Why are you complaining? The economy is running exactly according to plan!

Tags

alistair darling, benefit, Boris Johnson, bullingdon, business, Carwyn Jones, Chancellor, close, Coalition, Conservative, credit, Credit Crunch, creditor, danny blanchflower, David Cameron, death spiral, double-dip, economy, George Osborne, IMF, International Monetary Fund, investor, John Major, john maynard, keynes, Liberal Democrat, Office for National Statistics, ONS, private sector, profit, propaganda, public, public relations, rating, Sky News, spending, Tories, Tory, Treasury, triple dip, wages

Celebrating Britain’s ruin: The Bullingdon boys rave it up in Davos – David ‘Flashman’ Cameron (centre, facing us), George ‘Slasher’ Osborne (left, back to us), Boris ‘Zipwire’ Johnson (right, back to us)

Confirmation has come through from the Office for National Statistics that the UK economy shrank in the last months of 2012.

It’s no surprise – you only had to look at the shop sales figures for December to know that something was going wrong.

The poor performance has negated the effects of the growth bump in the previous quarter, when the economy improved by 0.9 per cent, boosted by the London Olympics.

The official Treasury line is: “While the economy is healing, it is a difficult road.” Healing? Total growth for the whole of 2012 has flatlined. Again. If the economy was a hospital patient it would need a sharp electric shock to get it going again (but we’ll come back to that)!

The total economic growth since the Conservative-led Coalition government came into power is 0.4 per cent; less than that recorded during the first quarter of the Parliament when the government was still working under Labour Chancellor Alistair Darling’s spending rules.

“Today’s GDP figures are extremely disappointing, but not surprising. We warned the UK Govt their cuts were too deep, too fast,” said Carwyn Jones, the Welsh Government’s First Minister.

“UK Government cuts to capital investment in major infrastructure projects is causing damage to our economy. A new plan for growth and jobs should now be a major priority for the Prime Minister and the Chancellor of the Exchequer.”

Economist Danny Blanchflower tweeted: “-0.3% lack of growth comes as no surprise but is appalling this was made in #11 Downing Street. The question is what is Slasher going to do?

“Given that the coalition in June 10 predicted growth would be +6 per cent and we now have +0.3 per cent we are entitled to know what went wrong. One-twentieth won’t do.”

Sky News ran with this: “Osborne says Britain faces a difficult economic situation and that he will confront problems to create jobs.”

Comedy Prime Minister David Cameron received early warning of the figures, and responded by having a slap-up meal with his Bullingdon chums Gideon George Osborne (the man responsible for the mess) and London’s comedy mayor Boris ‘zipwire’ Johnson.

Osborne later responded: “We can either run away from these problems or confront them, and I am determined to confront them so that we go on creating jobs for the people of this country.” What jobs?

In fact, this is the very predictable result of the Conservatives’ ideology-led dogma, that put a project to shrink the state ahead of prosperity.

The Tories have always wanted to pin the blame for our debt woes on the state. They suggest that we are in crisis because public spending got out of control, and that this is what happens when the state gets too big.

But this is a fantasy, unsupported by any sound economic analysis and designed to pursue a reckless plan that puts the economy and long-term recovery at risk.

The image of a bloated state getting fatter on taxpayers’ money while crowding out a budding private sector is nothing but propaganda, and here’s why: Before the credit crunch, public sector debt was less than 40 per cent of national income – it was the private corporate sector that was out of control, with debt at almost 300 per cent of national income.

The Tories wanted to say the private sector was being crowded out by the public sector, but in fact, it was being propped up by it.

Those of us who listened to the experts knew that cutting would make things worse, rather than better, but we heard yesterday that Osborne is now ignoring the advice of his former bosom-buddies at the IMF and intends to keep chopping away at the carcass, presumably until there’s nothing left at all.

