Bankers who torpedoed the economy are set to get away with it after all

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Andrew Green QC, Andy Hornby, bank, banker, Banking Standards, Coalition, Conservative, crisis, David Cameron, Democrat, economic, economy, FCA, financial, Financial Conduct Authority, Financial Services Authority, fred goodwin, fred the shred, FSA, fund, George Osborne, government, HBOS, James Crosby, Johnny Cameron, Lib Dem, Liberal, Lord Stevenson, maxwellisation, Mike Sivier, mikesivier, Mirror, Parliamentary Commission, pension, Peter Cummings, politics, Private Eye, RBS, recession, Robert Maxwell, Royal Bank of Scotland, Tom McKillop, Tories, Tory, Vince Cable, Vox Political

Not even this many: This Economist cartoon paints a false picture of the situation. The magazine has stated: “In Britain, which had to bail out three of its biggest banks, not one senior banker has gone on trial over the failure of a bank.”

Here’s a word that should be in all our dictionaries but probably isn’t: ‘MAXWELLISATION’.

It refers to a procedure in British governance where individuals who are due to be criticised in an official report are sent details in advance and permitted to respond before publication. The process takes its name from the late newspaper owner Robert Maxwell, who fell off a yacht after stealing the Mirror Group’s pension fund.

Maxwellisation is how the irresponsible bankers who caused the economic recession, out of which some of us have just climbed according to the latest figures, are likely to get away Scot (and the word is used most definitely in reference to the land north of England) free.

Current folk wisdom has it that most of us are still unhappy about the banking crisis. We want to see heads roll.

This is a serious headache for the Coalition government, according to Private Eye (issue 1371, p33: ‘Call to inaction’) – because almost nobody involved in that fiasco is likely to suffer the slightest inconvenience.

They really are going to get away with it because the government of the day really is going to let them.

It seems that Andrew Green QC has been hired to find out whether action could and should be taken against those who bankrupted HBOS, beyond corporate lending chief Peter Cummings, who has already been banned for life from the industry and was fined half a million pounds in 2012.

That might seem a lot of money but the HBOS crash, along with that of the Royal Bank of Scotland, cost the taxpayer £60 billion (along with who-knows-how-much in interest payments).

Mr Green has also been asked why HBOS chief executives James Crosby and Andy Hornby were untouched, along with chairman Lord Stevenson.

For the facts, he need look no further than what happened with RBS, the Eye reckons.

In 2010, the Financial Services Authority – discredited forerunner to the FCA – allowed (allowed!) RBS’s top investment banker Johnny Cameron to ban himself from another senior banking job. The following year it pronounced chief executive Fred ‘The Shred’ Goodwin and chairman Sir Tom McKillop effectively blameless. Mr ‘The Shred’ was stripped of his knighthood, however.

This whitewash appears to have been an embarrassment for business secretary Vince Cable, who announced in December 2011 that he wanted to prosecute, disqualify as directors or ban from the financial sector those responsible at RBS and passed his request for disqualification up to the Scottish law officers in early 2012.

He is still awaiting an answer, it seems.

Back to HBOS, where Cable has made “similar disqualification noises”, according to the Eye, after a “highly critical” report from the Parliamentary Commission on Banking Standards last year.

Unfortunately for him, not only is HBOS also based in Scotland, so any proceedings may have to follow a similar path to those involving RBS, but also the FCA’s report into the bank’s failure is currently “unfinished”.

This is because it is being “Maxwellised” – according to the Eye, “whereby lawyers for those in the frame (if allowed) remove anything critical of their clients”.

The report continues; “With RBS, ‘Maxwellisation’ took several months and resulted in the whitewash that made any future action against those found not guilty difficult, if not impossible.

But the public wants heads to roll! Will anybody get what’s coming to them?

According to the Eye, the answer is a qualified “yes”.

Only one boss of HBOS still has links with any organisation regulated by the FCA – James Crosby is a director of the Moneybarn sub-prime car finance group and its parent, the Duncton Group. The FCA took over regulation of the consumer loan industry in April and has until December 2015 to provide full approval to the Moneybarn operation. The Eye states: “By then chairman Crosby would have to pass its ‘fit and proper’ test. He is completely unauthorised. So, a low-hanging scalp.”

Beyond that, expect “a wringing and washing of Coalition political hands, blaming legal loopholes, failures of others and it-was-all-a-long-time-ago”.

It is possible that other directors could be offered the Johnny Cameron deal – agree not to be a director for a few years “and this will all go away quickly and cheaply with no public hearings”.

Cable – along with George Osborne, David Cameron and any other Coalition MP who claimed that they were making laws to ensure the bankers responsible would face prison sentences – will simply walk away from the whole affair and hope that you forget about it.

Are you going to let that happen?

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If this is a recovery, why is the patient still on the critical list?

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banker, Britain, British, business, Conservative, construction, economy, energy, groceries, income, Labour, manufacturing, recovery, rent, services, Tories, Tory, UK

Time ticks on: We are told the recovery is well under way but have yet to enjoy any of its benefits. Why?

Official figures say the British economy has grown by 0.8 per cent in the last three months.

The Conservatives are rejoicing over this feeble effort, while saying there’s more to be done; an amazing attempt to travel in two directions at once, that should fool nobody.

It seems the recovery is becoming more balanced, with services, manufacturing and construction all registering expansion.

And it is predicted that the economy will recover to the same level as its pre-recession peak by the middle of this year.

But who, exactly, is this recovery helping?

I’m actually worse-off than this time last year. How is it for you?

My income has not increased appreciably since 2007. Meanwhile the rent has gone up and the costs of energy and groceries have skyrocketed.

