Do YOU feel as prosperous as you were before the crisis?

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[Image: David Symonds for The Guardian, in February this year.]

Britain has returned to prosperity, with the economy finally nudging beyond its pre-crisis peak, according to official figures.

Well, that’s a relief, isn’t it? Next time you’re in the supermarket looking for bargains or mark-downs because you can’t afford the kind of groceries you had in 2008, you can at least console yourself that we’re all doing better than we were back then.

The hundreds of thousands of poor souls who have to scrape by on handouts from food banks will, no doubt, be bolstered by the knowledge that Britain is back on its feet.

And the relatives of those who did not survive Iain Duncan Smith’s brutal purge of benefit claimants can be comforted by the thought that they did not die in vain.

Right?

NO! Of course not! Gross domestic product might be up 3.1 per cent on last year but it’s got nothing to do with most of the population! In real terms, you’re £1,600 per year worse-off!

The Conservatives who have been running the economy since 2010 have re-balanced it, just as they said they would – but they lied about the way it would be re-balanced and as a result the money is going to the people who least deserve it; the super-rich and the bankers who caused the crash in the first place.

You can be sure that the mainstream media won’t be telling you that, though.

Even some of the figures they are prepare to use are enough to cast doubt on the whole process. The UK economy is forecast to be the fastest-growing among the G7 developed nations according to the IMF (as reported by the BBC) – but our export growth since 2010 puts us below all but one of the other G7 nations, according to Ed Balls in The Guardian.

And it is exports that should be fuelling the economy, according to JML chairman John Mills in the Huffington Post. He reckons the government needs to invest in manufacturing and achieve competitive exchange rates in order to improve our export ability.

“Since most international trade is in goods and not in services, once the proportion of the economy devoted to producing internationally tradable goods drops below about 15 per cent, it becomes more and more difficult to combine a reasonable rate of growth and full employment with a sustainable balance of payments position,” he writes.

“In the UK, the proportion of GDP coming from manufacturing is now barely above 10 per cent. Hardly surprising then that we have not had a foreign trade surplus balance since 1982 – over thirty years ago – while our share of world trade which was 10.7 per cent in 1950 had fallen by 2012 to no more than 2.6 per cent.”

All of this seems to be good business sense. It also runs contrary to successive governments’ economic policies for the past 35 years, ever since the neoliberal government of Margaret Thatcher took over in 1979.

As this blog has explained, Thatcher and her buddies Nicholas Ridley and Keith Joseph were determined to undermine the confidence then enjoyed by the people who actually worked for a living, because it was harming the ability of the idle rich – shareholders, bosses… bankers – to increase their own undeserved profits; improvements in working-class living standards were holding back their greed.

In order to hammer the workers back into the Stone Age, they deliberately destroyed the UK’s manufacturing and exporting capability and blamed it on the unions.

That is why we have had a foreign trade deficit since 1982. That is why our share of world trade is less than one-third of what it was in 1950 (under a Labour government, notice). That is why unemployment has rocketed, even though the true level goes unrecognised as governments have rigged the figures to suit themselves.

(The current wheeze has the government failing to count as unemployed anyone on Universal Credit, anyone on Workfare/Mandatory Work Activity and anyone who whose benefit has been sanctioned – among many other groups – for example.)

You may wish to argue that the economy is fine – after all, that’s what everybody is saying, including the Office for National Statistics.

Not according to Mr Mills: “The current improvement in our economic performance, based on buttressing consumer confidence by boosting asset values fuelled by yet more borrowing, is all to unlikely to last.”

(He means the housing bubble created by George Osborne’s ‘Help to Buy’ scheme will burst soon, and then the economy will be right up the creek because the whole edifice is based on more borrowing at a time when Osborne has been claiming he is paying down the deficit.)

Ed Balls has got the right idea – at least, on the face of it. In his Guardian article he states: “We are not going to deliver a balanced, investment-led recovery that benefits all working people with the same old Tory economics,” and he’s right.