The same experts, last year, were warning of a double-dip recession – or what legendary economist John Maynard Keynes called the “death spiral”. Now we’re facing a TRIPLE-dip. We haven’t just entered the death spiral; we’re well into it!

Osborne’s solution is to cut benefits and wages so that people have less money to spend on the UK economy. With less money in circulation, shops will close and businesses will go to the wall. Foreign investors will turn away from a nation where they will see there is no profit to be gained. Creditors will start to worry and our credit rating will suffer. By the next election in 2015, there may not be any life in UK business worth mentioning.

Does anyone remember when David Cameron said, “The good news will keep on coming”?

He’s a public relations man, you see. His skill is in saying the opposite of what he means, in order to make a message palatable to the public. You could say he’s not very good at it, because his greatest feat was to persuade the British public to reject his Conservatism a little less harshly than that if all the other Tory leaders since John Major – which is what made it possible for him and Osborne to put us all in this mess by forming a dirty backroom deal with the Liberal Democrats.

I’d like to talk to some of the people he persuaded to vote for his squalid little gang of cutthroats. What would they have done, if they had know what would happen?

How can unemployment be dropping at the same time as claims for joblessness are rising?

Tags

avoidance, Bank of England, BBC, benefit, benefits, business, claimant, CPI, disposable, economy, George Osborne, government, haven, income, inflation, infrastructure, Irresponsibility, job market, jobless, Jobseeker's Allowance, living wage, Mervyn King, Mike Sivier, mikesivier, OBR, Office for National Statistics, Office of Budget, Olympic, ONS, people, politics, responsibility, RPI, spending, tax, The Guardian, Treasury, unemployment, Vox Political, welfare

Today, the government was very pleased to announce, on the BBC and in all the usual right-wing rags, that the number of people out of work in the UK has fallen to its lowest total for more than a year – 2.51 million or 7.8 per cent of the working-age population.

But the claimant count – which tracks the number of people receiving Jobseekers’ Allowance and is the most timely measure of employment – rose by 10,100 last month, the largest increase since September 2011, as reported by the BBC and The Guardian.

Both figures were released by the Office for National Statistics, which seems to be treading on territory that is practically owned by the Office of Budget Irresponsibility.

Are you as confused as I am?

How can unemployment be down when more people are claiming for it?

No explanation.

It’s interesting that long-term unemployment has increased by 12,000, meaning those out of work for over a year now number 894,000.

Part-time employment rose by 49,000 to 8.1 million, more than a quarter of the workforce and close to a record high.

The fall in unemployment has been attributed to a reduction in youth unemployment, but that still leaves 963,000 people, aged between 16 and 24, looking for work.

Most tellingly, average incomes rose by 1.8 per cent for the year to date, while inflation measured according to CPI is now 2.7 per cent. According to RPI, it’s 3.2 per cent. That means the spending power is falling.

Economists say the job market is worsening, possibly as people who were hired for the Olympics, and other summer events, come off firms’ books.

Bank of England supremo Mervyn King said the figures suggested the labour market was “pretty strong” but said it was hard to reconcile this with the economy’s weak growth.

I’ve got a pretty good idea about that, Mervyn.

The economy is growing slowly because the vast majority of people aren’t being paid reasonably by their employers. Wages have grown by almost (or more than, depending which yardstick you use) a whole percentage point less than inflation. People don’t have the money to spend!

If the economy is to enjoy real growth, then the government needs to launch a major attack on tax avoidance and tax havens, get that money back into the UK Treasury where it belongs, and then use it to invest in British infrastructure and British business. That way, firms can get back on their feet and will have no excuse not to pay a living wage to workers. Then working-class people – the vast majority of the population – will have a higher disposable income and therefore more spending power (they’ve hardly got any to spare at the moment). They will use that money; it will go around the system again, and the economy will grow again.

If I can see that – and I’m no economist – why can’t you? Why can’t Gideon George Osborne?

I think we all know the answer to that. He can.

But it suits his purposes to ignore it.