The Labour Party has calculated that average earners will be more than £2,000 a year worse-off than they were in 2010, by the time of the general election next year.

What conclusions may we draw from this?

Well, we know that the recession did not harm the richest in society at all. Their profits increased massively, even while the economy was flatlining, because that’s what happens in times of hardship; the poorer, more precarious firms go out of business while the larger ‘fat cats’ mop up the trade those competitors would have had.

If the economy is recovering to its pre-crash level, and average people are worse-off by around eight per cent of their pre-crash earnings (if you say the average wage was around £25K per year), then somebody must have benefited – and the most likely candidates are the same rich businesspeople who were never touched by the recession or austerity in the first place. Also the bankers who caused the mess in the first place.

So we have a situation in which the average earner – who, don’t forget, makes the entire economy work (we spend a higher proportion of our earnings than anyone else – by necessity, and this pushes money through the system and creates economic growth; the very rich hoard their massive wealth, usually in offshore banks) facing increasingly hard times, while the richest enjoy all the benefits.

…and the gap between the earnings of the richest and poorest increases massively…

… all engineered by a government of millionaires who have financial interests in big business and whose political party is backed mainly by bankers.

This has all the hallmarks of a conspiracy.

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The Tories have run out of momentum, ideas and even arguments

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bank, banker, charge, Co-op, company, Conservative, crash, Credit Crunch, Ed Miliband, edict, election, energy, Europe, finances, firm, Fraser Nelson, free enterprise, general, George Osborne, government, green, ideological, ideology, inequality, interference, investment, Labour, lloyds, long term economic plan, market, neoliberal, predator, price freeze, privatisation, public, purse, raid, recovery, regulation, regulator, Reverend Flowers, rip-off, Scandinavia, Spain, Square Mile, teacher, The North, The Spectator, Tories, Tory, Tory Democrat

Old Labour: Oversaw the longest periods of economic growth in British history and DIDN’T cause the biggest crash (that was neoliberalism, beloved of Conservatives). There is nothing wrong with it.

Dear old Fraser Nelson has been trying to generate some momentum against Ed Miliband’s plans for a Labour government.

But, bless ‘im, not only did he hit the nail on the head when he wrote (in The Spectator), “Tories seem to have lost interest in ideas”, he might just as well have been talking about the Tory press because – other than the parts in which he praises Miliband for his political acumen and perception, Fraser has nothing new to say at all.

“Why, if he is such a joke, has Labour led in the opinion polls for three years solidly? And why has he been the bookmakers’ favourite to win the next general election for even longer?” These are the questions Fraser asks, and then goes on to answer in the most glowing terms possible.

“His agenda is clear, radical, populist and … popular. His speeches are intellectually coherent, and clearly address the new problems of inequality,” writes Fraser.

“His analysis is potent because he correctly identifies the problem. There is [a] major problem with the recovery, he says, in that the spoils are going to the richest, and it’s time to act… George Osborne does not talk about this. He prefers to avoid the wider issue of inequality. This leaves one of the most interesting debates of our times entirely open to Miliband.”

All of the above is a gift to the Labour leadership. Fraser has scored a huge own-goal by admitting the Labour leader – far from being “a joke”, has correctly identified the problem and can say what he likes because the Tories won’t even discuss it!

Worse still (for Fraser), he seems to think that telling us Ed Miliband is mining Labour’s past policies to get future success will put us off.

Hasn’t anybody told Fraser – yet – that it is current neoliberal policies, as practised by both Labour and the Tories, that caused the crash of 2007 onwards? With that as our context, why not go back and resurrect policies that offer a plausible alternative?

As a Conservative, Fraser should appreciate the irony that it is Labour who are now looking at the past to create the future.

“The philosophical underpinning is rehabilitated: that the free enterprise system does not work, and should be put under greater government control,” writes Fraser. “That companies, bankers and markets have buggered up Britain — and it’s time for people, through Big Government, to fight back.” Who could argue with that?

Then Fraser goes into some of those policies, like the plan to revive the 50 per cent tax rate. “But Miliband isn’t taxing for revenue. He’s taxing for the applause of the electorate and he calculates that the more he beats up on bankers and the rich, the louder the masses will cheer.” The answer to that is yes! What’s wrong with that? The Coalition came into office on a ticket that said bankers would pay for the damage they caused, and yet bankers have been among the principal beneficiaries of the ongoing raid on the public finances that the Coalition calls its “long-term economic plan”. In the face of dishonesty on that scale, Fraser should be more surprised that the North hasn’t invaded the Square Mile and strung anybody in a suit up on a lamppost – yet.

Next up, Fraser tries to attack Miliband’s proposed revival of a Kinnock plan for a state-run ‘British Investment Bank’ and two new high street bank chains. To this writer, the prospect of two new, state-run and regulated, banks is a brilliant idea! No more rip-off charges for services that should be free! Investment in growth, rather than short-term profit! And all run the way banks should be run – prudently and with the interests of the customer – rather than the shareholder – at heart. How can Fraser (bless ‘im) argue with that?

Argue he does. He writes: “As Simon Walker, head of the Institute of Directors, put it: ‘The last time the government told a bank what to do, Lloyds was ordered to sell branches to the Co-op’s Reverend Flowers. And we all know how that ended.’ Wrong. European regulators ordered the government (then principle shareholder in Lloyds) to sell the branches, and it happened on the Coalition government’s watch. In fact, George Osborne welcomed the deal. That’s an argument against Conservative mismanagement.