“Hoping tax cuts at the very top will trickle down, a race to the bottom on wages, Treasury opposition to a proper industrial strategy, and flirting with exit from the European Union cannot be the right prescription for Britain.” Right again – although our contract with Europe must be renegotiated and the Transatlantic Trade and Investment Partnership agreement would be a disaster for the UK if we signed it.

But none of that affects you, does it? It’s all too far away, controlled by people we’ve never met. That’s why Balls focuses on what a Labour government would do for ordinary people: “expanding free childcare, introducing a lower 10p starting rate of tax, raising the minimum wage and ending the exploitative use of zero-hours contracts. We need to create more good jobs and ensure young people have the skills they need to succeed.”

And how do the people respond to these workmanlike proposals?

“You intend to continue the Tories’ destructive ‘austerity’ policies.”

“The economy isn’t fixed but you broke it.”

There was one comment suggesting that all the main parties are the same now, which – it has been suggested – was what Lynton Crosby told David Cameron to spread if he wanted to win the next election.

Very few of the comments under the Guardian piece have anything to do with what Balls actually wrote; they harp on about New Labour’s record (erroneously), they conflate Labour’s vow not to increase borrowing with an imaginary plan to continue Tory austerity policies… in fact they do all they can to discredit him.

Not because his information is wrong but because they have heard rumours about him that have put them off.

It’s as if people don’t want their situation to improve.

Until we can address that problem – which is one of perception – we’ll keep going around in circles while the exploiters laugh.

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

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

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

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

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

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

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

But who, exactly, is this recovery helping?

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

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

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

What conclusions may we draw from this?

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

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

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

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

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

This has all the hallmarks of a conspiracy.

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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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If the economy is in recovery, why does it still feel like recession?

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BBC, benefit, benefits, bubble, build, Coalition, compassionate, Conservative, construction, corporate, corporation, cost of living, debt, deficit, Department, Department for Work and Pensions, DWP, economy, Ed Balls, evict, financial crisis, food bank, George Osborne, Gideon, government, Graeme Leach, help to buy, house, inflation, Institute of Directors, manufacturing, Mike Sivier, mikesivier, mortgage, national, office, ONS, Pensions, people, politics, production, prosperity, recession, recovery, repossess, retail, services, statistics, tax, tax haven, Tories, Tory, Vox Political, wage, work, Workfare

Path to prosperity? If the economy has been growing for the last nine months, why has food bank use almost tripled during the last year?

No doubt Gideon George Osborne will spend the next few days (if not weeks and months) crowing about the figures from the Office for National Statistics that say the British economy has grown for a third successive quarter.

He has already tweeted, “This shows that Britain’s hard work is paying off & the country is on the path to prosperity.”

The construction industry has grown by 2.5 per cent on the previous quarter, with house builders buoyed up by Gideon’s Help to Buy scheme, which offers (unsupported) mortgage guarantees to buyers and lenders. He has promised to divert £12 million to this, but has not said where he will find the money.

Critics have warned that this is simply creating another housing-fuelled debt bubble that will burst in a couple of years’ time, leaving even more people in debt than after the financial crisis hit us all.

Has this growth generated work for electricians, plumbers, plasterers, roofers? If so, are they being paid fairly? These are the people who will take their disposable income back into the wider economy, for the benefit of other businesses.

Production (including manufacturing) and services are both on the up as well. The BBC report says nothing about retail. But if this good news is true, why is the Department for Work and Pensions determined to expand its Workfare scheme, as laid out in a Conservative conference announcement and by an article reblogged here.

Shadow Chancellor Ed Balls welcomed the signs of growth in the ONS report but warned: “For millions of people across the country still seeing prices rising faster than their wages, this is no recovery at all.”

He is right, of course. Look at the rise and rise of food banks, which have seen a massive rise in attendances from even working people – whose wages simply don’t cover the cost of living. Benefits are, of course, being cut back by our “compassionate” Conservative-led government.

They say there’s no money for it but – if the economy is surging back into growth – where are all the tax receipts from the big corporates that are profiting?

