Does Cameron really think Scotland will stay in the UK because he wants it?

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Why Cameron is on a hiding to nothing: Many Scottish people have not forgotten how British governments have mistreated them. [Image: Ceasefire Magazine]

David Cameron gave a speech today in which he made an impassioned plea for Scottish people to vote for staying in the United Kingdom – and if any of them needed an excuse to do the exact opposite, there it is.

He made his comments from the Olympic Park in London – which says everything you need to know about his relationship with Scotland. Was he afraid of the jeers if he travelled up to Edinburgh?

“I passionately believe it is in their interests to stay in the UK – that way Scotland has the space to take decisions while still having the security that comes with being part of something bigger,” Cameron wittered. But he has been shrinking the state. The UK as a whole is much smaller – economically and philosophically – than it was four years ago and that’s his fault.

“In the UK, Scotland is part of a major global player,” he burbled. But the rest of the world now looks down on the UK because of his unstatesmanlike behaviour when dealing with foreign powers. He has diminished the UK in the international community and the Scottish people are well able to see that.

Appealing for those of us in the other UK countries – England, Wales and NI – to apply emotional blackmail on our friends in Scotland, he gibbered: “From us to the people of Scotland, let the message be this: We want you to stay.”

Cameron must think we all have memories so short we could qualify as brain-damaged. Conservatives have historically used Scotland as the testing ground for every rotten little policy they wanted to try out – remember the Poll Tax? – because of no special quality other than the fact that there are no Conservative MPs there.

I don’t want Scotland to vote for independence because I think Scottish people have contributed hugely towards the culture shared by everybody living on the British Isles – it is possible they have added more to our society than the English who dominate our political lives.

In return, they have been treated abominably – most particularly by English Conservatives – and that is why I can’t see Scotland staying in the Union while an English Conservative is in charge in Westminster.

If Scotland does go, you should all know what will happen next: Wales will become the testing ground for rubbish Tory policies. They won’t try it on Northern Ireland because that province’s history tells them exactly what they’d get in return – and if that isn’t a good enough reason for the Welsh people to go feral and start causing havoc, I don’t know what is!

So well done, David – you have considerably worsened our chances of remaining united.

My only hope is that, if Scotland does secede from the union, its leaders keep the door open, so that there always remains the possibility of some form of reunification on terms that strengthen both countries – when (or if) a reasonable government is returned to office in the UK.

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What you’re not being told about Europe’s verdict on social security

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“Manifestly inadequate” are words that should ring in Iain Duncan Smith’s ears for some time to come.

They are the Council of Europe’s verdict on the UK’s social security system of payments for jobseekers, pensioners and recipients of both short- and long-term incapacity benefit.

The Council, an international organisation promoting co-operation between all countries of Europe in legal standards, human rights, democratic development, the rule of law and cultural co-operation, is home to the European Court of Human Rights.

The finding was made in an annual review of the UK’s adherence to the council’s European Social Charter. If the UK’s Conservative and Liberal Democrat Coalition government takes no action to rectify the situation, then the Council of Europe’s Committee of Ministers may address a recommendation to the UK, asking it to change the situation in law or in practice. This is clearly a weak way of handling a situation that could affect the well-being of many millions of people.

But Council officials say national courts refer to these international standards when deciding on relevant cases, meaning benefit claimants could try to use the Council’s ruling to boost their case for a higher award.

In response, our ever-more-right-wing government could decide to withdraw from its dealings with the Council altogether, meaning our citizens would no longer have recourse to the European Court of Human Rights. Many Tories – like Philip Davies – have long held this desire!

The Daily Mail, of all rags, appears to have done its homework on this, stating: “JSA, ESA (both £67 a week) and pension (about £102) all fall well below the £138 a week, or £596 a month, that the Eurocrats have set as the benchmark.

“Because all three are below a second threshold of £110 a week, they are rated ‘manifestly inadequate’.”

The UK has signed treaties in which it has promised to adhere to the provisions of the European Social Charter, so the Council’s claim that its conclusions are legally binding are accurate.

But the Coalition government has never been one to accept rules made by anybody else, and the DWP – one of the worst offenders (see previous articles on Workfare, work capability assessments for people with mental health problems, and the Bedroom Tax) is trying to claim that the findings must only be “taken into account” (meaning they would be noted, but ignored).

In his own response, Iain Duncan Smith appears to have completely misunderstood the meaning of the judgement, providing yet another example of why he is rightly considered one of the Coalition government’s leading dunderheads.

“This government has made great strides in fixing the welfare system so that spending is brought under control. It’s lunacy for the Council of Europe to suggest welfare payments need to increase when we paid out £204 billion in benefits and pensions last year alone.”

He simply does not understand that talking about the whole amount paid by the government is irrelevant when it is the amount paid on a regular basis to individuals that is at issue.

