Good riddance to bad rubbish: Universal Jobmatch to be scrapped

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Leaked documents from the Department for Work and Pensions have shown that Universal Jobmatch is set to be scrapped – not only because it is full of fake and repeat job entries but also because it is too expensive.

But the government is bound to its contract for another two years and is unlikely to try to release itself until the agreement (with a company called, appropriately, Monster) comes up for renewal.

The plans have been revealed by The Guardian, after the documents were passed to the paper from an unnamed source.

It seems there was no mention of the adverts for illegal jobs such as sex work; perhaps the particular civil servants who wrote these reports don’t look at that kind of material on the internet!

The leak follows revelations that some job postings “enticed jobseekers to spend money needlessly – for example on fake criminal records checks – or were a means of harvesting personal information for identity fraud”.

According to Wikipedia, the site was developed by Monster at a cost of over £17 million and has annual running charges of £6 million. The Guardian states that Monster wanted an extra £975,000 to clear UJM of fraudulent employment adverts.

What is not clear is whether jobsworth Jobcentre staff will continue demanding that jobseekers use the site.

They’ll have a big job on their hands – convincing anyone that it is still workable.

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‘Abolition of the Bedroom Tax’ Bill is launched in Parliament

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Ian Lavery launched his ambitious Bill to abolish the Bedroom Tax yesterday. [Image: Daily Mirror]

Make no mistake about it – the purpose of the legislation tabled yesterday (Wednesday) by Labour’s Ian Lavery is to discover how many Liberal Democrat MPs are redeemable and how many have been irreversibly corrupted by their current alliance with the Conservatives.

The Bill to abolish the hated Bedroom Tax is unlikely to gain Royal Assent unless Liberal Democrats who supported the imposition of the Bedroom Tax reverse their point of view. There is even the possibility that some Conservatives may now realise that they, as Mr Lavery put it, “underestimated the real consequences of walking through the Government Lobby to support the introduction”. He also said: “It is an olive branch… I would hope that my Bill would receive support from members in all parties.”

MPs voted almost unanimously for the Bill to be brought in, with 226 votes in favour and only one against – but readers of this blog will be familiar with the fact that this happened with Michael Meacher’s motion for a commission of inquiry into the impact of social security changes on poverty. The House approved; the government did nothing.

So don’t get your hopes up too high.

Mr Lavery was the only person to speak on the subject, and his words are well worth noting here.

“The full and sole intention of this Bill is to sweep away the dreaded bedroom tax,” he said.

“It seeks to restore justice for up to 660,000 people — some of our country’s most vulnerable citizens, two-thirds of whom are disabled. They have been inhumanely let down by the Government’s reforms to housing benefit in the social sector. The tax has caused heartache and devastation to thousands of residents up and down this country. It is a tax whose forced implementation has put extreme pressure on councils, housing associations and social landlords. It is a tax that has put extreme pressure on the ordinary working people who are forced to deal with those unable to move and those unable to pay.

“On the introduction of the tax, Ministers argued that the changes would encourage people to downsize to smaller properties and, in doing so, help to cut the £23 billion annual bill for housing benefit; would free up living space for overcrowded families; and would encourage people to get jobs. Significantly, it has achieved none of those objectives.

“At the same time, the Department for Work and Pensions has trumpeted the measure as ‘returning fairness to housing benefit’. The words ‘fairness’ and ‘bedroom tax’ should not be uttered in the same sentence.”

He said: “This tax is a problem in each and every constituency up and down the country; this is not simply a problem in Labour-dominated authorities. I was contacted only last week by a distraught resident from the Tory shires who is hoping that my Bill will be successful, because he, a disabled man, is living in a three-bedroom property and has just received an eviction notice for bedroom tax arrears. He is not alone. The bedroom tax sufferers in Liberal Democrat and Tory constituencies number around 250,000. Perhaps we should ask them whether they think this abominable tax has restored fairness to housing benefit.”

Mr Lavery said his Bill seeks “to restore fairness and to end the misery that the bedroom tax has caused”. He said there are hundreds, if not thousands, of “appalling” examples of suffering, mentioning (but not naming) mother-of-two Stephanie Bottrill, a woman suffering a crippling illness who committed suicide after realising that she could not pay the bedroom tax. Her family received correspondence later saying that she should have been exempt from the charge.

He also mentioned a case he said was “hard to comprehend; it really is difficult to try to get to grips with”. He said: “The family of the 1999 child of courage, who spent years battling multiple cancers, is suffering at the hands of this horrible reform. These people are not living a life of luxury in palatial properties; they are living in a place in which they feel safe and which they call home. It is time to listen. I am sure that most fair-minded individuals would agree that a bedroom is not spare when carers sleep in it, when couples use it because one of them has health problems and they cannot share a bed, or when it houses vital medical equipment, yet this indiscriminate tax deems it so.

