Cameron’s comedy turn won’t make anybody happy

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David Cameron should be very happy that UKIP is around to make him look acceptable.

We can’t ever say he’ll look good, but in contrast to the ‘Farage wave’, the spectacle of UKIP being thrown out of the venue where it was supposed to be launching its European election campaign, and the never-ending queue of candidates who are desperate to embarrass themselves publicly – what’s the latest one? “Women should be made to wear skirts because they’re a turn-on for men”? Ye gods… – it’s easy to think that the Conservatives are mild, or at least rational.

They’re not.

But Cameron was keen to project an image of competence at the Conservatives’ campaign launch for the local council elections. This is strange because, with his record of achievement, the things he was saying seem more like stand-up comedy than serious statements of ability.

Try this, about the European Union: “I have a track record of delivery – and believe me, whatever it takes, I will deliver this in-out referendum.” A track record of delivery? Well, yes. He delivered a top-down reorganisation of the NHS that nobody wanted, leading to an inrush of private health companies into the NHS – that nobody wanted. He has delivered the lowest amount of house-building, per year, since records began. He has delivered a withered economic ‘recovery’ that arrived three years later than if he had continued with the plan of the previous, Labour, government. He has delivered all the benefits of that ‘recovery’ to the extremely rich, rather than sharing it equally with the people responsible for it. And he has delivered a new high in employment, with no economic benefit to the country, that has left workers on wages that are so low they are going into debt.

He delivered the bedroom tax.

He delivered a massive increase in the National Debt.

He delivered millions of people into poverty and food bank dependence.

Ha ha ha. Very funny, Mr Cameron.

He told us, “People said I would never veto a European treaty. In 2011 that’s exactly what I did.” Well, yes. But the rest of Europe just went right ahead and carried on without you. You marginalised Britain as a member of the EU and made us a laughing-stock in the eyes of the world.

Ha ha ha. Very funny, Mr Cameron.

“We came through the great recession together; we are building the great British revival together,” he said. But he can’t say that to the many thousands of people who used to be claiming sickness and disability benefits but aren’t anymore because they are all dead. They didn’t come through the great recession. Cameron cut off their means of survival, forcing them into situations in which their health was allowed to worsen until their conditions overwhelmed them, or their situation induced such huge bouts of depression that they took their own lives.

Ha h- no. That’s not funny, Mr Cameron.

“The job is not done. If you want to finish the job we have started, back the party with a plan,” he said. Well, no. The Conservative plan (such as it is) will destroy your employment rights, scrap the welfare state, maintain a huge underclass of unemployed people to use as fodder for work-for-your-benefit schemes (a contradiction in terms if ever there was one) to circumvent the minimum wage, and to claim credit for successes that aren’t theirs.

There is only one reason to support the Conservative Party in this – or any other election.

That is if there is only one other political party on the ballot paper – and that party is UKIP.

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The State of Osborne: a visitor’s guide

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A moment of crisis for David Cameron as he realises it is unlikely that George Osborne has the faintest idea what the Autumn Statement means.

If anybody else had prattled on for 50 minutes while hardly uttering a single sensible word, they would have been consigned to a mental hospital forthwith.

But this is Coalition Britain, and the speaker was George Osborne, the man who likes to tell us all that he is in charge of the nation’s finances. Thanks to his government’s Department for Work and Pensions, nobody is allowed to have mental illnesses anymore; after this speech, it seems likely we all have an idea about the reason for that.

A 50-minute speech is a lot of verbiage, and it is certain that worthier journalists across Britain – if not the world – have already analysed it to exhaustion. Allow me to let you into a secret:

They’re probably trying too hard.

Most of the speech was about putting Labour down. The Opposition has made all the headway over the past few weeks, and we all knew Osborne was under orders to change the mood music of the nation in time for Christmas.

Did he manage it? Not really. His speeches always come across as strained events, where he’s making an effort to be clever without ever achieving it. As a result, the message gets lost. We can therefore discount the Labour-bashing.

That leaves us with what he actually said. Even here, his meaning was at times opaque. What follows is an attempt to provide a handy guide to George-speak, for anyone unfortunate enough to have heard him yesterday.

Osborne: “We have held our nerve while those who predicted there would be no growth until we turned the spending taps back on have been proved comprehensively wrong.”/Meaning: “I am lying. Austerity failed miserably and the economy flatlined. A few months ago I realised that we would have nothing to show at election time so I turned the spending taps back on, with Help To Buy and Funding For Lending. I know that these are exactly the sort of Keynesian economic levers that I preached against for three years but I’m hoping that nobody noticed.”