The Council of Europe states that 40 per cent of the Eurostat median equivalised income is the level at which the benefits should be paid and, as a treaty signatory, the UK has agreed to meet this requirement. RTU’s opinion is of no consequence at all. He is in breach of an international treaty.

The ruling also undermines his claim that many people have made a lifestyle choice to live in comfort on the dole, and his party’s claim that foreign nationals have been immigrating to Britain for purposes of benefit tourism – income levels are too low for anyone in their right mind to consider it.

What nobody is telling you is that this report does not even take account of the changes to the UK’s social security system that were ushered in by RTU’s (we call him that in honour of his ignominious army career – it stands for Returned To Unit, the fate of officer candidates who didn’t make the grade) hopelessly ignorant and hideously draconian Welfare Reform Act.

These are conclusions based on the system before the Bedroom Tax, before the benefit cap, before the flat-rate state pension, and before the one per cent limit on benefit uprating.

The report states: “The Committee notes that these legislative developments (the Welfare Reform Act and the State Pension Reform) are outside the reference period. Therefore, it asks the next report to indicate how these have affected the personal coverage of social security risks – ie the percentage of the covered persons out of the total active population as well as the minimum levels of income-replacement benefits (unemployment, sickness, maternity and old-age).”

In particular, it singles out Employment and Support Allowance: “The Committee of Ministers observed that there was a toughening of the qualifying conditions for the entitlement to ESA on the one hand and a drastic reduction of its duration on the other, which could result in an outright reduction of protection offered by the sickness benefit.

“The Committee of Ministers invited the Government to show in its next report … that the obligations and sanctions under the work-related activity regime are of such a nature as not to unduly limit the protection afforded … to sick persons after the 13th week of sickness.”

That’s going to be tricky for RTU – the last figures his department deigned to release showed that an average of 73 people a week were dying after going through his ideologically-motivated work capability assessment.

As stated at the start of this article, “manifestly inadequate” are words that should ring in Iain Duncan Smith’s ears for some time to come.

They describe the performance of his department in looking after the needs of British taxpayers who have fallen on hard times due to unemployment or illness – and also its treatment of pensioners.

They also describe, in the opinion of objective outsiders, his own performance as a British government minister.

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To the devil with the details – axing the bedroom tax is the right decision

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Costed and credible: Ed Miliband announcing Labour’s plan to end the bedroom tax. [Picture: BBC]

The SPeye blog makes a good point.

Labour doesn’t need to justify scrapping the bedroom tax beyond stating the fact that it is an unjust measure designed to inflict misery upon the lowest-earning citizens of the UK while conferring no discernible benefit on the state.

Therefore Ed Miliband’s insistence on pandering to the Coa-lamity government’s narrative by trying to say where he would find the money to make the move possible may be seen as a mistake; there is no evidence that the bedroom tax has saved a single penny and every reason to believe that it will be a greater burden on the taxpayer in the long run.

Labour failed to attack the claim that the bedroom tax was saving money and we should question the wisdom of Miliband’s advisors in omitting this detail.

He should have pointed out that the Coalition government’s claim – that the tax negates differences between social rented accommodation and the private sector – is nonsense and we should question the wisdom of Miliband’s advisors in omitting this detail.

And he should have pointed out that the Coalition’s claim – that the bedroom tax and other changes would cut the cost of Housing Benefit by £2 billion – is also nonsense; that bill was £20.8 billion in 2010 when the claim was made so, with the current cost at more than £23 billion, the bill is now £5 billion above the Coalition’s target without showing any signs of coming down. We should question the wisdom of Miliband’s advisors in omitting this detail, also.

Or rather, he should question their wisdom.

There will be a time for that, but this isn’t it.

Those arguments don’t matter right now.

The fact is that he said the bedroom tax is unfair and a Labour government would end it – and he said it after a United Nations investigator made exactly the same claim. Labour has brought itself in line with UN findings and now the Coalition has been cast as a rogue government, acting against legally-binding international agreements which Labour would uphold.

But let’s just have a look at that mistake again. Labour said it would be able to axe the bedroom tax because it would save money by other means – ending a tax break for hedge funds and cutting short the new shares-for-rights scheme currently being thrust at company employees by the Treasury.

These are things that Labour would do anyway. The bedroom tax is just an excuse – in the same way that the Conservatives and the Liberal Democrats put up an excuse for inflicting it on the poor, the sick and the disabled in the first place. It’s basically Miliband and the rest of the Labour Party offering the Conservatives and their little yellow friends a taste of their own medicine.

That gives them credibility.

And, if these measures really can boost public funds by £2 billion, then Labour will have found a way to do what the Coalition could not, because the bedroom tax was always likely to cost more money than it saved, for reasons well-discussed in the past.