“The reality is that yet another measure introduced by this Government is in total and utter chaos. It lies in tatters, with the victims left to pick up the pieces. As thousands suffer, there is a real risk that the bedroom tax will end up costing more than it saves. The National Housing Federation has said that the savings claimed by the Government are ‘highly questionable’, partly because those who are forced to move to the private rented sector will end up costing more in housing benefit.

“Surely, as politicians and members of the general public, we are entitled to question the motives behind the introduction of the bedroom tax. The tax does not deal with the problem of under-occupation. In fact, the Government’s costings on the yield raised from the bedroom tax explicitly assume that people will not move into smaller properties. There are simply not enough smaller properties for people to move into.

“Some 180,000 households were deemed to be under-occupying two-bedroom homes, yet only 85,000 one-bedroom homes became available during the whole of 2012. The savings projections of the Department for Work and Pensions assume that not one of the 660,000 households affected would respond to the policy by moving to a smaller home. Put simply, this is yet another example of the Government balancing the books on the backs of the disabled and the vulnerable. The tax must be scrapped now.

“Housing associations say that tens of millions of pounds are likely to be lost through the build-up of arrears. Reports this morning estimate that 144,000 people have fallen behind with their rents since the introduction of the bedroom tax and that 14 per cent have received eviction notices [20,160].

“Was that really meant to happen? Was this eviction of the poor really the plan of the Government?

“In October, research by the University of York, which was based on data by the housing associations that have tenants affected by the bedroom tax, suggested that the policy could save up to 39 per cent less than the DWP had predicted. In the past week, it has emerged that more than half of the £500 million that the Government claim will be saved by the hated tax will be spent on re-housing disabled people. These are vulnerable people who already live in properties that have been adapted for their needs and who have built up local support networks with their friends, family and neighbours. The future for them lies in communities that are unknown and foreign to them. They have been cast out like the proverbial dog in the night.”

Interrupted when he mentioned the loophole that exempted Stephanie Bottrill from paying the bedroom tax – another member said that the loophole had been closed – Mr Lavery continued: “As Ministers scramble to mop up the mistakes, another challenge to the hated tax has arisen. A judge has overturned the tax in the case of a Rochdale man who argued that one of his bedrooms was used as a dining room. The appeal was upheld on the basis that the dictionary definition of a bedroom is a room that contains a bed that is used for sleeping in. An avalanche of appeals is on its way.

“I am proud to see that, only last week, the Scottish Labour party shamed the Scottish National party into abolishing the bedroom tax. I must put it on the record that I am also proud that one of the first acts of a future Labour Government will be to end this full frontal attack on the vulnerable. However, we cannot afford to wait until the general election of 2015. I urge the supporters of this tax to think again.

“The question is this: Are they happy to see the misery and social disruption of the vulnerable and disabled? I began this speech by expressing the view that those who voted in favour of introducing this dreaded bedroom tax may have underestimated the human suffering that it would cause. That is no longer in any doubt, so I urge them all to do the honourable thing and support my Bill.”

That really is the question for members of the public to consider, along with MPs. If your MP votes against Mr Lavery’s Bill, then you will know that they are, indeed, happy to inflict misery and disruption on the vulnerable and disabled.

Do you want to live in a country where people like that are allowed to rule?

Make no mistake: This legislation is unlikely to succeed without support from people who previously helped bring the Bedroom Tax into law. As such, it might not work.

But this is also legislation that should help you decide how you will vote in May next year.

We can hope that our MPs – and you yourself, dear reader – choose wisely.

The Bill will have its second reading on February 28.

 Labour’s Chris Bryant took the opportunity afforded by Mr Lavery’s motion to bring a point of order – that Iain Duncan Smith, Esther McVey and Lord Freud had been using false statistics. He said: “Earlier this year, when asked how many people had been affected by the loophole in the bedroom tax legislation, the Secretary of State for Work and Pensions… said that the number was between 3,000 and 5,000. In a written answer, the Minister of State… (Esther McVey)… said that she did not know how many had been affected. Lord Freud, a Minister in another place, said that it was an insignificant number. Today, however, he told the Work and Pensions Committee of this House that the number was 5,000.

“We have been doing their work for them, and from Freedom of Information requests to local authorities in England, Wales and Scotland, we already know, from just the third that replied, of 16,000 cases.”

Debbie Abrahams, a member of the Work and Pensions committee to whom Lord Freud provided the false figure, said committee members will be pursuing the matter.

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The fakery and failure behind the DWP’s new ‘health’ scheme

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It seems that the Department for Work and Pensions is sticking to the ‘Adolf Hitler’ model of public relations: If you tell a big lie and repeat it often enough, people will believe it. The press release announcing the new ‘Health and Work Service’ is riddled with long-debunked old lies – and one new statement that deserves our scrutiny.

