As Osborne has yet again pronounced, the Tory mantra repeated like a broken record is that spending cuts will continue throughout the next Parliament until the structural budget deficit is eliminated by 2019. Labour, to its shame, follows exactly the same line. Yet the ONS Quarterly National Accounts published by the government demonstrate that this objective is fantasy and on current policies will never happen. The reason for this is that the government deficit is only one component of the borrowing and lending by the 4 major sectors which takes place every year in the economy. The other 3 are all the businesses operating in the UK, all the households or consumers, and the UK’s trade transactions with foreigners. All the borrowing and lending done by all these 4 sectors has to sum to zero, because all borrowing has to be matched in accounting terms by exactly equivalent lending. The ONS National Accounts figures show all too clearly the key problems in cutting the deficit and why on current policies they’re insuperable. (more…)
Despite the recent howls from the City of London about the new criminal offence of reckless misconduct by senior bank executives, little or nothing has been done to curb the very real and big risks associated with derivatives which were at the heart of the financial crash 6 years ago. It is little understood that whilst banks have little interest in buying or selling commodities, they nevertheless spend vast sums speculating on the change in their prices. This not only drives up the price so that ordinary people have to pay more for electricity, gas, water, copper, wheat or whatever commodity they’re buying, but it also generates huge profits and losses. This institutionalised gambling by the banks was famously described by the investment sage Warren Buffett as ‘financial weapons of mass destruction’. This is because the economic exposure of banks to derivatives, that is the hard cash needed to settle the outcome of the bets, is always highly uncertain until the contracts mature which could be 10-15 years into the future. (more…)
Last Tuesday the share price of Chesapeake Energy, one of the leading US shale oil producers, fell 29% in a single day. With internationally traded Brent Crude now trading at below $88 a barrel, a 4-year low and down from $100 only a few weeks ago, and the US benachmark West Texas Intermediate at below $85, down from over $107 in June, the fabled miracle of US shale is facing a near-death experience. The oil consultancies estimate that US shale production will break even at $75 a barrel, so there is still some leeway for survival. But the impact of tensions over Ukraine and the gathering conflagration in the Middle East, plus above all the global market fears of secular stagnation kiboshing the world recovery from lengthy recession, are putting the market for unconventional energy production under strain as never before. (more…)
The gravy train rolls on reaching ever more sickening heights of greed, selfish gratification and disregard for the ever deeper miasma of poverty that disfigures our country. The latest figures show that the richest 10% of the UK population, who already owned 52% of UK wealth just before the 2008 crash, have become significantly richer since the crash because of the rise in value of financial assets, during a time when averages income have fallen 8% in real terms. Britain now has 2 million dollar millionaires, if the value of equity in houses is included, up by almost a third since last year. There are also now 44 billionaires in Britain, up from 8 in 2000. The individual excesses continue apace, only getting ever more outrageous. BG Group has just appointed a new chief executive, Helge Lund, previous boss of Norway’s Statoil company, with a £15m ‘golden hello’ and potential earnings of an additional £14m a year. At the other end of the scale are 70 former NHS care workers for the disabled in Doncaster who have taken so far 85 days’ strike action resisting the further crushing of wages and terms and conditions for the lowest paid. Their jobs were outsourced, holidays cut, and take-home pay cut by a third. Care UK which won the contract and ousted them is owned by private equity firm Bridgepoint Capital and its chairman John Nash was recently made a peer after donating a quarter of a million pounds to the Tory party. (more…)
MIPIM is the name of the sales fair to flog off Britain. This is the latest extravaganza of market fundamentalism which is now sweeping Britain. It is being pitched at this moment is a huge hall in London which brings together property developers, billionaire investors from all over the world and, incongruously, local council officials from over Britain. Their common interest, though from very different concerns, is public housing. The property developers want to make a mint from knocking it down and putting up luxury flats in its place. The investors are motivated by a juicy return on capital if they invest in a must-win bonanza. And the local councils – and here’s the rub – are there because they are broke and have no other means of raising serious money. The only people who aren’t there are the tenants of the public housing which is about to be demolished before their eyes. Their homes, which many have lived in for 30-40 years, are about to be turned into someone else’s speculative asset without their even being consulted, let alone given a chance to impose a veto on a process which literally destroys their livelihood. (more…)
Osborne’s own policies are shrinking tax revenues, yet he demands even bigger spending cuts to compensateOctober 15th, 2014