Hedge funds are a rich seam of cash, ripe for mining by politicians because they aim to make money whether the market is moving up or down. The means by which they do this are extremely questionable and can artificially engineer collapses in company share prices, so it is right that a punitive tax regime should be imposed upon them.

That means that Labour’s plan really has been costed in a reasonable way. Costed and credible – just as Miliband claimed.

And the Treasury knows it. Look at its response – an unfounded, nonsense claim that Labour would tax pensions and borrow more money to fund the change.

Sajid Javid came out with this rubbish on the BBC’s news website. His credibility is already shaky and his claim has done nothing to improve that situation for him.

Business minister Matthew Hancock also got in the ring, but flailed wildly around with another nonsense claim that ending the bedroom tax would lead to higher taxes and higher mortgage rates.

He doesn’t matter. Javid doesn’t matter. A Department for Work and Pensions spokeswoman said something as well, but that doesn’t matter either because nobody believes a single word those people say.

The Guardian is currently running a poll asking members of the public to vote on whether the bedroom tax should be scrapped. A massive 91 per cent of voters want rid of it.

Labour has promised to get rid of it.

That is all that matters.

Cameron – corrupt corporate whore, according to Meacher

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alcohol, branding, BSkyB, cigarette, Coalition, commercial, Conservative, contempt, corporate, corporation, corruption, credibility, David Cameron, evidence, fear, fracking, international, Labour, law, Lynton Crosby, Michael Meacher, Mike Sivier, mikesivier, minimum, money, Packaging, Philip Morris, power, price, prostitute, prostrate, rebel, Rupert Murdoch, Syria, union, Vox Political, whore

A corporate whore servicing one of his clients: Apparently they’re normally called ‘Johns’, but in the high-paid corporate whoring world they’re known as ‘Ruperts’. Both of them. Silly Ruperts.

It seems opponents of the Coalition have realised its degraded claim to be a government is worthless and have decided to pour contempt on it at every opportunity.

I mention this after seeing Michael Meacher’s excellent column on David Cameron. The fake Prime Minister’s instincts, according to Mr Meacher are “that there is no such thing as the rule of law, and that the only things that ultimately matter are power, fear and money”.

These words should come as hammer-blows to Cameron’s credibility. It is to his credit that Michael Meacher has written them – but also to the shame of the Labour front bench that none of them had the guts to come out with it first.

Mr Meacher supports his claims by laying out a wealth of evidence that, while the comedy PM crows on and on about Labour’s (non-existent) pandering to the unions, “there is almost nothing… that Cameron won’t do, no commercial interest he will disdain, no policy he will refuse to alter if it will ingratiate himself with the sources of money and power… He has prostrated himself before a wide range of commercial interests by changing government policy to suit them in order to recruit their money and power for himself and his party in the lead-up to 2015”.

He supports his assertions as follows:

1. Cameron was determined to hand BSkyB to Rupert Murdoch, in exchange for support for the next general election (he failed in this attempt).

2. He ditched plans to remove branding from cigarette packaging. It has emerged that his advisor Lynton Crosby’s company lobbies on behalf of tobacco giant Philip Morris International.

3. Soon after Crosby was hired by Cameron, the government dropped plans for a minimum alcohol price. Crosby’s Australian company has represented an alcohol industry group campaigning heavily against similar plans in that country.

4. Crosby’s company also represents an oil and gas lobby group that campaigns aggressively for fracking, so now the UK government is encouraging fracking with tax breaks for the companies involved.

5. Crosby’s UK company represented rebel forces in Syria for six months, which may explain Cameron’s decision to send weapons to the rebels (but again failed in the attempt, thanks to a rare outbreak of sanity in the House of Commons).

The government will no doubt try to counter these arguments but there is no credible way of doing so. We are able to judge our politicians by what they do – not what they say – and the evidence is available for all to see.

So, ladies and gentlemen, let’s change the pitch of news reporting this summer. Instead of the usual ‘silly season’, let’s make it open season on Cameron and his cronies. Let’s get all the evidence against them together and make it clear to the general public, via all possible avenues, what a craven cadre of corrupt corporate prostitutes they all are.

It shouldn’t be too hard.

UK Treasury changes title to ‘Department of Clutching At Straws’

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'Starve the Beast', agriculture, BBC, budget, construction, David Cameron, debt, deficit, economy, expansionary fiscal contraction, fund, George Osborne, Gideon, growth, IMF, international, manufacturing, Michael Meacher, Mike Sivier, mikesivier, Monetary, national, NHS, OBR, office, ONS, playing field, politics, privatisation, privatise, responsibility, Royal Mail, sell, service, statistics, student loan, Treasury, Vox Political

The economy is growing: The Coalition government will claim credit but there is no reason to believe it has anything to do with current government policy – quite the opposite, in fact.