Oh yes – they’re safely closeted in the tax havens that Mr Osborne kindly opened up for them. Ordinary, working, and poor people have to use their own limited funds to pay off a Conservative-run national deficit, presumably because Tories think the rich, who caused the problem, shouldn’t have to pay for services they don’t use.

And the Institute of Directors’ chief economist, Graeme Leach, warned that there are “strong headwinds” restricting the possibility of further growth, including “debt and inflation” which are “rising faster than earnings”.

That’s right. Only yesterday, Yr Obdt Srvt was talking with a gentleman who – despite having a full-time job – has fallen so severely into debt that he has had to cut his expenditure down to nothing but taxes, the vital utility bills (water but not heating), and rent. He has no budget for food and faces the possibility of having his belongings, such as his car, repossessed – and even eviction.

Is he on the path to prosperity, Mr Osborne? Of course not. This report is merely further proof that you were lying when you said, “We’re all in it together” – as you did (again) at the Conservative conference.

It’s prosperity for the greedy few, and austerity for the rest of us.

Maybe you have a different opinion, but ask any average worker on the street and they will tell you that continued wage depression and price inflation, the expansion of the Workfare regime that gives free employment to firms that don’t need it while the workers themselves have to survive on benefits, massive growth in food bank use, and the threat faced by thousands of eviction and the repossession of their belongings are not milestones on the path to prosperity.

Soundbite Britain: This is a game we can ALL play!

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Here’s a good anti-Coalition soundbite: It’s based on a well-known saying and it tackles the falsehoods put out by Iain ‘Returned To Unit’ Smith.

Sitting in the cafe yesterday, I was discussing the situation in Egypt with a couple of friends. One was getting quite heated because he considered the problem to have been created by the “fundamentalist Islamic government they elected”.

He said something like, “These fundamentalists promised everyone the world. They said they would make everything better, did whatever they could to secure the vote – and then once they were in power they forgot all those promises and did whatever they wanted instead. They got what they wanted from the people and then the people could go hang.”

I couldn’t resist. “So you’re saying they’re exactly like the Conservative Party over here, then,” I replied.

Laughter all around. We laugh because it’s funny and we laugh because it’s true. And because the only alternative is tears.

Let’s not dwell on the Egyptian situation beyond what I said afterwards – that the ‘Arab Spring’ countries seem to need help in establishing the basics of real democracy but there is nobody around who can provide it. They would (rightly) distrust any foreign power that claimed to offer help, but there’s no independent organisation that offers such a service either.

The UK would be one of the last places I would advise Egypt to look. Consider the last general election here. People with a lot of money to spend on it funded a hugely expensive election campaign to get the Conservative Party into power, in order to serve their interests which are to accumulate an even larger share of the available wealth, along with the power that goes with it, while removing and restricting the freedoms of the people from whom that wealth was to be drained.

Those people got involved in politics and worked very hard to make sure they got a government that genuinely serves their interests – selfish and cruel as those interests are. They ended up having to put up with a Conservative-led government, rather than a fully Conservative one, but are now working very hard to finish the job with a propaganda campaign – based on lies – that appears to be swaying public opinion.

So they say (and here I’m quoting Owen Jones in his recent analysis): “We’re clearing up Labour’s mess. Labour overspent and now we’re balancing the books. A national deficit is like a household budget. Welfare is out of control and lining the pockets of the skivers. The unemployed person or immigrant down the road is living off your hard-earned taxes. Labour is in the pocket of union barons.”

All of these are falsehoods. They’re lies. But they’re also very effective soundbites that stay in people’s minds and colour their perceptions of the way things are.

And those responsible get away with it, I’m sorry to say, because the people who stand to lose the most are lazy. They can’t be bothered to get involved and make sure the government they get is one that genuinely serves their interests.

Why do you think Her Majesty’s Opposition is filled with neoliberals who agree with the government that our public services should be carved up and handed to private companies, to run them for profit and not in the interests of the people? Why do you think the Labour Party has agreed to stick to Coalition spending plans for the first year of the next Parliament, if it gets elected? Why do you think Labour has stopped opposing social security policies that have been killing an average of 73 people a week (according to figures that are now well out of date, so the average today is probably much higher)?