Fraser goes on to claim that Miliband doesn’t care how his bank project will work out – he just wants it done. He’s on an ideological crusade. Again, this provokes comparisons with the Tories that are (for the Tories) extremely uncomfortable. The Tories (and their little yellow Tory Democrat friends) have spent the last four years on an ideological crusade that has robbed the poorest people in the UK of almost everything they have, and are now starting to attack people who are better off (but still not posh enough) – they can hardly criticise Labour for having an ideology of its own.

The line about green policies which cost nine jobs for every four created – in Spain – is risible. Fraser has chosen a country where green policies have not worked well. How are they managing in Scandinavia?

Fraser says Labour’s energy price freeze “magically” makes good a 1983 pledge for everyone to afford adequate heat and light at home – without commenting on the fact that energy companies have been ripping us all off for many years and failing to invest in the future of power generation; they are an example of the worst kind of industrial privatisation.

Fraser says Labour has revived a 1983 demand for “a supply of appropriately qualified teachers” as though that is a bad idea (it isn’t. Bringing in unqualified people to act as teachers in Michael Gove’s silly ‘free schools’ sandpit was the bad idea). Note he says Labour wants “union-approved” qualified teachers – depending on mention of the unions to get a knee-jerk reaction from his readers, no doubt.

Fraser says Miliband attacks “predator” companies – moneylenders who offer short-term loans; people who make fixed-odds betting machines; landowners who stand accused of hoarding and thwarting housebuilding. “When Miliband talks about the future, he says very little about what he’d do with government. He talks about what he’d do to British business. All this amounts to a blitz of regulation, edicts and interference,” he writes.

This is to suggest that “regulation” is a dirty word – a synonym for “interference”. Let’s help Fraser out by suggesting a word he can use instead of “regulation” or “interference”.

That word is “help” – and it exemplifies what regulation is, in fact, about – helping companies to provide the best service possible, with the least possible corruption or profiteering, to ensure that customers get what they want and are happy to come back – boosting prosperity for everybody.

Substitute that word for the others and Fraser’s remaining rhetoric looks very different:

“All this amounts to a blitz of help” evokes the response, about time too!

“[Tristram] Hunt does not pretend that help at this level is being attempted in any free country” begs the question, why not?

While Fraser may have set out to write an assassination piece on Ed Miliband’s Labour, there can be no doubt that he ended up doing the exact opposite. It wasn’t his intention – look at his final few lines: “Miliband is bold enough to think that, in a country midway through the worst recovery in history, there may be a market for all this now. And most terrifyingly of all, he might be right.”

This botched attempt at scaremongering only exposes right-wing ideology for what it is: Out-argued, outclassed and badly out-of-step with the thoughts of the British people.

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Osborne brings in new tax avoidance laws; city minister undermines him

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Andrea Leadsom, Andrew Mitchell, avoidance, Bandal, bank, banker, bonus, Conservative, financial transaction, George Osborne, government, help to buy, inheritance, Mike Sivier, mikesivier, offshore, Philip Hammond, politics, tax, Tobin, Tories, Tory, Treasury, Vox Political

Andrea Leadsom [Image: The Independent].

George Osborne’s latest attempt to make us think that Conservatives can be tough on tax avoiders has lasted less than a week.

The part-time Chancellor announced measures that meant avoiders faced bigger fines and were more likely to go to jail, on April 12.

What a shame his new city minister, Andrea Leadsom, is facing hard questions over actions she took to cut her own inheritance tax bill, just six days later.

Ms Leadsom is now responsible for the government’s Help to Buy property scheme, making this even more embarrassing as the allegations against her refer to shares in a property company.

The allegation is that she took advantage of offshare banking arrangements for her buy-to-let property company, placing her shares into controversial trusts in order to reduce her inheritance tax bill, for the benefit of her children.

The property firm Bandal, created by Ms Leadsom and her husband, another ex-banker – also created charges over two of its buy-to-let properties in favour of the offshore branch of an investment bank. Apparently this indicates that she obtained loans from the Jersey-based bank that were secured against the buy-to-let properties.

While none of the above is actually unlawful, it does mean there is at least one alleged tax avoider – not only in the Conservative Party but in the Treasury. The self-styled ‘Party of Financial Competence’ has become, once again, the Party of Financial Fiddles.

According to The Independent, “Since becoming an MP, Ms Leadsom has campaigned vigorously against bankers’ bonus caps and a financial transaction ‘Tobin’ tax.

“It is not the first time millionaire Tory ministers have been caught up in tax avoidance claims.

“The Defence Secretary Philip Hammond, former Chief Whip Andrew Mitchell and Mr Osborne were all accused of legal tax avoidance in 2010 by Channel 4’s Dispatches programme. All three men denied any wrongdoing.”

This is a serious embarrassment for George Osborne, who told the nation, “If you’re hiding your money offshore, we are coming to get you,” in a speech last week.

In the case of Ms Leadsom, it seems, he doesn’t have far to go.

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Inflation drop doesn’t mean wages will rise

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banker, beast, bill, boss, Coalition, Conservative, Customs, debt, Democrat, economy, Ed Balls, employment, FTSE 100, fuel, George Osborne, government, groceries, grocery, health, hmrc, income, inflation, insurance, Keith Joseph, Liberal, Media, medicine, Mike Sivier, mikesivier, MP, Nicholas Ridley, people, politics, privatise, Revenue, salary, self-employed, shareholder, social security, starve, starving, tax credits, Tories, Tory, unemployment, utility, Vox Political, wage, welfare, welfare state

‘For the privileged few’: If you’re earning the average wage of £26,500 per year, or less, then nothing George Osborne says will be relevant to you.

Why are the mainstream media so keen to make you think falling inflation means your wages will rise?

There is absolutely no indication that this will happen.