All right, the Treasury hasn’t really changed its name – but it might as well have, after the joy that greated this week’s meagre growth figures.

The Office for National Statistics is reporting growth in construction, manufacturing, services and agriculture in an estimate based on 44 per cent of actual data on economic activity during the second quarter of 2013 (April-June). That’s less than half of the evidence.

We live in times when the whole of the evidence means a great deal – for example, information on Q1 of 2012 that put growth at a standstill – neither up nor down – meant the UK did not enter a double-dip recession, even though the economy contracted in the periods immediately before and after. In real terms we were backtracking – but on paper, no.

Let’s remember, also, that the organisations that record our economic fortunes are liable to revise their predictions down as well as up – remember when the Office of Budget Irresponsibility changed its mind about the growth figures for 2012? It had predicted growth of 2.5 per cent for that year. In fact, once we iron out the ups and downs, the economy really only bumped along at a roughly steady state.

The International Monetary Fund had predicted a more conservative 1.6 per cent growth for 2012 – but in January of that year revised this down to 0.6 per cent. You get the picture.

The 0.6 per cent figure was in line with market expectations, though – and that is a good sign. But 0.6 per cent is a very fragile figure and the prospects for the rest of the year are “highly uncertain”, as market analyst Richard Driver said in the BBC News website’s report.

We all knew that the economy would start turning upwards again at some point. That it has taken five years to do so indicates the severity of the banker-induced crash – and also the lack of any investment in recovery.

In the past, the upturns arrived comparatively swiftly – but there had been a willingness on the part of both government and businesses to put money into it. The current government has been sucking money out of the economy in the pursuit of Gideon‘s nonsensical “expansionary fiscal contraction” and getting the deficit down – meaning that all the effort has been put into cutting spending and none into actually making a buck or two. Meanwhile, it has been estimated that businesses have been sitting on fortunes totalling six or seven per cent of GDP – around £775 billion, according to Michael Meacher.

In his blog, Mr Meacher said he expected the announcement to be “milked by Cameron-Osborne for all it’s worth” and he was not to be disappointed.

“These figures are better than forecast,” said Osborne in the BBC report – claiming credit for something that had nothing to do with him. “Britain is holding its nerve, we are sticking to our plan, and the British economy is on the mend – but there is still a long way to go.”

What will he say if a later revision knocks the figure down again?

Mr Meacher’s blog stated that the growth figures had been inflated “by being talked up by the finance sector”, and stimulated by Osborne’s Help to Buy scheme “which has ploughed taxpayers’ money into mortgages but without increasing the number of houses being built, which can only push up property prices… igniting yet another housing bubble which is the last thing the economy needs”.

He added that the real essentials of recovery are still missing – “an expansion of manufacturing and exports”.

We may have to wait for another government before that happens; the Coalition is too busy exploiting our current economic fragility as an excuse to sell off the family silver – those parts of the NHS it thinks nobody will notice, the Royal Mail, school playing fields, student loans…

I could mention ‘Starve the Beast’ again – but by now you should be on intimate terms with that expression.

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Treasury responds to Vox’s austerity challenge

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Last month, Vox Political wrote to the Chancellor of the Exchequer, a Mr Osborne, politely asking him whether he had any other documentary justifications for his disastrous programme of austerity after the previous principal pillar of his faith – a paper by Harvard economists Reinhart and Rogoff – had been disproved by a student at a rival university.

Today we received a response! A lengthy, well-considered one at that.

What a shame that we found a way to trash it before we reached the end of page one.

But we’re getting ahead of ourselves. Let’s all read the letter together, shall we? It begins:

“Thank you for your letter dated 22 April about the recent publication by Herndon, Ash and Pollin, a critique to the paper ‘Growth in the time of Debt’ by Reinhart and Rogoff.

“You asked for the Treasury’s views on the recent criticism of the paper by Carmen Reinhart and Kenneth Rogoff which concluded that public debt above 90% of GDP could prove a significant drag on economic growth.

“As you will be aware, the Coalition Government inherited the largest deficit in post-war history due to unsustainable increases in Government spending by the previous Government and the effects of the financial crisis [We don’t know that at all. The largest deficit in post-war history is something to which this writer cannot respond – I only know that the national debt at the end of WWII was 250 per cent of GDP, or very nearly four times as much as it is now. Spending by the Labour administration was less than that of the Conservatives until the financial crisis took place, so the writer is effectively admitting that Conservative spending between 1979 and 1997 was even more unsustainable. As for the financial crisis, the Tories would have done the same as Labour at the time, as is borne out by the history books]. In order to address these problems the Coalition Government set a clear and credible consolidation plan to reduce the risks of a costly loss of market confidence in the UK, to restore confidence and underpin sustainable growth.