Government borrowing: Insanity, explained with nonsense

Tags

austerity, Bank of England, benefits, BoE, British Chambers of Commerce, Coalition, Conservative, Conservative-led, Corporation Tax, crisis, David Cameron, David Gauke, debt, deficit, economic, economy, Eurozone, GDP, George Osborne, government, government borrowing, Gross Domestic Product, Guardian, income, inflation, Mike Sivier, mikesivier, national, OBR, Office for Budget Responsibility, Office for National Statistics, offshore, ONS, Parliament, people, politics, Royal Mail, Sir Mervyn King, tax, tax avoidance, tax haven, Tories, Tory, Tory-led, Treasury, Vox Political

The Coalition government has no intention of reducing the UK’s debt burden as it provides an excuse to cut spending on public services and shrink the state. Messrs Cameron, Osborne et al know that, when the public becomes sick of all the nonsense they have been spouting about it, they can hand the mess over to the next government and laugh all the way to the (offshore) bank.

Government borrowing figures for August have been released and the Treasury has been talking nonsense about them. Again.

Let’s start with the facts: UK public sector net borrowing was £14.4bn in August – slightly higher than the same month last year, and therefore the biggest deficit for the month since records began. Corporation tax receipts fell by 2.1 per cent; benefit payments rose by 4.9 per cent.

Barring the effects of one-off transactions like the raid on the Royal Mail Pension Plan that I mentioned last month, borrowing from April to August increased by £12.9bn, or 22 per cent, on the same period last year – to £61.3bn.

The British Chambers of Commerce reckon that at this rate, total borrowing for 2012-13 will be £20bn+ more than estimated by the misnamed Office for Budget Responsibility at the time of the last budget.

Public sector net debt stood at £1.04 trillion at the end of August 2012, equivalent to 66.1 per cent of gross domestic product (GDP) – that’s up from 1.032tr at the end of July, or 65.7 per cent of GDP.

The BBC, reporting on its website, has stated that the figures make it more likely the government will fail to wipe out the structural budget deficit by its deadline – and I think it won’t make a difference whether that’s 2015 (already long-abandoned) or 2017.

The Treasury, on the other hand, is still telling us it is getting the deficit down. Exchequer secretary to the Treasury David Gauke said new figures showing borrowing for 2011-12 came it at £119bn, rather than the OBR’s forecast of £126bn meant the government was dealing with its debts.

This is particularly rich, coming from him. Everybody now knows that the best way for the government to pay down its debts is to tax all the rich Brits who have stashed their cash in offshore tax-havens. Mr Gauke used to work for a tax avoidance firm and his wife is a tax avoidance lawyer. He is exactly the wrong man to lecture us on getting the deficit – the difference between government spending and tax receipts – down.

Some, like Sir Mervyn King, governor of the Bank of England, are now saying that overshooting the deficit reduction target would be acceptable if the reason was slower economic growth across the world, and the government has been happy to play its ‘Eurozone Strife’ card many times in the past.

But I’m not convinced. I tend to agree with The Guardian’s summary of the Coalition’s non-achievements so far, which states: UK exports to the EU have been growing, at least until early 2012; the deepening Eurozone crisis was mainly due to the same austerity policies employed in the UK; therefore austerity should have been cut back and demand revived.

What we’re left with should be no surprise to anyone: Numbers that don’t add up and explanations that don’t make sense.

Why the Tory-led debt crisis has worsened

Tags

banker, BBC, benefit, bonus, Conservative, Conservative-led, Corporation Tax, crisis, death, debt, economic, economy, Elgin, GDP, government, Gross Domestic Product, Guardian, hooligan, income, inflation, insurance, loophole, national, off, Office for National Statistics, oil, ONS, pension, platform, playing field, private sector, public sector, Royal Mail, sell, sell-off, slash, suicide, Tories, Tory, Tory-led, Treasury, tuition, university, VAT

This poster contains more factual accuracy than you’ll ever see on genuine Conservative campaign material (I say)

Never mind the playing field sell-offs for a moment; they’re only a small part of the economic mess over which the UK’s Conservative-led government is presiding.

