Osborne preened himself – yet again – at the IMF conference 2 days ago that the Western economies are now set for a prosperous future even as central banks steadily withdraw the lifeline that kept them afloat after the 2008 crash. The line is that normality is returning after the unfortunate blip 5-6 years ago that required more than $3 trillions of funds to be pumped into the US economy and £375bn of quantitative easing into the UK economy to prevent a catastrophic credit crunch. The idea that such enormous sources of demand can be gradually but increasingly withheld and that interest rates can be pushed up again to a ‘healthy’ 2-3% without any disturbance to markets is pure complacent folly. There are two grounds for serious pessimism. One is that the recovery internationally, not just in the UK, from the longest recession since the nineteenth century remains weak and fragile. The other is that the levels of debt in the system remain disturbingly vast and dangerous, and indeed the whole emphasis of policy has been to encourage this as the last desperate throw to snatch growth from the jaws of stagnation, but without any regard to inflating future risks. (more…)
One of the few good things that Blair did as party leader was to set up a prompt, robust and effective rebuttal machine to counter lying Tory propaganda. It worked. Within hours of false, misleading or selective Tory claims being aired, a strong Labour rebuttal was in place in the media. It is worrying that such a mechanism seems to have been dropped since the last few days and weeks have seen a veritable cascade of Tory folderol which not only demands instant repudiation but offers the opportunity for a stinging counter-blast, ending along the lines of “I’ll stop telling the truth about you if you stop telling lies about me”. But alas it hasn’t happened. The Tories are being allowed to get away with outrage after outrage.
The defenestration of Miller has taken place without scarcely a word from Labour, even when the Standards Committee made the unconscionable decision to reduce her payback by 90%, when you might expect Labour to be demanding her head from the start. Cameron has the gall to claim the NHS has been performing better than ever before when in fact he has nearly brought it to breakdown because of remorselessly rising pressures and mounting debts and when patients now have to wait up to 4 weeks to see their doctor and then far, far more than the 18 week limit achieved by Labour to see a hospital specialist for an operation. But the opportunity for a powerful rebuttal was missed. Osborne makes the risible claim that he’s aiming for full employment when he himself is responsible for holding the level of unemployment at the highest level for 30 years – a golden opportunity to throw back in his face that not only has he kept joblessness stuck at 2.4 million or more for 4 years, yet at the same time he has hardly reduced the deficit at all (it’s still stuck at £111bn). (more…)
It was the Blairite press officer Jo Moore who in 20o1 on the day of 9/11 coined the infamous phrase: “This is a good day to bury bad news”. Cameron seems to have learnt the lesson when yesterday he used the furore over Maria Miller’s avarice and arrogance to quietly give a welcome to a report from the surveillance commissioner giving the all-clear to Britain’s spy agencies following the Snowden revelations. In vintage Cameron style, just as he tried to smother the row swirling around Miller with cavalier bravado: “She’s apologised, done the right thing, and we should now move on”, so here he paraphrases the watchdog’s report as: “agencies undertake their role conscientiously and effectively, and public agencies do not engage in indiscriminate mass intrusion”. So that’s all right then, nothing to worry about. (more…)
According to the writing on Osborne’s tin, we now have the fastest rate of growth of any major Western country. But as with all tins, it’s as important to think about what it doesn’t say as what it does say, as well as to wonder whether what it does say is realistic and can be delivered. On both counts more than a pinch of salt is needed. What it doesn’t say is, first, that a forecast is not an actual happening. Consistently since 2010 the OBR and the Treasury have optimistically over-estimated annual UK growth levels, and though there clearly will be some modest growth this year it is extremely unlikely to reach anywhere near the latest IMF figure of 2.9% because all the essential foundations for sustainable growth – rising business investment, rising demand through rising wages, rising productivity, and rising exports net of imports – are all absent. Second, Osborne’s tin also omits the rather important point that the UK economy after 4 years of austerity is still way behind all the other major G7 economies. In particular US output following Obama’s stimulatory policies is now 5% above pre-crash levels while UK output depressed by Osbornian austerity is still 1.4% below its pre-2008 level. (more…)
Cameron’s obstinate defence of Maria Miller against the large majority of his own party and the public who want to be rid of her for her greed, arrogance and sheer callous disregard for decent standards in public life needs some explaining. Maybe he doesn’t want to be pushed, he wants to put in the knife himself in his own time in the reshuffle after the European elections. Maybe he doesn’t want to be pushed around by the media or his own party (again), and prefers to tough it out. But he’s shedding political goodwill by the gallon over this shoddy episode. Sooner or later he’ll call it a day. The rule for Prime Ministers is, if the media keep up a barrage for 5 days or more and if the political hostility in Westminster is still growing, he’ll staunch his losses and cut her loose.