The hard work of the British people is paying off, and we will not squander their efforts./Osborne appears to be celebrating his three years of stagnation. He inherited growth and decided to trash it. (MagsNews on Twitter)

There was no double-dip recession./“Phew! Lucky escape there!”

At the time of the Budget in March, the Office of Budget Responsibility forecast that growth this year would be 0.6 per cent. Today, it more than doubles that forecast and the estimate for growth will be 1.4 per cent./“Please God don’t let anybody remember that three years ago, the forecast for this year was 2.9 per cent.”

Today in Britain, employment is at an all-time high… We have the lowest proportion of workless households for 17 years./These jobs have increased the numbers of the working poor. Too few are full-time; too many are part-time, zero-hours or self-employed, serving up no National Insurance contributions from employers, no holiday or sick pay, or making contractors work long hours for less than the minimum wage.

The number of people claiming unemployment benefit has fallen by more than 200,000 in the past six months—the largest such fall for 16 years./“And we have imposed sanctions on more people on Jobseekers’ Allowance than ever before, in order to produce that figure.”

By 2018-19, on this measure, the OBR does not expect a deficit at all. Instead, it expects Britain to run a small surplus. These numbers mean that the Government will meet their fiscal mandate to bring the structural current budget into balance and meet it one year early./Although of course the books were initially supposed to be balanced by 2015. (Huffington Post live blog)

This year, we will borrow £111 billion, which is £9 billion less than was feared in March./…and £41 billion more than forecast in 2010.

We will cap overall welfare spending./But this will not include the state pension (half the social security budget) or the most cyclical jobseeker benefits./”A living wage would mean less dosh on in-work benefits; letting councils build would mean less subsidies for private landlords.” (Owen Jones on Twitter)

Pensioners will be more than £800 better off every year./But as usual he’s ignoring the VAT elephant in the room. (Mark Ferguson on Twitter)

We think that a fair principle is that, as now, people should expect to spend up to a third of their adult lives in retirement. Based on the latest life expectancy figures, applying that principle would mean an increase in the state pension age to 68 in the mid-2030s and to 69 in the late 2040s./But life expectancy depends on where you live and how much money you have, meaning the poor continue to pay more towards the pensions of the rich./”Current pensioners better off – future pensioners paying for it. What was that about “making our kids pay for current spending” George?” (Mark Ferguson of LabourList on Twitter)

Most wealthy people pay their taxes and make a huge contribution to funding our public services; the latest figures show that 30 per cent of all income tax is paid by just one per cent of taxpayers./Estimates of the amount of tax that is not collected range between £25-£120 billion per year and it is not the poor who aren’t paying up.

This year the rich pay a greater share of the nation’s income taxes than was the case in any year under the last Labour Government./Because they now have more income. Simple really. (Tom Clark of The Guardian, on Twitter)

Today we set out in detail the largest package of measures to tackle tax avoidance, tax evasion, fraud and error so far this Parliament. Together it will raise over £9 billion over the next five years./Including capital gains tax for foreign investors on sales of UK property, which has nothing to do with tax avoidance/evasion, fraud or error.

We must confront this simple truth: if we want more people to own a home, we have to build more homes… The latest survey data showed residential construction growing at its fastest rate for a decade./The rate of house building is at its lowest peacetime level since the 1920s

This autumn statement has found the financial resources to fund the expansion of free school meals to all school children in reception, year 1 and year 2, announced by the Deputy Prime Minister and supported by me./On Wednesday, the Lib Dems and Michael Gove’s education department argued over who had to pay for it.

Extra funding will be provided to science, technology, and engineering courses [in universities]. The new loans will be financed by selling the old student loan book, allowing thousands more to achieve their potential./And pushing thousands into the hands of debt collectors.

The best way to help business is by lowering the burden of tax. KPMG’s report last week confirmed for the second year running that Britain has the most competitive business tax system in the world./KPMG would know – it writes the tax system and also runs some of the larger tax avoidance schemes.

From April 2015 we will introduce a new transferable tax allowance for married couples… Four million families will benefit, many of them among the poorest working families in our country./Osborne says the Tories are backing British Families – but only ones who are married it seems. (Mark Ferguson on Twitter)/While the new tax arrangements bribe families to marry, the benefit cap will bribe big families to split up. (Tom Clark on Twitter)

We are all in this together./The biggest lie of this Parliament.

We are also helping families with their energy bills./Commence the cutting of the “green crap”. This from the “Greenest government ever”. (Mark Ferguson on Twitter)

Next year’s fuel duty rise will be cancelled./This is a cut in a tax that was never imposed in the first place.

