Labour is following the same plan as England’s football team – to failure

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Mock sympathy: This is the sort of treatment Ed Miliband can expect from David Cameron if he keeps following policies that are created by the Tory media rather than the needs of the British people.

Labour could be heading for defeat next year, after it set out new policies that have the same chance of success as England’s plan for the 2014 World Cup.

The party put its weight behind a report by the Institute of Public Policy Research (IPPR) that left the public cold. If Labour does not change direction, it seems likely the party will not win the votes it needs to get into office next year – unless its rivals make serious mistakes.

It is a situation almost exactly like that of the England football team.

All right, it’s not a perfect parallel. England got into this fix because it was outplayed by teams with ambitious and flamboyant star players – Balotelli for Italy and Suarez for Uruguay. Labour doesn’t have that problem as the closest equivalent in politics is Nigel Farage.

But, like England, Labour seems unable to defend itself against even rudimentary attacks – partly because leaders have painted themselves into a corner (marked ‘pro-austerity’) and partly because they simply refuse to use the logical arguments. Does anybody remember what a relief it was when, after years of silence in response to Tory claims that Labour caused the financial collapse, Peter Hain finally told Owen Paterson, on the BBC’s Any Questions, “It was the banks that destroyed the economy, not the Labour government – it was the international banking system!”

And where is Mr Hain now? He’s retiring at the next election. The only Labour player who was man enough to fend off this blatantly unreasonable Tory attack and he’s being taken off the field.

Meanwhile, Labour’s leaders continue to make schoolboy mistakes that create the opportunity for the other side to score. Ed Miliband’s publicity-seeking pose with The Sun was a spectacular example; yesterday’s IPPR report was a more subtle one.

The lack of ambition is staggering; it seems that, after four years, the Miliband camp still hasn’t understood that copying Tory austerity will scare voters away. Committing to Tory-imposed constraints that require any new idea to be covered by a cut or a tax increase will just increase the exodus – Labour needs to be ambitious.

Everybody knows now that austerity is nonsense. It’s an excuse to drive money into the hands of those who have too much of it already. After four years of it, we are told that this government is on course to put five million British children in poverty by 2020. Food bank use is at its highest ever. The number of people claiming in-work benefits is at its highest ever because employers refuse to pay a living wage and expect the taxpayer to subsidise them instead; by the time of the 2015 election, working families will be around £2,000 per year worse off than they were in 2010.

You are worse-off under the Tory Coalition. You are worse-off under austerity.

Meanwhile, business bosses and shareholders have been having a spectacularly good time, with incomes skyrocketing. There’s no austerity for the One Per Cent!

Indeed, income inequality has increased hugely to place the UK seventh on the international table, behind the USA (fourth) and Chile (first) – and we all know that Tory neoliberals are huge fans of the systems in those two countries.

What are the wealthy doing with all the money they have parasitised from the rest of us?

Well, they’re not using it to pay their taxes, that’s for sure!

One of the main plans put forward in Labour’s IPPR report was to save money by means-testing benefits for 100,000 young people – saving £65 million. That’s a pittance compared to the £600 million in taxes that is being withheld by Google, Amazon and Apple, according to an infographic that’s currently doing the rounds.

Labour is very quiet about that – copying the Tory attitude of diverting people with stories about welfare abuses because Miliband’s know-nothing advisors think being “hard on benefits” is popular with the public, who don’t like “scroungers”.

They’re not intelligent enough to understand that this attitude has been carefully nurtured in the public consciousness by a right-wing, Tory-controlled media. It has nothing to do with reality, in which only a tiny minority of people are in fact defrauding the taxpayer out of benefit money. Lord Fraud – sorry, Freud – was taken to task for this only days ago.

It seems that – like England’s football team – the Labour Party has been off chasing a fantasy. Austerity and the persecution of people on benefits (most of whom are entirely deserving of them, plus massive amounts of compensation for the despicable way they have been treated for the past few years) are Conservative-created blind alleys. In politics, you don’t oppose anybody by copying them.

If Labour concentrated on the real causes of Britain’s problems, the party might have a hope of success.

Otherwise, like the England team, Labour will have to be content with hoping that the Tories make a big mistake.