But it’s not just this tawdry saga itself, it’s the way that judgement on it within Westminster has been manipulated. The Commons Committee on Standards has 10 MPs on it plus 3 lay members (none of whom have a vote), and the MPs split 5 Tory, 4 Labour and 1 LibDem. Why did they deal so excessively leniently with Miller, reducing by nine-tenths the payback required by their own independent standards commissioner? And why was the tone of their admonition of Miller so mild when that can be politically weighted and can carry great influence – their vigorous condemnation of Denis McShane MP for over-claiming £12,000 led to his resignation from the House (and possible imprisonment) while their exoneration of David Laws MP on a pretext for wrongly claiming £40,000 allowed him to stay in Parliament and now return to ministerial office. (more…)
If one wanted a clear example (out of many) where ideology trumps common-sense in Cameron’s Tory party, you couldn’t do better than their latest knee-jerk reaction against onshore wind turbines. They are a significant and fast-growing source of electricity in the UK and by far the cheapest source available to provide the low-carbon energy to meet Britain’s mandatory target of 15% of all energy consumption to come from renewables by 2015. Cameron appears to be floating the idea of including in the 2015 Tory manifesto either a cap on onshore turbines’ output or lower subsidies to make it harder or even impossible to operate them or tighter planning restrictions to prevent them being built. This crackers. To meet the legally binding target it would then be necessary to build more offshore windfarms or more nuclear power stations, both of which are far more expensive. Electricity from offshore turbines costs over 60% more than that produced by onshore turbines, whilst the new nuclear station at Hinckley Point C (if it is ever built at a cost of £14bn) is expected to produce electricity at twice the current price. Is Cameron mad or simply the cat’s-paw of his more wacky backbenchers? (more…)
It is shocking that Cameron, who has repeatedly said in the past that he is cleaning up on MPs’ expenses, now says he is giving “very warm support” to Maria Miller, the disgraced secretary of state for culture, media and sport. Miller, a haughty Tory lady of the grande dame variety, became an MP in 2005 and designated a house in Wimbledon as her second home (and thus eligible under parliamentary expenses) on the grounds that she spent most of her time in a rented house in her constituency (Basingstoke). She then made claims for 4 years on the Wimbledon home, but stopped claiming when the expenses scandal broke in 2009. The Commons committee on standards in their report just published found that she had over-claimed on her mortgage. The standards commissioner, Kathryn Hudson, recommended that Miller be made to pay back more than £44,000. The Commons committee on standards, for reasons not disclosed, did not support Hudson’s recommendation. Instead they merely criticised Miller for frustrating the investigation for over a year by declining to give direct answers to questions about her claims for taxpayers’ money. They ordered her to repay just £5,800. Then to cap it all, her ‘apology’ to the House of Commons yesterday which was minimalist (30 seconds), did not even mention the money she had been ordered to repay, and from her manner clearly lacked sincerity. (more…)
This is the edited text of a speech I made today in the House of Commons, in a debate I initiated on the many cases of sanctions being wrongfully applied to benefit recipients, calling on the Government to review the targeting, severity and impact of such sanctions.
