Labour’s spending plan could humiliate the Tories

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bond, borrow, Conservative, debt, deficit, economic, economy, growth, increase, interest rate, Labour, loan, mortgage, neoliberal, plan, public, spending, stimulate, taxation, Tories, Tory, Treasury

“There is an alternative” – and it doesn’t have to cost more than we’re spending now.

It seems some people are upset that Labour has announced it does not intend to increase public spending, if elected into office after next year’s general election.

This is a perfectly reasonable reaction, depending on the amount of information available to the person holding that opinion.

In other words, if you don’t know why Labour has made this decision, it is perfectly reasonable to assume that the former Party of The Left has turned Tory-lite.

That’s why we’re hearing that Labour will simply continue Tory policies; that the main three parties are “all in it together” (to overuse a hackneyed and devalued phrase).

But evidence is available to suggest that this is a big mistake.

To finance extra spending, Labour would have to borrow more money – but this would push up interest rates and create a potential disaster for people with mortgages and loans to pay off.

According to Modern Monetary Theory – an economic method that seems to have earned credence with all the main parties – government borrowing is not undertaken to finance its spending, but to maintain a target interest rate.

In times of recession, businesses borrow more and households find it hard to save money for a rainy day (as the saying goes). We have spent most of the last decade either in recession or in the slowest recovery in British history and the private sector simply doesn’t have the spare cash to pay higher interest demanded on loans in the wake of higher government borrowing.

Labour wants to safeguard those businesses; Labour wants to safeguard your homes.

The alternative would cost any government much more in the long run.

It’s as simple as that.

So Labour has set a spending target that is the same as the Conservatives’, ensuring that interest rates can be kept under control.

This doesn’t mean it will continue with Conservative-led spending plans. That would be a betrayal of Labour’s core voters.

Instead, it seems more likely that Labour will seek to stimulate the economy by taking funding away from wasteful areas – this blog would certainly wish to see less public money given to private contractors who pocket half of it as profit – and investing it in economic growth.

With more money flowing through the system and coming back to the Treasury in taxation, it will then become easier to relax restrictions on interest rates, which will help the government with its debt issue (this has to do with the way governments borrow money, issuing bonds at fixed rates of interest, and is a story for another day).

If Labour’s plan works, it will mean humiliation for the Conservatives and the Liberal Democrats, as Labour will have spent exactly the same amount doing it as those other parties have been spending for the previous five years – to little effect.

Do not misunderstand; it is perfectly possible that Labour’s spending plans could be entirely wrong-headed! Labour spent most of the last 20 years experimenting disastrously with neoliberal thinking that, continued and concentrated by the Coalition government, has led us to the current pretty pass.

In this case, it seems the Devil really is in the detail.

But the overarching strategy is sound and Labour should not be criticised for it.

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Blame David Cameron for the catalogue of Conservative lies

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"Have I Got News For You", Angus Deayton, Conservative, contempt, cruel, David Cameron, debt, deficit, Democrat, Department, disability, disabled, discrimination, discriminatory, DWP, England, health, Iain Duncan Smith, Ian Hislop, ideological, IDS, John Major, liar, Lib Dem, Liberal, lie, Mike Sivier, mikesivier, mislead, misled, National Health Service, neoliberal, NHS, Nicholas Scott, Parliament, Pensions, people, politics, Reform, Return To Unit, RTU, sick, social security, spending, Tories, Tory, Vox Political, waiting time, welfare, work

Don’t expect Conservative ministers to do the honourable thing when they are found to have misled Parliament – it turns out they have ‘previous’ (or is it ‘form’?) in this regard.

Take a look at the YouTube clip above. It is from an April, 1994 episode of Have I Got News For You and refers to Nicholas Scott, then a minister of state for social security, who ‘talked out’ a private members’ bill aiming to outlaw discrimination on grounds of disability.

On behalf of the Conservative government of the day, he made it his business to ensure that it would remain possible to discriminate against disabled people.

Asked if this was true, he denied it and – as the very young-looking Ian Hislop states in the clip – “he was lying, of course.”

Angus Deayton (remember him?) fleshes out the story: “John Major previously gave his word that any minister who knowingly misled his fellow MPs should be sacked… It sounds like John Major has knowingly misled his fellow MPs as well. Perhaps he should go sack himself.”

Of course Major stood by his minister – Scott was only doing what Major had told him!

In fact, Parliamentary convention has long held that anybody committing ‘contempt of Parliament’ by deliberately misleading fellow MPs may be suspended or expelled, as highlighted previously by this blog.

The clip makes it clear that Conservatives have been ignoring such rules for decades – and that the person to blame is usually the one at the top – John Major, back in the 1990s.

 

David Cameron, now.

This makes sense. Look at Iain Duncan Smith, who has loudly and continually fibbed his face off about his so-called “welfare reforms”, in spite of the mountain of evidence showing that tens of thousands of people have died because of them.

That is as discriminatory as a law can be.

Commenters on this blog, in their multitudes, have asked why Iain Duncan Smith has remained in his post after setting in motion the sequence of disasters that have hit the Department for Work and Pensions on his watch. Looking at the Scott/Major affair, we can deduce that the man we call RTU has not been ‘Returned To Unit’ (in this case, the backbenches) because he has been doing exactly what David Cameron wanted – victimising the disabled in the worst possible way.

What does this say about Cameron, whose own late son was disabled? Cameron claimed all the disability benefits he possibly could, before he became Prime Minister and ordered RTU to cancel them or change their eligibility criteria so that almost nobody could legitimately claim them.

Recent stories show that RTU is still victimising the disabled while his reaction to criticism is becoming increasingly unbalanced.

Meanwhile, Cameron has to answer for multiple offences of his own. Most recently he lied about waiting times in the English part of the National Health Service, but this article also highlights his false claim – in a party political broadcast – that the Coalition was “paying down Britain’s debts”, and the false claim that spending on the NHS had risen in real terms since the Coalition took office.

What conclusion can we draw from this? It’s obvious, really.