And, like the England team, they are most likely to learn that this is not good enough.

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Is anyone stupid enough to fall for this Tory tax bribe?

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So David Cameron wants us to believe further public spending cuts will be used to ease the tax burden on the proles, does he?

He must think you’re stupid. Are you?

Exactly one month ago (February 5), the Institute of Fiscal Studies reported that Cameron’s Coalition government will be less than halfway through its planned spending cuts by the end of the current financial year, as Vox Political reported at the time.

These are the cuts that the government considers vital in order to bring the nation’s bank account back into some kind of balance in the near future.

If Cameron abandons the “long-term economic plan” his Tories have been touting for the last few months, in a bid to bring voters back on-side, it means he will want to make even more cuts if he is returned to office in 2015.

We can therefore draw only two possibilities from his claim:

There will be no tax cuts; he is lying, in the same way he lied about keeping the NHS safe from private companies – the same way Jeremy Hunt has lied about your medical records being kept away from companies who will use them to raise your health insurance premiums, and the same way that Iain Duncan Smith has been hiding the true extent of the deaths caused by the Atos- (sorry, OH Assist-) run work capability assessments.

He will make a few tax cuts (probably in the March budget) but any benefit will be clawed back as soon as the Tories have secured your votes and won another term; the only people they want to help are rich – and you don’t qualify.

According to yesterday’s (March 4) BBC report, “every efficiency” found could help provide a “bit of extra cash” for households.

But we already know from the BBC’s article about the IFS that “additional spending, population growth and extra demands on the NHS meant more cuts were needed”.

Cameron even contradicted himself in his speech! At one point he said, “Every bit of government waste we can cut… is money we can give back to you.” Then he went on to add: “If we don’t get to grips with the deficit now, we are passing a greater and greater burden of debt to our children.”

Which are you going to do, David? Give money back to the people in tax cuts or tackle the deficit? If you want to achieve your goals within the time limit you have set yourself, you can’t do both!

Not that deadlines mean anything to him, of course. As noted in the earlier Vox Political article, it is more likely that the Conservatives have been working to give themselves an excuse for more cuts, rather than to restore the economy and balance the books.

And if he does cut taxes, what public services will we lose forever as a result?

Think about it.

Don’t let this liar make a fool out of you.

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Church v (Secretary-in-a-) State over social ‘reform’

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Cardinal-designate Vincent Nichols, who has attacked fellow Catholic Iain Duncan Smith’s benefit cuts as a “disgrace”. [Image: Liverpool Echo]

Does anybody else have the feeling that Vincent Nichols, the Roman Catholic Archbishop of Westminster, was only waiting for the Pope to name him a Cardinal-designate before sinking his teeth into the UK’s Conservative-led Coalition government?

One gets the impression he feels secure that the new position means his words now carry sufficient weight – and they are weighty words indeed.

“People do understand that we do need to tighten our belts and be much more responsible and careful in public expenditure,” said the Archbishop to the Telegraph.

“But I think what is happening is two things: one is that the basic safety net that was there to guarantee that people would not be left in hunger or in destitution has actually been torn apart.

“It no longer exists and that is a real, real dramatic crisis.

“And the second is that, in this context, the administration of social assistance, I am told, has become more and more punitive.

“So if applicants don’t get it right then they have to wait for 10 days, for two weeks with nothing – with nothing.

“For a country of our affluence, that quite frankly is a disgrace.”

“Hunger”, “destitution”, “crisis” – “a disgrace”. You cannot accuse this man of mincing his words!

They come almost a year after the (Anglican) Archbishop of Canterbury, the Most Reverend Justin Welby, together with the Archbishop of York and 43 bishops, launched their own attack on changes to social security, saying they would have a “deeply disproportionate” effect on children and families.

Mr Welby had himself only recently taken the Church of England’s most senior office.

Speaking to the Telegraph on March 9 last year, 12 days before his enthronement, he said: “As a civilised society, we have a duty to support those among us who are vulnerable and in need. When times are hard, that duty should be felt more than ever, not disappear or diminish.

“It is essential that we have a welfare system that responds to need and recognises the rising costs of food, fuel and housing.

“These changes will mean it is children and families who will pay the price … rather than the Government.”

