The Tories have run out of momentum, ideas and even arguments

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Old Labour: Oversaw the longest periods of economic growth in British history and DIDN’T cause the biggest crash (that was neoliberalism, beloved of Conservatives). There is nothing wrong with it.

Dear old Fraser Nelson has been trying to generate some momentum against Ed Miliband’s plans for a Labour government.

But, bless ‘im, not only did he hit the nail on the head when he wrote (in The Spectator), “Tories seem to have lost interest in ideas”, he might just as well have been talking about the Tory press because – other than the parts in which he praises Miliband for his political acumen and perception, Fraser has nothing new to say at all.

“Why, if he is such a joke, has Labour led in the opinion polls for three years solidly? And why has he been the bookmakers’ favourite to win the next general election for even longer?” These are the questions Fraser asks, and then goes on to answer in the most glowing terms possible.

“His agenda is clear, radical, populist and … popular. His speeches are intellectually coherent, and clearly address the new problems of inequality,” writes Fraser.

“His analysis is potent because he correctly identifies the problem. There is [a] major problem with the recovery, he says, in that the spoils are going to the richest, and it’s time to act… George Osborne does not talk about this. He prefers to avoid the wider issue of inequality. This leaves one of the most interesting debates of our times entirely open to Miliband.”

All of the above is a gift to the Labour leadership. Fraser has scored a huge own-goal by admitting the Labour leader – far from being “a joke”, has correctly identified the problem and can say what he likes because the Tories won’t even discuss it!

Worse still (for Fraser), he seems to think that telling us Ed Miliband is mining Labour’s past policies to get future success will put us off.

Hasn’t anybody told Fraser – yet – that it is current neoliberal policies, as practised by both Labour and the Tories, that caused the crash of 2007 onwards? With that as our context, why not go back and resurrect policies that offer a plausible alternative?

As a Conservative, Fraser should appreciate the irony that it is Labour who are now looking at the past to create the future.

“The philosophical underpinning is rehabilitated: that the free enterprise system does not work, and should be put under greater government control,” writes Fraser. “That companies, bankers and markets have buggered up Britain — and it’s time for people, through Big Government, to fight back.” Who could argue with that?

Then Fraser goes into some of those policies, like the plan to revive the 50 per cent tax rate. “But Miliband isn’t taxing for revenue. He’s taxing for the applause of the electorate and he calculates that the more he beats up on bankers and the rich, the louder the masses will cheer.” The answer to that is yes! What’s wrong with that? The Coalition came into office on a ticket that said bankers would pay for the damage they caused, and yet bankers have been among the principal beneficiaries of the ongoing raid on the public finances that the Coalition calls its “long-term economic plan”. In the face of dishonesty on that scale, Fraser should be more surprised that the North hasn’t invaded the Square Mile and strung anybody in a suit up on a lamppost – yet.

Next up, Fraser tries to attack Miliband’s proposed revival of a Kinnock plan for a state-run ‘British Investment Bank’ and two new high street bank chains. To this writer, the prospect of two new, state-run and regulated, banks is a brilliant idea! No more rip-off charges for services that should be free! Investment in growth, rather than short-term profit! And all run the way banks should be run – prudently and with the interests of the customer – rather than the shareholder – at heart. How can Fraser (bless ‘im) argue with that?

Argue he does. He writes: “As Simon Walker, head of the Institute of Directors, put it: ‘The last time the government told a bank what to do, Lloyds was ordered to sell branches to the Co-op’s Reverend Flowers. And we all know how that ended.’ Wrong. European regulators ordered the government (then principle shareholder in Lloyds) to sell the branches, and it happened on the Coalition government’s watch. In fact, George Osborne welcomed the deal. That’s an argument against Conservative mismanagement.

Fraser goes on to claim that Miliband doesn’t care how his bank project will work out – he just wants it done. He’s on an ideological crusade. Again, this provokes comparisons with the Tories that are (for the Tories) extremely uncomfortable. The Tories (and their little yellow Tory Democrat friends) have spent the last four years on an ideological crusade that has robbed the poorest people in the UK of almost everything they have, and are now starting to attack people who are better off (but still not posh enough) – they can hardly criticise Labour for having an ideology of its own.