If you are lucky, and the drop in inflation (to 1.7 per cent) affects things that make a difference to the pound in your pocket, like fuel prices, groceries and utility bills, then their prices are now outstripping your ability to pay for them at a slightly slower rate. Big deal.

The reports all say that private sector wages are on the way up – but this includes the salaries of fatcat company bosses along with the lowest-paid office cleaners.

FTSE-100 bosses all received more pay by January 8 than average workers earn in a year. Their average annual pay rise is 14 per cent. Bankers get 35 per cent. These are all included in the national private sector average of 1.7 per cent, which means you get a lot less than the figures suggest.

Occasional Chancellor George Osborne said: “These latest inflation numbers are welcome news for families.” Why? Because they aren’t sinking into debt quite as fast as they were last month? They’re great news for the fatcats mentioned above, along with MPs, who are in line to get an inflation-busting 11 per cent rise; but as far as families are concerned, rest assured he’s lying again.

“Lower inflation and rising job numbers show our long-term plan is working, and bringing greater economic security,” he had the cheek to add. Employment has risen, although we should probably discount a large proportion of the self-employed statistics as these are most likely people who’ve been encouraged to claim tax credits rather than unemployment benefits and will be hit with a huge overpayment bill once HMRC finds out (as discussed in many previous articles).

The problem is, Britain’s economic performance has not improved in line with the number of extra jobs. If we have more people in work now than ever before in this nation’s history, then the economy should be going gangbusters – surging ahead, meaning higher pay for everybody and a much bigger tax take for the government, solving its debt reduction problem and ensuring it can pay for our public services – right?

We all know that isn’t happening. It isn’t happening because the large employment figures are based on a mixture of lies and low wages. The economy can’t surge forward because ordinary people aren’t being paid enough – and ordinary working people are the ones who fuel national economies; from necessity they spend a far higher percentage of their earnings than the fatcats and it is the circulation of this money that generates profit, and tax revenues.

Osborne compounded his lies by adding: “There is still much more we need to do to build the resilient economy I spoke of at the Budget.” He has no intention of doing any such thing. He never had.

Conservative economic policy is twofold, it seems: Create widescale unemployment in order to depress wages for those who do the actual work and boost profits for bosses and shareholders; and cut the national tax take to ensure that they can tell us the UK cannot afford a welfare state, opening the door for privatised medicine and private health and income insurance firms.

This is why, as has been discussed very recently, leaders of the Margaret Thatcher era including Nicholas Ridley and Keith Joseph determined that the defeat of the workers would require “the substantial destruction of Britain’s remaining industrial base” (according to ‘The Impact of Thatcherism on Health and Well-Being in Britain’). It is, therefore, impossible for George Osborne to seek to build any “resilient economy” that will improve your lot, unless you are a company boss, banker, or shareholder.

The plan to starve the public sector, as has been repeated many times on this blog, has been named ‘Starving the Beast’ and involves ensuring that the tax take cannot sustain public services by keeping working wages so low that hardly any tax comes in (the Tory Democrat determination to raise the threshold at which takes is paid plays right into this scheme) and cutting taxes for the extremely well-paid (and we have seen this take place, from 50 per cent to 45. Corporation tax has also been cut by 25 per cent).

This is why Ed Balls is right to say that average earnings are £1,600 per year less than in May 2010, why Labour is right to point out that the economy is still performing well below its height under Labour…

… and why the government and the mainstream media are lying to you yet again.

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‘The Budget that confirms Britain is worse-off under the Tories’

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alistair darling, banker, bedroom tax, benefit, benefit cap, benefits, budget, business, Coalition, Conservative, Corporation Tax, cost of living, council tax, cut, debt, deficit, Democrat, economy, Ed Miliband, employment, energy, environment, food bank, George Osborne, government, green, high speed rail, ISA, Labour, Lib Dem, Liberal, living standard, medical research, Mike Sivier, mikesivier, North Sea oil, nurse, Parliament, pay, Pensioner Bond, people, personal tax allowance, politics, public sector, referendum, restraint, rich, rise, saver, saving, Scotland, self, senior citizen, service, shale gas, social security, special advisor, spending, tax credit, Tories, Tory, Treasury, unemployment, Vox Political, welfare, work

Mr Os-bean: As Ed Miliband gave his response to the Budget, George Osborne had a gormless smile on his face that made him look like Mr Bean. This is not him – but it’s the closest image I could find at short notice. [Image as credited]

If a Conservative government is returned to office after the 2015 election, there will be yet more spending cuts and service cuts afflicting hard-working, low-paid families.

That was the message for most people in George Osborne’s latest attempt at a Budget speech today.

There were plenty of groan-worthy moments as the part-time chancellor trotted out the Coalition’s catchphrases: “We will fix the roof while the sun is shining” (groan. The job is taking so long, one has to question whether the contractor is Con-ning the client). “We are all in this together” (groan). Oh really?

Benefit spending is to be capped at £119 billion per year, albeit rising with inflation; public sector pay “restraint” will continue for the foreseeable future. This is from the government whose Prime Minister was confirmed, only minutes previously, as having approved 40 per cent pay rises for his special advisors!

Most significant is the fact that Osborne avoided mentioning ordinary working people for most of his speech; this was a budget for businesses, with the benefits reserved for fatcat bosses.

No major advanced economy in the World is growing faster than the UK, said Mr Osborne; more people are in work. This appears to be borne out by current employment figures (although it should be noted that this is due to a vast and questionable boom in self-employment – the number of employees has dropped by 60,000).

Where is the benefit to the British economy? Why has the deficit not been eliminated? Osborne said it stood at £157 billion in the year he came to office, and would be £108 billion this year, but in fact £39 billion was removed due to measures brought in by the previous Labour chancellor, Alistair Darling. He has cut government spending by something like £80 billion so far, but the deficit has dropped by – possibly – £10 billion. Not a good start to his speech.