Your Conservative-led Coalition government has been lying to you. It is lying to you now. It will lie to you in the future.

This is not in the national interest. How can it be in the national interest for the government to pass laws that harm the disabled – and to pass laws that could harm the sick by delaying medical aid – and then lie to you to keep you quiet?

It is ideologically-motivated cruelty. Nothing more.

It will continue as long as your vote supports it.

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Cumulative effect of welfare reform revealed – deprived areas hit much harder than the rich

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allowance, austerity, BBC, business, Centre, close, commission, communities, community, cost, cumulative impact assessment, David Cameron, demonstration, deprivation, deprived, disability, Disability Living Allowance, disability news service, disabled, DLA, DNS, economic, EHRC, employment, equalities, ESA, esther mcvey, financial loss, human rights, IB, Incapacity, Landman Economics, mark hoban, Mike Penning, National Institute, NIESR, Personal Independence Payment, PIP, Reform, Regional Economic, report, Revenue, rich, Sheffield Hallam University, shop, Social Research, social security, spending, support, tax, transparent, travel, viability, welfare

Deprived parts of Glasgow were worst-affected by ‘welfare reform’ according to The Courier [Image: thecourier.co.uk].

The headline should not come as a surprise – of course changes that cut benefits for the poor are going to harm them more than rich people.

But do you remember David Cameron’s claim that his government would be the most transparent ever?

Isn’t it interesting, then, that the independent Equalities and Human Rights Commission (EHRC) has found a way to compile information on the effects of tax, social security and other spending changes on disabled people, after the government repeatedly claimed it could not be done?

It seems Mr Cameron has something to hide, after all.

We already have a taste of what we can expect, courtesy of our friends in Scotland, who commissioned the Centre for Regional Economic and Social Research at Sheffield Hallam University to study the relationship between deprivation and financial loss caused by “welfare reform”.

The study shows that more than £1.6 billion a year will be removed from the Scottish economy, with the biggest losses based in changes to incapacity benefits. The Scottish average loss, per adult of working age, is £460 per year (compared with a British average of £470) but the hardest hit area was impoverished Glasgow Carlton, where adults lost an average of £880 per year.

In affluent St Andrews, the average hit was just £180 per year.

Of course, the cumulative effect will hit the poorest communities much harder – with an average of £460 being taken out of these communities it is not only households that will struggle to make ends meet; as families make cutbacks, local shops and businesses will lose revenue and viability. If they close, then residents will have to travel further for groceries and to find work, meaning extra travel costs will remove even more much-needed cash from their budget.

For a nationwide picture, the EHRC commissioned the National Institute of Economic and Social Research (NIESR) and the consultancy Landman Economics to develop a way of assessing the cumulative impact of “welfare reform”.

The report will be published in the summer, but Landman Economics has already told Disability News Service that the work was “not actually that difficult”.

Why, then have Mark Hoban, Esther McVey and Mike Penning, the current minister for the disabled, all claimed that a cumulative assessment is impossible?

Some might say they have a vested interest in keeping the public ignorant of the true devastation being wreaked on Britain’s most vulnerable people by Coalition austerity policies that will ultimately harm everybody except the very rich.

Some might say this is why the BBC – under the influence of a Conservative chairman – failed to report a mass demonstration against austerity by at least 50,000 people that started on its very doorstep.

Misguided conspiracy theorists, all!

Or are they?

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‘The Budget that confirms Britain is worse-off under the Tories’

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alistair darling, banker, bedroom tax, benefit, benefit cap, benefits, budget, business, Coalition, Conservative, Corporation Tax, cost of living, council tax, cut, debt, deficit, Democrat, economy, Ed Miliband, employment, energy, environment, food bank, George Osborne, government, green, high speed rail, ISA, Labour, Lib Dem, Liberal, living standard, medical research, Mike Sivier, mikesivier, North Sea oil, nurse, Parliament, pay, Pensioner Bond, people, personal tax allowance, politics, public sector, referendum, restraint, rich, rise, saver, saving, Scotland, self, senior citizen, service, shale gas, social security, special advisor, spending, tax credit, Tories, Tory, Treasury, unemployment, Vox Political, welfare, work

Mr Os-bean: As Ed Miliband gave his response to the Budget, George Osborne had a gormless smile on his face that made him look like Mr Bean. This is not him – but it’s the closest image I could find at short notice. [Image as credited]

If a Conservative government is returned to office after the 2015 election, there will be yet more spending cuts and service cuts afflicting hard-working, low-paid families.

That was the message for most people in George Osborne’s latest attempt at a Budget speech today.

There were plenty of groan-worthy moments as the part-time chancellor trotted out the Coalition’s catchphrases: “We will fix the roof while the sun is shining” (groan. The job is taking so long, one has to question whether the contractor is Con-ning the client). “We are all in this together” (groan). Oh really?

Benefit spending is to be capped at £119 billion per year, albeit rising with inflation; public sector pay “restraint” will continue for the foreseeable future. This is from the government whose Prime Minister was confirmed, only minutes previously, as having approved 40 per cent pay rises for his special advisors!

Most significant is the fact that Osborne avoided mentioning ordinary working people for most of his speech; this was a budget for businesses, with the benefits reserved for fatcat bosses.

No major advanced economy in the World is growing faster than the UK, said Mr Osborne; more people are in work. This appears to be borne out by current employment figures (although it should be noted that this is due to a vast and questionable boom in self-employment – the number of employees has dropped by 60,000).

Where is the benefit to the British economy? Why has the deficit not been eliminated? Osborne said it stood at £157 billion in the year he came to office, and would be £108 billion this year, but in fact £39 billion was removed due to measures brought in by the previous Labour chancellor, Alistair Darling. He has cut government spending by something like £80 billion so far, but the deficit has dropped by – possibly – £10 billion. Not a good start to his speech.

There will be further investment in high-speed rail, even though there is no way of predicting whether this hugely costly investment in making train journeys 20 minutes faster will create any economic improvement.

There will be money to fund new centres for medical research – but will these be absorbed by private health firms after the public purse has paid for them?

