or below. In his ‘Emergency Budget’ of 2010, Osborne predicted that borrowing this year would be down to half that – at £60 billion, and estimates have been rising ever since.
The 2011 budget had the 2013-14 deficit at £70 billion; in 2012 it was expected to be £98 billion; and now £120 billion – double Osborne’s prediction when he became Chancellor.
As for the numbers of people in work, let’s ask Cameron: If more people are working, why has productivity fallen back to the level it reached in 2005? Is it because employers are taking on workers in part-time, zero-hours or self-employed contracts, rather than full-time, in order to take advantage of the opportunity to get out of their holiday pay, sick pay and National Insurance obligations? This seems most likely.
Average wages have been cut by nine per cent since 2010, in real terms, and are still falling. Should Cameron really be boasting about this?
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