The line about green policies which cost nine jobs for every four created – in Spain – is risible. Fraser has chosen a country where green policies have not worked well. How are they managing in Scandinavia?

Fraser says Labour’s energy price freeze “magically” makes good a 1983 pledge for everyone to afford adequate heat and light at home – without commenting on the fact that energy companies have been ripping us all off for many years and failing to invest in the future of power generation; they are an example of the worst kind of industrial privatisation.

Fraser says Labour has revived a 1983 demand for “a supply of appropriately qualified teachers” as though that is a bad idea (it isn’t. Bringing in unqualified people to act as teachers in Michael Gove’s silly ‘free schools’ sandpit was the bad idea). Note he says Labour wants “union-approved” qualified teachers – depending on mention of the unions to get a knee-jerk reaction from his readers, no doubt.

Fraser says Miliband attacks “predator” companies – moneylenders who offer short-term loans; people who make fixed-odds betting machines; landowners who stand accused of hoarding and thwarting housebuilding. “When Miliband talks about the future, he says very little about what he’d do with government. He talks about what he’d do to British business. All this amounts to a blitz of regulation, edicts and interference,” he writes.

This is to suggest that “regulation” is a dirty word – a synonym for “interference”. Let’s help Fraser out by suggesting a word he can use instead of “regulation” or “interference”.

That word is “help” – and it exemplifies what regulation is, in fact, about – helping companies to provide the best service possible, with the least possible corruption or profiteering, to ensure that customers get what they want and are happy to come back – boosting prosperity for everybody.

Substitute that word for the others and Fraser’s remaining rhetoric looks very different:

“All this amounts to a blitz of help” evokes the response, about time too!

“[Tristram] Hunt does not pretend that help at this level is being attempted in any free country” begs the question, why not?

While Fraser may have set out to write an assassination piece on Ed Miliband’s Labour, there can be no doubt that he ended up doing the exact opposite. It wasn’t his intention – look at his final few lines: “Miliband is bold enough to think that, in a country midway through the worst recovery in history, there may be a market for all this now. And most terrifyingly of all, he might be right.”

This botched attempt at scaremongering only exposes right-wing ideology for what it is: Out-argued, outclassed and badly out-of-step with the thoughts of the British people.

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Tory Democrats withdraw Bedroom Tax support – too little, too late?

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According to The Guardian, the Liberal Democrat president Tim Farron is set to withdraw his party’s support for the Bedroom Tax today (Wednesday), saying it has caused “huge social problems”.

It is too little, too late from the Party that Likes to Change its Mind – and one must question the timing. The newspaper states that “the Liberal Democrat conference agreed to review the bedroom tax” in September last year, but this is inaccurate; the conference passed a motion that official Liberal Democrat policy must be condemnation of the Bedroom Tax.

According to the newspaper: “In a speech that will distance the Lib Dems from the controversial tax, Farron condemns what he describes as attacks on the poorer members of society. ‘The onslaught of divisive rhetoric that demonises the poor can never help us to create a fairer society,’ he will tell the Centre for Social Justice. ‘The bedroom tax causes huge social problems and distorts the market – we as a party cannot support this.'”

But the Tax has already been in place for a year and the damage has been immense. Hardly a day goes by without a new report of victimisation. Why didn’t Farron make his move sooner?

Could it be more likely that, with elections on the way, it now seems like a good idea to get on the public’s side?

Back in the autumn, Vox Political wrote: “The tax was really brought in for several reasons: It is partly a reaction against the increase in the Housing Benefit bill to accommodate people with jobs whose wages are below their cost of living – this is due to greed on the part of employers; it is partly intended to clear housing – not for people on any waiting list but as a form of social cleansing, getting the riff-raff out of attractive parts of our towns and cities; and it is also another attempt to spite people on sickness, incapacity or disability benefits, who must either face the extra cost and inconvenience of removing special adaptations to their houses and reinstalling them elsewhere if they are able to move, or must lose the company of carers who use spare bedrooms when they have to stay over, or must pay the tax and live without food or heat, thereby risking their health.”