There will be further investment in high-speed rail, even though there is no way of predicting whether this hugely costly investment in making train journeys 20 minutes faster will create any economic improvement.

There will be money to fund new centres for medical research – but will these be absorbed by private health firms after the public purse has paid for them?

There will be investment in faster extraction of oil from the North Sea – aiming to get as much as possible out before the Scottish referendum, in order to impoverish the Scots if they decide to go for independence?

And there will be investment in low-cost energy (finally killing the highly questionable green agenda) – meaning money for shale gas companies, and to hell with the environmental cost.

All this investment will go into businesses whose main contribution to the Treasury – Corporation Tax – has already dropped by a quarter (from 28 per cent to 21 per cent) and will go down to 20 per cent this year. This is less than the lowest level of Income Tax.

Up go the profits – down go the tax payments. Who benefits?

Council tax in England remains frozen, meaning fewer public services.

The personal tax allowance is to rise, so people may earn £10,500 before paying tax. This is nowhere near enough to offset the massive drop in living standards that has been caused by the Tory-led Coalition. The cost of living has risen for 44 out of the 45 months of this Parliament – for the whole period, if the earnings of high-paid bankers are removed from the calculation.

The threshold for payment of the 40p tax rate is to rise, so fewer people will pay the higher rate.

Savers are to be helped but – again – this is not a boost for the poor. Most working and unemployed families don’t have any spare money to put into the banks. How does it help them to know they would not pay any tax on savings up to £15,000 in an ISA, when they cannot afford to open one?

And there is a new Pensioner Bond for rich senior citizens (poorer pensioners don’t live long enough to benefit).

As Ed Miliband said in his scathing response, the Coalition can afford to give a tax cut of £200,000 per year to bankers who earn £5 million – but can’t afford £250 per year extra for nurses.

Mr Miliband said the Budget speech was more significant in what it hid than in what it actually said.

Working people are suffering under the Bedroom Tax, under cuts to their tax credits, and they are having to visit food banks if they want to eat.

This is a government that gives with one hand, but takes back much more with the other.

And the Conservatives have the bare-faced cheek to call themselves “The Workers’ Party”.

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The benefit debate is a diversion – that’s why it will go on and on

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allowance, banker, benefits street, blame, boss, build, Channel 4, Conservative, crisis, David Cameron, debate, dodge, economic, economy, Eton, flood, house, housing benefit, industrial, industry, job, jobless, jobseeker, low, Owen Jones, pay, private landlord, relief, rent, rip-off, strategy, subsidise, system, tax, tax haven, Tories, Tory, workless

How many of you tuned into the last episode of Benefits Street on Channel 4, and stayed on for the debate that followed?

Quite a few, I reckon.

They were worth watching, but the feeling that was left with this viewer (and I’ve been reviewing television for 20 years or more) is that we are talking ourselves around in circles – led by politicians with a vested interest in perpetuating the discussion.

They don’t want a solution. They want us to keep going over the same ground – which they have laid out for us with very specific limits – and they want to concentrate our anger about this issue so that we blame, not the people responsible – the tax dodgers who put money into tax havens that could be invested in British industry, the private landlords and low-paying bosses who are subsidised by the benefit system and the bankers who caused the economic crisis a few years ago – but the people who have been forced onto benefits through no fault of their own and are being persecuted for it by a punitive system that penalises them for failing to find jobs that really do not exist.

Look at the way David Cameron leapt forward with fistfuls of cash to pay for flood relief when Tory heartlands were affected, saying that money was no object and Britain is a rich country. We’re rich enough to look after the playing fields of Eton, but not our poorest citizens, according to his mentality. Property is worth more to him than people.

Why? Because the people who send their children to Eton are the people Cameron hopes will elect him (he can’t be re-elected; he didn’t win the 2010 election) in 2015. The unemployed are less likely to vote for him – in fact they are less likely to vote at all. It seems there is something about being rejected by society that instils a sense of listlessness and despair in the human psyche. People ask themselves: Why bother?

There are solutions, but it is cause for concern that we are not hearing about them from our MPs and politicians. Journalist Owen Jones came out with the clearest plan during the debate on Channel 4 last night, and it is well worth quoting in full.

He said: “Firstly let’s make it clear – work does not pay in this country. We hear that as a mantra, when most people in poverty get up in the morning and earn that poverty.

“We’re talking about people milking the system. Let’s talk about the low-paying bosses who are being subsidised with in-work benefits because, in the seventh-richest country on Earth, they won’t pay.

“If we’re talking about getting people into jobs I actually think we need to talk about solutions here. One in six workers in the last two years have claimed Jobseekers’ Allowance at some point; that’s a lack of security.

“What we need firstly is a massive house-building programme that would reduce the amount spent on Housing Benefit which, by the way, is not going into the pockets of these tenants – it’s lining the pockets of private landlords charging rip-off rents. If we build housing, it would create jobs and we would stimulate the economy as well.

“It goes the same with the need for an industrial strategy because what successive governments have done, and it started in the eighties, is let the secure jobs go to rot, if you like. Now, other countries like Germany, what they’ve done is had an industrial strategy. Instead of saying, ‘Hands off, let the market decide,’ they’ve said, ‘Actually we want to create jobs in renewable energy.’ Now we’ve just seen the floods; we’re going to have a lot more extreme weather, so let’s have an industrial strategy to go and create renewable energy jobs, giving people secure, dignified jobs, taking on the environmental crisis.