We are going to abolish the jobs tax on young people under the age of 21. Employer national insurance contributions will be removed altogether on a million and a half jobs for young people./Young people will therefore have less chance to get contribution-based benefit. National Insurance assures people their pension contributions – except when it isn’t paid. So they will have no contributions to show for any years they worked before 21 and will have to work until their late 60s.

The cost for a business of employing a young person on a salary of £12,000 will fall by over £500./This is a bonus for businesses, not employees.

“Jobs tax” – it’s ludicrous, isn’t it? National Insurance has been a respected part of British life for more than 100 years but Osborne, living as he does in a mythical Victorian-era golden age that never actually existed, thinks it is a “jobs tax”. Either that or he’s still bruised by the fact that Labour’s labelling of the under-occupation charge as a Bedroom Tax caught on with the public.

Shadow Chancellor Ed Balls got on his feet and immediately attacked Osborne’s “breathtaking complacency” for denying the drop in living standards faced by everyone in the country, with families already £1,600 per year worse off. Osborne laughed. He thought that was funny.

The Shadow Chancellor pointed out that we are enduring the slowest recovery in a century, and that average real wages will have dropped by 5.8 per cent by the end of the Parliament (except for fatcat business bosses).

He was having a hard time getting his points across, however, because Tory MPs were heckling him very loudly. Owen Jones tweeted, appositely, “Do the Tories think that a bunch of braying MPs dripping with privilege, while ordinary people’s living standards crash, is good TV?”

Maybe they did. Maybe they thought they had the public on their side.

Let’s have a look at a few comments from the public – courtesy of the Huffington Post:

“Planning to kill more people, George?” (Robin Stacey)

“Spend more you wet lipped monkey.” (Will Moriarty)

“No one has an ounce of faith in anything you say, you parasitic pool of curdled warthog’s puke.” (Anthony Nicholas)

And finally: “Hope you end the speech with your resignation x” (Joanne Wood – and yes, she did mean to end with a kiss).

What a shame Osborne did not follow her advice.

 

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Public and private debt reach record levels under ConDem Coalition

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Household debt in the UK has reached a record £1.43 trillion, according to the BBC. What a marvellous achievement for Gideon George Osborne to put next to his already-record public net debt of £1.212 trillion (excluding interventions) or £2.184 trillion (including them).

If you’re surprised at that, don’t be – he needs to pretend that there isn’t any money so he can cut any services that are still left in the public domain after the fire sale of the last few years.

The Tory plan was always to increase private debt. Of course it was – if you cut public spending for people on the breadline, then they go into debt. Why do you think Wonga.com’s owner Dawn Capital is such a prolific contributor to Tory Party funds, with £537,000 in known donations this time last year?

The rich are shielded from debt problems in the same way they are shielded from taxation, thanks to the way our tax laws have been rewritten in their favour – all their money is safely tucked away in tax havens and can’t be touched.

On average, each adult in the UK owes £28,489. Some owe much more than that, though. Yr obdt srvt doesn’t owe a bean to anyone, despite being very poor, so that’s already £28,489 to be spread among everyone else. Mrs Mike isn’t in debt either.

The BBC report cautiously suggests that the record debt level “might increase concerns that the UK’s economic recovery [you know, the one they keep talking about on the news and in Parliament as if it actually exists] is based on increased borrowing, rather than growth sustained by rising incomes” – which of course is correct.

According to The Money Charity, total net lending by UK banks and building societies rose by £1.9 billion in September 2013 – that’s just in one month.

Over the four quarters to Q2 2013, they wrote off £3.67 billion of loans to individuals. In Q2 2013, the daily write-off was £7.61 million.

Based on the latest available data, every day in the UK 285 people are declared insolvent or bankrupt – that’s one every five minutes; 84 properties are repossessed; 1,447 people lost their jobs and eight people became unemployed for more than 12 months; 141 mortgage possession claims are issued and 113 mortgage possession orders are made; and 431 landlord possession claims are issued and 319 landlord possession orders are made.

The benefit system helps nobody. It has been redesigned specifically to push people further into debt – the cap on benefit rate increases to one per cent per year means people are two per cent worse-off for every year it continues, while inflation remains at current levels.

It is in this atmosphere that words written in this blog more than a year ago come back to haunt us all: “What do people do for money when the State fails them and they can’t get work? They fall into the debt trap.

“High-interest, doorstep lending to poor people is Britain’s latest – perhaps only – boom industry. In other words, the government’s sick benefits regime is forcing the poor into debt to organisations that will take away everything they have left, in order to make up payments on a loan whose interest rate they probably made up on the spot.