Nothing has changed since then.

Let’s hope the voters see this pathetic display for what it is.

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Tories are using the poor for medical experimentation

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Seal of approval: We asked TV doctor House MD whether he foresaw any problems with the Early Access to Medicines scheme. “Nuh-uhrr,” he replied.

Concern has been raised over a plan announced by Health Secretary (and misprint) Jeremy Hunt to give new medicines to people who are severely ill, years before they are licensed.

In comparison, little has been said about findings by the Office for National Statistics (ONS) showing that people in deprived areas live shorter lives and spend more of those lives in poor health.

There is an obvious conclusion to be drawn from this:

If poorer people spend more time in ill health, then they are more likely to be given experimental drugs before those treatments are clinically proven.

In other words, the Conservative-led government is using the poor as guinea pigs for drug trials.

The BBC quoted Mr Hunt: “What patients want is sometimes to try medicines that may not be clinically proven to be effective but are clinically safe. We are streamlining the process so these medicines can be used much earlier – particularly if they have early promise – and that is something which will bring hope to a lot of patients.”

How does he know these medicines are safe? How does he know that people want them? How does he know that they’ll do what they say? He doesn’t.

This shows what he wants – to make the UK a profitable place for pharmaceutical companies by giving them a market for drugs that could be completely useless – or could have unforeseen effects.

It’s more marketisation for our once-great NHS.

Long-term readers will be aware that Mrs Mike has been receiving treatment from the NHS in England, including injections to alleviate the severe back pain from which she suffers.

I asked her if this announcement was worrying for her – as a poor person who has spent much of her life in ill-health.

“Nuh-uhrr,” she said. That seemed conclusive, so I threw her lunchtime slab of raw meat into the cage and locked the door before she could reach me.

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How much can YOU pay? A&E charges would speed NHS privatisation

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accident, CCG, charge, Chris Ham, clinical commissioning group, Department of Health, doctor, emergency, expensive, Freedom of Information, GP, health, healthcare, hospital, insurance, Kaiser Permanente, managed care, Managed Care Organisation, market, MCO, National Health Service, NHS, Personal Care Budget, private, privatisation, top-up, UK, undercut, USA

Health-CARE? It seems increasing number of GPs want the person on the stretcher to stump up a fiver or a tenner before the medical staff in the photograph can begin treatment. (Image: BBC – intentionally left fuzzy to preserve anonymity of those involved)

It is strange that more has not been made of the revelation that one-third of GPs apparently believe a £5 or £10 charge should be imposed on everybody turning up at hospital Accident and Emergency departments.

This seems to be a clear next step towards the marketisation of what used to be the National Health Service, disguised with a claim that it would “reduce frivolous use of the NHS and the growing pressure on emergency departments”.

It seems that a poll of more than 800 doctors found 32 per cent said “fees would be the most cost-effective way of cutting the number of people who go to A&E, who could have gone to their GP or a pharmacist instead or did not need medical attention at all”. Presumably they have already tried simply telling people what to do, then.

The story in The Guardian states that “specialists believe between 30 per cent and 40 per cent of all visits are unnecessary and that many patients could have sought help elsewhere because their illness was minor or not urgent”. That leaves 60-70 per cent of visitors paying extra for services their taxes have already funded!

According to the book NHS SOS (edited by Jacky Davis & Raymond Tallis; published by Oneworld), the plan is to convert the publicly-funded nationwide health service into one of “managed” care along the lines provided by Kaiser Permanente in the USA.

This is based on a flawed use of figures (p.39) so Kaiser is in fact far more expensive, but that didn’t stop then-Department of Health strategy director Chris Ham from defending the claims and allowing Kaiser to emerge as the model for NHS reform. This was seen as particularly useful for those with cash to invest in the company or other MCOs (Managed Care Organisations) as they reaped huge profits – until market saturation, government and employer schemes to keep health care costs down, and a series of scandals made the pendulum swing the other way. Then these companies started lowering patient benefits, increasing premium fees and withdrawing from unprofitable markets, and this is very similar to the current situation in England.