There will be investment in faster extraction of oil from the North Sea – aiming to get as much as possible out before the Scottish referendum, in order to impoverish the Scots if they decide to go for independence?

And there will be investment in low-cost energy (finally killing the highly questionable green agenda) – meaning money for shale gas companies, and to hell with the environmental cost.

All this investment will go into businesses whose main contribution to the Treasury – Corporation Tax – has already dropped by a quarter (from 28 per cent to 21 per cent) and will go down to 20 per cent this year. This is less than the lowest level of Income Tax.

Up go the profits – down go the tax payments. Who benefits?

Council tax in England remains frozen, meaning fewer public services.

The personal tax allowance is to rise, so people may earn £10,500 before paying tax. This is nowhere near enough to offset the massive drop in living standards that has been caused by the Tory-led Coalition. The cost of living has risen for 44 out of the 45 months of this Parliament – for the whole period, if the earnings of high-paid bankers are removed from the calculation.

The threshold for payment of the 40p tax rate is to rise, so fewer people will pay the higher rate.

Savers are to be helped but – again – this is not a boost for the poor. Most working and unemployed families don’t have any spare money to put into the banks. How does it help them to know they would not pay any tax on savings up to £15,000 in an ISA, when they cannot afford to open one?

And there is a new Pensioner Bond for rich senior citizens (poorer pensioners don’t live long enough to benefit).

As Ed Miliband said in his scathing response, the Coalition can afford to give a tax cut of £200,000 per year to bankers who earn £5 million – but can’t afford £250 per year extra for nurses.

Mr Miliband said the Budget speech was more significant in what it hid than in what it actually said.

Working people are suffering under the Bedroom Tax, under cuts to their tax credits, and they are having to visit food banks if they want to eat.

This is a government that gives with one hand, but takes back much more with the other.

And the Conservatives have the bare-faced cheek to call themselves “The Workers’ Party”.

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Budget fever grows but is Gideon up to the task?

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benefit cap, bubble, budget, business rates, cart, censure, Chancellor, Conservative, ConservativeHome, deficit, Democrat, finance, fuel, George, Gideon, help to buy, horse, housing, Lib Dem, Liberal, lorry, national insurance, NI, Osborne, pay, poll, pre-industrial, privatisation, privatise, privatising, Prosecution, public sector, social security, spending, tax, Tories, Tory, voodoo

Cart crash: In line with the theme explored in this article, not only is it likely that George Osborne won’t even have the right vehicle to carry his budget – he’ll probably crash it, too.

Part-time Chancellor Gideon George Osborne will be having another go at delivering a budget next week; while we can all hope he does better than the last four wrecks, experience – and a voodoo poll on the ConservativeHome website – suggests the opposite.

The poll asks readers to prioritise possible policies on a scale of one to 10, where one is “low” and 10 is “high”. The policies themselves?

“Cut spending further, so that the deficit can be reduced faster”. Clearly this is nonsense. Osborne’s massive spending cuts have, so far, delivered tiny reduction in the national deficit of only £7 billion – from £118 billion to £111 billion. In four years. Clearly, he needs to change his ways.

Other possibilities include cutting the higher rates of tax (or raising the threshold for them) – helping the very rich; extending National Insurance cuts for employers taking on young workers – helping employers; cutting business rates – helping businesspeople; and privatising more state assets, such as roads – helping rich investors and penalising the poor.

Other ideas intended to harm the poor include regionalising public sector pay, extending the freeze on public sector pay rises or cutting public sector pay, lowering the benefit cap to less than the current £26,000 per family and lowering a cap on broader social security spending that is yet to be introduced (it is scheduled for 2015).

All of the measures mentioned in the above two paragraphs will harm the British economy, rather than helping it. If Osborne includes any of them, he will deserve censure (if not prosecution, although it might be hard to find an offence on which to charge him after five years of Tory/Tory Democrat tinkering with the legal system).

By now, dear readers, some of you will be sitting with your blood boiling at this insolent blogger who’s telling you your prized policy ideas won’t work. You’re probably itching to demand what I would do to address the challenge.

I would have examined the economy from a different angle. Let’s look at it metaphorically.

Imagine the British economy is a haulage lorry or, better yet, a horse and cart. Tories are pushing us back towards pre-industrialism so we might as well get used to the idea. Either way, the job in hand is to take provisions to different parts of the locality that will allow the people there to prosper – and return with a share of that prosperity, to be distributed equally for the benefit of everyone.

Firstly, you need fuel. This is where we can prove that Osborne’s austerity is completely useless. How far can a lorry travel with an empty fuel tank? How far will a horse pull a cart if you don’t feed it? Not very far at all.

Then you need to make sure you’re providing the right kind of fuel. A diesel lorry won’t go far on petrol or vegetable oil before it starts to complain; give a horse the wrong kind of food and it will develop who-knows-what kind of digestion-related illness and keel over. This is what happens to an economy that is over-reliant on – for example – a single economy sector such as finance, or an economic ‘bubble’ like the housing growth triggered by Help to Buy (although this scheme could work well with the correct controls, in the same way you can probably keep a horse working with the correct medicine).

The result in both cases – no fuel or wrong fuel – is the same: Your supplies don’t get out to your people and they suffer as a result. The last four years of Tory/Tory Democrat rule has proved this.

In non-metaphorical terms: There must be investment, and it must be the right kind.

Then, of course, there is the question of what you have in the back of your lorry (or on the cart). You must be providing your people with what they need, otherwise there’s no point in making the journey and the fuel/food in which you have invested – in fact, the whole journey – will have been wasted (like Osborne’s last four budget attempts). Your choice of supplies will depend on what your people are doing – what crops they are growing or products they are making – and on whether these can be traded with your neighbours. If they have been misled into producing wares that can’t be traded, what good is that?

Get it right and you’ll be able to make a return trip laden with goods and supplies that will – with a bit of wise distribution and trade – help build up your society, meaning that the load might not be so great on the next trip. This means less fuel/horse feed will be needed and there won’t be as large a load in goods to be redistributed on the return journey (although an expanding economy means there might be farther to travel, so this must be recognised in the amount of fuel to be used).