This is the press release used by the BBC in its article on Saturday, telling us that the new, privately-run service is needed to combat the high cost of long-term absence from work.

It seems to be the DWP’s new practice to pass announcements to – let’s call them “trusted” – media outlets before putting them up on the government’s own press website, as a kind of test-run, allowing any credibility problems to be fixed before the government commits itself in an official way.

That’s why the announcement appeared on the government website yesterday (Monday) – two days after the BBC broke the story. Now – in just half the time it took to appear – let’s look at why it’s a load of rubbish.

“As many as 960,000 employees were on sick leave for a month or more each year on average between October 2010 and September 2013, the government has revealed,” the document begins.

Oh really? The DWP reached this figure by applying the findings of a survey, showing the ratio of long-term absences to total days of sickness absence, to findings by the Labour Force Survey showing the total number of days of sickness absence in the UK. That’s 9,000 sick days and 70 absences, applied to an average of 120 million sick days per year. This is based on 2,019 interviews with employees. There’s just one problem.

At the time covered by these surveys, there were around 4.9 million private sector employers.

Considering the huge size difference between the sample surveyed and the body it represents, it seems unlikely in the extreme that the figure is accurate. If it is right, it would be by luck; it’s probably wrong. The figure might as well have been made up – and you should treat it as though it was.

“The government has already taken big steps in getting people on long-term sick benefits back into work as part of the government’s long-term economic plan, with almost a quarter of a million coming off incapacity benefits since 2010-” Let’s stop there and examine the information content of this sentence so far.

The “government’s long-term economic plan” is a phrase that is being shoe-horned into every press release possible and means nothing. There never was a “long-term economic plan”, and there isn’t one now. Have you seen it? Of course not – it doesn’t exist. This is just a comforting nonsense inserted to lull people into false security that somebody knows what they are doing; I suspect the newly-privatised “nudge” unit may have had something to do with this.

As for “almost a quarter of a million coming off incapacity benefits since 2010”, check out this interview with Iain Duncan Smith, published in the Telegraph & Argus in 2010. He said: “I intend to move 1.5 million off incapacity benefit by 2014.”

It’s now 2014. We don’t have up-to-the-minute figures but on November 13 last year, the DWP press office helpfully tweeted us its then-current figure for people moving off incapacity benefits in a handy chart: 156,000.

That is a long way from a quarter of a million, and only around one-tenth of the Secretary-in-a-State’s 2010 target.

“- and almost a million who put in a claim actually have been found fit for work.” This is a bare-faced lie. It relates to a statement that 980,400 people were judged capable of work between 2008 and March 2013, but there are two problems with this. Firstly, it does not take into account the number of successful appeals against the ‘fit for work’ judgement (125,700); when adjusted to account for these, the total drops to 854,700. Secondly, this refers to the cumulative number of ‘fit for work’ outcomes of initial functional assessments since October 2008, and it seems likely that many people will have made repeat claims after being knocked off-benefit by an adverse decision. We do not know how many people have done this. Therefore the figure is meaningless.

So far, the DWP has told us that working people get sick (no surprises there), that it has failed to reach its target for clearing people off incapacity benefit and that its work capability assessment system is failing to push as many off-benefit as it should, because it is riddled with errors.

How does this connect with the creation of a new ‘Health and Work Service’, dedicated to ensuring that people who spend more than four weeks at a time off work with an illness get back into their job with a minimum of difficulty?

It’s obvious, isn’t it?

This is a scheme to ensure that people are discouraged from claiming incapacity benefits; the idea is that a drop in new claims, coupled with the number of uncontested ‘fit for work’ decisions, might lead to a larger drop in the number of active claims – which means the amount of money being paid out in benefits would also drop.

Inclusion of the word ‘health’ in the title of the new service is misleading, as it seems unlikely that consideration of an employee’s physical condition will have anything to do with the aim of the exercise.

Look at what the release has to say: “The Health and Work Service will offer a work-focused occupational health assessment and case management to employees in the early stages of sickness absence.”

It continues: “The work-focused occupational health assessment will identify the issues preventing an employee from returning to work and draw up a plan for them, their employer and GP, recommending how the employee can be helped back to work more quickly.”

Health doesn’t get a look-in.

No, what we’re most probably seeing is an expansion of the “biopsychosocial” method employed in work capability assessments, in an attempt to convince sick people that their illnesses are all in their minds. Don’t expect this approach to be used for people with broken limbs or easily-medicated diseases; this is for the new kinds of ‘subjective illness’, for which medical science has not been prepared – ‘chronic pain’, ‘chronic fatigue syndrome’, fibromyalgia and the like.

People with these conditions will probably be sent back to work – with speed. Their conditions may worsen, their lives may become an unending hell of pain and threats – I write from experience, as Mrs Mike spent around two years trying to soldier on in her job before finally giving up and claiming her own incapacity benefits – but that won’t matter to the DWP as long as they’re not claiming benefits.