The Department for Work and Pensions laughed off Mr Welby’s concerns.

But Iain Duncan Smith, the Secretary of (or “in a”) State for Work and Pensions, is – or is at least supposed to be – a devout Catholic. How could he ignore such harsh criticism from the most senior member of his Church in the United Kingdom?

Very easily, it seems.

Iain Duncan Smith has not deigned to respond. Perhaps he has a belief – he does seem to rely on them a lot, now, doesn’t he? – that he is doing more for the people of this country than the Archbishops. There’s a word for this condition that’s slipping my mind for a moment… no – I’ve got it.

A ‘Messiah’ complex – a state of mind in which an individual holds a belief that they are, or are destined to become, a saviour.

‘Messiah’ trumps ‘Archbishop’ so IDS has chosen to ascend above the debate, leaving its resolution to his trusty DWP spokesperson, who came out with the usual lies.

“Our welfare reforms will transform the lives of some of the poorest families in our communities with Universal Credit making three million households better off and lifting hundreds of thousands of children out of poverty,” wittered the spokesperson.

To disprove these words, let’s turn to the Joseph Rowntree Foundation, the social policy research charity that seeks to understand the causes of social problems, identify ways of overcoming them, and show how social needs can be met. This organisation has stated – repeatedly – that Universal Credit in its current form will create “increased risks of budgeting problems, debt, arrears and ultimately financial exclusion”.

The same organisation quotes research from the Institute of Fiscal Studies (IFS) which states that, under current Coalition government policies, rather than hundreds of thousands of children being lifted out of poverty, by 2020 more than one million more children will be in poverty than when the Conservatives and Liberal Democrats slithered into office by the back door in 2010.

So who do you believe? Come to that, what does Iain Duncan Smith really believe?

The DWP spokesperson said: “It’s wrong to talk of removing a safety net when we’re spending 94bn a year on working age benefits and the welfare system supports millions of people who are on low incomes or unemployed so they can meet their basic needs.”

But we know that Iain Duncan Smith has inflicted £28 billion of cuts on people receiving benefits from his Department for Work and Pensions. If another IFS statement – that this represents only two-fifths of the Coalition’s cuts plan – is accurate, then the total amount he’ll want to cut is a staggering £70 billion.

And he wants his people to talk about the money he’s spending, rather than the effect he’s having. So, what does he believe?

He believes in Mammon.

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Coalition drags out the pain with promise of many more cuts

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The BBC has reported findings by the Institute for Fiscal Studies, showing that the Coalition government will be less than halfway through its planned spending cuts by the end of the current financial year (March 31).

The organisation said 60 per cent of the cuts were still to come.

This raises a few urgent questions. Firstly: This government was formed on the promise that it would balance the books by 2015, which presupposes that its entire plan for doing so would be in place long before then. We know that this ambitious claim was dismissed after years of failure, but part of the reason for this failure was that George Osborne stopped a recovery that was already taking place, and which would have led to economic growth of 20 per cent by now, if it had been allowed to continue (according to Michael Meacher MP). My question, therefore, is: Have the Conservatives been working to ensure that they would have an excuse to make more cuts, rather than to restore the economy and balance the deficit?

Secondly: We may presume that these further cuts will be inflicted over a period of years (as even the Tories know it is important to enact change gradually, rather than inflict sudden shocks on the economy that could create entirely unforeseen consequences). Are the Coalition parties assuming that they will be re-elected next year, and is it not supremely arrogant of them to believe this, considering the harm they have caused so far?

Thirdly: If the Coalition parties do want to be re-elected, it is clear that they will need to try to bring a majority of voters back on-side. Therefore we may reasonably expect to see all sorts of gifts coming our way over the next year – tax breaks or whatever else they can devise – aimed at increasing the amount of money in our pockets. However, knowing that 60 per cent of the Tory/Lib Dem cuts process is still to come, this means they will want to make even more cuts if they are returned to office. Why would we want to give them our vote, in return for presents they’ll grab back as soon as they’ve got what they want?