There are now unmistakeable signs that Osborne’s so-called economic recovery is fading, despite all the right-wing think tanks and pro-Tory media to talk it up. A survey of 7,000 businesses by the British Chambers of Commerce has just found that manufacturers have suffered a sharp slowdown in export orders, and even more significantly domestic sales and orders – the part of manufacturing that has been faring better due to household expenditure based on rising debt – are now also reported to be slowing. The third quarter growth figures also show the UK economy losing steam, down from ).9% in the second quarter to 0.7%. The TUC has just reported that not since 1865-7 has there been a comparable squeeze on earnings for British workers, with an 8% fall in real earnings between 2007-14, and the fall is still continuing with the latest figures this year showing annual wage growth of 0.7% against inflation at 1.5%, i.e. a further real wage fall of 0.8%. There is then a serious knock-on adverse effect in a reduced tax take for the government which is actually this year increasing the deficit (from the current £100bn to around £105bn) when Osborne’s whole object is ostensibly above all else to cut the deficit. His austerity programme is now beginning to eat itself. (more…)
Next week the government is intending to push through legislation which will remove the cover which self-employed people have always received over the last 40 years since the passing of the Health & Safety at Work Act. Section 3 of this Act currently places a duty on all employers and self-employed people to ensure, as far as reasonably practicable, the health and safety of others. The government is now proposing to change this to: “It shall be the duty of every self-employed person who conducts an undertaking of a prescribed description to conduct the undertaking in such a way as to ensure, so far as is reasonably practicable, that he and other persons who may be affected thereby are not thereby exposed to risks to their health and safety”. This means that any self-employed person who is not on a prescribed list (not yet specified) will have no duties under the Act and will not be able to be convicted of any criminal act, or be issued with enforcement proceedings regardless of any risk that they pose to themselves or others. This is one of the most dangerous pieces of deregulation on health and safety ever proposed. (more…)
The only way to stop the US-EU trade deal (euphemistically called the Transatlantic Trade and Investment Partnership, TTIP) from interfering with the freedom of an incoming Labour government to reverse NHS privatisation is by demanding that the UK government vetoes TTIP unless health services are clearly and fully exempted. At present they are not, and the government minister Lord Livingston has confirmed that the NHS will be covered by TTIP. As a result a US investor such as Blackrock or Invesco) profiting from NHS privatisation could use TTIP to sue the UK government if it could prove to a panel of 3 trade lawyers sitting in secret, one of which would be chosen by the investor, that its rights under TTIP had been breached. That could occur if, in the words of the EU’s Chief Negotiator, there was a claim”for example by expropriation without compensation, a denial of justice or manifestly arbitrary treatment”. In such cases the tribunal would be able to award unlimited compensation and there is no right of appeal. (more…)
It is significant that tomorrow’s vote in the Commons for Britain to recognise the Palestinian state alongside the Israeli state comes not at the behest of the government, but on the initiative of an MP (the redoubtable and resourceful Labour MP, Grahame Morris) under the relatively new procedure that allows Back-Benchers to choose the issue for debate on the floor of the House. The government would never have allowed this to be debated and voted on if they could have prevented it, and if this resolution supporting Palestinian statehood receives a majority, which seems likely, it will insist that the vote is purely advisory and simply ignore it. It is yet another abuse of the House of Commons that the government has quietly and unobtrusively adopted the principle, without consultation or consent, that the only votes it will accept are those put forward by government itself as part of its own business programme. This not only means that debates and votes on international matters not initiated by the government are ignored, but also domestic petitions that gain enough signatures to earn debate on the floor of the House. (more…)
The by-election result in Heywood & Middleton in the Manchester conurbation is deeply worrying for Labour. It is true that people take liberties in by-elections that they would be unlikely to take in general elections, but it is designed to show their real underlying feelings which it would be unwise to discount or explain away. It is also true that Labour’s proportionate share of the vote rose by 1%, but that was largely because the Tory vote fell dramatically and the LibDem vote plummeted, and it doesn’t explain why the UKIP vote rose by 35%. The real reason for this disturbing result is the disillusionment felt by so many working class people in Labour’s northern strongholds that they have been neglected and that their interests have not been properly represented by the Westminster establishment (shades of the No vote in the Scottish referendum). This was expressed poignantly on the doorstep as ‘the Tories are going to continue with cuts till 2020, and you’ve said you will do the same, so why should we vote for you?’