“And when they’ve taken everything, what do you do then?

“Do you really want your kids to starve?”

Iain Duncan Smith owes us all an apology – but do we owe one to Rachel Reeves?

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Iain Duncan Smith: He opens his mouth – and the world screams. [Image: Steve Bell]

It seems redundant to start an article by saying Iain Duncan Smith is a filthy liar, because it is a fact that we all know too well already.

The latest offence – and the word is used very deliberately – took place during Work and Pensions Questions in Parliament yesterday (October 14) and means that he has lied to Parliament – not for the first time, either!

It is interesting that he phrased his words in a particular way. Responding to Andy Sawford’s call for clarity on whether, under the new claimant commitment, benefits officers will sanction jobseekers for refusing zero-hours work, he said this referred to “people’s obligations under the existing terms… Once they are offered a job they must take it… Right now, zero-hours contracts are legal.”

You will note, Dear Reader, that he did not simply say, “Under the claimant commitment, they must take zero-hours work or be sanctioned,” even though that is clearly the meaning of his words. It seems likely he was looking for leeway if questioned about it afterwards.

Well, he shouldn’t get any. A reasonable person, looking at the statement, will draw the obvious – intended – conclusion.

It is a conclusion – and a statement – that runs against current DWP policy.

The DWP responded to a Freedom of Information request in July this year, which also called for clarity on zero-hours contracts. The response contains the very clear statement: “Jobseeker’s Allowance claimants are not required to apply for zero hours contract vacancies and they will not face sanctions for turning down the offer of a zero hours contract.”

So Iain Duncan Smith was lying to Parliament yesterday – a very grave offence for a Secretary of State to commit.

Smith said, responding to Mr Sawford: “People will lose benefits for three months for a first offence, six months for a second offence and three years for a third offence.” When it comes to Parliamentary lies, he has committed multiple offences, and yet he gets away with it every time.

Why?

Another person who seems to have had trouble saying what they mean is Rachel Reeves. This blog – and many other people – took her to task last weekend, after The Observer published an interview in which she reportedly made many ill-advised comments, giving the impression that Labour policy on social security was lurching to the right yet again.

Yesterday a statement appeared on the Labour Party website in which the new Shadow Work and Pensions Secretary put forward a much more reasonable plan for social security reform under a Labour government. Particularly attractive are the parts where she says Labour will work with the disabled to design services and benefits that will help them play their part, and where she promises to repeal the Bedroom Tax, which has penalised vulnerable people, many of them disabled.

It is a much better statement of intent and indicates that Ms Reeves has been from one end to the other of a very steep learning curve with extreme rapidity.

Does it mean she was misquoted in the Observer article, and should she receive an apology from those of us who leapt down her throat? No.

There has been no suggestion that the article was inaccurate or unfair. The logical conclusion is that she said those words, and it is also logical to deduce that, had we not reacted so strongly, she might not have released the new statement.

It is unfortunate that, for many, the damage has been done. The Observer article was the first chance we had to see what the new Shadow Work and Pensions Secretary was thinking – and first impressions last. Her new statement seems like to go largely unreported. It should be noted that Tristram Hunt also made a fool of himself by supporting Michael Gove’s wasteful and elitist ‘Free Schools’ scheme. Hopefully Ed Miliband has accepted the need to make sure all of his Shadow Cabinet stay on-message from now until the next election. Reeves and Hunt should count themselves lucky to still have their new jobs.

But let’s not dwell on that. The new statement by Rachel Reeves has much to commend it, and is reproduced in full below. Your responses are invited.

Leading the debate on employment, poverty and social security.

Families facing a cost of living crisis want to know we have a social security system that is fair and sustainable, with costs kept under control but there for them when they need it.

The Tories seek to use every opportunity to divide this country and set one group of people against another. But their approach is failing – with the result that people are left out of work for year after year and costs to the country continue to rise. The Work Programme isn’t working, the roll-out of Universal Credit is in disarray, the Youth Contract has been a flop and there is mounting anger at the degrading and disgraceful treatment of disabled people by ATOS.

The complacent Tories are congratulating themselves about a long-delayed recovery. But almost a million young people are out of work. For those in work, increasing numbers of them aren’t being paid a living wage, are stuck on zero hours contracts or working part time when they want to work full time, and are being hit by soaring rents because levels of house building are so low – all of which drive up the benefits bill.

Labour will control the costs of social security by getting more people into work, rewarding work and tackling low pay, investing in the future, and recognising contribution. We’ll strive to make the right to work a reality for people with disabilities, working with them to design services and benefits that enable them to play their part.