Labour doesn’t stand up for you any more. That’s why it has had no effective answer to the Tory lies. The masses can’t be bothered to find out the truth – and certainly won’t lift a finger to get involved and stop the corruption that is eating our institutions away. But that is the only way it can be stopped. You stay away and they get what they want.

At this rate, we’ll all be slaves by 2020.

It doesn’t have to be so hard, though. We could all turn the corner, just by devising a few soundbites of our own.

I was thinking this last night, while I was writing a response to Margaret Johnson. Ms Johnson was commenting on a previous article as follows (apologies to anyone who’s offended; they’re her words, not mine): “It was Labour who signed up Atos, engineered so many civil service jobs that were not needed, opened the borders for the rest of the world’s trash to enter our country, brought in more taxes, actively encouraged the demise of manufacturing and the rise of the banks, signed up to allow Europe to rule us, doubled the rate for income tax for the lowest paid, gave GP’s 100K a year to work 9-5 Monday to Friday, got the most revenue in and still left this country in the worse mess ever.”

So we could say something like (and feel free to include ‘Liberal Democrats’ wherever I have mentioned Conservatives):

“It is the Conservatives who employed a private firm, paying £1 billion to ‘A-toss’ disabled people off the benefits they need to survive.” If Labour was doing its job properly it would add: “A Labour government would save that money by throwing Atos out”.

“No wonder the government can’t make anything work properly – they have been sacking all the professionals. More than 600,000 government employees will have lost their jobs by 2015, replaced by amateurs working for the Conservatives.”

“It’s strange that the Conservatives complain so much about immigration from Europe – they signed the treaties that allow it! The Conservative governments of Edward Heath and John Major allowed the free movement of European immigrants into the UK. Now they see it is unpopular, they want to shift the blame.”

“Simplified tax under the Tories mean the rich pay less and the poor pay more.”

“Conservatives destroyed Britain’s manufacturing base in the 1980s – at the same time they created the conditions that led to the banking crisis.”

“Conservatives want to blame Europe for your problems. Who will they blame when Britain is out of the EU and your problems have multiplied?”

Going back to Owen’s examples:

“Conservatives: The only people who think they can clear up a mess by making a bigger one.”

“Conservatives say Labour overspent – but they have always spent more than Labour. You can’t trust them to balance the books.”

“If the Tories handled their household budgets like they’re handling the deficit, they would all have been evicted by now.”

“Privatisation is out of control; the Tories are using taxpayers’ money to line the pockets of greedy bosses.”

“You paid for Iain Duncan Smith’s £39 breakfast. How much do you spend on your own?”

“The Conservative Party is in the pocket of big business and the bankers.”

Of course, the above are just essays in the craft of soundbiting; I’m just a beginner.

So let’s have a competition to see who can invent the best soundbite, challenging the government’s lies with facts!

Please send your ideas in to this blog – but also put them out to the national media as well, any way you can. Try to get anyone opposing the government to use them, because this may lead to them being picked up by the newspapers and TV news reporters as well.

Above all, please try to make this fun. A soundbite is many times more effective if it makes people laugh, and the Tories and Liberal Democrats are silly, silly people. Let’s bring that out.

Or is it too much like hard work after all?

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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Goodbye, Baroness Thatcher – perhaps now we can put ThatcherISM to rest as well

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Baroness, community charge, companies, company, council, death, economy, Euro, European, Eurozone, house, housing, industries, industry, manufacturing, Margaret, milk, Monetary, Mrs, national utility, parties, Party, Paul Krugman, Poll Tax, privatisation, privatise, public relations, riot, Saatchi & Saatchi, snatcher, social, street, Thatcher, trade, union, utilities

The Iron Lady: This is probably the most iconic image of Margaret Thatcher from her tenure as Prime Minister of the UK. “The lady’s not for turning,” she warned. Unfortunately for Britain, she kept her word.

It isn’t every day that a former Prime Minister dies – and even rarer that we witness the death of one who affected the UK in such a fundamental way as Baroness Thatcher.