“As noted by the OECD in their Economy Survey of the United Kingdom February 2013, ‘global developments have shown that the consequences of loosing [sic] market confidence can be [a] sudden and severe and sharp rise in the interest rates [that] would [be] particularly damaging to an economy with the United Kingdom’s level of indebtedness.’ A 1 percentage point increase in government bond yields would add around £8.1 billion to annual debt interest payments by 2017-18.

“Fiscal consolidation also reduces the risk of adverse feedback between weak public finances and a strained financial sector. This feedback can be very damaging, as evidenced by recent events in the euro area. Globally, the UK has one of the largest financial systems relative to the size of its economy, meaning that any loss of investor confidence in the UK’s fiscal position would not only affect the UK, but also the global economy. As the IMF has stated in their United Kingdom – 2011 Article IV Consultation Concluding Statement of the Mission, ‘the UK financial system thus serves as a global public good’. It is the IMF’s view that the UK’s economic and financial sector policies have a systemic impact on the global economy.

“The Government’s approach is supported by a large body of academic and professional literature which finds that there are strong theoretical and empirical grounds for a relationship between high levels of debt and slow growth, including:

“1. Work by staff of the Bank for International Settlements:

“* ‘The Real Effects of Debt’ by Cecchetti et al, 2011 (published as a Bank of International Settlements working paper in September 2011), found that government debt above 85% had a negative impact on growth.

“2. Research by staff of the International Monetary Fund:

“* ‘Public Debt and Growth’, an IMF 2010 working paper prepared by Kumar and Woo, found that an increase in debt ratio of 10& resulted in an annual decrease of 0.2% in per capita GDP growth, with a stronger effect at higher levels of debt. The paper found some evidence of nonlinearity with higher levels of initial debt having a proportionately larger negative effect on subsequent growth. Analysis of the components of growth suggested that the adverse effect largely reflects a slowdown in labour productivity growth mainly due to reduced investment and slower growth of capigal stock.

“* ‘How costly are debt crises’, an IMF 2011 working paper prepared by Furceri and Zdzienicka, finds that debt crises produce significant and long-lasting output losses. This study also provides support to the idea of a threshold for the debt-to-GDP ratio above which output growth starts to decline.

“* The IMF 2013 WEO box 1.2 ‘Public Debt Overhang and Private Sector Performance’, cites studies that have found a threshold beyond which public debt harms growth. It also lists several reasons why a debt overhang can affect economic activity.

“3. Work by staff of the Organisation for Economic Co-operation and Development:

“* ‘Public Debt, Economic Growth and Nonlinear effects, Myth or Reality?’ Egert, OECD 2012, finds ‘some evidence in favour of a negative nonlinear relationship between debt and growth using a variety of econometric models.

“4. Work by staff of the European Commission:

“* Report on Public Finances in EMU 2012 supports the statement that public debt can trigger economic growth: ‘higher debt levels and interest rates might weigh on economic growth, especially when debt exceeds a certain threshold level as a number of papers suggest.’

“There are also theoretical reasons, highlighted in Boskin, 2012 and OECD, 2012 for believing that higher levels of public debt will damage medium-term growth prospect:

“* First, tax hikes needed to service a higher public debt may crowd out private investment by reducing disposable income and saving.

“* Second, if the higher debt servicing costs associated with increased debt levels are financed by increasing tax revenue, they also imply a deadweight loss on the economy as a result of distortionary effect of raising tax revenues.

“* Third, there is broad agreement that large deficit and debt levels are associated with a higher level of long-term Government bond yields which may crowd out productive public investment and reduce private investment through an increase in the cost of capital. Reduced investment in research and development will have long-lasting negative impacts on growth.

“The approach is also supported by international organisations. The OECD, for example, noted in its November 2012 Economic Outlook that ‘With the budget deficit (excluding temporary factors) at over 8% of GDP and gross government debt at over 80% of GDP, fiscal consolidation is necessary to restore the sustainability of public finances and will strengthen medium-term growth prospects. The fiscal stance remains appropriate, and is supported by the strong institutional framework.’

“Olli Rehn, Vice President of the European Commission, on the speech of the Spring Forecast in May 2013 noted: ‘It is important that the UK follows through with consistent consolidation of public finances with a view to achieve (sic) a more sustainable fiscal position.’

“At the end of this letter you can find the papers referred to above online.”

I shan’t embarrass the letter’s author by naming that person.