A One Nation social security system will be one with responsibility at its heart – people receiving benefits who can work have a responsibility to look for work, prepare for work and take jobs that are available to them, but government has a responsibility to treat benefit recipients fairly and decently, help and support them and work with employers to ensure there are real job opportunities available.

Our compulsory jobs guarantees for young people and the long term unemployed, funded by repeating the tax on bank bonuses and limiting pensions tax relief for those on more than £150,000, would ensure there is work for under 25s out of work for more than a year and adults out of work for more than two years. These would be proper paid jobs – and people would be expected to take them or face losing benefits.

And unlike the Tories, we’ll put an effective cap on structural social security spending by getting tough on the causes of unemployment and rising benefit bills: low pay, lack of economic opportunity, shortage of affordable housing.

We would repeal cruel and counterproductive measures like David Cameron’s Bedroom Tax. I see constituents week in and week out with heart-breaking stories about how this policy is hitting them and their families. Around the country hundreds of thousands of vulnerable people, many of them disabled, are being penalised by this perverse policy which could end up costing more than it saves because of the distress and disruption it’s causing.

And we’ll keep up the campaign for the living wage, and for the economic reforms we need to ensure that prosperity is fairly shared and welfare is not a substitute for good employment and decent jobs.

‘Slimy’ minister talks up unfunded housing scheme while 50,000 face eviction

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AAA, alistair darling, bedroom tax, bubble, building, Channel 4, Coalition, Conservative, credit rating, crisis, David Cameron, debt, deficit, equity loan scheme, evict, George Osborne, government, help to buy, housing, interest rate, Johnny Void, Keighley, Kris Hopkins, Michael Meacher, Mike Sivier, mikesivier, mortgage guarantee, Nadine Dorries, nastiest, nasty, Northampton, people, Philip Davies, politics, price, slimiest, slimy, Tories, Tory, under occupation charge, unfunded, Vox Political

‘Slimy’ Tory mouthpiece? Kris Hopkins (left), the Coalition’s new housing minister, takes tea with David Cameron on a Northampton housing estate while talking a lot of nonsense about Help to Buy. [Picture: WPA Pool/Getty Images Europe]

One of Parliament’s “slimiest, nastiest MPs” has got stuck into his new job, putting out a press release on how the hideously ill-judged ‘Help to Buy’ housing scheme is “surging ahead”.

Kris Hopkins, the Conservative MP for Keighley whose only previous claims to fame were allegations that “gangs of Muslim men were going around raping white kids” (thanks to Johnny Void for that one) and a Twitter spat with the odious Philip Davies, said the equity loan scheme had driven up the rate of house building and captured the public imagination with more than 15,000 reservations for new-build homes in its first six months.

Reality check: House building is at its lowest level since the 1920s. In the 2012-13 financial year, only 135,117 new homes were completed – the lowest number on record.

Earlier this year, Hopkins called for Conservatives to unite behind David Cameron – to which Nadine Dorries responded, “pass the sick bag”. Yesterday, he at least was united behind Cameron – as they toured a Northampton housing development.

According to the press release, he said government action to restore confidence to the housing market was working, with over a third of a million new homes built over the last 3 years, including 150,000 affordable homes.

Reality check: That is a lower number than any period on record prior to the current Coalition government. It is not an achievement. It is a disaster.

Under the equity loan scheme, buyers can get mortgages on new build homes with a five per cent deposit, with the rest provided by an equity loan from the government of up to 20 per cent on properties with a value of £600,000 or less.

Yesterday (October 8), Cameron and his Chancellor, George Osborne, launched the second part of Help to Buy – the mortgage guarantee – which will also be available on existing properties worth £600,000 or less. Lenders will be able to offer a 95 per cent loan-to-value mortgage, made possible by a government guarantee to the lender of up to 15 per cent of the value of the property.

Reality check: In English, this means the taxpayer is underwriting people’s mortgages. Osborne reckons he has put aside £12 billion for this part of the scheme but – as former Chancellor Alistair Darling recently noted  – the source is unidentified. “Strange that when Labour makes promises, the Tories claim it will mean more borrowing, yet it’s fine for them to make unfunded promises,” Mr Darling wrote.

Back to the press release: “Housebuilding is growing at its fastest rate for 10 years,” it says.

Reality check: The Channel 4 article, quoted above, warns us to “take the proclamations we are getting from the government about high rates of growth in housebuilding with a hefty pinch of salt. Housebuilding completions are starting from modern record lows; the rates of growth are bound to be high.”