Fourthly: Iain Duncan Smith has inflicted £28 billion of cuts on people receiving benefits from his Department for Work and Pensions. If the IFS statement is accurate, then the total amount he’ll want to cut is a staggering £70 billion. If we consider that the amount spent on pensions (more than £100 billion) is safe, this leaves only tiny amounts for all the other benefits supplied by the DWP. Are people currently on Jobseekers’ Allowance to get nothing in the future? What about disabled people getting DLA or PIP? How about all the many, many people on Employment and Support Allowance, including those currently going through the appeal process because of wrong decisions? Mr… Smith might claim that all these benefits are being rolled into Universal Credit, but that won’t happen until 2016 or 2017 according to his own estimates, and the rest of us know that it’s not going to happen at all. Will we have any benefit system left if these cuts continue – or will the Tories try to trick us into buying duff health and employment insurance policies from their friends at Unum instead?

The BBC report said George Osborne wants a budget surplus by 2018-19, but “additional spending, population growth and extra demands on the NHS meant more cuts were needed”. This statement is not supported by any source material and we may take it this is a further sign of BBC right-wing bias.

The additional spending was made necessary because of unintended consequences of the cuts – the Tories got their sums wrong. Population growth, if due to the EU immigration that everyone complains about, will have led to a net growth in the economy as it has been proved that migrant workers from the European Union contribute more to the Treasury than they ever take out – so this is not a cause of increased spending. If the indigenous British population has been growing faster than expected, let us remember that Child Benefit is to be restricted to the first two children in a family (Cameron has denied it so it must be true) and therefore any further growth in individual families will have no bearing on the government’s bank balance. Extra demands on the NHS are a thorny subject as the Coalition promised to inject billions of pounds into the health service but no evidence has yet appeared to show that it has. Since this money was promised many years ago, it should have been included in national budgets and should not be a burden now.

The IFS also reports that there is no evidence of a housing bubble in the UK, as a result of Osborne’s ‘Help To Buy’ scheme. This was introduced last year, when Osborne realised that his austerity programme had failed and resorted to a Keynesian ‘pump-priming’ scheme to boost the housing market. Fears that this would lead to a debt-fuelled ‘bubble’ made commenters like myself cautious about the plan.

However, if there are no signs of a debt-fuelled bubble, then we should consider this to be proof that Keynesian economics was always the way forward and austerity has led us up an economic dead-end for the past four years.

This means none of Osborne’s ridiculous cuts were necessary (barring a few to eliminate waste and corruption – but under a Conservative-led regime we have no evidence that these took place and every reason to believe the opposite to be true. Look at the current ‘cronyism’ row over the appointment of Conservative ‘yes’-people to senior quango posts).

It also means the government and the right-wing media have been lying to you for four long years – and will continue doing so in self-justifying stridence for another 14 months to come.

Let them talk.

But don’t ever let them convince you their cuts are necessary.

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Workers blamed for sinking wages by Tory-controlled BBC

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BBC, blame, Coalition, Conservative, cost of living, David Cameron, Democrat, drop, earning, economy, employment, fall, fiscal, government, House of Commons Library, IFS, inflation, Institute, Jonty Bloom, Lib Dem, Liberal, manufacturing, Mike Sivier, mikesivier, national, office, ONS, part-time, people, plausible deniability, politics, real, self-employed, service, statistics, Studies, Tories, Tory, Vox Political, wage, work, worker, zero hours

Congratulations are due to BBC business body Jonty Bloom, who should get an award for the bilge he blathered to justify the fact that the Conservatives and Liberal Democrats have engineered the longest drop in wages for 50 years.

He blamed employees, saying that they weren’t productive enough.

The Office for National Statistics had reported that real wages have fallen by 2.2 per cent every year since David Cameron took over as Prime Minister in 2010 and, as the Tory’s mass-media mouthpiece, the BBC seem to have tasked Mr Bloom with finding plausible deniability for the Coalition, so that ministers won’t have to take responsibility.

Real wages are worked out by taking the rising cost of living into account while calculating the value of earnings.

The ONS report followed one from the Institute for Fiscal Studies on Thursday, suggesting that a mid-range household’s income between 2013-14 was six per cent below its pre-crisis peak.

Both of these reports were latecomers to this particular party, though. A Labour Party report from August 2013 stated that prices had risen faster than wages in all but one month of Cameron’s premiership – April 2013, when he cut taxes for millionaires and bank bonuses soared. The overall fall in annual real wages was £1,350 at the time that report was written.