The online papers are:

Cecchetti, Bank of International Settlements, 2011. ‘The Real Effects of Debt’ http://www.bis.org/publ/work352.htm

Kumar and Woo. ‘Public Debt and Growth’, IMF 2010 http://www.imf.org/external/pubs/ft/wp/2010/wp10174.pdf

Furceri and Zdzienicka. ‘How Costly are debt crises’, IMF 2011 http://www.imf.org/external/pubs/ft/wp/2011/wp11280.pdf

IMF April 2013 World Economic Outlook (WEO) http://www.imf.org/external/pubs/ft/weo/2013/01/

Egert, OECD 2012. ‘Public Debt, Economic Growth and Nonlinear effects, Myth or Reality?’ http://www.oecd-ilibrary.org/economics/public-debt-economic-growth-and-nonlinear-effects_5k918xk8d4zn-en

Boskin, M. Stanford Institute for Economic Policy Research, 2012. A Note On the Effects of the Higher National Debt On Economic Growth http://siepr.stanford.edu/publicationsprofile/2491

OECD Economic Outlook, November 2012. http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-outlook-volume-2012-issue-2_eco_outlook-v2012-2-en

European Council, 2012 UK Country Specific Recommendation (CSR). http://ec.europa.eu/economy_finance/economic_governance/sgp/pdf/20_scps/2012/04_council/uk_2012-07-10_council_recommendation_en.pdf

… all of which can be picked apart with one observation and a couple of attached questions:

Mr Osborne demanded in 2010, that cuts to welfare benefits alone should total £18bn per year by 2014-15 (meaning a total of £90bn over the five years of Coalition government). Other government departments have had to take huge hits as well.

So why is the total drop in the deficit this year just £300 million? And why is the national debt now more than 88 per cent of total GDP – well inside the danger zone that Mr Osborne has been trying to avoid?

Could it be that, once put into practice, the theories outlined above aren’t actually worth a farthing?

Expect much more on this subject as we really get our teeth into the material the Treasury has kindly provided.

GDP figures due – will Gideon have anything to show for his austerity idiocy?

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Triple-dip breakfast: Will we all be dining on the sour cereal of recession again, when GDP figures are published on Thursday morning?

Thursday will be another ‘crunch’ day for our part-time Chancellor of the Exchequer – he’s having quite a lot of those lately, isn’t he?

Only last week, the academic justification for his austerity policy was disproven by an American student (oh, the shame!), and then his former allies at the International Monetary Fund distanced themselves from him (oh, the betrayal!) saying he should calm down a bit.

That’s the best advice this columnist has ever heard the IMF provide; if not for his own health, then for the nation’s.

Thursday, though, is a really big day. On Thursday, GDP figures for the first quarter of 2013 will be published.

It is a sign of how low expectations have fallen, that all the economic commentators are saying the best we can expect is to have kept out of a triple-dip recession – with falls in output due to the weather, among other things, making that unprecedented outcome more likely.

There is a problem with all of these predictions, which should be obvious to those of us living in the real world: Short-termism.

It’s all about how the UK managed in the last quarter, how it will manage in the next; what the situation is today. What about six months from now? What about next year? What about 2015, when we’re all expecting an election and the chance to banish this nightmare? What about 2017-18, when 0sborne still reckons he’ll have eliminated the budget deficit (fat chance)?

The fact is that the only options open to a Chancellor in the current climate are unpalatable to the Boy.

He could boost investment in infrastructure, in a bid to make this country a better place to open – and carry out – business. The trouble is, this tends to be a long-term project and he no longer has the time. His chances would have been better if he had started this in 2010, but his government cancelled as many such projects as they could back then, claiming it was more important to cut public spending in order to balance the books.

That was a vain hope. Without new investment, the country has lost revenue.

But if that is unpalatable, the other alternative is likely to make him choke on his pate de foie gras (or whatever it is these posh boys ingest): Increase the spending power of the poor.

It is known that the ‘trickle-down effect’ is a myth – giving all of a country’s money to the very rich, in the belief that they will spend it, boosting the economy and the income of the poor, is nonsense. What they actually do is bank it – in offshore tax havens, most likely. That is what 0sborne has been doing; it is another reason the economy has bombed.

It is also a rock-solid fact that poor people do spend their money – or as much as they can get their hands on. When you are constantly struggling to make ends meet, it’s very hard to keep cash in the bank – you have to spend it on food, clothes, rent, heat, light, water… the list is endless, because it constantly repeats.

When you don’t have much cash, as Edmund Blackadder once said, you feel like a pelican. Everywhere you turn, there’s a large bill in front of you.

That money does work for society. It reinvigorates the economy as it filters through different hands. And it brings with it the extra joy of fiscal multipliers – every pound that gets put into the economy is worth more after it has been through.

The trouble is, Gideon shut off that money supply. He raised VAT, making it harder for working-class people and those on benefits to buy certain economy-boosting products, and then he and Iain Duncan Smith spent the last few years on their project to depress wages.

