Osborne sticking to austerity: will the last person out turn off the light?
May 8th, 2012News that Merkel may well be about to exercise one of her skidding U-turns on growth doesn’t seem to have filtered through our George. Even if he’s the last one in Europe after everyone else, including dominatrix Merkel herself, has accepted that austerity isn’t working and slumps require spending on jobs and growth, he’s not going to shift from his fixation with debt deflation. Nor is he the boy standing alone on the burning deck: he has plenty of other takers. Their local election drubbing seems to have redoubled the Tories’ ardour for ideological zealotry, with the Tory Right (and where they go, Cameron will soon follow) now hawking around their demands for even bigger public service and welfare cuts (when we haven’t even yet had 90% of the first tranche) which will reduce tax receipts still further and ratchet up the recession another notch. And they want too to ditch the human rights convention, bring back selective grammar schools, and heighten job insecurity. Bring it on!
Even in policy areas where Osborne’s boasted about his reforms, it’s all turned to dust. He claimed that through the Merlin negotiations he was increasing bank lending to industry; it is still falling. He claimed he was taking action to avoid another banking crash; but the new rules on capital ratios won’t come into operation till 2019. He claimed he found tax avoidance ‘morally repugnant’; but he hasn’t staunched the flow into tax havens – BIS data show bank accounts in tax havens still held £1,700bn in 2011, much the same as in 2007.
He has notoriously said (till recently) that ’We’re all in it together’. But last year average real UK incomes fell 1.6%, yet in the same year the wealth of the richest 1,000 Britons, according to the Sunday Times Rich List, rose £18bn – an average increase per person amounting to £346,155 a week!
He has declared that executive pay increases have been excessive, but apart from wringing his hands has done nothing to stop it; it’s only shareholders and investors who’ve taken the action. He thought the 50p top tax rate cut would go down a blinder in Tory circles; even Tory voters according to the Mail on Sunday are now demanding its return.
This man has the touch of genius if the Tory aim is now, as it seems, to lose the next election.
May 9th, 2012 at 12:54 am
They are bringing in a season of distress for the poor and vulnerable in our society
May 11th, 2012 at 2:40 pm
Austerity is not going to solve the UK financial problems. Austerity reduces the currency supply and creates more unemployment. Private Companies lose customers.
An interesting paper that the IMF wrote a few years ago is titled:
“Does Corruption affect income inequality and poverty?”
http://www.imf.org/external/pubs/ft/wp/wp9876.pdf
The IMF says – well… yes it does.
Bob Diamond was to be paid £8.2 million. Average Financial Services Salary is £34,000. That’s a ratio of 241 times the average financial services wage.
Is Bob Diamond a different species to the rest of us. Has he cured Cancer, found an alternative to Oil, solved World Hunger and Disease? Can he perform Brain Surgery ? No ?
His suits are nice though, perhaps they cost several million pounds. He obviously has to look smart to create that feeling of stability amongst his clients.
Would Diamond be paid millions of pounds if his product wasn’t able to be created out of thin air?
Would Barclays be in a position to “bet the ranch” on investments if it could not rely upon Deposit Insurance provided by the Government through taxation?
Rover cars actually were producing good products at the time they went out of business. Barclays does not produce anything except dreams and debt and yet – even though they are technically insolvent (if everyone went to Barclays now and demanded their deposits in cash), Bob Diamond is getting annoyed about his salary being less than £8.2 million.
Our financial system is propped up with tax payers money (due to deposit insurance and loss of income through seigniorage) that the telephone number salary deals are an indicator of how corrupt Society has become.
May 12th, 2012 at 3:08 pm
As always, Mr Meacher is right on the money with his point about Tax Havens.
Nicholas Shaxson has written a book called: “Treasure Islands”.
It’s about Tax Havens. It’s not about where drug dealers and dictators hide their ill gotten gains, it where most large and respectable corporations hide their profits inorder to avoid paying their fair share of tax. The Government then takes the flack when they have to make cuts to public services and put VAT up to 20%.
http://www.youtube.com/watch?v=BqhcMAE1ekA
Guernsey Registered Office Search:
https://www.greg.gg/webCompSearch.aspx?r=0&crn=&cn=B&rad=StartsWith&ck=False
Have some fun with this – you can search for big name UK and American Investment Banks on this site.
The whole purpose of offshore now is to evade Taxes. It use to be portrayed as a way of preventing double taxation by a company operating in two different tax jurisdictions. When a large corporation holds onto it’s profits and reduces it’s tax, it does not do this inorder to pay it’s staff more. Bob Diamond is an example of this. Barclays can be found several times on the Guernsey Register. Not only are Barclays avoiding (legal term) tax, they are helping their clients “Avoid” Tax. Is the financial Crisis a smoke screen as to the real reason Taxes are going up and Public Services are being cut?
Heres the counter argument for Tax Havens:
http://www.youtube.com/watch?v=aTfZADGK6TY&feature=endscreen&NR=1
I guess it’s like a Crack Cocaine Dealer who sold his product to school children arguing that if the Laws were changed to make it legal to sell Drugs to School Children, he would not have to break the Law anymore.
May 20th, 2012 at 11:45 pm
Executive pay is usually high for Bankers because they can create their product from nothing.
Can someone please explain to Robeert Peston that Banks do not act as intermediaries.
http://www.bbc.co.uk/programmes/p0073l69
Banks do not just rely on depositors money to lend. They can and do create new money whnever they lend.
It is a serious mnatter when the BBC is attempting and succeeding in making people believe that Banks can only lend moeny that already exists when the reality is that the money then lend is created at the point of lending.
If Robert Peston is correct, then where does M4 (lending) money come from? This is at the heart of the crisis of 2008.