That is what we can all expect from the new ‘service’.

It will be a fake, necessitated by failure.

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How much of the national debt has been faked by tax dodgers?

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Diddled into debt: A corporate tax avoidance scam is conning workers out of decent pay and the government out of tax and NI money, after causing the financial crisis.

“A bank in the UK could lend, say, $1bn to a US bank… generating tax-free income in the UK but a tax deduction in the US – and then simply borrow it back. For the second leg a different instrument could be used that generated tax-free income in the US and a tax deduction in the UK. The banks had simply swapped $1bn, to no economic effect beyond two tax breaks, while quite possibly keeping any mention of the debts off either’s balance sheet. Such tricks – the creation of debt more for tax advantages than any real business need – undoubtedly contributed to huge levels of inter-bank indebtedness that triggered the financial crisis.” – Richard Brooks, The Great Tax Robbery, p86.

If you are not deeply disturbed by the implications of the above quotation, read it again until you are. Richard Brooks is saying that the major banks of the UK, the USA, and who knows how many other countries colluded to hide massive amounts of money from the tax man by claiming – falsely – that it was debt.

The financial crisis happened because the banks could not service the debt they had created – they could not even pay back the interest on it, let alone the debt itself – and so the government was forced to step in and bail them out. So now the government had not only lost the tax it was due from the bank profits that had been hidden by the dodge Mr Brooks mentions, but it had now taken on the fake debt that had been created. The taxpayer was doubly the loser.

Who pays back the debt? Not the banks. Not the large corporations that are also avoiding tax. Not the rich businessmen and women who dreamed up the tax dodges. Thanks to changes in the law and already-existing legal loopholes that have not been closed by the Coalition government, they have been able to park their ill-gotten gains in offshore tax havens, depriving the nation of the wherewithal it needs to fix the problem they created.

Now it seems the government is also being deprived of badly-needed tax money because of the way large firms are structuring their pay packets – to the disadvantage of low-paid workers. The details were in Channel 4’s Dispatches documentary, Secrets of Your Pay Packet, broadcast on October 21.

With more people in work than ever before, the UK should be getting massive amounts more in tax and National Insurance, allowing it to provide the services we expect and pay down the national deficit. But the deficit hasn’t budged. Why?

Because the new jobs are part-time, self-employed or temporary.

Self-employed contracting means you can end up working for less than the minimum wage (you’re paid a fixed daily rate for the job, not the hours it takes to do it, so if it takes a long time to get it done, your pay-per-hour diminishes proportionately – and, as you are self-employed, you’re not entitled to the minimum wage).

Conversely, if you are employed part-time, you can end up working too few hours to qualify for tax or National Insurance (so you don’t get enough credits to pay for your pension later in life and the Treasury doesn’t get the tax money it needs to pay for services and clear debts) and on a personal level you don’t work enough hours to qualify for decent holidays. The company doesn’t pay for employees going on annual leave, potentially saving tens of millions of pounds.

If you work overtime, this doesn’t count towards annual leave, of course. So you can be employed on a part-time contract for, say, three days a week, be asked to work two more days overtime (a full five-day week) and lose out on all the benefits a full-time worker would expect.

The threshold is 20 hours per week. If you work less than that, employers do not have to pay NI contributions which would cost them nearly 14 per cent of pay. So people may work all their lives but never qualify for the state pension.

This is why more people are now in work than before the recession – it’s a cheat by bosses. They’re the ones who pay your tax and NI contributions. If you’re on pay that’s below the new tax threshold, you don’t pay tax. We have the Liberal Democrats to thank for that. It seems like a good deal but in fact it isn’t.

Meanwhile the companies say that cutting down working hours has saved jobs in a hard business environment, while the number of full-time jobs is down and wages have now fallen by 12 per cent in real terms (up from nine per cent, only a few months ago).

It is cheaper for companies to employ more people on shorter hours because they pay less to the government in tax and NI. And they say the “flexible” labour market has been a boost for the country, that having a job is better than having no job, and that it will help people progress.

That is not what we see.

We see a workforce ground down by the pressure of making ends meet on part-time or zero-hours jobs, making no NI contributions, getting very few holidays, and afraid to challenge the situation because their employers can simply let them go and hire someone else from the huge 2.5-million-strong pool of the unemployed (who are desperate for jobs because the DWP fills their entire lives will bullying and threats about losing their benefits).

We see the government completely unable to cover its costs because its own tax system – written by the ‘Big 4’ accountancy firms that have been responsible for more tax avoidance schemes than any other organisations in the country – actively promotes corporate tax avoidance; and Conservative ministers are totally indifferent to the huge losses they are piling up, because it means they can cut public services, or sell them off to (again) big corporations who will then avoid paying tax on them.