As we enter the eighth year of continuing austerity this is the first vote in a northern constituency that expresses the resistance bubbling up against a regime of endless cutbacks – average wages already fallen 9% in real terms and still falling, low-paid insecure jobs (even if you can get one) whether self-employment on pittance incomes or zer hours contracts, with benefit cuts forcing people to leave home or use food-banks, and with no sign of any change for the foreseeable future. What people are crying out for, and want desperately to hear from Labour, is the alternative to austerity that would give them hope and inspire them to come out to vote. That is a policy of public investment to kick-start the economy on a sustainable course (when the present so-called recovery is already fading before 90% of the population have even felt it), a policy of job creation in house-building, infrastructure and green economy, a policy of rising incomes which will increase government tax revenues which will pay down the deficit much faster (when it’s still £100bn and actually rising this year).
Of course immigrants are blamed for all this disillusionment by Farage, the con-man ex-investment banker posing as a man of the people behind two pints in a pub). But immigrants are not the root of the problem – austerity is. All the studies undertaken of the immigrant contribution to the British economy shows that they provide a net benefit, there are a higher proportion of them in work than in the white host community, and a smaller proportion of them are on benefits than in the white community. There are undoubtedly problems of providing public services, particularly housing and education, in some areas, but that of course is exacerbated by Tory government cuts of 40% to local authority budgets.
The President of the World Bank, Jim Kim, got it right when he said last night of the international community: “It’s late, really late……We were tested by Ebola and we failed. We failed miserably in our response……..Every developed country should be prepared to send trained medical staff to West Africa………We don’t need to stop all travel from these countries. It’s going to be impossible to stop people. The way to stop the flow the patients from these countries getting to the rest of the world is to have programmes that will treat people (in their home countries) and increase survival dramatically. It’s possible”. But it isn’t nearly happening. The WHO reports already 3,900 deaths in West Africa from Ebola, though with no sign that the epidemic was being brought under control. (more…)
Corporate welfare has been estimated in a University of York social policy study to cost British taxpayers nearly £85bn a year. That is not far short of the current level of the entire budget deficit which is still £100bn. If industrial-scale corporate tax avoidance were added in to the corporate welfare state, the cost to Britain would comfortably exceed the whole deficit. So instead of focusing on £25bn (unspecified) further benefit cutbacks and a further huge squeeze on departmental public services bringing their cumulative cutbacks since 2010 to a staggering 40% or more, Osborne might be well advised to look at where money is truly wasted. Instead of the government scrapping a £347m Crisis Fund which is the last remaining port of call for families on the edge of homelessness or starvation, he might well have cause to wonder whether doubling the public subsidy to £5bn a year for the owners of Britain’s privatised railways can conceivably be justified or whether he should now be ladling out government grants to Jeff Bezos, the billionaire boss of Amazon, which actually exceed the corporation tax he paid last year to Britain.