“These are solutions… We’ve got to change the debate we have at the moment where the real villains of the piece, like the tax dodgers who get away with not paying £25 billion a year in tax, like the private landlords and the low-paying bosses milking our welfare state, like the bankers who caused the economic disaster – they get away with it, but all we ever hear about is kicking people at the bottom.”

Absolutely right. And that’s all we’ll hear about it for the foreseeable future, as well. We won’t hear about returning to a full-employment society (which is perfectly possible), because that means the greedy rich will have less money for themselves in the short term.

In the long term, ensuring that there are properly-paid jobs for the most people, so they do not have to claim benefits, means that there is more money moving around the economy – and money makes money. The parasites – who are making a fortune unsustainably by working people hard and paying them poverty rations – would be just as rich in the long run, but they cannot bear to consider the possibility.

One has to consider whether they want to force people into poverty, just to make their own wealth seem more remarkable – the poverty trap as ego-trip, if you like.

But we won’t hear about that because it is politically inflammatory. Far better to set the lower classes against each other, laying blame on each other for problems that are caused by different people entirely – and laugh all the way to the offshore bank.

If I had to describe Britain to a foreigner, I would ask them to imagine a person being robbed outside a public lavatory, by the mayor of his town, while council workers started demolishing the building; the rich are destroying our public services and mugging us at the same time.

Very soon, the same people who are mugging you will be asking for your vote…

… while blaming you for problems they have done nothing to solve.

Follow me on Twitter: @MidWalesMike

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Peter Oborne is right to support the 50p tax rate

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50 per cent, 50p, abuse, ambulance, assurance, banker, basic pay, benefit, bonus, checks and balances, claim, Coalition, compulsory, Conservative, corporate, corporation, Daily Telegraph, dependency, depress, dividend, Ed Balls, employer subsidy, George Osborne, Gordon Brown, government, housing benefit, incentive, job guarantee, jobseeker, Labour, Landlord Subsidy, living standard, living wage, low, Mike Sivier, mikesivier, minority interest, neoliberal, Peter Oborne, politics, poor, result, salary, sanction, shareholder, social security, super rich, target, tax credit, tax rate, taxpayer, top, Tories, Tory, underwriter, very rich, Vox Political, wage, Wales, welfare, welfare state, Welsh

… but wrong about many, many other matters.

The Torygraph‘s chief political commentator was right to come out as a supporter of Ed Balls’s pledge to raise the top tax rate back to 50p in the pound.

He was right to say it was “profoundly shaming and offensive” for Conservative voters – especially those who are not super-rich – when George Osborne lowered the top rate to 45p, two years ago.

He was right when he wrote that “to make the rich richer at the same time as making the poor poorer – what George Osborne has been doing – is simply squalid, immoral and disgusting.

“Any decent human being must surely feel sick in the stomach that he is taking this action at the same time as cutting the amount of tax paid by people earning more than £150,000.”

To that, let’s add a point about the kind of people who are benefiting from the lower tax rate – the kind of people who take home around £1 million a year in basic pay, who are promised bonuses of up to twice those yearly salaries, and who caused the financial crisis that has allowed Osborne to pursue his policy of impoverishing the poor.

That’s right: George Osborne’s 45p tax rate is a £100,000 extra bonus, every year – in gratitude for all their help, one must presume – for bankers.

Oborne is also right to say that Labour’s decision in the 1970s, to impose a top tax rate of 83p in the pound, was a huge mistake – for whatever reasons. It genuinely drove people out of the country, whereas at 50p they just grumble and threaten to go.

All of the above being said, Oborne continues to espouse some utterly wrong-headed nonsense. He claims that “the Conservative Party is not an interest group which represents only the very rich” when all of its actions since getting into office in 2010 demonstrate ample proof that a minority group representing only the very rich is exactly what it is.

Oborne actually puts in print: “The Coalition government has devoted a great deal of effort to lowering the living standards of the poor. I support this project.”

It’s great to see a Tory voter actually admitting this, but imbecilic behaviour for a columnist who (one presumes) wants people to respect his point of view.

He goes on: “I believe that Gordon Brown’s welfare state forced some people into a life of dependency… There have been many people on welfare who need much more of an incentive to return to work.”

Wrong, wrong, wrong.

The reason many people are without jobs and claiming benefit is, there are almost five jobseekers for every job. This is a situation created by the Tory-led government in order to keep wages low; with so many people clamouring for jobs, people who do have work but are on the bottom rung of the employment ladder can’t ask for a raise – they would be jettisoned and replaced by a jobseeker (most likely on lower basic pay than the original holder of the job).

Nobody was forced into a life of dependency by Gordon Brown; the vast majority of unemployed people genuinely want to improve their situation with a job that allows them to avoid claiming benefits – and it is good that the Labour Party, if returned to office next year, will work hard to bring the Living Wage into force for all working people.

You see, Mr Oborne and his ilk conveniently forget that the vast majority of people whose living standards have been hit by the Tory war on the poor are in work. They are so poorly-paid by George Osborne’s corporate friends that they have to claim tax credits – or, as I like to call them, Employer Subsidy – and housing benefit – otherwise known as Landlord Subsidy.

That’s improper use of our tax money. We should not be subsidising fat corporates with our hard-earned taxes, so they can deliver ever more swollen dividends to their shareholders; and we should not be subsidising greedy landlords who charge multiples of what their properties are worth to tenants who have nowhere else to go if they want to keep their pittance-paying job.

It is valid to criticise Gordon Brown for allowing this to happen, but who knows? Maybe this figurehead of neoliberal New Labour was using tax credits as a stop-gap, intending to persuade corporate bosses round to the Living Wage in good time. We’ll never know for sure.