And we see the rich corporates laughing all the way to the (offshore) bank yet again.

The Coalition government has tried to tell us that it must squeeze benefits for the extremely poor, and low-paid working people must work much harder, in order to pay off the debt that – no matter what ministers tell us – neither they, nor the last Labour government, created.

In fact, this has been a story of tax avoidance by the very rich. A huge scam, running for decades, and hidden from the British people.

Are you angry yet?

Osborne’s big plan: falsify unemployment figures under the Workfare banner

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A swivel-eyed loon, earlier today. [Picture: Left Foot Forward]

So Gideon wants the long-term unemployed to go on Workfare indefinitely, does he?

Forgive me if I’m mistaken, but doesn’t this mean the Chancellor of the Exchequer’s big announcement – at this year’s Conservative Party Conference – is a tawdry plan to massage the unemployment figures?

I’m indebted to The Void blog for the following information, which I recalled while reading reports of Osborne’s drone to the swivel-eyed masses. An article from May stated that the Department for Work and Pensions (DWP) had been forced to admit a rise in unemployment was down to a fall in the number of people on Workfare.

“According to the Department, the number of people in work fell by over 47,000 over the last three months – which they say ‘reflects’ amongst other things a drop of 16,000 in the numbers on Government employment schemes,” the article states. As far as I know, this is still correct – if a person is put on Workfare, they are removed from unemployment statistics, even though they only receive social security payments for the work they do.

Putting the long-term unemployed on Workfare indefinitely, therefore, will effectively wipe long-term unemployment from the national figures. This will make Osborne’s administration look very good indeed – despite having done nothing to improve anyone’s chances of finding a job. In fact, those prospects will have worsened because every Workfare place removes a paying job from the market.

And what will this do for the Bank of England’s scheme to raise interest rates only if unemployment drops below seven per cent?

Wait – it gets worse. We can also see a now-traditional Tory ‘bait-and-switch’ going on, supported by a justification narrative based on a bit of voodoo polling. This one pushes lots of our favourite buttons!

Osborne’s rationale for imposing the scheme – the justification narrative – is simply that people want it. He’s basing his reasoning for this on a voodoo poll by the right-wing Policy Exchange, as described on The Void today.

“The general public’s opinions on workfare have been grossly distorted by the nature of the questions asked in this survey – of which there were only two,” the article states.

“The first question asked whether people thought ‘The government should require people who are unemployed for 12 months or more to do community work in return for their state benefits.’ The truth is that only just over half agreed at 56%. But the public were not asked if this workfare should be full time. In fact it does not even specify that the work should be unpaid – previous workfare schemes have come with a top up payment to benefits attached. Whilst those engrossed in welfare policy might assume workfare to mean 30 hours a week, every week, without pay, there’s no reason a survey respondent would think that. They might think yes, they should volunteer in an old people’s home for an afternoon a week, or do a couple of days a month helping out in the local park, for reasonable expenses. This 56% in no way gives a mandate for full time unpaid workfare.”

It continues: “The second question is even more dubious. The Policy Exchange are attempting to use the answers to this question to claim that only 22% of the public support disabled people being exempt from workfare. That incidentally is disabled people “who are capable of working” – another devious phrase as who is and isn’t capable of working is clearly open to debate as the Atos scandal has shown. The obvious inference from the from this figure is that 78% of the public support workfare for disabled people. Yet in question 1 only 56% of people support workfare for anyone at all. There must be something in the going on to explain this bizarre discrepancy.

“Question 2 asks respondents to imagine that compulsory workfare exists and then questions who should be exempt. Now a disabled person completing this survey may think well if I have to do workfare then why shouldn’t a lone parent, and vice versa. That doesn’t mean they support workfare, it means they support equality, of a sort.

“There is no option available for those who think that everyone should be exempt from workfare, although it is possible to answer that every group of claimants given should undertake unpaid work.”

So: Extremely dubious findings, used to support a dubious claim that the public supports increasing Workfare and this is why the Coalition is doing so. In fact, this is a thinly-veiled attempt to falsify unemployment statistics and trigger an interest rate rise.

The swivel-eyed loons must have lapped it up.

Now, why wasn’t Vox Political‘s best friend, Iain Duncan Smith, making this announcement?

Is this spoof benefit form the basis for Coalition unemployment policy?

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Take a good hard look at the picture above and then try to tell yourself it isn’t the basis for RTU’s (see the earlier article on Iain Duncan Smith) entire benefits policy.

It is taken from the Spitting Image spin-off book Thatcha! The Real Maggie Memoirs, published in 1993 – just one year after Smith was returned to unit – sorry, Parliament – as MP for Chingford.

He first came to prominence as Shadow Social Security Secretary under William Hague in 1997. It cannot be beyond credibility that he had bought the Spitting Image book and had been taking notes… can it?