The Labour report went on to say that figures from the House of Commons Library forecast that, after inflation, wages will be £1,520 lower in 2015 than in 2010, meaning working people, on average, will have lost £6,660 in real terms during the Coalition Parliament.

You’ll notice the BBC report only provides percentages. Interesting, that.

Over at the BBC, Mr Bloom tried to convince us that “workers have, on average, been working fewer hours during the downturn and that in turn has meant that they are earning less.

“The wage an employer pays… will be based on the productivity of the employee. So if a firm’s output falls, it will respond by reducing either the level of wages or the number of people employed in order to maintain its viability… Many firms seem to have held on to staff but output per hour worked fell, putting downward pressure on wages.”

He also suggested that a shift from higher-paid manufacturing jobs to lower-paid service jobs had contributed.

Sadly for Mr Bloom, we can punch holes through all of his arguments. Firstly, this is the government that insisted private sector jobs growth would outweigh the loss of public sector jobs it was going to inflict on the country. That claim alone suggests that ministers may have pressurised firms to keep employees in-post.

But the downturn meant there was less demand for firms’ products. How could they remain viable? Answer: Cut the hours worked by employees. Could this be the reason part-time and zero-hours contracts have exploded during the course of this Parliament? Part-time workers have fewer holiday entitlements and do not cost employers as much in National Insurance. Zero-hours workers are only called when they are needed and therefore the firm’s overheads are hugely reduced. Bosses benefit while workers go without.

Could this also be why firms have hired outside contractors on a self-employed basis, paying them a set amount per job, no matter how long it takes, in order to bypass the minimum wage law? Contractors earn less than the minimum wage but work far longer hours (without upsetting Mr Bloom’s average).

The productivity of a worker depends on how long they are working; part-time or zero-hours employees work for less time and therefore their productivity cannot be anything but lower than a full-time worker. Self-employed contractors’ pay is fixed in companies’ favour from the start. Mr Bloom’s argument is based on a wages fiddle.

Oh, and that shift from manufacturing to the service industries? Isn’t that something the Conservative-led Coalition has vowed vehemently to reverse, while doing spectacularly little about it? I think it is.

One personal note: My own experience as an employee suggests that firms’ financial woes have far more to do with the idiotic decisions made by executives than with the output of employees. Changes in the market do not lead to inventive and innovative responses; instead, the workers are penalised with lower wages or unemployment. This puts firms in a slow death spiral as continual erosion of the workforce makes managers increasingly less able to cope with the challenges that, unaddressed, rack up against them.

So congratulations, Jonty. You carry on blaming the workers if you want. It won’t make a scrap of difference because the real problems lie with the decisions made by company execs, responding to stupid Tory policies.

What a shame you can’t say anything about that because your employers are so utterly under the Tory thumb.

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The Coalition is creating serious problems and distracting you with phantoms

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Annual Survey, ASHE, Bank of England, BBC News, beauty, bedroom tax, benefit, benefit cap, BoE, breasts, bribe, Bulgaria, business, business rate, catastrophe, Child Benefit, claimant, Coalition, Conservative, council, council tax, CPI, Croatia, cure, cut, David Cameron, debt, defence, Democrat, deodorise, earning, earnings, economic, economy, false, falsify, fiddle, figure, fiscal, flood, frack, fund, George Eaton, George Osborne, government, Heathrow, hours, household, housing bubble, IFS, immigrant, Income Tax, individual, industry, inflation, Institute, interest rate, invent, Jill Filipovic, job, jobseeker, Jonathan Portes, Jonathan Wilson, Keith Vaz, Lib Dem, Liberal, low-paid, Matthew Hancock, Mike Sivier, mikesivier, National Institute, national insurance, New Statesman, NIESR, pay, Personal Allowance, politics, pretend, problem, reassessment, retail, rise, Romania, RPI, salary, sanction, self-employed, shale gas, Social Research, storm, Studies, swoob, tax credit, The Guardian, Tories, Tory, unemployment, uprating, upturn, Vox Political, wage, weather, Workfare

According to the beauty industry, women must now start deodorising under their breasts.