It speaks volumes that the totals of taxpayers’ subsidies lavished on corporate welfare are not systematically kept anywhere in government and certainly not published even fragmentarily except under duress. Tony Benn insisted that the grants and subsidies paid to the top 100 companies under a range of Acts of Parliament should be published, which Whitehall did everything in its power to block, though eventually he overruled them. However since that unique breakthrough, the figures have been very difficult to come by, and they have to be painstakingly assembled from a large set of different sources. This is a scandal. The public who provide the money are entitled to know how their money is spent.
Even what we do know shows how utterly prejudiced and lop-sided is the political discussion over the budget deficit. It ignores the grants and subsidies paid directly to businesses, amounting to £14bn a year, almost three times the £5bn a year spent on income-based jobseeker’s allowance. Then there are the insurance schemes run by government to protect exporters, the market job for British companies done by the Business Department, the cheap credit made available to banks and other businesses, and the gravy train rolls on. Even that leaves aside the £25bn a year paid in tax credits, housing and council tax benefits to people in work because bad employers refuse to pay them a living wage. Or the colossal public subsidies shelled out to the too-big-to-fail banks to protect the economy from their folly and recklessness. So when is Channel 4 going to put on Corporate Benefits Street and invite on Osborne to defend it?
The security services are getting desperate. Over the last 4 years they, and their political figurehead May, have tried time and time again to push mass surveillance through Parliament. Whenever a security scare arises or a trial of alleged terrorists or belated arrests over a drugs scandal, the cry is always foisted on the public that what we need is a comprehensive snoopers’ charter which will record all the communications of all the citizens in the UK. No mention of the fact that they have already been doing this for over a decade through GCHQ’s Tempora and Bullrun programmes as Snowden revealed, and what they desperately want now is to legitimize their illegal activities. No mention that they already infiltrating our smartphones via the Dreamy Smurf programme which can turn them on even when we’ve switched them off. No mention that Nosey Smurf can turn on the microphone in a mobile remotely to listen in to our conversations, nor of Tracker Smurf which can track our location in real time. (more…)
It has been said that Grayling’s inveighing against the European Court of Human Rights is to spike UKIP’s guns in denouncing the EU. It is much more likely to be spurred on by another Tory personality trait – the unyielding demand for control to mould everything in their own image. They concede greater devolution to Scotland, but only at the expense of neutering Scottish MPs at Westminster to secure their own semi-permanent dominance in England. They are prepared (or at least some of them) to tolerate the EU exclusively as a trading bloc, but only on condition of junking the social, environmental and labour standards that go with it. They’ll put up grudgingly with trade unions, but only so long as they have little or no power to be effective. They want charities and voluntary groups to blossom in the Big Society, but then use the Lobbying Act to try to choke them off from having any political influence. They pretend to be champions of liberty, but then keep trying to push through the intelligence-gathering Snoopers Act to hoover up all the communications of every single citizen. And now they want to exit the ECHR and become the only European state except Belarus to dump this fundamental statement of human rights, so that they can re-write their own version to suit their own prejudices, for example to dispense with any rights for trade unionists. (more…)
Osborne’s latest diatribe at an Institute of Directors meeting against the ‘anti-business views’ of charities, pressure groups and trade unions (he would no doubt include the churches too, but daren’t risk publicly attacking them) is yet another sign of this Tory government’s determination to suppress criticism and squeeze out dissent to ensure the paramountcy of the market beyond all other considerations. He appealed to company bosses to ‘put their head above the parapet’ to argue for ‘a country that is for business, for enterprise, for the free market’ – not for fairness, equal opportunity, public services, accountability of power, or social justice. Osborne’s sole objective is to consolidate a fundamentalist market system, dominated of course by the extremely narrow elitist group he was addressing, with all other interests marginalized. It’s the same Tory allergy to criticism that has provoked Grayling’s demand to limit political and civil rights by abandoning the ECHR, Cameron’s demand to restrict strikes to a 50% voting threshold of all those eligible to vote (a requirement that would disqualify all MPs if applied to parliamentary elections), May’s demand to override privacy by snooping on the communications of all citizens, the disgraced Newmark’s insulting demand that charities ‘stick to their knitting’, among many other examples. (more…)