That’s about as simple a metaphor as I can devise at the moment.

If I had to predict what will happen on Wednesday, though, I would probably expect Osborne to be demanding that we leave the lorry in the garage (or the horse in the yard), and struggle out on foot with all our burdens on our own back.

Not so much “all in it together” as “everyone for themselves” – and that’s how we’ll all be ruined.

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Is the state pension about to be privatised?

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Atos, benefit, benefits, bereavement, capita, Coalition, Conservative, Democrat, Department, DWP, efficiency, G4S, government, Guardian, Iain Duncan Smith, Lib Dem, Liberal, Mike Sivier, mikesivier, National Health Service, NHS, operational, pension, Pensions, people, politics, privatise, review, Ros Altmann, saving, Serco, service, social security, spending, state, Tell Us Once, Tories, Tory, Universal Credit, Vox Political, welfare, work

The DWP could be about to privatise delivery of the state pension, according to a leaked report. Many may have missed this revelation because of today’s other, more high-profile events.

According to The Guardian, the Department for Work and Pensions is struggling to meet the demand for savings being placed on it by the government; the plan is to slash its operational spending from £9 billion per year in 2009 to £6.3 billion by 2016. This means a £1 billion cut in the 2014-15 financial year.

A leaked report entitled DWP Efficiency Review claims one way of doing this would involve “a review of the pension service’s current delivery model and alternative delivery models” – in other words, privatisation.

The money would still come from the taxpayer but a private company would deliver it to pensioners.

What could possibly go wrong with that idea? After all, involving private companies in public services has worked so well in the past, hasn’t it? Look at G4S with the Olympics, Atos with sickness and disability benefits, any of the many companies involved with the useless Work Programme, or indeed any of the companies currently raiding the English NHS for profit.

(Please be aware that the immediately preceding paragraph was loaded with so much sarcasm, it may now be dripping from your screen. Apologies if this is the case but Vox Political will not be held responsible for the damage. Contact Parliament’s IT service – which happens to be another example of what happens when you get private companies involved in taxpayer-funded services.)

The review will question whether the recently-launched ‘Tell Us Once’ bereavement service, that helps people report deaths in a way that ensures all necessary government departments are made aware, could be more efficient if outsourced. This will be a waste of time as the answer is, quite clearly, no.

Pensions expert Ros Altmann was quoted as saying she was concerned by the idea that firms like Capita, Serco or G4S could be brought in to administer £100bn in public money to millions of pensioners: “We’re dealing with a vulnerable group and a massive number of people, so I would be seriously concerned about outsourcing a service like this, which is working well, with a view that it might make some short-term savings.”

The trouble is, the DWP has to make a saving somewhere, and all the easy efficiencies have already been made, according to the leaked report.

Too crude an approach to future cuts could jeopardise the department’s capacity to roll out changes to pensions, child maintenance and disability benefits.

It is significant that Iain Duncan Smith’s flagship Universal Credit, which is dogged by delays and IT problems, is not part of the review.

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

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additional, allowance, Atos, balance, bank, BBC, bribe, burden, Coalition, companies, company, Conservative, cut, David Cameron, debt, deficit, efficiency, employment, ESA, firm, fiscal, government, health, household, Iain Duncan Smith, IB, IFS, Incapacity Benefit, Institute, insurance, Jeremy Hunt, long term economic plan, medical record, Mike Sivier, mikesivier, National Health Service, NHS, OH Assist, people, politics, population, premium, private, privatisation, public spending, spending, Studies, support, tax, Tories, Tory, Vox Political, waste, WCA, work capability assessment

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

He must think you’re stupid. Are you?

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

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

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

We can therefore draw only two possibilities from his claim:

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

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

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

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

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

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

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

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

Think about it.

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

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Divisions in Coalition as MPs demand independent inquiry on poverty

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absolute, allowance, austerity, authorities, authority, avoid, bank, bed, bedroom tax, benefit cap, breakfast, capital gains, Chancellor, child, children, Coalition, commission, Conservative, council tax, cut, Daily Mail, David Nuttal, David Taylor-Robinson, David TC Davies, debt, deficit, delay, Democrat, Department, dependency, destitute, domestic, DWP, eastern, economy, electricity, employment, ESA, EU, Europe, european union, evade, evasion, export, families, family, food bank, gas, George Osborne, Gordon Brown, growth, health, homeless, housing benefit, Iain Duncan Smith, immigration, income, industry, infrastructure, inquiry, interview, investment, Jacob Rees-Mogg, Jeremy LeFroy, job, Jobseekers, John Hemming, John Major, joseph rowntree foundation, JSA, Labour, Lib Dem, Liberal, local, malnutrition, Margaret Thatcher, Michael Meacher, minimum wage, mistake, payment, Pensions, poverty, public, Red Cross, regulation, retired, Ronnie Campbell, rule, sanction, Sir Peter Bottomley, social security, spending, Steve Rotheram, Sunday Times, support, tax, Tony Blair, Tories, Tory, Trussell Trust, utility, violence, welfare, work, Work Programme, Workfare, workless

Calls for a ‘commission of inquiry’ into the impact of the government’s changes to social security entitlements on poverty have won overwhelming support from Parliament.

The motion by Labour’s Michael Meacher was passed with a massive majority of 123 votes; only two people – David Nuttall and Jacob Rees-Mogg – voted against it.

The debate enjoyed cross-party support, having been secured by Mr Meacher with Sir Peter Bottomley (Conservative) and John Hemming (Liberal Democrat).

Introducing the motion, Mr Meacher said: “It is clear that something terrible is happening across the face of Britain. We are seeing the return of absolute poverty, which has not existed in this country since the Victorian age more than a century ago. Absolute poverty is when people do not have the money to pay for even their most basic needs.”