As I write this, the outpouring of tributes and discussion of her achievements in the mass media are in full swing – mostly concentrating on what their editors would define as the ‘good’ she did for our country. Most of the TV channels and papers are run by right-wingers, of course – so you can expect them to be dripping with adulation.

However, as I commented on Facebook yesterday evening, street parties broke out in Brixton and Glasgow, celebrating her demise (I understand celebrations took place in Leeds and Liverpool, and possibly many other cities, towns and villages across the UK). They had bands, they have people handing out milk (remember, she was the ‘Milk Snatcher’ before she was PM), they were chanting “Maggie, Maggie, Maggie – dead, dead, dead” and popping champagne.

There was a humour – a sense of wit – about it, not only in what was going on (the milk, for example) but also the locations (there were riots in Brixton during her tenure, and Scotland was where the hated Poll Tax was piloted).

But I said it is also tragic “that a person should do so much harm in her life, and be so hated by the people she was elected to represent – more than 20 years after she left office – that her death is marked by spontaneous celebration and, literally, dancing in the streets”.

That comment thread has now been read by more than 15,000 people (usually I get one or two thousand through my Facebook door). A question I posted has received more than four times as many votes saying she harmed the country as say she improved it (47 – 11).

What DID she achieve?

According to Paul Krugman’s blog, it’s debatable whether she achieved anything, in terms of the economy.

“Thatcher came to power in 1979, and imposed a radical change in policy almost immediately,” he wrote. “But the big improvement in British performance doesn’t really show in the data until the mid-1990s. Does she get credit for a reward so long delayed?”

Good question. In fact, her two-and-a-half terms in office constituted an extremely rocky road for those of us who had to live through them (and I was one)! My opinion is that this is because she was not interested in improving Britain’s NATIONAL prosperity.

No – the Thatcher crusade was ideological. She wanted to thrust her form of Conservatism so far down everybody’s throat that it would take decades for any other way to be accepted – and she succeeded beyond her wildest dreams.

Let’s look at the policies that most clearly demonstrate this ideology.

She sold off Britain’s council houses. The cheap, rented social housing that accommodated those of us who earned the least were sold wholesale during her premiership – and not replaced. Mrs Thatcher is said to have had a dream to create a Britain full of homeowners. Sadly, this is not what happened. Instead, the majority of council houses were sold off to private landlords who then rented them out again – at higher cost. The lack of replacement council houses meant that the country’s poor had no alternative but to rent at the higher level, meaning they had less disposable income than before the sell-off. The rise of housing associations to fill the social housing gap has meant an extra layer of bureaucracy between the tenant and their elected representatives, who can now claim that any abuse of power by landlords is nothing to do with them.

She broke the unions. Some say this was vitally important, as the unions had become too powerful and were able to bring the country to its knees whenever they felt like it, calling strikes on a whim – and there is mileage in this. But it’s also possible to say that business bosses and members of the Thatcher government provoked confrontation in order to justify the erosion of union power – this is certainly true in the case of the mineworkers’ strike of 1984-5. There is an argument that National Coal Board chairman Ian MacGregor was paid millions of pounds to engineer the confrontation. The result was that the unions were stripped of many of their rights, meaning working people had nobody left to stand up for them in wage negotiations. It is a direct result of this that workers’ wages have risen by just 27 per cent over the last 30 years, while bosses’ salaries have multiplied by 800 per cent, and the gap between the country’s richest and poorest has grown, massively.

She stripped the UK of its manufacturing industries. What can be said about this? Thatcher saw much of Britain’s private industry as uneconomical, unprofitable. She oversaw a switch to service industries and finance – boosting this with bank deregulation. It is this move, which took place in the USA at around the same time, that led to the financial crisis of 2008 and the austerity measures which the current Coalition government is using to hammer the poorest in the modern UK.