What does Kris Hopkins have to say about this? Not a lot, in fact. He blathers that the equity loan has “captured the imagination of the public and is boosting the supply of new homes across the country”.

Reality check: Back to Channel 4 – “The levels… show that something went wrong in 12/13. Turning the corner means going from abysmal to terrible.”

“Our policies on housing are working,” said Hopkins in the press release. “Housebuilding is growing at its fastest rate for 10 years, and the tough decisions we’ve taken to tackle the deficit have kept interest rates low and are now delivering real help to hardworking people.”

Reality check: We’ve already covered the speed at which house building is growing; he should not be pretending this is a huge success when the number of new houses being built has fallen to a record low. As for the policy on the deficit keeping interest rates low – Vox Political blew that out of the water months ago. For clarity: A government can always service its debt, if that debt is in its own currency. Our debt is in UK pounds and we can always service it. Our creditors know that, so they remain happy to continue financing it. Otherwise, with Osborne borrowing 75 per cent more than he said he would in 2010, and with the UK’s ‘AAA’ credit rating gone in a puff of agency doubt earlier this year, Osborne would have been up a certain creek without an economic lever (to mix a metaphor or two).

“I’m delighted we’ve launched the second part of Help to Buy, the mortgage guarantee, which will strengthen the package of measures that have already done so much to restore confidence in the housing market,” Hopkins concluded.

Final reality check: Michael Meacher is one of many who believe that ‘Help to Buy’ will do nothing more than create another housing price ‘bubble’, most likely leading to another debt crisis. “Even [George Osborne’s] Tory supporters believe [this] will throw oil on the fire of the already overheated surge in house prices,” he wrote.

Meanwhile, at the other end of Britain’s housing market, 50,000 people are facing eviction because of the Bedroom Tax.

Thinktank’s schizoid report will not help Osborne to secure more cuts

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Schizoid report: José Ángel Gurría, secretary general of the OECD. He’d probably object to the way we’ve defaced his sign, but it now provides a more accurate description of his organisation’s opinions.

How can the Organisation for Economic Co-operation and Development tell George Osborne that he should invest in infrastructure projects but continue with his policy of cutting public spending, when the first public spending he cut was infrastructure projects?

Is this a sign of the delirium into which the western economies are sinking, partly through slavish adherence to neoliberal nonsense – in the face of all the facts – and party through a lack of raw intelligence?

The OECD, according to The Guardian, has revised down its economic growth forecast for the UK. What a surprise; they haven’t revised our growth upwards since before Osborne became Chancellor – and that alone indicates where the problem lies.

It says spending cuts and a lack of consumer and business confidence are restricting what we should all call “the recovery” only in mocking terms.

But, as the newspaper reports, “it [the OECD] backed George Osborne’s plans for further spending cuts, saying: ‘With a high budget deficit and gross government debt rising to 90 per cent of GDP in 2012, further fiscal consolidation is necessary to restore the sustainability of public finances.'”

What? It’s still supporting the discredited view that when public debt hits 90 per cent of GDP, growth is slowed? Hasn’t that idea been comprehensively rubbished – not only on paper but in the fact that UK growth hit standstill point the instant Osborne came in as Chancellor and inflicted his policies on us all?

It isn’t the amount of debt that’s the problem – its the stupid things that blinkered upper-class idiots do in response!

The OECD said the Labour market was “resilient”, so it obviously has been paying too much attention to DWP press releases when it should have looked up the facts. According to the Resolution Foundation (yes, another thinktank), as reported in The Independent, “The jobs market remains weak and is likely to continue to struggle well into the second half of the decade, making this a more severe downturn for employment levels than the two previous recessions”.

The article states: “The Resolution Foundation has performed an analysis of the total adult employment rate – which reflects the increase in the size of the population and the growth of the available workforce – and found that there remains a “jobs gap” of 930,000. This is the number of new jobs that would be required to restore the employment rate from its present level of 58.5 per cent to the 60.3 per cent recorded in 2008. This jobs gap has actually grown from 830,000 in the final quarter of last year.”

Once again, we see the facts do not support Coalition government press releases.

The OECD’s claim that average real earnings are “weak”, on the other hand, is realistic and gives the necessary perspective to a report from the Office for National Statistics that the total number of weekly hours worked across the economy hit a new record high of 950.3 million in the first quarter of the year.