He said the evidence was all around:

• There are at least 345 food banks and, according to the Trussell Trust, emergency food aid was given to 350,000 households for at least three days in the last year.
• The Red Cross is setting up centres to help the destitute, just as it does in developing countries.
• Even in prosperous areas like London, more than a quarter of the population is living in poverty.
• According to the Joseph Rowntree Foundation, for the first time, the number of people in working families who are living in poverty, at 6.7 million, is greater than the number of people in workless and retired families who are living in poverty, at 6.3 million.
• Child poverty will rise from 2.5 million to 3.2 million during this Parliament, around 24 per cent of children in the UK. By 2020, if the rise is not stopped, it will increase to four million – around 30 per cent of children in the UK.
• The use of sanctions depriving people of all their benefits for several weeks at a time, had increased by 126 per cent since 2010 and 120 disabled people who had been receiving jobseeker’s allowance had been given a three-year fixed duration sanction in the previous year.
• There are now more than 2,000 families who have been placed in emergency bed-and-breakfast accommodation after losing their homes.
• The per cent rise in the overall homelessness figures last year included nearly 9,000 families with children, which is the equivalent of one family losing their home every 15 minutes.
• A third of families spent less than £20 a week on food and that the average spend on food per person per day was precisely £2.10. That is a third less than those families were able to afford three months before that.
• The proportion of households that had to make debt repayments of more than £40 a week had doubled and the average level of debt was £2,250.
• A third of families had council tax debt.
• 2.7 million people had lost out through the Government’s changes to council tax benefit – many of them disabled people, veterans and some of the most vulnerable in our communities.
• Households were having to spend 16 per cent more on gas and electricity.
• There are 2.5 million people who have been unemployed for the best part of two years, and there were 562,000 vacancies when the debate took place (Monday), so four out of five of those who are unemployed simply cannot get a job whatever they do.
• Cuts to local authorities mean many home care visits are limited to 15 minutes.
• The 10 per cent of local authorities that are the most deprived in the country face cuts six times higher than those faced by the 10 per cent that are the most affluent.
• 60 per cent of benefit cuts fall on those who are in work.

Mr Meacher said the biggest cause of absolute poverty was the huge rise in sanctioning, often for trivial reasons such as turning up five minutes late for a job interview or the Work Programme:

• A dyslexic person lost his Jobseekers Allowance because his condition meant that in one fortnightly period he applied for nine jobs, not 10. He was trying to pay his way and already had work, but it provided only an extremely low income.
• The jobcentre didn’t record that a claimant had informed them that he was in hospital when he was due to attend an appointment and he was sanctioned.
• A claimant went to a job interview instead of signing on at the jobcentre because the appointments clashed – and was sanctioned.
• A claimant had to look after their mother who was severely disabled and very ill – and was sanctioned.
• A Job Centre sent the letter informing a claimant of an interview to their previous address, despite having been told about the move. The claimant was sanctioned.
• A claimant was refused a job because she was in a women’s refuge, fleeing domestic violence and in the process of relocating, but I was still sanctioned.

Mr Meacher also quoted what he called a classic: “I didn’t do enough to find work in between finding work and starting the job.”

The latest DWP figures suggest that more than one million people have been sanctioned in the past 15 months and deprived of all benefit and all income. “Given that the penalties are out of all proportion to the triviality of many of the infringements, and given that, as I have said, four out of five people cannot get a job whatever they do, the use of sanctioning on this scale, with the result of utter destitution, is — one struggles for words — brutalising and profoundly unjust,” said Mr Meacher.

Other reasons for the rise in absolute poverty included:

• Delays in benefit payments.
• The fact that it is impossible for many poor and vulnerable people to comply with new rules – for example a jobseeker who asked to downsize to a smaller flat who was told he must pay two weeks’ full rent upfront before getting housing benefit. He does not have the funds to do so and is stuck in a situation where his benefits will not cover his outgoings due to the Bedroom Tax.
• The Bedroom Tax, which applies to around 667,000 households, and two-thirds of those affected are disabled. More than 90 per cent of those affected do not have smaller social housing to move into.
• The Benefit Cap, imposed on a further 33,000 households.
• Mistakes by the authorities; up to 40,000 working-age tenants in social housing may have been improperly subjected to the Bedroom Tax because of DWP error (although Iain Duncan Smith claims a maximum of 5,000).

Mr Meacher said: “The Chancellor’s policy of keeping 2.5 million people unemployed makes it impossible for them to find work, even if there were employers who would be willing to take them, and the 40 per cent success rate of appeals shows how unfair the whole process is.”

Responding to a comment from David TC Davies (Conservative) that those who are not looking for work must realise there will be consequences, particularly when a million people have been able to come to the UK from eastern Europe and find work, Mr Meacher said, “Those who come to this country are more likely to be employed and take out less in benefits than many of the indigenous population.”

He asked: “Is all this brutality towards the poor really necessary? Is there any justification in intensifying the misery, as the Chancellor clearly intends, by winding up the social fund and, particularly, by imposing another £25 billion of cuts in the next Parliament, half of that from working-age benefits?

“After £80 billion of public spending cuts, with about £23 billion of cuts in this Parliament so far, the deficit has been reduced only at a glacial pace, from £118 billion in 2011 to £115 billion in 2012 and £111 billion in 2013. Frankly, the Chancellor is like one of those first world war generals who urged his men forward, over the top, in order to recover 300 yards of bombed-out ground, but lost 20,000 men in the process. How can it be justified to carry on imposing abject and unnecessary destitution on such a huge scale when the benefits in terms of deficit reduction are so small as to be almost derisory?”

Suggested alternatives to the punitive austerity programme of cuts came thick and fast during the debate. Challenged to explain what Labour’s Front Bench meant by saying they would be tougher on welfare than the Tories, Mr Meacher said: “As the shadow Chancellor has made clear on many occasions, is that we need public investment. We need to get jobs and growth. That is the alternative way: public investment in jobs, industry, infrastructure and exports to grow the real economy, not the financial froth, because that would cut the deficit far faster than the Chancellor’s beloved austerity.”