I kid you not – it was in The Guardian.

Columnist Jill Filipovic hit the nail on the head when she wrote: “I can already hear your objections: ‘But the area under my boobs doesn’t stink!’ or ‘What kind of marketing genius not only came up with the term “swoob,” but actually thought half the world’s population might be dumb enough to buy into it?’ or simply, ‘This is a dumb product aimed at inventing an insecurity and then claiming to cure it.’

“You would be correct on all three points.

“In fact, inventing problems with women’s bodies and then offering a cure – if you pay up – is the primary purpose of the multi-billion dollar beauty industry.”

The simple fact is that you don’t really need to worry about smells down there – a good old soapy flannel will cure any such problems.

That’s not the point, though. The aim is to get you thinking about it and devoting your energy to it, rather than to other matters.

Now let’s translate that to politics.

We already know that all the scaremongering about Romanian and Bulgarian immigrants storming the country from January 1 was a crock. That bastion of good statistics, The Now Show, told us last week that the total number of Bulgarian immigrants in the last couple of weeks was “around two dozen so far”, according to their ambassador. In the first three months after our borders were opened to Croatians, 174 turned up.

Yet the government wanted you to believe they would flood our immigration service in their millions, “taking benefits and yet simultaneously also taking all the jobs”.

My use of language such as “storming” and “flood” is not accidental. By far the more serious threat to the UK in the early days of 2014 was the weather – and, guess what, not only was the government unprepared for the ferocity of the storms that swept our islands, the Coalition was in fact in the process of cutting funding for flood defence.

This would have gone unnoticed if the weather had behaved itself, because we would all have been distracted by the single Romanian immigrant who was ensnared by Keith Vaz in a ring of TV cameras at Heathrow Airport.

Now the Tories are telling us that our take-home pay is finally on the rise for all but the top 10 per cent of earners, with the rest of us seeing our wages rise by at least 2.5 per cent.

The government made its claims (up) by taking into account only cuts to income tax and national insurance, using data leading up to April last year, according to the BBC News website.

This kind of nonsense is easily overcome – New Statesman published the above chart, showing the real effect of changes to weekly income for people in various income groups, and also provided the reason for the government’s mistake (if that’s what it was).

“The data used … takes no account of the large benefit cuts introduced by the coalition, such as the real-terms cut in child benefit, the uprating of benefits in line with CPI inflation rather than RPI, and the cuts to tax credits,” writes the Statesman‘s George Eaton.”

He also pointed out that other major cuts such as the bedroom tax, the benefit cap, and the 10 per cent cut in council tax support were introduced after April 2013 and were not included in the Coalition figures.

Once all tax and benefit changes are taken into account, the Institute for Fiscal Studies has shown that almost all families are worse off – and the Coalition also appears to have forgotten the five million low-paid workers who don’t earn enough to benefit from the increase in the personal allowance.

Skills and enterprise minister Matthew Hancock compounded the mistake in an exchange on Twitter with Jonathan Portes, director of the National Institute of Economic and Social Research (NIESR). Asked why his analysis “ignores more than four million people in work (the self-employed)”, Mr Hancock tweeted: “Analysis based on ONS ASHE survey of household earnings data”.

Wrong – as Mr Portes was quick to show: “Don’t you know the difference between household and individual earnings?”

Apparently not. ASHE (Annual Survey of Hours and Earnings) is a survey of employed individuals using their National Insurance numbers – not of households or the self-employed.

So the Coalition – and particularly the Tories – were trying to make us all feel good about the amount we earn.

That’s the distraction. What are we supposed to be ignoring?

Would it be David Cameron’s attempt to bribe councils into allowing shale gas companies to frack their land? Councils that back fracking will get to keep all the business rates collected from the schemes – rather than the usual 50 per cent.

He has also claimed that fracking can boost the economy and encourage businesses into the country, in a further bid to talk down dissent.

Or is it the growing threat of a rise in interest rates, which may be triggered when official unemployment figures – which have been fiddled by increased sanctions on jobseekers, rigged reassessments of benefit claimants, a new scheme to increase the number of people and time spent on Workfare, and the fake economic upturn created by George Osborne’s housing bubble – drop to seven per cent?