Finally, these firms began to expand internationally, to countries including the UK, where the NHS was seen as a hugely attractive business opportunity.

MCOs decide how services are organised and funded for their clients, through contracts with selected providers and rigorous control of hospital admissions. This seems uncannily close to the work of Clinical Commissioning Groups, which were set up under the pretext that they would allow GPs to control budgets, but in practice allow the money to be controlled by private firms that have been hired by overworked doctors – as was always intended by the Tory-led Coalition government.

Government regulations mean private companies must be allowed to bid to provide as many services as possible. Freedom of Information rules mean they can find out how the public service operates and then undercut its bid. Without funding, the public service will close, leaving the way clear for the private provider to pump up its prices – so they will eat up more and more of the limited NHS budget. But which services do they choose?

They choose those that are easiest and cheapest to provide – the services that provide the most opportunity to make a profit.

Accident & Emergency is not one of those services. It will remain with the public sector providers who are being “continuously cut and squeezed into downsizing, mergers, centralisation and closures”, reducing care to “short-staffed, overloaded, ‘centralised’ units”, covering “only those services that the private sector does not wish to provide” (ibid, p.18).

How can services like A&E continue, if the private operators are taking all the cash? The only answer, it seems, is to bring in health insurance. That is the plan, at least – and the proposed A&E charges seem intended to be a palatable way of opening that door to a public that would once have treated the very idea as anti-British and voted the government that proposed it out of office for a considerable period of time.

Next it seems likely that “top-up” insurance will be offered to people whose complex ongoing conditions qualify them for so-called Personal Care Budgets. The budget money will be limited, forcing patients (or rather, customers) to “top them up” with insurance.

Be very clear on this: You are not looking at the thin end of the wedge. The wedge has already been driven in and England is well on the way to having a privatised health service, with the NHS as nothing but a brand under which taxpayers’ money can be handed out to private firms that handle only the simplest procedures.

The intention, it seems clear, is to allow publicly-funded services to wither over a period of time, in order to soften you up – make you more receptive to the idea of paying for healthcare that once was free but may not even be available in the future if you don’t come up with some cash.

Are you going to sit there and wait for that to happen? Private health care, and health insurance, is far – far – more expensive than the NHS, which was the most cost-effective and efficient health provider in the world until the Tory-led Coalition got hold of it. Don’t believe the propaganda – the service had record satisfaction levels in 2010.

You can still stop the rot. To find out how you can work to reverse the damage being done to the most cherished organisation in the UK, visit www.keepournhspublic.com and www.nhscampaign.org.uk

If you’re living in Wales, Northern Ireland or Scotland, don’t think that devolution of healthcare will save you because it won’t. Budgets are already under pressure from Westminster and the Tories will do whatever they can to force regional governments into the same, or similar, patterns.

One of life’s certainties is that you will become ill at some point. Don’t wait until that happens, because it will be too late.

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Another Cameron lie: Energy companies’ profits are unaffected by his changes – and we still pay

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Cost shock: Even the Conservative-supporting Daily Telegraph has been complaining about high energy prices – as demonstrated by this cartoon from 2012.

To borrow a favourite David Cameron phrase: Let us be clear on this – any savings on your fuel bills as a result of the Coalition government’s policy change will be added to general taxation in another way and you will still pay.

Energy firms’ profits, which have tripled since 2010, will be unaffected. Cameron’s plan is akin to shifting deckchairs on the Titanic (to borrow another well-known saying).

Why on Earth does he think anybody is going to be deceived by this silliness?

Even with the changes in place, prices will still rise by an average of around £70, at a time when people were already being forced to choose between (let’s have yet another now-tired phrase) heating and eating. Average household incomes have dropped by nine per cent since David Cameron made himself Prime Minister by the back door three years ago.