He asked: “How about the ultra-rich — Britain’s 1,000 richest citizens — contributing just a bit? Their current remuneration — I am talking about a fraction of the top 1 per cent — is £86,000 a week, which is 185 times the average wage. They received a windfall of more than £2,000 a week from the five per cent cut in the higher rate of income tax, and their wealth was recently estimated by The Sunday Times at nearly half a trillion pounds. Let us remember that we are talking about 1,000 people. Their asset gains since the 2009 crash have been calculated by the same source at about £190 billion.

“These persons, loaded with the riches of Midas, might perhaps be prevailed upon to contribute a minute fraction of their wealth in an acute national emergency, when one-sixth of the workforce earns less than the living wage and when one million people who cannot get a job are being deprived of all income by sanctioning and thereby being left utterly destitute.

“Charging the ultra-rich’s asset gains since 2009 to capital gains tax would raise more than the £25 billion that the Chancellor purports to need. I submit that it would introduce some semblance of democracy and social justice in this country if the Chancellor paid attention to this debate and thought deeply about what he is doing to our country and its people.”

Ronnie Campbell (Blyth Valley, Lab) suggested that the Government might save a lot more if its members “showed the same energy and enthusiasm for getting those who evade their taxes and run to tax havens as they do for going after the poor, the sick and people on the dole”.

Against this, David TC Davies offered insults and distortions of the facts, quoting the Daily Mail as though it provided an accurate account of current events: “Members of the shadow Cabinet might need a boxing referee to sort out their disputes at the moment, as we read today in the Daily Mail.”

He said: “We took office with a deficit of £160 billion and a debt that was rising rapidly to £1 trillion. That was after years of overspending in good times, as well as in bad, by Labour, a cheap money supply and lax banking regulation under the former Government.” Labour’s spending, up until the financial crisis, was always less than that of the previous Conservative administration; Gordon Brown and Tony Blair both ran a lower deficit than John Major and Margaret Thatcher, and at one point actually achieved a surplus, which is something that the Conservatives had not managed in the previous 18 years. While Mr Davies here complained about the “lax banking regulation”, Conservatives supported it at the time and in fact demanded more DE-regulation, which would have made the financial crisis worse when it happened.

“We had disastrous economic decisions, such as that to sell gold at a fraction of its real rate,” said Mr Davies. Yes – the UK lost around £9 billion. But compare that with the disastrous economic decision by George Osborne to impose more than £80 billion worth of cuts to achieve a £7 billion cut in the national deficit. The UK has lost £73 billion there, over a three-year period.

And Mr Davies said: “Worst of all and most seriously, we had a welfare system that allowed people to get into a trap of welfare dependency, leaving them on the dole for many years, but at the same time filling the consequent gap in employment by allowing mass and uncontrolled immigration into this country, which completely undercut British workers.” The first assertion is simply untrue; the second is a legacy of previous Conservative administrations that agreed to the free movement of EU member citizens, meaning that, when the eastern European countries joined in 2004, citizens migrated to the UK in the hope of a better life. Labour has admitted it should have negotiated for a delay in free movement until the economies of those countries had improved, making such migration less likely, but the situation was created before Labour took office.

Challenged on the Coalition’s record, Mr Davies fell back on the Tories’ current trick question, which is to counter any criticism by asking: “Is he suggesting that we are not doing enough to pay down the national debt? Is he suggesting that we should cut further and faster? If so, and if we had the support of other Opposition Members, that is exactly what the Government could do and, indeed, possibly should do. I look forward to seeing that support for getting the deficit down.” This disingenuous nonsense was batted away by Labour’s Hugh Bayley, who said “investing in the economy, creating jobs and thereby getting people off welfare and into work” was the way forward.

Mr Davies’ Conservative colleague Jeremy Lefroy took a different view, agreeing that increasing numbers of people are finding it impossible to make ends meet, and that job creation and apprenticeships were a better way out of poverty than changing the social security system alone. He agreed that sanctions were applied to his constituents “in a rather arbitrary manner”. He spoke against George Osborne’s suggested plan to remove housing benefits from people aged under 25, saying this “would have a drastic impact on young people who need to live away from home and who have no support from their families”. He spoke in favour of councils increasing their housing stock. And he admitted that disabled people faced severe problems when unfairly transferred from ESA to JSA: “A lady in my constituency says, ‘I am simply not fit for work, but by signing on for JSA I have to say that I am available and fit for work.’ She does not want to tell a lie.”

Steve Rotheram (Liverpool Walton, Labour) spoke powerfully about the effect of being on benefits: “Lots of people in my city are on benefits for the very first time. Far from being in clover — it beggars belief what we read in the right-wing press — they are struggling to make ends meet, and the problem that thousands of Liverpudlians are facing is new to them. For many, the idea that they might miss a rent payment is totally alien. They have not done that in the past 20 years, but since May 2010, their individual household incomes have been on such a downward trajectory that they now find themselves in rent arrears, seeking advice on debt management and unable to afford the daily cost of travel, food and energy. Figures suggest that 40 per cent of the adult population in Liverpool are struggling with serious debt problems.”

And he said poverty had health implications, too: “David Taylor-Robinson of the University of Liverpool and his fellow academics have highlighted the doubling of malnutrition-related hospital admissions nationally since 2008.”

John Hemming (Birmingham Yardley, LD) raised concerns about “the interrelationship between the welfare cap and victims of domestic violence, and whether there are situations that need more attention. I believe that people can get discretionary housing payment to leave a violent home, but it is important that we ensure that there is a route out of domestic violence for women. I am worried about that issue, just as I am about some wrongful sanctioning that I have seen. That does not help at all, because it undermines the whole process.” He also called for “a substantial increase in the minimum wage, because as the economy is improving the Government should look at that, rather than maintain things as they are”.

The vote gave huge endorsement to the call for an independent inquiry into poverty under the Coalition.

But with an election just 15 months away, how long will we have to wait for it to report?

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The State of Osborne: a visitor’s guide

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A moment of crisis for David Cameron as he realises it is unlikely that George Osborne has the faintest idea what the Autumn Statement means.