(For clarity, it goes like this: The DWP makes the benefit system so difficult to navigate that people in receipt have to do their utmost to get off-benefit as soon as possible. This means they are constantly looking for jobs, which in turn makes it possible for employers to refuse pay rises for their workforce, with the classic line that “there are plenty of other people who’d be happy to have your job, you know!” You didn’t really think the benefit cap was about making work pay, did you?)

Say what you like about Labour, but they’ve got the right idea when it comes to the money supply. Ed Balls wants to cut VAT; he wants to bring back the 10 per cent tax rate for the lowest-paid; he wants to bring in a National Insurance holiday for companies that agree to take on new employees.

These are measures that will help.

What is Gideon going to do?

It’s time Osborne provided evidence for his disastrous economic course

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Gideon needs to put his house in order, pronto.

That’s the message I’m taking from the fact that the previous article on this blog – Austerity programme proved to be nonsense based on a spreadsheet mistake – has become the most popular ever to appear here. More than 10,000 of you read it within 24 hours of publication.

Clearly, the fact that a principal pillar of his faith – the work by Harvard economists Reinhart and Rogoff – has been disproved, and by a student at a rival university, should have shaken his confidence. It is also ironic for a member of the Conservative Party to realise that they would have got their sums right, if they had done them the old-fashioned way.

But we’ve had no expressions of apology or acts of contrition from the Treasury. It seems Mr Osborne is determined to keep going, no matter what damage this causes.

I don’t reckon that’s good enough. I think he should be brought to account. So I have written him a letter, asking him to justify his position.

I reproduce it below. If you agree that it is time Mr Osborne put his cards on the table, you might wish to consider using it as a template for a letter of your own.

Here it is:

The Right Honourable George Osborne MP

Chancellor of the Exchequer

HM Treasury

Horse Guards Road

London SW1A 2HQ

Dear Chancellor,

Following the revelation that a fundamental justification for your austerity policy has been disproved – the paper by Reinhart and Rogoff that was based on a mistake on a spreadsheet – I am writing to ask: What other documentary evidence do you have that supports your policy of economic austerity?

I am mindful of the fact that one of your aides is quoted in The Guardian newspaper as saying “the suggestion that the case for dealing with fiscal deficits and debt rests on one paper is patently absurd” (http://www.guardian.co.uk/politics/2013/apr/18/uncovered-error-george-osborne-austerity), but this person did not provide any other examples.

It should also be noted that this aide added, “It remains the case that the majority of economists still back the government’s strategy.” I await proof to justify this statement as well. Perhaps it is worthwhile to remind you that, of the 20 economists who publicly backed the Osborne Austerity plan in 2010, only one was willing to publicly back it in August last year. Nine publicly disavowed you, and the other 10 had no comment or went on holiday (http://www.newstatesman.com/blogs/politics/2012/08/exclusive-osbornes-supporters-turn-him).

Be advised that it will not be enough for you to discount the quotations above because they come from left-wing sources. As it stands at the moment, the situation is that your policy has no evidence to support it, nor does it have the support of expert opinion that is being claimed for it. Bear in mind that even the International Monetary Fund is criticising your policy, despite having been a staunch support in 2010.

You will recall that the Coalition came into being, nearly three years ago, for the specific purpose of bringing the economy under control. Your policy is the instrument with which this was to be done.

If you do not provide evidence to support its continuation, then what are we, the public, to think? That you are inflicting austerity on us – primarily upon the poorest of us – purely to shrink the state? To sell off the profitable parts to private industry, for the good of private bank balances rather than for the benefit of the nation as a whole? For spite?

If I were in that position, honour would demand an admission of the mistake and either an alteration of policy to one that is more likely to support economic growth (I understand alternatives are available) or – considering this government that was formed to fix the economy has spent three years doing the exact opposite – the dissolution of this administration and election of one that is better-equipped to make the best decisions, in the interest of the nation as a whole.

I look forward to your response.

Austerity programme proved to be ‘nonsense’ based on a spreadsheet mistake

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George Osborne famously shed tears at the funeral of Margaret Thatcher – but were they really for the Blue Baroness, a woman he is understood to have met only once (twice if you count Wednesday), or was it because he’d just heard that the entire theory forming the basis for his economic policy had just disappeared from under him?

The government’s principal justification for pursuing austerity lay in tatters today, after it was revealed that the economic theory behind it is based on a mistake.

The Chancellor’s entire austerity policy is based on a paper by economists Carmen Reinhart and Ken Rogoff, which is itself based on a spreadsheet concluding that public debt of more than 90 per cent of a country’s gross domestic product (GDP) slows down growth by 0.1 per cent – which is wrong.

It should have found that countries with such levels of debt see their economies grow by 2.2 per cent – but the false conclusion was used by the UK Treasury to justify the horrific austerity programme that has already caused terrible harm to many British citizens, and is expected to cause much worse harm in the future.