Average pay for bosses of FTSE-100 companies has risen by 20 times the rate of pay growth for most workers, just in the last year. And let’s not forget that they were getting much higher than average pay already!

It should surprise nobody that all of the ‘Big Six’ energy firms are part of the FTSE-100 – or were, before foreign takeovers.

This means average pay for these companies’ bosses should be around £2,321,700, while profits have risen to £2 billion – up 75 per cent on last year (according to the Independent reports).

None of this will be changed by David Cameron’s measures, which were hastily cobbled together in a bungled bid to regain the initiative from Labour, whose plan to freeze energy prices and re-order the energy market has captured the public imagination.

Instead Cameron – who once campaigned under the slogan ‘Vote Blue – Go Green’ – will postpone green policy targets to a later date, cutting the so-called ‘green levy’ on the energy firms accordingly. This means the UK will be forced to rely on greenhouse gas-producing carbon fuels for longer.

Subsidies for people in fuel poverty will be moved into general taxation, meaning we pay for them rather than the energy firms who should.

“Even after these changes to levies, energy bills are still rising and the average household will still be paying £70 more for their energy than last winter,” said Labour’s Shadow Energy and Climate Change Secretary, Caroline Flint. “Any help is better than none, but you can judge this Government by who they’re asking to pick up the tab – the taxpayer. The energy companies have got off scot-free.

“This shows why nothing less than a price freeze and action to reset the market to stop the energy companies overcharging again in the future will do.”

She was expected to tell the IPPR thinktank today: “If David Cameron and Nick Clegg think just doing what the energy companies ask of them is the answer to bills being too high, they are wrong.

“Energy bills have gone up by £120 this winter alone, so even with a £50 cut in levies, people’s bills will still be higher this winter than last year. The real reason bills are rising year on year without justification is because the energy market is broken.

“Instead of bailing out the energy companies, David Cameron should stand up to them and stop them overcharging people.”

But we all know that David Cameron never stands up to his corporate masters, don’t we?

(Vox Political‘s Mike Sivier will be talking about the energy scandal, along with the continuing cover-up of DWP-related deaths on Sonia Poulton Live today. You can see it by visiting www.thepeoplesvoice.tv, starting at 5pm.)

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No justice for legal aid as Grayling ignores thousands of consultation responses

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Blind Justice: In Tory-led Britain, it’s also deaf. And ignorant. In fact, can it really be described as ‘justice’ at all?

A story has appeared on the BBC News website, stating that elite barristers have joined the chorus of opposition to the government’s plan to cut legal aid for criminal cases by almost a quarter.

It states that the Treasury Counsel, a group appointed by the Attorney General to prosecute the most serious crimes, has followed the lead of the Bar Council and the Law Society in saying the plan to cut £220 million from the annual £1 billion legal aid budget is unsustainable.

This is accurate, but fails to address the most damning indictment against Chris Grayling and the Ministry of Justice in this matter.

According to the Treasury Counsel’s written response: “HM Government has indicated that it rejects or can ignore much of the content of the thousands of Consultation Responses, …particularly as to the future effect on the supply and quality of criminal advocacy services from the proposed changes to legal aid funding.”

It continues: “Criminal legal aid remuneration is identified as an appropriate target for ‘reduction’: this is based on a ‘belief’. The belief is that ‘further efficiency and cost savings in criminal legal aid remuneration” are both possible and sustainable’.”

This means that Chris Grayling and his cronies have decided to ignore evidence-based opposition to their plans because of an unfounded, unquantifiable “belief” that cutting funding will not affect the quality of the legal advice available in criminal cases.

If this matter were itself a court case, it could be settled with a simple question: When has this ever been proved in the past?

Can you think of any time when cutting budgets has not harmed a service – or actually improved it? Of course not.