If anybody else had prattled on for 50 minutes while hardly uttering a single sensible word, they would have been consigned to a mental hospital forthwith.

But this is Coalition Britain, and the speaker was George Osborne, the man who likes to tell us all that he is in charge of the nation’s finances. Thanks to his government’s Department for Work and Pensions, nobody is allowed to have mental illnesses anymore; after this speech, it seems likely we all have an idea about the reason for that.

A 50-minute speech is a lot of verbiage, and it is certain that worthier journalists across Britain – if not the world – have already analysed it to exhaustion. Allow me to let you into a secret:

They’re probably trying too hard.

Most of the speech was about putting Labour down. The Opposition has made all the headway over the past few weeks, and we all knew Osborne was under orders to change the mood music of the nation in time for Christmas.

Did he manage it? Not really. His speeches always come across as strained events, where he’s making an effort to be clever without ever achieving it. As a result, the message gets lost. We can therefore discount the Labour-bashing.

That leaves us with what he actually said. Even here, his meaning was at times opaque. What follows is an attempt to provide a handy guide to George-speak, for anyone unfortunate enough to have heard him yesterday.

Osborne: “We have held our nerve while those who predicted there would be no growth until we turned the spending taps back on have been proved comprehensively wrong.”/Meaning: “I am lying. Austerity failed miserably and the economy flatlined. A few months ago I realised that we would have nothing to show at election time so I turned the spending taps back on, with Help To Buy and Funding For Lending. I know that these are exactly the sort of Keynesian economic levers that I preached against for three years but I’m hoping that nobody noticed.”

The hard work of the British people is paying off, and we will not squander their efforts./Osborne appears to be celebrating his three years of stagnation. He inherited growth and decided to trash it. (MagsNews on Twitter)

There was no double-dip recession./“Phew! Lucky escape there!”

At the time of the Budget in March, the Office of Budget Responsibility forecast that growth this year would be 0.6 per cent. Today, it more than doubles that forecast and the estimate for growth will be 1.4 per cent./“Please God don’t let anybody remember that three years ago, the forecast for this year was 2.9 per cent.”

Today in Britain, employment is at an all-time high… We have the lowest proportion of workless households for 17 years./These jobs have increased the numbers of the working poor. Too few are full-time; too many are part-time, zero-hours or self-employed, serving up no National Insurance contributions from employers, no holiday or sick pay, or making contractors work long hours for less than the minimum wage.

The number of people claiming unemployment benefit has fallen by more than 200,000 in the past six months—the largest such fall for 16 years./“And we have imposed sanctions on more people on Jobseekers’ Allowance than ever before, in order to produce that figure.”

By 2018-19, on this measure, the OBR does not expect a deficit at all. Instead, it expects Britain to run a small surplus. These numbers mean that the Government will meet their fiscal mandate to bring the structural current budget into balance and meet it one year early./Although of course the books were initially supposed to be balanced by 2015. (Huffington Post live blog)

This year, we will borrow £111 billion, which is £9 billion less than was feared in March./…and £41 billion more than forecast in 2010.

We will cap overall welfare spending./But this will not include the state pension (half the social security budget) or the most cyclical jobseeker benefits./”A living wage would mean less dosh on in-work benefits; letting councils build would mean less subsidies for private landlords.” (Owen Jones on Twitter)

Pensioners will be more than £800 better off every year./But as usual he’s ignoring the VAT elephant in the room. (Mark Ferguson on Twitter)

We think that a fair principle is that, as now, people should expect to spend up to a third of their adult lives in retirement. Based on the latest life expectancy figures, applying that principle would mean an increase in the state pension age to 68 in the mid-2030s and to 69 in the late 2040s./But life expectancy depends on where you live and how much money you have, meaning the poor continue to pay more towards the pensions of the rich./”Current pensioners better off – future pensioners paying for it. What was that about “making our kids pay for current spending” George?” (Mark Ferguson of LabourList on Twitter)

Most wealthy people pay their taxes and make a huge contribution to funding our public services; the latest figures show that 30 per cent of all income tax is paid by just one per cent of taxpayers./Estimates of the amount of tax that is not collected range between £25-£120 billion per year and it is not the poor who aren’t paying up.

This year the rich pay a greater share of the nation’s income taxes than was the case in any year under the last Labour Government./Because they now have more income. Simple really. (Tom Clark of The Guardian, on Twitter)

Today we set out in detail the largest package of measures to tackle tax avoidance, tax evasion, fraud and error so far this Parliament. Together it will raise over £9 billion over the next five years./Including capital gains tax for foreign investors on sales of UK property, which has nothing to do with tax avoidance/evasion, fraud or error.

We must confront this simple truth: if we want more people to own a home, we have to build more homes… The latest survey data showed residential construction growing at its fastest rate for a decade./The rate of house building is at its lowest peacetime level since the 1920s

This autumn statement has found the financial resources to fund the expansion of free school meals to all school children in reception, year 1 and year 2, announced by the Deputy Prime Minister and supported by me./On Wednesday, the Lib Dems and Michael Gove’s education department argued over who had to pay for it.

Extra funding will be provided to science, technology, and engineering courses [in universities]. The new loans will be financed by selling the old student loan book, allowing thousands more to achieve their potential./And pushing thousands into the hands of debt collectors.

The best way to help business is by lowering the burden of tax. KPMG’s report last week confirmed for the second year running that Britain has the most competitive business tax system in the world./KPMG would know – it writes the tax system and also runs some of the larger tax avoidance schemes.

From April 2015 we will introduce a new transferable tax allowance for married couples… Four million families will benefit, many of them among the poorest working families in our country./Osborne says the Tories are backing British Families – but only ones who are married it seems. (Mark Ferguson on Twitter)/While the new tax arrangements bribe families to marry, the benefit cap will bribe big families to split up. (Tom Clark on Twitter)

We are all in this together./The biggest lie of this Parliament.

We are also helping families with their energy bills./Commence the cutting of the “green crap”. This from the “Greenest government ever”. (Mark Ferguson on Twitter)

Next year’s fuel duty rise will be cancelled./This is a cut in a tax that was never imposed in the first place.