Look at the image. The form is described as “Form SCRO/UNG(e)/R” – and now benefit claimants are derided by the Conservative-led Coalition government as “scroungers”.

Note 2, referring to a claimant’s address, states: “Ha! Now we know where you live, we can keep an eye on you. You might have to keep up that fake limp for a long time.” This is typical of the current attitude, that disabled people are faking it in order to get a state handout.

Note 5, for those with relatives, delivers a classic Tory line, “Well why can’t they look after you? Must you always come running to us? Claim disallowed.”

Note 7 is for those who are registered disabled: “Claim disallowed – and don’t bother coming in to complain, we’ve got steps up to the office heh heh.” Is this a million miles away from current DWP policy, to make it as hard as possible for the sick and disabled to claim?

The form disallows claims made by people with partners, with savings, without savings; it asks claimants if they are lying and, if the ‘no’ box is ticked, bluntly responds, “Oh yes you are. Claim disallowed.”

The question “You don’t know the meaning of the words ‘hard work’ do you?” is an exact reflection of the attitude put around by the right-wing press, encouraged by ministers in the Coalition government, as is the fact that there is no ‘yes’ box to tick.

An affirmative response to “Would you be prepared to take any work offered to you, no matter how poorly paid, degrading & menial?” elicits the response: “God, you’ve really got no self-respect left, have you, you scrounging little bastard. I pity you.” Isn’t this exactly the sort of emotional state that Coalition benefit policy is intended to create?

Note 19, for those who ticked a box saying that they wished to claim the money – and claim free NHS spectacles (this last included in tiny print) – states: “Aha! Got you! You obviously don’t need them if you can read that tiny print. Claim disallowed” in a move reminiscent of the ‘voodoo polling’ that appeared on the Conservative Party’s website earlier this year, asking people if they thought benefit increases should be greater than wage rises for working people. When people ticked the box saying they disagreed with this, the Tories were able to claim this meant support for their policy for a below-inflation rise in benefits, when in fact it was based on a false premise, as benefit rises were never greater than wage rises in real terms.

“We promise to process this claim within 28 days. Though exactly which 28 days is up to us,” the form states. This will ring true, particularly for anyone who has received notice that they have a limited period in which to appeal against a decision – and that period ran out the day before they received the letter.

Most damningly true of all is the warning: “Remember, to give false information is a very serious offence – unless of course you are Minister of Employment, in which case it’s essential.” This is certainly a sentence that Iain Duncan Smith seems to have taken to heart.

By now, you may be thinking that this is all taking a silly joke form from a book of satirical humour – published 20 years ago! – just a little too seriously.

But, when you consider the sheer number of similarities between what was wild humour in the 1990s and what is bitter reality now, there can be no conclusion other than that the joke is on us.

From the DWP to the economy – the Coalition’s growing credibility chasm

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All the wrong choices for all the wrong reasons: The evidence fails to support George Osborne’s economic austerity policies – the only likely explanation seems to be an intention to rob this nation of everything possible before 2015.

The more we learn of the Tory-led Coalition’s policies, the wider the gap grows between what it is doing and what it should be doing.

Look at the sham psychometric tests, exposed by fellow blogger Steve Walker in a series of articles on his Skwawkbox site. It is now firmly established that the DWP – aided by the Cabinet office ‘nudge unit’ – set out to pressgang put-upon benefit claimants into taking part in a crude piece of neuro-linguistic programming – no matter what answers you provided, the test always pushed out a ridiculously upbeat appraisal of your character and then tried to get you to act according to this verdict in your jobsearching activities. The theory is that this will make a jobseeker more confident and finding a job easier. The problem is that it’s quite utterly ludicrous.

If you haven’t already, you can read the Skwawkbox exposure of this particular caper on that site – there are plenty of links to it from this one. The reason it is mentioned here is that it provides a useful set of questions with which to analyse any government activity: First, is the theory behind this activity sound? Second, if that theory is being used to support a particular course of action, is that action justifiable?

So let’s turn once again to George Osborne’s reasons for pursuing economic austerity, as described in the letter Vox Political received from the UK Treasury last month.

Firstly, the letter warns against the perils of losing market confidence. By this, we can see that it means we should fear any downward revision of our credit rating by the credit agencies, as “a one percentage point increase in government bond yields would add around £8.1 billion to annual debt interest payments by 2017-18”.

What’s being said is that a drop in our credit rating would mean the people and organisations that have invested in UK government debt (by buying our bonds) might move their funds to others, meaning the government could be faced with an interest rate rise, leading to increased difficulty in borrowing.

But we know that this isn’t true. The UK’s credit rating was downgraded only a few months ago. Did interest rates rise? Was our ability to borrow hindered at all? No. There’s a reason for that.