The process of sanctioning benefit recipients is now being used on an enormous scale—almost 1 million sanctions a year. Even the right-wing Policy Exchange think-tank acknowledged in a report published last month that about 68,000 benefit claimants each year are having their welfare payments stopped unfairly. Given that the penalty for the first infringement is the loss of benefit for four weeks, for the second the loss of benefits for three months and for the third the loss of benefits for three years, the number of people being driven into destitution by administrative diktat is enormous. Even the Policy Exchange admits that 8% of that number should never have been sanctioned. (more…)
The fall in anticipated government revenues, just announced, must send alarm bells to anyone who still believes that the current economic uptick is going to go anywhere. The OBR had predicted that government revenues in the 2014-5 tax year would reach 38.8% of national income. They have been progressively revising down their forecasts to as low as 37% now, a level that could fall still further as this year proceeds. This is a significant setback since a downgrading of 1.8% represents a loss of £32bn in government receipts compared with what had been confidently predicted. The reasons for this fall lie with lower tax receipts from the financial sector, declining North Sea oil revenues, and falling real wages which lower income tax revenues. But what really gives meaning to this shortfall is that, despite the Treasury estimating that the government has imposed £23bn a year net tax increases (mainly VAT) since the 2010 election, the tax take in this coming fiscal year is expected to be no higher than it was in 2010-11. Even more significant, whilst in the recovery from the 1990s recession tax rises led to a surge in revenues, from 34.8% of national income in 1993-4 to 37% in 1997-8, the same has not happened this time round at all. (more…)
The scandal of wrongly sanctioning people and depriving them of all benefit for either 4 weeks, 13 weeks or (almost unbelievably) 156 weeks for trivial, ill-considered or utterly unjustified reasons is too little understood by the general public. I will quote a few examples from my own constituency experience or from Citizens Advice across the country:
* A man had his JSA sanctioned because he had not attended a 2-day training session with a back-to-work scheme provider. The man insisted he had attended on both days, and the training provider had confirmed that.
* A security guard at a Job Centre turned away a man with learning disabilities who had arrived 20 minutes early to sign on. He then returned 2 minutes late to sign on and had his JSA sanctioned for 4 weeks.
* A man was sanctioned for 4 weeks because he missed an appointment with his back-to-work scheme provider. He hadn’t known about the appointment because the letter had been sent to an address he left over a year before. JCP were aware of his current address.
* A woman claiming ESA had been diagnosed with cervical cancer and had given the back-to-work scheme provider a list of her hospital appointments. She was sanctioned for failing to attend an appointment on the middle day of a 3-day hospital stay. The woman had 2 daughters and her ESA was reduced to £28 a week. She asked for reconsideration, but had heard nothing 5 weeks later. (more…)
So now we know the latest steps being proposed to make the NHS into a full-blown private health service, just like it was before 1948. The various steps to achieve this supreme goal of the private marketeers have been prepared right from the start with great care. First, Blair encouraged and then pressured NHS hospitals to become foundation trust hospitals, with more independence and financial self-reliance, the first nudge towards becoming self-standing suppliers within a competitive market. Cameron took this further by announcing that all health services would be open to tender by any qualified provider. That began the massive process of privatising and outsourcing every chunk of the NHS that the marketeers, nearly always a very small cabal of the biggest healthcare multi-nationals, could get their hands on or rather teeth into. Meanwhile the Lansley plan for the wholesale privatisation of the NHS had been hatched in deepest secrecy between the Tory high command and the big private healthcare companies before the election, with not a word about it in the Tory 2010 manifesto because if it had been known it would have blown the Tories away. But all the time the mantra was repeated that the ‘NHS’ would remain free at the point of service. But now the truth has been let out of the bag that the Tories and their big corporate friends had in fact intended all along that it would become a fully paid-for service, only they didn’t dare say so before now. (more…)
As Labour’s lead in the polls narrows to 1-2%, we need to keep our nerve and get our priorities right. The previous Blairite electoral rule was to focus exclusively on middle class marginal seats with a narrow majority on the grounds that working class constituencies were bound to vote Labour if for no other reason than to keep the Tories out. That attitude is exactly wrong. Working class voters do have an option, in fact two of them: they can simply not vote, which is precisely what millions of them did in 2005 and 2010, but in addition this time they have another allurement – UKIP. The real problem for Labour is that for too many working class voters the party doesn’t feel like the Labour party which once represented them and fought for them and with which therefore they strongly identified. Ed Miliband has certainly come up with some resonant themes on energy, Living Wage, banks, etc., but there is a desperate need to join up the threads and pull them together within a strategic framework which makes it indelibly clear what a Labour Government will do – and above all why that will strongly benefit the working class, not just middle Britain which is often a misnomer for the upper middle class.
There are several strong reasons for pursuing this strategy. One is that working class influence in deciding elections is hugely under-estimated. They are the largest class in the country, representing nearly half the electorate, and the most cohesive since the middle class under market pressures has become more fragmented. Second, they have been under continuous attack and feel deeply let down by the Labour party in failing to defend them as they would have expected against Osborne’s austerity, soaring rents, the suppression of trade unions and workplace rights, job-cutting privatisations and outsourcings, and the squeezing of the wage share by out-of-control inequality and rampaging capital. Third, the depredations of this government, arguably even harsher than Thatcher, have produced an enormous groundswell of anger seething just below the surface, but what it lacks is the lead from Labour to transform it into a decisive political force.