She privatised national utilities. The share sell-offs were, on the face of it, intended to make it possible for every British citizen to buy shares in the companies that provided power, telecommunications, water and so on. In practice, the poorest couldn’t afford it, and those on middle incomes saw the shares as a short-term investment, believing they would be able to sell their shares on for many times the amount they paid, a few months later. This has led to the vast majority of shares in the privatised utilities falling into the hands of – you guessed it – the very, very rich. Another publicised intention of the sell-off was that, as private companies, these organisations would deliver a better service at a lower price. This was a fantasy; it never materialised. Look at British Rail (which I admit was privatised after Mrs Thatcher left office, but is a great example of the trend): Not only do users pay much more for their tickets now than when it was publicly-owned, but the subsidy paid to the private rail companies by the government has multiplied massively as well. Result: Rich shareholders become very much richer. Poor users struggle to cope with rising prices.

Can you spot the trend here?

She changed taxation to make the poor pay more. I refer, of course, to the infamous Poll Tax. Mrs Thatcher claimed in 1989 that a flat-rate tax for local services – with everybody, rich or poor, paying the same amount – was fairer. The public – who had already been fooled by the council housing sell-off, the public utility sell-off and the breaking of the unions, and were therefore sick of being hoodwinked – claimed otherwise and refused to pay. The public won and Mrs Thatcher was consigned to the waste basket of politics soon after. The current Coalition government is working hard to ensure that this policy is carried out, with the so-called ‘Pickles Poll Tax’ – the council tax support scheme that ensures everybody pays council tax. Meanwhile, efforts to ensure the rich pay less are going ahead, with Corporation Tax cut by a quarter during the lifetime of this Parliament, and the ‘Millionaires’ Tax Break’ cutting the top rate of Income Tax from 50p in the pound to 45p.

She kept Britain out of the Euro (or more accurately, European Monetary Union). This was her one sensible policy, history has proved. There is much to be said in favour of a free-trading zone where countries can trade amongst themselves at favourable rates – but monetary union cannot be a workable part of that, when the countries involved are at hugely varying stages of development. Mrs Thatcher was right to oppose it and the fact that the UK is not mired in the current Eurozone crisis, except as a member of the EU with trading interests to protect, is to her credit.

By now, dear reader, you are probably wondering how Mrs Thatcher lasted so long, if her policies were all so divisive, and so clearly trained on impoverishing the lower classes. The answer is simple: She was excellent at public relations. The fact that she was the UK’s first-ever female Prime Minister was a huge publicity boost for her, and she built on it by nurturing an image of herself as ‘The Iron Lady’ – a Prime Minister of firm convictions who knew that what she was doing was absolutely right for Britain (“Right for the goolies of Britain,” as Graeme Garden joked on Radio 4’s I’m Sorry I Haven’t A Clue at the time). The PR-reliance was clear from the start – the Conservative Party hired the Saatchi & Saatchi agency to run its 1979, 1983 and 1987 election campaigns. It is notable that this partnership dissolved during the 87 campaign and Thatcher’s premiership ran out of steam shortly afterwards.

To sum up, I’ll leave you with the comment I placed on the New York Times website, in response to that paper’s piece about Mrs Thatcher’s death:

“Having lived through the Thatcher years and the changes her government perpetrated on British society, allow me to assure you that there is little reason to heap praise upon her.

“The entire thrust of her thinking was to ensure that the rich and powerful became richer and more powerful, and the poor – especially those with intelligence and/or ability – would be denied any chance of prosperity or success.

“What’s the American Dream all about? Life, liberty, the pursuit of happiness? Everybody created equal, with opportunity for each according to their ability or achievement, regardless of social class or circumstances of birth?  The Thatcher government is a rejection of all those aspirations, as is the current Cameron government, which is its natural successor.

“The Thatcher government deprived people of their liberty by creating a large underclass of unemployed people and using the threat of unemployment to depress workers’ wages.

“As a result, they did not have the disposable funds to take advantage of the sell-offs of national utilities such as British Gas and British Telecom.

“She sold social housing but did not build any to replace it.

“She used the police as a tool of political repression, rather than as guardians of the law.

“She used taxation in a similar manner, crippling the poor with punitive measures such as the hated Poll Tax – a flat-rate charge, effectively a tax cut for the rich, but a huge tax hike for the poor.

“That was her fatal error, of course.”