As Professor Malcolm Sawyer notes in Fiscal Austerity: The ‘cure’ which makes the patient worse (Centre for Labour and Social Studies, May 2012), “It is well-known that a government can always service debt provided that it is denominated in its own currency. At the limit the UK government can ‘print the money’ in order to service the debt: this would not take form of literally ‘printing money’ but rather the Central Bank being a willing purchaser of government debt in exchange for money.” This is what is happening at the moment. Our debt is in UK pounds, and we can always service it. Our creditors know that, so they remain happy to continue financing it.

This means that the Treasury’s next point, that “any loss of investor confidence in the UK’s fiscal position would not only affect the UK, but also the global economy” is also meaningless. There won’t be a loss of investor confidence, so there won’t be an effect on the global economy.

We move on – to the Chancellor’s claim that fiscal austerity is required to prevent the slowing of economic growth that happens when the national debt hits 90 per cent of gross domestic product (or thereabouts).

You’ll recall that my letter to the Chancellor was prompted by the revelation that the academic paper on which he relied most often, by Reinhart and Rogoff, had been proved to be mistaken. The Treasury’s response pulled out a series of references to other academic works suggesting a fiscal cliff similar to the Reinhart-Rogoff model, off which we would drop if the national debt passed an arbitrary level around 85-90 per cent of GDP. These were published by the International Monetary Fund, which we know isn’t quite as keen on austerity as it used to be; the Organisation for Economic Co-operation and Development, which this blog marked out as “schizoid” only a few days ago; and others.

Obviously I haven’t had time to look up eight academic works to support any opposing theory I may wish to create – and I think I would be foolish to try. I don’t have any grounding in economics beyond what I’ve been able to pick up by following the national and international debates.

But, then, according to Dean Baker of the Center (yes, it’s American) for Economic and Policy Research: “As a general rule economists are not very good at economics.”

He writes: “Most economists are unable to conceptualize anything that someone with more standing in the profession did not already write about. This is the only reason that the Reinhart-Rogoff 90 per cent debt-to-GDP threshold was ever taken seriously to begin with.”

That prodded my curiosity to check some of the papers listed by the Treasury in support of its stance, and the three that I checked (The Real Effects of Debt, Public Debt and Growth, and How Costly Are Debt Crises?) all listed the Reinhart-Rogoff paper in their supporting references. So Mr Baker is right.

“Debt is an arbitrary number,” he continues. “The value of long-term debt fluctuates with the interest rate… The value of our debt will plummet if interest rates rise… This means that we could buy back long-term debt issued today at interest rates of less than 2.0 percent for discounts of 30-40 percent. This would sharply reduce our debt-to-GDP ratio at zero cost.

“Bonds carry a face value, meaning the amount that will be paid off when they reach maturity. This is what gets entered in our debt figure. However bonds also carry a market price, which fluctuates inversely with interest rates. The longer the term of the bond, the more its price will vary with interest rates.

“If interest rates rise, as just about everyone expects over the next three-to-five years, then the market price of the bonds we have issued in the current low interest rate environment will fall sharply. Since we count our debt at the face value of the bonds, not their market price, we could take advantage of the drop in bond prices to buy up… bonds at sharp discounts to their face value.

“The question is why would we do this, we would still pay the same interest? The answer is that the policy would make no sense for exactly this reason.

“However, if we accept the Reinhart-Rogoff 90 per cent curse, then reducing our debt in this way could make a great deal of sense. Suppose we can buy back debt with a face value of 60 per cent of GDP at two-thirds its face value, or 40 per cent of GDP. In our debt accounting we would have reduced our debt-to-GDP ratio by 20 percentage points. If this gets us below the 90 per cent threshold then suddenly we can have normal growth again.

“Yes, this is really stupid, but if you believed the Reinhart-Rogoff 90 per cent debt cliff, then you believe that we can sharply raise growth rates by buying back long-term bonds at a discount. It’s logic folks, it’s not a debatable point — think it through until you understand it.”

I found Mr Baker’s piece after asking Jonathan Portes of the National Institute for Economic and Social Research (NIESR) for his opinion on the Treasury letter. He described it as “Predictable and largely irrelevant”.

So despite my lack of economic education, we have a working theory that suggests the Treasury has built its economic castle on the sand; that its justification for austerity is unsound. What about the austerity measures themselves? Are they justifiable on any level at all?

Evidence suggests not.

Let’s go back to our other friend in this matter, Prof Malcolm Sawyer. “Fiscal austerity and cuts in public expenditure do not work – there is a limited, if any, effect on reducing the budget deficit, and any return to prosperity is severely undermined.” We can see that this is true, using the government’s own figures. It managed to cut the deficit from £150 billion to £120 billion in 2011-12, mostly by axing large projects that invested in the UK economy. How much did it cut from the deficit in 2012-13? Less than £1 billion. The benefit cuts that created much of the fuel for this blog have not helped to cut the deficit at all.