It seems possible that the government – especially the Tory part of it – would want to keep people from considering the implications of an interest rate rise that is based on false figures.

As Vox Political commenter Jonathan Wilson wrote yesterday: “If the BOE bases its decisions on incorrect manipulated data that presents a false ‘good news’ analysis then potentially it could do something based on it that would have catastrophic consequences.

“For example if its unemployment rate test is reached, and wages were going up by X per cent against a Y per cent inflation rate which predicted that an interest rate rise of Z per cent would have no general effect and not impact on house prices nor significantly increase repossessions (when X per cent is over-inflated by the top 1 per cent of earners, Y per cent is unrealistically low due to, say, the 50 quid green reduction and/or shops massively discounting to inflate purchases/turnover and not profit) and when it does, instead of tapping on the breaks lightly it slams the gears into reverse while still traveling forward… repossessions go up hugely, house prices suffer a major downward re-evaluation (due to tens of thousands of repossessions hitting the auction rooms) debt rates hit the roof, people stop buying white goods and make do with last year’s iPad/phone/tv/sofa, major retail goes tits up, Amazon goes to the wall, the delivery market and post collapses… etc etc.

“And all because the government fiddled the figures.”

Perhaps Mr Cameron doesn’t want us thinking about that when we could be deodorising our breasts instead.

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Workplace battleground: Labour and Tories at war over employment

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Zero hours, zero benefits, zero enthusiasm. Why would anyone take a job on these terms?

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abuse, andy burnham, BBC, benefit, Chartered, CIPD, contract, Dave Prentis, Department, development, earning, economy, education, employment, flexible, health, holiday, Institute, Job Centre, manager, Mike Sivier, mikesivier, minimum wage, occasional, pay, pension, Pensions, personnel, Peter Cheese, public, punish, reward, safety, sanction, sickness, Unison, Vince Cable, Vox Political, work, zero hours

The rise of zero-hours contracts: These figures from the Office for National Statistics may be showing only one-fifth of the picture, according to new research.

The rise of the zero-hours contract must be deeply disturbing to all those with an interest in fair employment practices.

The arrangement is that an employee agrees to be available for work whenever required, but with no set number of hours or times of work specified. The employee is expected to be on-call at all times but is paid only for the number of hours that are actually worked.

There appears to be no pension scheme, no sickness cover, no holiday entitlement – no rights other than those laid down by health and safety regulations (which the government is trying to ditch) and the National Minimum Wage Act (also under threat from the Conservative-led government).

Also, the system is open to abuse by managers, who can use it to reward some employees (and the term is used in its loosest possible sense) with extra hours or punish others with fewer.

And how, exactly, is an employee supposed to be engaged in, and enthusiastic about, a job where they are treated as a disposable commodity, to be picked up and thrown away whenever it is expedient?

It seems possible that there is an argument in favour of zero-hours contracts – but only for employees who want to top-up another income stream; people who want occasional earnings and are flexible about when they work. The problem here is that it seems likely employers will want these people to work at times when it will be hard to meet the commitment.

For anyone else – including people who are unemployed, penniless, and need the certainty of a properly-constituted employment contract with set hours, pay and conditions, there seems to be no point in taking up such a contract at all. Yet they are proliferating across the UK.

Is the Department of Work and Pensions, through the Job Centre Plus network, forcing these conditions on jobseekers?

Such a situation might be a huge boost to employment figures, but it would also explain why average pay has fallen so drastically in recent years and the economy has failed – so abjectly – to reignite.

Today (Monday) it is being reported that more than a million UK workers are on zero-hours contracts – four times official estimates.

The BBC is reporting that 14 per cent of these could not earn a basic standard of living. If Job Centres are forcing people into these jobs, via the sanctions regime, this is scandalous. Perhaps it is permitted by law, but this would only mean that the government should have a duty to ensure that jobs which are taken under the threat of sanction are capable of providing this basic standard.

Worse still for the government is the allegation, in research by the Chartered Institute of Personnel and Development, that public sector firms – those with government contracts – are more likely to use zero-hours contracts than private companies.

This is particularly prevalent in education and healthcare.

And how is the benefits system affected by these contracts?