It means that the slaughter of innocents down at the DWP – the deaths of many thousands of people claiming Employment and Support Allowance, due to changes in the assessment regime that were based on a false theory dreamed up by an American insurance company when it needed an excuse not to pay out  – have been in vain.

It means that the huge cuts to social security benefits for those who are out of work and those in work but poorly paid are totally unjustified. Here in Mid Wales, they average out at £433 per year, for everyone of working age. That’s roughly one week’s wages here – and of course much more than that in terms of benefits because, let’s remember, this government wants to make sure that work pays more than worklessness.

And it means that the Income Tax cut for the very rich, and the cuts that have reduced Corporation Tax by a quarter, were also unjustified. Let’s not forget that the Coalition government has been giving our money back to its influential friends.

Gideon George Osborne’s ridiculous plan was known as “expansionary fiscal contraction”. Just looking at those words together, anyone with an ounce of common sense knows it’s ridiculous. It implied that the economy would grow if it was starved of investment. What rubbish. How on earth can anything grow if it is being starved?

Now that plan has been exposed as “total nonsense” – which is exactly the way Ed Balls described it after hearing of the mistake.

Osborne, of course, is sticking to it. An aide said it was “absurd” that only one paper supports the Chancellor’s case for austerity – but put forward no examples of other justifications.

The aide said “the majority of economists still back the government’s strategy”.

But the International Monetary Fund doesn’t. The IMF was the main supporter of Osborne, using the same Reinhart-Rogoff paper to justify austerity schemes three years ago.

Now, both IMF chief economist Olivier Blanchard and its head, Christine LaGarde, have suggested that he should be “slowing the pace” of his cutbacks.

In fact, we all know why Osborne will continue to push austerity down our throats, and it has nothing to do with balancing the budget.

He knows it is extremely unlikely that the Conservative Party will win an election in 2015 – the damage he has already done to all our lives means that is a statistical probability on which he can rely.

But he has more ideologically-motivated changes to foist upon us, whether we want them or not. His buddy David Cameron once said he wanted to see all public services except justice and the security services privatised, and we can expect Osborne to push this agenda forward with vigour.

This government is all about taking public services and putting them into private hands, for profit and to spite the poor.

That is the real truth that was revealed by a statistical error in a spreadsheet this week.

UK police state moves a step closer (to your door)

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It really was a good day to bury bad news.

As the press went into overdrive about the vote to permit gay marriage, a House of Commons committee quietly axed amendments to the Justice and Security Bill that would have made it less damaging to your freedom.

This is the controversial Bill to allow ‘secret courts’ in the UK, so cases that are potentially embarrassing to government can be held behind closed doors.

As it now stands, defendants – or claimants in civil cases – will be excluded from the hearings where their fates will be decided. They will not be allowed to know or challenge the details of the case against them and will have to be represented by a security-cleared special advocate, rather than their own lawyer.

Are alarm bells ringing in your head yet?

Apparently the Bill has been drafted in close co-operation with the security services, who have claimed other countries may stop sharing intelligence with Britain if it risks being disclosed in open court. Clearly the intention is to deal with terrorism cases but there is no necessary limit to the possibilities.

The House of Lords had amended the Bill last November after concerns were raised about the threat to civil liberties. The changes would have meant judges could only grant secret hearings – or ‘Closed Material Procedures’ (CMPs) – if other alternatives like the existing system of public interest immunity had been ruled out.

A call to permit such hearings only after balancing the government’s call for it against the ancient legal principles of open justice was also thrown out.

Secret hearings could now become the default in cases where the existing system for fairly handling sensitive material could instead have been used.

Human rights organisations Amnesty International, JUSTICE, Liberty and Reprieve have condemned the changes, which mean secret material – never disclosed to the claimant, let alone the public or the press – would routinely be used to defend serious allegations.

In other words, if this Bill becomes law, the government would be able to do anything it likes, to anyone it likes, under a veil of secrecy. It’s a clear contradiction of the Conservative Party’s own pre-election commitment to a far more open and accountable Parliament, and also of the Coalition Agreement, which stated: “The Government believes that we need to throw open the doors of public bodies, to enable the public to hold politicians and public bodies to account.”

But don’t just take my word for it. Amnesty International UK Head of Policy and Government Affairs, Allan Hogarth, had this to say: ““If the Bill becomes law we will end up with victims of human rights violations being prevented from seeing secret evidence against them and even being prevented from talking to their own lawyers.

“It’s ludicrous and totally contrary to basic principles of open justice.”

The government says the Bill is perfectly safe because the final decision on whether to hold proceedings in secret will be up to the judge.

And we all know that they are entirely beyond reproach.

Right?