Figures from the Office for National Statistics have shown that in July the government borrowed £3.4 billion more than on the same month last year. Net borrowing was £557 million (according to The Guardian), but the government made a surplus this time last year, and the figures were a serious disappointment for economic analysts, who had been predicting another surplus of about £2.5 billion.

So far this year, public sector net borrowing – excluding banking interventions and a one-off boost from a transfer (some say theft) of Royal Mail pension assets to the Treasury – was £47.2 billion, up from £35.6 billion during the same period in 2011.

The Office for National Statistics said net debt was 65.7 per cent of GDP. The BBC said this amounted to £1.032 billion, but I think £1.032 trillion is nearer the mark.

The Treasury says disappointing Corporation Tax receipts are to blame, especially after the closure of the Elgin oil platform.

Some analysts say the government may now overshoot its target for reduced borrowing this year, of £120 billion, possibly by more than £35 billion (excluding the Royal Mail effect)

I say that the Coalition government’s economic mismanagement has reached new heights.

We know what’s happening: This government has left open tax loopholes – such as exempting profits earned in overseas subsidiaries from taxation – that have allowed corporations to sit on hundreds of billions of pounds in retained profits.

It abolished the bankers’ bonus tax, so the financiers who caused the mess are not only still paying themselves average salaries of £350,000, but also enjoying billions in bonuses.

It has abolished the 50p top tax rate – creating a tax break for the rich. Executive pay has risen by more than eight per cent this year.

The richest thousand people in Britain own 25 per cent of its wealth – £1.5 trillion.

At the same time, benefits have been slashed, leading to mass suicides and health-related deaths.

VAT has been increased, helping to stall the economy.

Inflation has risen.

Income tax and National Insurance have increased in real terms.

University tuition fees have been tripled, meaning students face years – perhaps decades – of work to pay off the loans they have to take out, simply to get an education.

Public sector pay has been frozen.

Tax avoidance is only seen as a problem if it’s done by a satirical comedian with a talent for humiliating the Coalition government.

And then there’s that massive Royal Mail pensions raid.

And we see that the government is borrowing more, due to a fall in corporation tax payments.

We know why it’s happening: The government wants to cut public services down to (if David Cameron has his way) nothing apart from the judiciary and security services. Everything else is to be sold off to private corporations in order to fleece the general public of whatever they have left – wages, benefits, savings.

Some people are saying that the Tory economic policy has failed. They say George Osborne, as Chancellor, set out an economic goal and a method for achieving it – only to find that his methods have made the problem far worse. They say that his stubbornness in pressing on, even after being told his plan is a disaster, makes him the very definition of a failure.

Silly, silly people.

They forget how much the Conservatives love the private sector and hate public services. Their instinct is to ensure that large corporations (the kind that are happy to give funds to the Tories) have as much opportunity to make as much money as possible. They don’t want to balance the nation’s account books; that would mean taxing the rich and the corporations – in essence, biting the hands that feed them.

As long as the UK is in the red, they’ll have a perfect excuse to do as much damage to public services – and the vast majority of the population that relies on them – as they possibly can.

Let’s go back to the playing fields now. The decision to spite the legacy of the Olympic games by selling off 31 of these fields – 10 more than the Department for Education had previously admitted – was a gift on a day when the economy was shown to be utterly unfit while in Tory hands. They provide so many opportunities for clever wordplay, don’t they?

For example, I could say that, instead of levelling the playing field (in terms of the deficit and national borrowing) the Tories have made it steeper – possibly to match the slope at sold-off Woodhouse Middle School in Staffordshire.

But it would be more accurate to say that these Conservative Party hooligans have got onto the pitch – and spoiled it for everyone else.