CIPD chief executive Peter Cheese told the BBC: “Zero-hours contracts cannot be used simply to avoid an employer’s responsibilities to its employees.” But isn’t that exactly how they are being used? Don’t the number of people saying they can’t make ends meet, and the wider state of the economy, indicate exactly that?

Unison general secretary Dave Prentis seems to have got it right when he said: “The vast majority of workers are only on these contracts because they have no choice. They may give flexibility to a few, but the balance of power favours the employers and makes it hard for workers to complain.

“The growing number of zero-hours contracts also calls into question government unemployment figures.”

Business secretary Vince Cable has ordered a review of the zero-hours contracts system, to take place over the summer. He played down fears of abuse, saying evidence was “anecdotal” and adding that “it’s important our workforce remains flexible” (in employment terms, this means all the power is with the employer, while the actual worker has to adapt to the circumstances foisted upon them).

Shadow Health Secretary Andy Burnham called for zero-hours contracts to be banned, back in April this year.

It seems clear that they are unsafe and open to abuse. But would an all-out ban be appropriate?

Would it not be wiser for Job Centres to continue advertising them, but with no obligation to recommend them to jobseekers (and certainly no requirement to force anyone into applying for them), and with a requirement to warn anyone considering taking up such a position about the possibility that they will not be able to survive on the pay provided?

This might go some way to redressing the balance of power with employers; without the coercive power of the government supporting these contracts, they might try more traditional (and fairer) employment models.

This is a subject worth more examination. What are your thoughts?

Name benefit recipients if you like – but only alongside all taxpayers’ details

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Affairs, benefit, detail, economic, IEA, Institute, Mark Littlewood, Mike Sivier, mikesivier, name, pensioner, recipient, Samwise Gamgee, social security, taxpayer, Vox Political, welfare

I just received this as a comment from Samwise Gamgee, who is a frequent friend of this page. It’s too interesting to leave as a comment so I quote it here in full:

“‘Why Osborne must publish the names of every benefits claimant – and how much we pay them: An incendiary idea to save on our £500m A DAY welfare bill’.

“It seems Mark Littlewood, Director General for the Institute of Economic Affairs, wants to name (but not shame, he assures us) everyone in receipt of state benefits, including pensioners. From the article –

“‘The welfare benefits claimed by every individual – including pensions, jobseeker’s allowance, bus passes, winter fuel payments and child benefit – should be put in the public domain.

“‘They should be listed, in full, on a publicly accessible website for all of us to inspect. Taxpayers have a right to know exactly who is claiming what and how much they are getting.”

“This mad idea is needed because the welfare bill ‘is ballooning out of control’. So how would such a proposal help reduce the bill? Well Mr Littlewood is clear that this will not be about naming and shaming people, but he does say taxpayers are entitled to know where their money is going (and to whom).

“So draw your own conclusions. I certainly have!”

The logical reply to that is, if taxpayers are entitled to know where their money is going, then everyone should be entitled to know where it originated.

In other words, by all means publish names and details of benefit recipients but, before this happens, let’s see the names and details of all taxpayers, including total earnings per year (before any tax avoidance schemes get into them) and the total amount of tax they pay.

The findings should make very interesting reading.

But do you know what?

If publishing the latter list is a precondition of publishing the former, I doubt anything will happen about it.

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

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90 per cent, agencies, agency, arbitrary, austerity, benefit, bogus, bond, cabinet, Centre, Chancellor, co-operation, Coalition, confidence, Conservative, credit, credit rating, cut, Dean Baker, debt, Department, DEPR, development, domestic, down, DWP, economic, economy, fake, fiscal, fiscal cliff, GDP, George Osborne, government, gross, IMF, inequality, infrastructure, Institute, Interest, International Monetary Fund, investment, job, Jonathan Portes, living, Malcolm Sawyer, market, market price, Mike Sivier, mikesivier, minimum, national, NIESR, nudge unit, OECD, organisation, Pensions, policy, politics, product, project, psychometric, rate, ratio, reinhart, Research, revise, revision, rogoff, sham, Skwawkbox, Social Research, Steve Walker, test, Tories, Tory, unemployment, Vox Political, wage, work, yield

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.”