The response – written by people who are appointed by the Coalition Government’s own Attorney General, let’s not forget, and who may therefore be taken as broadly sympathetic to its aims, continues: “The Minister of State said, ‘This is a comprehensive package of reform, based on extensive consultation. I believe it  offers value for the taxpayer, stability for the professions, and access to justice for all’… yet the Impact Assessment attached to the new Paper simply makes no attempt to evaluate or monetise the behavioural changes that will most certainly result from its proposals.

“The entirely obvious and predictable outcomes are lost quality and reduced supply. These are airbrushed in the Impact Assessment by repeated “steady state” assumptions. The behavioural changes are not then, uncertain. Neither will any steady state remain. They are, though, unpalatable; they will not improve the public interest.

“In a telling acknowledgment of this, the Ministry in its new consultation paper wholly abdicates its responsibility for this assessment by first making neutral assumptions and then asking the consultees what the impact will be. The Minister of State has lifted his telescope to his bad eye.”

The assessment of the Treasury Counsel is that cumulative changes since 1997, and a real terms cut of nearly half since 2007, mean Grayling’s proposals “will do significant harm to the operation of the criminal justice system… In particular, they will have both an adverse and disproportionate effect on the supply of such services by the acknowledged experts – the criminal Bar”.

Not only that, but the response says the cuts could be achieved in less harmful ways, such as “the proper working through of existing changes. Or, for example, in the proper letting and administration of government contracts for CJS services; court interpreters, custodians and other activities are telling examples of incompetent administration and wasting money – and these on services ancillary to the main process, that are provided by trading companies rather than professionally regulated people.”

In other words, allowing the market into the Criminal Justice Service (that’s the ‘CJS’ in the quotation) has lowered its quality and increased its cost.

The bottom line: “We consider that the proposed reductions, in whichever iteration, are unnecessary, have an effect much larger than claimed and will produce unsustainable results.” In terms of quality of service, it seems that it is the government’s proposals that are unaffordable.

The Attorney General himself, Dominic Grieve, indicated his own lack of enthusiasm for the proposals in a letter to the Bar Council in June. This accepted that opposition to the proposals cannot be explained away by self-interest, acknowledging that there is serious and principled opposition to the proposals which cannot be attributed to mere selfishness.

“Many… took the view that these proposals would cause the edifice to collapse,” he wrote, adding that he would continue to draw Grayling’s attention to the concerns that had been expressed to him.

It seems, considering the latest developments, that the Ministry of Justice not only has a bad eye but also a deaf ear.

What a shame its members are not speechless as well. For the sake of balance, here’s what a Ministry spokesperson had to say: “At around £2 billion a year we have one of the most expensive legal aid systems in the world and even after our changes would still have one of the most generous. We agree legal aid is a vital part of our justice system and that’s why we have to find efficiencies to ensure it remains sustainable and available to those most in need of a lawyer.

“We have engaged constructively and consistently with lawyers – including revising our proposals in response to their comments – and to allege we have not is re-writing history.”

Is it constructive for a government department to ignore evidence that it has specifically requested?

Is it consistent to run a consultation process, and then throw away the results because they don’t agree with ministers’ “belief”?

Of course not.

Grayling’s plans are ideologically-based and entirely unsupportable and should be laughed out of court.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

That is not what we see.

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

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

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

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

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

Are you angry yet?

Profiteering energy firms would be stupid to believe they can hold Labour to ransom

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BBC, blackout, British Gas, California, Centrica, company, cost of living, E.on, economy, Ed Miliband, EDF, energy, Energy UK, failing, firm, freeze, government, Guardian, Income Tax, invest, John Lewis, market, Mike Sivier, mikesivier, nationalise, npower, people, politics, power station, price, profit, ransom, reset, Scottish Power, SSE, tax, Treasury, Vox Political, workers co-operative

Miliband’s cost-of-living crusade starts here. [Picture: Metro – from an article in August headlined ‘Energy company profits rise 74 per cent in 48 months’]

The UK’s private energy companies will be playing a very dangerous game if they think they can call Ed Miliband’s bluff on price-freezing.

According to The Guardian, Mr Miliband’s announcement that energy prices will be frozen for 20 months under a Labour government has sparked a chorus of protest from the affected firms.