“The reduction of the budget deficit can only come from a revival of private demand which is harmed by an austerity programme,” Prof Sawyer continues. Again, we can see that this is true. Austerity measures such as benefit cuts and the axing of infrastructure investment projects means there is less money available to the people who are most likely to spend it – the working- and middle-classes, and those who are unemployed. People with less money have to spend just about everything they receive in order to cover their costs. That money passes into circulation and the economy grows, through the fiscal multiplier effect. An attempt to explain this effect appeared on this blog within the last few days. The point is that demand increases when the people who earn the least have more to spend.

Therefore we see that Prof Sawyer’s next statement, “Deficit reduction requires investment programmes and reduction of inequality to stimulate demand”, is already proved.

So the answer is to reduce the unemployment rate by creating more jobs and closing the jobs deficit, as highlighted in this blog only a few days ago; to raise incomes by significantly increasing the minimum wage and adopting the proposed ‘living wage’, as promoted in this blog frequently; and investment in infrastructure projects.

What has Osborne done, along with his economically-illiterate chums?

He has created high unemployment.

He has depressed wages.

He has cut infrastructure projects.

He has, therefore, sucked all the demand out of the economy. What effect has this had?

Economic growth has, in the single word of Shadow Chancellor Ed Balls, “flatlined”, borrowing has remained high and the national debt is continuing to rise.

In other words, this part-time Chancellor’s strategy – a plan on which we have all been asked to judge the entire Coalition government, let’s not forget – has failed. Hopelessly.

I return you to Prof Sawyer, one last time [bolding mine]: “The austerity programme is economically irrational, socially irresponsible, and lacks credibility that it can reduce the budget deficit and secure any return to prosperity. The time has come to rebuild through investment and through a major assault on inequality.”

Whoever said Labour has no policies: Prepare to be embarrassed!

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The end of austerity should be Labour’s flagship policy, according to Michael Meacher MP. Don’t get too excited – Labour has to get into office first, and we’ve no idea how bad the Conservative-led Coalition will wreck the systems of government before May 2015.

This is turning into a very bad weekend to be a Conservative.

The Nasty Party has lost control of 10 councils, with hundreds of councillors unseated. Its claims about people on benefits are falling flat when faced with the facts. It has fallen foul of UK and EU law with its fake psychometric test, which turned out to have been stolen from the USA. Its claim that Labour has no policies has proved to be utterly unfounded.

… What was that last one again?

Yes, you must have heard at least one Tory on telly, rabidly barking that Labour can’t criticise the Coalition if it doesn’t have any policies of its own. Those people were not telling the truth – even though they probably thought they were (poor deluded fools).

I am indebted to Michael Meacher MP, for posting information on the following in his own blog. He lists Labour promises, as revealed to date – and it’s quite a long list. Much – or indeed all – of it may have also appeared in an article on the Green Benches site, I believe. So let’s see…

Labour has already promised to:

• Repeal the Health and Social Care Act (otherwise known as the NHS privatisation Act)
• Build 125,000+ homes
• Regulate private rents
• Promote a Living Wage for public sector workers and shame the private sector into following that lead
• Offer a minimum 33-40 per cent cut in tuition fees
• Limit rail fare increases to one per cent
• Reimpose the 50p rate of income tax for the super-rich
• Impose a mansion tax on the rich
• Repeat the bankers’ bonus tax
• Reverse the bedroom tax
• Scrap Workfare and replace it with a ‘compulsory’ Jobs Guarantee (I’m not too keen on this one but it’s been promised)
• Offer a VAT cut or a ‘temporary’ VAT holiday
• Implement the High Pay Commission report in its entirety
• Scrap Ofgem and bring in proper energy price regulation
• Break up the banks and set up a National Investment Bank, and
• Support mining communities and clean coal technology.

In his article, Mr Meacher suggests that Labour needs to go further, with a really strong hook on which to hang all these policies. He suggests the following:

We will end austerity.

Yes, I thought that might stun you. Let’s have it again:

We will end austerity.

Now that you’ve had time to get used to the idea, I hope you’re applauding as much as I was when I read the article. Why not end austerity? The squeeze on public spending and services that David Cameron and his Boy Chancellor imposed in 2010 has not worked at all. There is now no basis for it – I wrote to Mr Osborne, requesting information on the other foundations of the policy after it was revealed that his main justification contained a huge error, and he has not replied, so clearly he has nothing to say. Its loss will be unlamented and can’t come soon enough.

There’s more in the article so I invite you to visit Mr Meacher’s site and read it yourself.

As for Mr Cameron… he’s a survivor but he’s starting to look tired and the number of his own party members who are stabbing him in the back is growing – Lord Tebbit has stuck his own knife in (again) during a BBC interview.

I wouldn’t bet any money that Cameron will still be PM by the end of the year.