There remains a strong argument that government schemes to get people into work should have checks and balances. As underwriters of these schemes, we taxpayers need assurances that the firms taking part will not abuse their position of power, using jobseekers until the government subsidy runs out and then ditching good workers for more of the unemployed in order to keep the cash coming. That is not a worthwhile use of our cash.

We also need assurances that participants won’t drop out, just because life on the dole is easier. I was the victim of several personal attacks last week when I came out in support of Labour’s compulsory job guarantee, because they hated its use of sanctions. I think those sanctions are necessary; there should be a penalty for dropping out without a good reason.

In a properly-run scheme, those sanctions should never be put into effect, though. That means that any government job scheme needs to be driven, not by targets but by results.

Look at the Welsh Ambulance Service. Targets imposed by the Welsh Government mean that ambulances are supposed to arrive at the scene of an emergency within eight minutes – even if they are 20 minutes’ fast drive away, on the wrong side of a busy city like Cardiff, when they get the call. This means the Welsh Ambulance Service faces constant attack for failure to meet targets.

But what kind of results does the service achieve? Are huge numbers of Welsh patients dying, or failing to receive timely treatment because an ambulance arrives a minute or so after its target time? No. There will, of course, be some such occasions but those will most likely be the result of many contributory factors.

So: Results-driven schemes will put people into jobs and improve the economy; there is no need to impoverish the poor; the very rich never deserved their tax cut; and Ed Balls is right to want to re-impose the 50p rate.

The Conservatives are wrong to attack poor people; there is no need to impose further cuts on social security as part of Osborne’s failed austerity policy; and these things show very clearly that the Tories are a minority-interest party supporting only the extremely rich.

In the end, I find myself agreeing with one more comment by Mr Oborne; Ed Balls really has “given ordinary, decent people a serious reason for voting Labour at the coming election”.

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Workplace battleground: Labour and Tories at war over employment

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banker, benefit, benefit tourism, bonus, compulsory, Conservative, David Cameron, employment, English, general election, guarantee, I'm not racist but, Iain Duncan Smith, immigrant, improve, Institute, IPPR, job, Jobseeker's Allowance, Labour, Liam Fox, literacy, long term, Lynton Crosby, math, Michael Gove, Mike Sivier, mikesivier, national debt, numeracy, pension, Pensions, policy, politics, public, Rachel Reeves, relief, repress, Research, school, secretary, service, shadow, skill, social security, tax, Tories, Tory, translation, unemploy, unemployment, Vox Political, wage, welfare, work, workplace, xenophobe, xenophobic, young

Labour is forging forward with new plans to improve work prospects and the skills of those seeking employment, while the Conservatives are plunging backward with proposals to penalise people who lack the ability to speak basic English.

Already right-wingers in the media have been trying to undermine the policies announced by Rachel Reeves in a speech to the Institute of Public Policy Research. They say Labour is planning to strip people of their benefits if they don’t take classes to improve their English and Maths skills, if necessary.

This talk of punishment for people who need help is completely wrong-headed. If someone can’t get a job because they can’t read, write or do their sums, then they should get help. Of course they should.

One has to wonder what has gone wrong in our schools, to lead to this situation. Perhaps Michael Gove would like to take responsibility? No, didn’t think so.

In fact, the plans announced by the Shadow Work and Pensions Secretary are perfectly reasonable – especially in contrast with the latest Tory madness, but we’ll come to that soon enough.

We already know that the centrepiece of Labour’s economic plan is a compulsory jobs guarantee for young people and the long-term unemployed.

This means anyone over 25 who has been receiving Jobseeker’s Allowance for two years or more, and anyone under that age who has been receiving the same benefit for one year or more would get a guaranteed job, paying at least the minimum wage, for 25 hours a week – coupled with training for at least a further 10 hours a week.

This is perfectly reasonable. If you have been looking for work for more than a year, and couldn’t get it yourself, then the extra income provided by such a placement (especially coming in line with Labour’s plan to increase wages, in order to really make work pay, rather than depressing benefits and putting everyone in poverty, which is Conservative policy) will be welcome.

It doesn’t mean that people will have to put their own ambitions on hold. The best advice I ever received was to get a paying job during the day, in order to put food on the table and clothes on my back, and work on what I really wanted to do in the evenings. Eventually, with perseverance, it should be possible to replace the day job with what you really want to do.

Most of the jobs are likely to be in small firms where, once a company has invested six months in a new recruit, the chances are they will want to keep them on after the subsidy has ended.

The jobs guarantee would be fully funded by repeating the tax on bankers bonuses – they were in the news recently, when it was announced that these people would be receiving unearned bonuses worth twice as much as their salary so they’ve definitely got the cash to spare – and a restriction on pension tax relief for those on the very highest incomes.

But – of course – putting people into a job isn’t much good if they don’t have the knowledge of English and Maths that most of us use without thinking in our everyday lives.

In her speech, the Shadow Work and Pensions Secretary said: “The shocking levels of English and maths among too many jobseekers are holding them back from getting work, and trapping them in a vicious cycle between low paid work and benefits.

“Nearly one in 10 people claiming JSA don’t have basic English skills, and over one in ten don’t have basic maths. IT skills among jobseekers are even worse; nearly half don’t have the basic email skills which are now essential for almost any job application.

“And we know that this keeps people out of jobs: those out of work are twice as likely than those in work to lack basic English and Maths,” she said, proving that her own lack in that area hasn’t held her back. Twice as likely as those in work, Rachel.

She said research has shown that, when people who lack these skills do get jobs, they too often find themselves in short term or temporary work, with a swift return to benefits. Nearly one in five of those who have made multiple claims for unemployment benefits have problems with reading or numeracy.