In the first skirmish in the new political battle over the cost of living in the UK, Mr Miliband wants to “reset” what he sees as a “failing” energy market in which customers had paid £3.9 billion more than necessary since 2010. The measure would save families an average of £120 and businesses £1,800.

Energy firms say it would lead to blackouts similar to those seen in California. They say it will stall investment in new power stations.

Energy UK, which represents the largely foreign-owned energy firms, said: “It will… freeze the money to build new power stations, freeze the jobs of 600,000 people dependent on energy industry and [make] the prospect of energy shortages a reality.”

Here’s Centrica: “If prices were to be controlled against a backdrop of rising costs, it would simply not be economically viable for Centrica or indeed any other energy supplier to continue to operate and far less to meet their sizeable investment challenges the industry is facing.”

And Ian Peters, head of residential energy at British Gas, said: “If we have no ability to control what what we do in retail prices and wholesale prices suddenly go up within a single year that will threaten energy security.”

Labour has said the claims were “patently absurd” and “nonsense” put about by the large energy companies.

Mr Miliband said: “There’s a crisis of confidence in the system. It’s time we fixed it and they can either choose to be part of the problem or part of the solution. I hope they choose to be part of the solution.”

Suppliers say prices have gone up to cover their rising environmental and social obligations and in response to commodity price rises – sums paid on wholesale markets. So let’s examine the profits made by the “big six” – British Gas, EDF, E.On, npower, Scottish Power and SSE – over the last few years (figures courtesy of the BBC): In 2009, £2.15 billion. In 2010, £2.22 billion. 2011 – £3.87 billion (a massive hike of £1,870,000,000 in a single year). And in 2012 – £3.74 billion. That’s £11.98 billion in profits over four years – a huge and unwarranted amount in these times of supposed austerity.

And let’s not forget – this is pure profit. None of that money will have been reinvested into the companies. It goes to the shareholders.

It is while sitting on such huge amounts that these companies are trying to tell us they won’t be able to afford theinvestments to which they have signed up; that they won’t be able to increase employee pay. And it is while sitting on this massive pile of cash that they are threatening us with blackouts if they aren’t allowed to continue demanding huge price rises.

Well, it won’t wash.

Doesn’t it seem more likely that, faced with threatened blackouts, Mr Miliband will choose to re-nationalise the energy firms, rather than back down?

After all, they would be reneging on their contract to provide energy to the United Kingdom. This could be just what Mr Miliband needs to bring them back under State control, where energy generation and distribution belongs. And it would show he is serious about having the strength to “stand up to powerful vested interests”.

Naysayers may point out that this would only put him back in a position of being at the unions’ mercy, instead of under the thumb of big business, but this isn’t true either – the Tories restricted the unions’ power massively back in the 1980s.

Besides, new structures have come into being since then. What if the energy companies were re-constituted as Nationalised Workers’ Co-operatives? This would entail every employee receiving a percentage of any profits – possibly along the lines of the successful John Lewis model – with the remainder ploughed back into the Treasury to reduce income tax bills.

Such an arrangement should silence any dissent among workers as they would receive two slices of the pie – a profit-driven bonus and a tax cut – while everyone else has lower energy bills, together with the tax cut.

If it were proven to be successful, then employees of the other privatised utilities could soon be queueing up to have their companies re-nationalised as well.

Is a mandated ‘WorkFAREhouse’ the Tories’ answer to the ‘bedroom tax’ court case?

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abuse, allowance, Atos, Auschwitz, bedroom tax, behavioural insights team, Belsen, benefit, benefits, camp, Coalition, Conservative, Dachau, Department for Work and Pensions, disability, Disability Living Allowance, disabled, DLA, DWP, employment, Employment and Support Allowance, ESA, franchise, fraud, government, health, Iain Duncan Smith, Incapacity Benefit, it couldn't happen here, mandate, mandatory, market, Mike Sivier, mikesivier, nudge unit, parasite, people, politics, private, profit, Remploy, residential, scrounger, sick, skiver, social security, support, Tories, Tory, unemployment, Vox Political, WCA, welfare, Winterbourne View, work capability assessment, Work Programme, Workfare

Work camp: But is this a Nazi camp of the 1930s/40s, or a prediction of a British residential workfare scheme for the disabled in the 2010s?