If everybody’s working so much, why haven’t we got any money? Answer: Because the Tory-led government has been pushing wages downwards, ever since it came into power. Average earnings for bosses of FT350 companies have rocketed upwards, but the worker on the street had a pay rise of just 0.8 per cent last year. Look at the way benefit increases have been pushed below the rate of inflation (the DWP again!) in order to make the unemployed desperate to take whatever work they can get – no matter how poorly-paid – and to put those who have jobs in fear of losing them, so that they won’t be demanding pay rises anytime soon.

Back to the OECD: It wants a house-building programme to spur jobs growth. Without this, it warned that house values could overheat, sparking another price bubble. Isn’t that what George Osborne wants? Look at the so-called “second-home subsidy” he announced in the March budget, when he said the government would underwrite a percentage of new house purchases. Already we have seen warnings (from Sir Mervyn King in this Vox article) that it will create a price bubble.

So not only is Osborne right; he’s also wrong. Growth is down because of his policy of cuts, but he should continue making them. Unemployment is down – but the jobs gap has grown.

Also, not only is Osborne wrong; he’s very wrong. Low wages mean economy-boosting demand is also low – but the government is pushing wages down still further. House-building is needed to spur jobs growth and prevent a price bubble – but he isn’t building houses and he is actively pursuing the creation of a price bubble.

That’s what the OECD report says. There’s no way Osborne should be using it to support his policies but I bet he will.

If I were the secretary of state in one of the government departments he’s trying to squeeze for more cuts, I would be phoning the local mental hospital, saying a dangerous madman was loose in Whitehall and demanding that he should be sectioned.

But it seems that, instead of this, the ministers who’ve dragged their feet will be subjected to a grilling by the all-new ‘Star Chamber’, which is the name for the public expenditure committee Osborne has set up. Apparently ‘Star Chamber’ has a “mystique” about it (according to The Guardian); in fact it will consist of Osborne, Danny Alexander and those ministers who’ve given in and agreed cuts, haranguing the dissenters until they fold up like cheap thugs who’ve been punched in the kidneys once too often.

The fact that they will all eventually capitulate means we can laugh at them next time they’re on television trying to act tough, but the whole sorry story leaves us with one immutable fact:

This is no way to run an economy.

Get a clue, George! (Or: Saving the economy, part two)

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Andrew Marr, autumn statement, benefit, benefits, building, change, climate, Coalition, Conservative, crisis, debt, deficit, Department for Work and Pensions, DWP, economy, Ed Balls, energy, financial, GDP, George Osborne, government, house, housing, infrastructure, justification narrative, Labour, Mike Sivier, mikesivier, OBR, Office for Budget Responsibility, politics, tax, Tories, Tory, unemployment, Vox Political, welfare, Work Programme

Don’t get your hopes up! The box is probably as empty of good ideas as his head.

What a lot of twaddle Gideon George Osborne was peddling to Andrew Marr yesterday!

Speaking in advance of his Autumn Statement (or mini-budget) on Wednesday, Gideon told us all that cutting the UK’s financial deficit was “taking longer” than planned. This is because his government hasn’t invested in any infrastructure projects worth mentioning, or created jobs any other way. Where projects have been identified (HS2, new airport/runway), his political party has descended into squabbles over price and place.

He said “to turn back now would be a complete disaster”, which is true but pointless, as nobody is contemplating it. If Labour were to take over in 2015, they would have to look at the situation then and find a way to progress from there – they wouldn’t try to turn back the clock; that’s not possible.

He said richer people would “pay their fair share”, which means nothing when we don’t know what Mr Osborne considers is fair to richer people. What we’ve seen so far would suggest he likes to hammer the poor while handing richer people a tax rebate. Do you think that’s paying their fair share?

But I’ve already tackled what I would do with taxation.

He said the deficit was down by a quarter. This is a statistic that the Tories like to peddle but it is utterly meaningless when you see that borrowing for October hit £8.6 billion – £2.7 billion more than in October 2011. How is this an improvement?

He did show one flash of wisdom; he wisely refused to divulge any of the Office for Budget Irresponsibility’s economic forecasts in advance of Wednesday’s Statement. This is an organisation that has been consistently wrong, ever since it was set up. I wouldn’t trust it to speak my weight.

His worst transgression, though, was this: “To go back to the borrowing and the debt and the spending that Ed Balls represents would be a complete disaster for our country.”

Get a grip, Gideon! Borrowing during the Labour years was around 2 per cent LESS than during any preceding Conservative administration over the last 40 years! As for debt, even after the financial crisis and the bank bailout, the UK’s debt was a lower percentage of GDP than it had been for most of the 20th century! You are peddling an infantile justification narrative that even a child can see is nonsense!