The response: “A new requirement [will be] for jobseekers to take training if they do not meet basic standards of maths, English and IT – training they will be required to take up alongside their jobsearch, or lose their benefits.

“[We] will ensure that people’s skills needs are assessed, and basic skills gaps addressed, from the start of a Jobseeker’s Allowance Claim, not after months and years of neglect.”

Contrast this with the Conservative Party’s latest plan to hammer immigrants and people on benefits – announcing a new policy of repression every week ahead of the election in 2015, according to politics.co.uk

It seems right-wing Australian election chief, and tobacco lobbyist, Lynton Crosby thinks this kind of bully-boy behaviour will make the Tories more popular! Don’t laugh.

This comes after satirical radio comedy The Now Show featured a sketch in which people tried to justify xenophobic attitudes without saying the words “I’m not racist, but…”

Let’s try the reverse – putting those words into the new policies announced on politics.co.uk:

“I’m not racist, but we should strip benefits from anyone who can’t speak English!” (Does this include the English people who can’t speak their own language properly, who Labour plan to help?)

“I’m not racist, but we should axe the service telling people about benefits in foreign languages!”

“I’m not racist, but we should end translation services in benefits offices!” (According to politics.co.uk, David Cameron is very keen on that one).

The site said “Iain Duncan Smith is understood to already be working on them”. (He’s not racist, but…)

Tory backbencher and former scandal Liam Fox tried to justify this lunacy by saying: “The ability to speak English is one of the most empowering tools in the labour market and we should be encouraging as many people as possible to learn it.” By cutting off their income? How does that work?

Plans to focus on the government’s increasingly racist tough anti-immigrant message come despite warnings that a reduction in immigration would make it harder for Britain to pay back its national debt.

The site said that, last week, a long-awaited report into benefit tourism had to be shelved in secret, after failing to find any evidence of it.

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Death of democracy is confirmed as Cameron ignores the will of Parliament

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The not-so-great dictator: It seems David Cameron’s government is now ignoring all attempts to hold it to account.

Ladies and gentlemen of the United Kingdom, your plight is worsening: The government now no longer pays any attention to the decisions of your Parliamentarians.

You’ll remember that a debate was held on Monday, in which MPs called for an inquiry into the effect of changes to the benefit system – introduced by the Conservative-led Coalition government – on the incidence of poverty in this country; the question was whether poverty was increasing as a result of the so-called reforms.

Parliament voted massively in favour of the inquiry (125 votes for; two against), as reported here.

We considered it a great victory at the time, and looked forward to the commissioning of the inquiry and its eventual report.

Now that dream is in tatters as Michael Meacher, the MP who brought the motion to Parliament, has reported that nothing is to happen and the government is ignoring the vote.

It seems he is blaming this partly on the media because “it wasn’t reported” – and he has a point; only 2,500 people have so far read the article on Vox Political, and that’s not nearly enough interest to worry David Cameron and his unelected cadre.

This turn of events raises serious questions about the role of Parliament in holding the government of the day to account, influencing legislation and taking effective initiative of its own.

Perhaps we should be glad that this has happened, because the illusion that we have any kind of democracy at all has been, finally, stripped away.

(On a personal note, this saddens me greatly as it confirms the belief of a very rude Twitter user who accosted me on that site earlier the week to inform me that democracy died many years ago, and I was deluded in trying to save it now. What a shame that such a person has been proved correct.)

Here are the facts, according to Mr Meacher – and they make bitter reading: “The chances of influencing … legislation are negligible because the government commands a whipped majority at every stage of a bill’s passage through the commons.

“Parliament can make its voice heard, but it can hardly change anything that the government has decided to do.

“The only rare exception is when there is a revolt on the government benches which is backed by the opposition, and even then when the government lost a vote on that basis last year on the EU budget, it still ostentatiously dismissed the vote as merely ‘advisory’.

“Nor, it seems from Monday’s vote, can parliament take any effective initiative of its own either.”

He said newly-instituted systems that followed the expenses scandal are already disappearing:

• “The backbench business committee, which for the first time gives parliamentarians some control over what is debated in the house, is being sidelined and decisions on its motions ignored.
• “The promised house business committee, which would share negotiations between government and parliament over the passage of all business put before the house, has been quietly dropped.
• “Only the election of members of select committees by the house, not by the whips, has so far survived, but one cannot help wondering if that too will be taken back by the party establishments over time.”

This is, as Mr Meacher states, a major constitutional issue – especially as our current government was not elected by the people but created in a dirty backroom deal, and its actions have no democratic mandate at all; nobody voted for the programme of legislation that we have had forced – forced – upon us.

Did you vote for the privatisation of the National Health Service? I didn’t.

Did you vote for the privatisation of the Royal Mail? I didn’t.

Did you vote for the increase in student fees? I didn’t.

Did you vote for the Bedroom Tax? I didn’t.

Did you vote for the Transatlantic Trade and Investment Partnership deal? I didn’t.

Did you vote for the Gagging law? I didn’t.

Did you vote to protect the bankers who caused the financial crisis from having to deliver compensation to us? I didn’t.

Did you vote to protect tax avoidance schemes? I didn’t.

There are many more examples I could list.

Mr Meacher suggests possible ways to reassert the authority of Parliament, but none of them will have any immediate effect – or possibly any effect at all.

He ends his piece by saying “the most effective way of making progress is greater awareness among the electorate of how Parliament actually performs, or fails to perform. If the public understood more transparently how the corrupting influence of patronage actually works, how the power system turns everything to its own advantage, and how the genuine objectives of democratic elections are so readily thwarted, a lot of these unedifying practices would have to be curbed.”

Considering Cameron’s attitude to the will of the people so far, this seems unlikely.

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