Goodbye, Baroness Thatcher. Hopefully your passing will trigger a reassessment of your career, so that we can all move on from the political nightmare your policies created for the vast majority of middle- and working-class people whose only political mistake lay in entrusting their future to you.

‘Recovery in sight’ says BoE. Oh really?

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Bank of England, BBC, Blockbuster, BoE, Comet, economy, HMV, Jessops, manufacturing, Mike Sivier, mikesivier, OBR, Office for Budget Responsibility, people, Republic, Sir Mervyn King, unemployment, Vox Political

One has to admire the Bank of England for its determined optimism in the face of all the facts. The only organisation that is even more adamant that the UK economy is going to grow is the Office for Budget Irresponsibility, and we all know how rarely that body ever gets anything right.

Today, the soon-to-be ex-governor, Sir Mervyn King, said the economy had “cause for optimism” and there was an “encouraging underlying picture”.

What makes this tragic is the timing. Today, the story appeared on the BBC’s business news web page beneath a revelation that the fashion chain Republic has become the latest High Street name to go into receivership, and an announcement that Blockbuster, which bit the bullet earlier this year, would be closing a further 164 shops – threatening 800 jobs.

Cause for optimism, Sir Mervyn? Really?

Comet has gone, Jessops has gone, HMV is hanging on by its forepaws after closing 66 stores. Now Republic. We understand more than 100 other chains are facing financial ruin.

What, in this situation, is the “encouraging underlying picture”? A resurgence in manufacturing? What good will that do, if everybody is out of work and unable to buy anything? Who will benefit?

It won’t be the people on the street. Republic had 2,500 employees; Blockbuster is likely to lose 800 staff. Those job losses follow the many hundreds in the other chains mentioned. If manufacturing does improve, it will be selling abroad, and the only beneficiaries will be company bosses.

You and I won’t see a penny of it.

One aspect of this that did make me smile was the fact that the administrators from accountancy firm Ernst & Young (itself no stranger to controversy – see the previous Vox Political article about tax avoidance for details) sacked all 150 staff at the fashion firm’s head office. All the managers lost their jobs, and quite right, too!

Will you stand up for a future that works?

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"A future that works", "Robin Hood", anti-austerity, anti-growth, austerity, avoidance, bank, borrowing, Coalition, cuts, debt, demonstration, economy, energy, evasion, government, green, housing, Hyde Park, industry, Justice, manufacturing, policy, rally, tax, transport, unemployment, wages, youth

Getting the message across: The PCS union managed to project it’s ‘Say no to austerity’ message onto the Palace of Westminster itself, home to the Houses of Parliament.

Anti-austerity campaigners from across the UK will be converging on London tomorrow for a mass demonstration against the Coalition government’s failed policy of cuts.

It is possible that hundreds of thousands of people will journey to the capital to march under the heading, “A Future That Works” – showing their opposition to the government’s pro-austerity, anti-growth policies. The march will end with a rally in Hyde Park.

If you’re wondering whether to go, or even whether the demonstration is justified, I would like to quote the following, from the organisers’ website:

“Austerity has failed – the economy has not grown for two years, unemployment and youth unemployment have risen, living standards have been squeezed and borrowing is not coming down.

“We need an alternative approach – one that puts decent work and growth at its heart and takes a long-term approach to rebuilding the British economy after the crash.

“We need to invest in new infrastructure in transport, energy and social affordable housing and to make fighting youth and long-term unemployment an absolute priority.

“We need to see rising wages so our economy has sustainable growth and isn’t based on household debt.

“We need to reform the banking system so it works for the real economy and an active industrial policy to support manufacturing and the green, low-carbon sectors of the future.

“We need tax justice with a clamp down on avoidance and evasion and a Robin Hood tax on the banks.

“We cannot afford to continue with austerity nor can we go back to business as unusual.

“We need policies to build a ‘new economy’ where the rewards from growth are more equally shared by those in the middle and at the bottom rather than just going to those at the top.

“Finally we need economic growth to be spread across the entire country rather than just being concentrated in a handful of sectors and parts of the UK.”