I think the biggest problem here is one of perception. Gideon‘s idea of borrowing and spending involves borrowing money to give to his party’s fatcat business friends through government schemes like the work programme (don’t let them tell you it’s payment by results – even the DWP has admitted it isn’t). If he actually got down to proper investment, in proper infrastructure projects, the economy would start to rally.

Government investment of this kind would, in fact, pay for itself – and help pay off the deficit.

Any spending has a greater impact on the rest of the economy than the initial outlay; this is known in the jargon as the ‘multiplier effect’. There are a variety of multipliers depending on the sector. The highest multiplier is attached to construction at 1:2.06, meaning that every £1bn invested in construction will actually generate £2.06bn in new activity.

The government could, for example, embark on a massive programme of publicly-owned housing, to help reduce the deficit. It can do so much more efficiently than the private sector for three reasons: First, government has a return in the form of taxes; secondly, welfare spending falls as people are brought into work; thirdly, government borrows at much lower interest rates.

For these reasons, government can actually build the same house for a much lower net outlay than the developer and so offer affordable housing which contributes to reducing the deficit.

Also, there are 1.8 million families (representing over five million people) on council house waiting lists. There is an urgent need to build affordable housing for these people, which would also help reduce housing benefit payments.

There is no obstacle to increasing borrowing in order to fund investment. The interest rate on 10-year government borrowing is currently well below the level of inflation – meaning the government can borrow at interest rates that are less than zero in real terms. Why doesn’t anyone ask Gideon why he isn’t taking full advantage of these amazingly favourable opportunities?

This is the kind of investment that creates real jobs. You don’t create jobs by bullying people on benefits into work that doesn’t exist, Gideon! Here are a few more examples of where public sector jobs would benefit the economy as a whole:

It has been estimated that over a million ‘climate jobs’ could be created if the government was serious about tackling both climate change and unemployment – these would include areas like housing, renewable energy and public transport investment including high speed rail, bus networks and electric car manufacture.

Much of the country outside of London also needs huge investment in bus services – and, just as we should invest in electric car technology, we should also invest in electric buses and tram networks.

Only 2.2% of UK energy comes from renewable sources compared with 8.9% in Germany, 11% in France, and an impressive 44.4% in Sweden. If we are committed to tackling climate change and ensuring domestic energy security there needs to be investment in renewable energy technology.

Are you going to mention any of those in your Autumn Statement, Gideon?

I think not.

‘New’ government plans – we really have heard it all before

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affordable homes, bank, bonus, building, Coalition, Conservative, David Cameron, debt, economy, fiscal austerity, George Osborne, government, Green Belt, housing, II, infrastructure, Labour, Liberal, Liberal Democrat, Mike Sivier, mikesivier, Parliament, people, planning, politics, tax, Tories, Tory, World War Two

David Cameron and George Osborne are hoping to relaunch (again) the Coalition government with policies that (apart from a couple of ‘Nasty Party’ twists) are straight from the Labour Party back catalogue. Someone should call their bluff.

You can’t make an old idea new just by saying it is.

David Cameron and George Osborne should have borne that in mind before they announced the ‘new’ policies with which they plan to relaunch (yet again) the Coalition government this week.

The plan appears to be threefold, with the government aiming to underwrite up to £10bn of new housing developments, and a further £40bn of private sector building projects which need finance – using money to be repaid on the government’s low interest rates, and it will also legislate to speed up planning conditions and encourage development on Green Belt land, if certain conditions are met.

New? Hardly.

The Labour Party has spent the last two years complaining bitterly at the government’s lack of interest in house building. It has been calling for construction of affordable homes, to be funded by a bank bonus tax.

Labour has also complained that major building projects have been falling backwards, due to a lack of investment.

It is also well-accepted that George Osborne’s plan to encourage building on Green Belt land is a renewal of a previous attempt.

But let’s go back a little further than recent history. I know I’ve already established that the new Tory plan is a modification of moves that Labour has been demanding for years, but there’s a better example that is decades old.

After World War Two, when the UK was in the deepest debt it had ever faced, the Labour government of the time decided that fiscal austerity was a move in entirely the wrong direction. Instead it invested in projects to rebuild the country and reinvigorate its industry. Barring the incursion into much-loved Green Belt land, this is exactly what Cameron and Osborne are planning now. But on a smaller scale.

So there it is. Not only are these ‘new’ policies unoriginal, they weren’t even Tory policies to start with (apart from the plan to kick us all in the teeth by relaxing planning regulations to prevent objections and build on the Green Belt – in other words, the nasty bits).

Somehow I doubt they’ll give credit where it’s due.