Residential Workfare for the disabled. If that sentence hasn’t already set off at least three separate alarms in your head, then you haven’t been paying attention. What follows is a warning: Stay alert. Ask questions. Do not allow what this article predicts.

Workfare, for all those who still need enlightening after three years of this particular Tory-led nightmare, is a government-sponsored way of keeping unemployment high while pretending to be doing something about it. The idea is to send unemployed people to work for a period of several weeks – often for a large employer that is perfectly capable of taking on staff at a reasonable wage – and remove them from the unemployment figures for that time, even though they continue to be paid only in benefits. When the time period is served, the jobseeker returns to the dole queue and another is taken on, under the same terms. The employer pays nothing but reaps profit from the work that is carried out. The jobseeker gains nothing at all.

The disabled are, of course, the most persecuted sector of modern British society – far more vilified than hardened criminals or terrorists. Since the Coalition came into office by the back door in 2010, it has been government policy to close down employers taking on disabled people (Remploy factories), to spread propaganda against them, claiming they are scroungers or skivers, and the vast majority of disability benefit claims are fraudulent (this is true of only 0.4 per cent of such claims – a tiny minority). The bedroom tax, enforced nationally in April, has proven itself to be a means of driving disabled people out of homes that have been specially adapted to accommodate their needs. The Work Programme, which was extended to disabled people last December, has proven totally unsuited to the task of getting them into work, yet the Work Capability Assessment for Employment and Support Allowance continues to sign 70 per cent of claimants off the benefit as ‘fit for work’ (whether they are or not), and a further 17 or 18 per cent into a ‘work-related activity’ group where they must try to make themselves employable within 365 days.

The word ‘residential’ – applied to any sector of society at all, never mind whether they’re disabled or not – rightly sends shivers through the hearts of anyone in this country of good conscience. The terrible regime at the Winterbourne View home in Bristol is still recent, and nobody wants to see those crimes repeated – on anyone.

However, put these three words together and that seems the most likely consequence.

So why bother?

Here’s some pure speculation for you: The government knew that the bedroom tax was going to put the squeeze on the disabled, and it knew that disabled people would complain (although there was no way of knowing whether it would win a court case on the issue, as happened this week). It had already devised a solution and called it residential training for the disabled.

This is already running. It provides worthless Work Programme-style training to participants while filling their heads with the silly nonsense that the Skwawkbox blog showed up to such great effect earlier this year, encouraging them to ‘think new thoughts’.

The residential aspect means that participants currently get to stay in their own rooms, in relative comfort – but this could change, and very soon.

You see, this scheme is intended as a pilot study, and the plan has always been to expand this form of training, opening it up to the market, for private-sector parasites to run for profit after competing with each other to put in the lowest bid for the franchise.

Bye bye, individual rooms. Bye bye, dignity. Hello, communal dormitories. Hello… well, eventually it’ll just be hell.

And you can be sure mandation will follow, meaning anyone refusing to attend will lose benefit.

Gradually, disabled people will disappear from our communities, ending up in these residential ‘Workfarehouses’.

How long will it take before we start hearing stories about abuses taking place against people living in these places?

How long did it take before the stories came out of Winterbourne View?

Come to that, how long did it take before the world found out about places like Auschwitz or Dachau or Belsen?

I know what you’re thinking:

“It couldn’t happen here.”

Think again.

(The first Vox Political book, Strong Words and Hard Times, is available now in paperback or as an eBook, including a large ‘footnotes’ section in which you can actually connect to internet links containing supporting evidence – if you’re reading on a device that supports this kind of activity.)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Evidence suggests not.

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

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

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

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

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

He has created high unemployment.

He has depressed wages.

He has cut infrastructure projects.

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

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

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

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