Five strategic themes could turn around the slide in the polls. Labour will reverse austerity by public investment to kickstart the economy and reduce the dole queues by a million or more within 2 years. Labour will bring in rent controls to stop rapidly rising, unaffordable rents and by the end of a 5-year term will be building 250,000 houses a year, a third of them social housing. Labour will re-nationalise rail and at least some of the energy companies because of their crucial importance to national security. Labour will ensure workers get a proper say in the company for which they work through enterprise councils and through encouraging the spread of collective bargaining. And Labour will reverse privatisations in the central areas of human welfare, in particular in health, education, housing and pensions.
Redistributing property empires of Britain’s ultra-rich families would be as popular as energy price freezeMarch 29th, 2014
Oxfam has just reported that Britain’s richest 5 families are wealthier than 12.6 Britons who make up a fifth of the entire UK population. The latest survey from Forbes magazine shows that these 5 fortunes are heavily based on property rather than entrepreneurial innovation. The families listed are those of the Duke of Westminster (who owns 190 acres of prime real estate in Belgravia, London), the property magnates David and Simon Reuben, the Hinduja brothers, the Cadogan family whose wealth has always traditionally come from property, and (the one exception) the Sports Direct investor Mike Ashley. Their combined wealth works out at £28.2bn, an average per family of £5.6bn each. The collective wealth of the poorest 12 million Britons however comes to only £2,230 each. Thus the wealth of the richest 5 families is 2.5 million times greater than that of the bottom fifth. This is grotesque: so what should be done about it? (more…)
Innocent JSA recipients lose all benefit, guilty bankers bailed out by their new banks: what’s new in Tory Britain?March 28th, 2014
Next Thursday I have secured a debate on the floor of the House on the sanctioning of benefit recipients. The details about the sheer injustice of the practice, its inappropriate targeting and its devastating impacts, all of which are horrendous, I shall spell out in full, but I will also be making another comparison. Why is it that those JSA recipients who are 5 minutes late for a job interview get deprived of their benefit (£71 a week) and hence their livelihood for 4 weeks for the first infringement (as it is called) of the rules, 3 months for the second, or 3 years for the third, while bankers or traders who have corruptly stolen hundreds of millions of pounds from the public suffer no punishment at all – their bank pays up for them? There could not be a more extreme example of one law for the rich and another for the poor.
So why does this happen? It’s got nothing to do with morality or justice, just the power structure. The Tories get half their national income each year from the Tories, so the perpetrators who bring home the goods will never be personally punished, whilst those forced to rely on JSA (which they’ve earned by national income contributions through their working life) because the Tories are running a high 2.4m unemployment policy are demonised as ‘shirkers’ and severely punished even for the most trivial of reasons. (more…)
The Commons debate on the budget has just finished, but one essential component in the UK economic strategy wasn’t mentioned by anyone including, mea culpa, me. The UK economy is still smaller than it was in 2008. Investment per head of the population, net of depreciation, has dropped to zero. Our manufacturing capacity is so run down, now accounting for barely 10% of our national income, that we cannot pay our way in the world: we have had a foreign payments deficit every year since 1983. Unemployment is still 2.4 millions, but that disguises the fact that probably twice as many men and women would be able and willing to work if reasonably paid jobs were available. Both the country and the government are drifting further and further into debt. This way points only to steady national decline. The current upturn won’t escape this. It is too heavily based on enormous stoking of the money supply and hence of asset price inflation leading relentlessly to an unmanageable balance of payments gap, rising interest rates and growth grinding to a halt again.
None of this is necessary or inevitable, just as austerity is also not necessary or inevitable. The £ campaign, which has just been launched, believes the central problem with UK economic strategy over the last several decades is that the exchange rate (currently some $1.65 to the £) is pitched significantly too high to achieve a sustainable manufacturing recovery and sustainable growth in the medium term. It believes, on very good evidence, that if these objectives are to be achieved, the sterling exchange rate should be reduced to around $1.10-1.20 to the £. The carefully quantified results show a dramatic improvement in Britain’s economic performance. (more…)