We are going to abolish the jobs tax on young people under the age of 21. Employer national insurance contributions will be removed altogether on a million and a half jobs for young people./Young people will therefore have less chance to get contribution-based benefit. National Insurance assures people their pension contributions – except when it isn’t paid. So they will have no contributions to show for any years they worked before 21 and will have to work until their late 60s.

The cost for a business of employing a young person on a salary of £12,000 will fall by over £500./This is a bonus for businesses, not employees.

“Jobs tax” – it’s ludicrous, isn’t it? National Insurance has been a respected part of British life for more than 100 years but Osborne, living as he does in a mythical Victorian-era golden age that never actually existed, thinks it is a “jobs tax”. Either that or he’s still bruised by the fact that Labour’s labelling of the under-occupation charge as a Bedroom Tax caught on with the public.

Shadow Chancellor Ed Balls got on his feet and immediately attacked Osborne’s “breathtaking complacency” for denying the drop in living standards faced by everyone in the country, with families already £1,600 per year worse off. Osborne laughed. He thought that was funny.

The Shadow Chancellor pointed out that we are enduring the slowest recovery in a century, and that average real wages will have dropped by 5.8 per cent by the end of the Parliament (except for fatcat business bosses).

He was having a hard time getting his points across, however, because Tory MPs were heckling him very loudly. Owen Jones tweeted, appositely, “Do the Tories think that a bunch of braying MPs dripping with privilege, while ordinary people’s living standards crash, is good TV?”

Maybe they did. Maybe they thought they had the public on their side.

Let’s have a look at a few comments from the public – courtesy of the Huffington Post:

“Planning to kill more people, George?” (Robin Stacey)

“Spend more you wet lipped monkey.” (Will Moriarty)

“No one has an ounce of faith in anything you say, you parasitic pool of curdled warthog’s puke.” (Anthony Nicholas)

And finally: “Hope you end the speech with your resignation x” (Joanne Wood – and yes, she did mean to end with a kiss).

What a shame Osborne did not follow her advice.

 

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Prepare to sift the substance from the sewage in the Chance(llo)r’s Autumn Statement

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[Picture: Vox Political reader Al Reading]

How long has it been since Labour was deemed the party with no policies and no direction? Now it seems the Conservatives have taken up this undesirable label and applied it to themselves (excuse the choice of words) liberally.

Labour’s stand on energy prices sent the Tories scurrying away to find an answer, after they finally realised that baldly claiming nothing could be done was not going to cut any ice.

When they finally came up with something, their answer was to “Cut the green crap” and reduce the environmental levy on energy firms – a u-turn within a u-turn for the party that once proclaimed to the nation, “Vote Blue – Go Green”.

This week they have also u-turned on cigarette packaging – for a second time within a matter of months. Before the summer, the Conservative vision was to safeguard children from smoking by removing packaging for cigarette packets. Then – after coincidentally hiring fag-company lobbyist Lynton Crosby to run their campaigns for them – they decided that the packaging could stay. Now – in the face of a possibly Lords rebellion – they are reversing their position yet again.

This is the context in which Boy Chancellor George Osborne will make his Autumn Statement – and he has already put himself on a sticky wicket before going in to bat.

Remember David Cameron’s massive error of judgement at the Lord Mayor’s banquet a few weeks ago, when he stood behind a gold-plated lectern that could easily be sold off or melted down to help pay of the interest on his government’s ever-increasing borrowing burden, and said austerity was here to stay?

It seems Gideon was eager to follow in his master’s footsteps, stumping up £10.2 MILLION (including VAT at the 20 per cent level that he imposed on us all in 2010) on new furnishings for his Whitehall HQ, from exclusive designers Panik, Ferrious and Senator. One Treasury insider, according to the Daily Mirror, wondered “why we couldn’t have just bought new furniture from Ikea”.

Good question! It is also one that is especially pertinent after it was revealed that Osborne has been calling for last-minute spending cuts from the Home Office and the departments of Justice, Defence, Business and Work and Pensions (yet again), because he will not be able to fund the £2 billion of giveaways announced during the conference season without them.

These include scrapping a rise in petrol duty of almost 2p per litre, free school meals for pupils aged five-to-seven and rewarding marriage in the tax system.

It seems clear that these measures were all unfunded when they were announced, putting the lie to Conservative claims that they have any kind of plan – and ruining their claim that Osborne’s schoolboy-economist austerity idiocy has done anything to improve the UK economy.

Like him or loathe him, Will Hutton in The Guardian had it right when he wrote: “The recovery is the result of the upward swing of the economic cycle finally asserting itself, aided by policies informed by the opposite of what Osborne purports to believe.”

Hutton went on to state that Osborne decided to “borrow from the Keynesian economic locker… never admitting the scale of the philosophic shift, and then claimed victory”. In other words, Osborne is the biggest hypocrite in Westminster (and that’s a huge achievement, considering the state of them all)!

Result: “The public is misinformed – told that austerity worked and, as importantly, the philosophy behind it works too… Thus the Conservative party can be protected from the awful truth that Thatcherism fails.”

Labour MP Michael Meacher is much more scathing (if such a thing is possible). In a Parliamentary debate, quoted in his blog, he told us: “We do have a recovery of sorts, but one that has been generated in exactly the wrong way. It has been generated by consumer borrowing and an incipient bubble, and it is not — I repeat, not — a real, sustainable recovery.”

In other words, the – as Hutton describes it – “eclectic and spatchcocked Keynesianism” employed by Osborne, while superficially useful in the short-term, will cause immense damage over a longer period because he doesn’t understand it and only used it in desperation.

Both Hutton and Meacher agree that a sustainable recovery can only come from what Meacher describes as “rising investment, increasing productivity, growing wages and healthy exports”, none of which are supported by Osborne’s current behaviour.

And yet, according to the Daily Telegraph, Osborne will fulfil another of this blog’s long-standing prophecies on Thursday by telling us all that “Britain can no longer afford the welfare state”.

From a member of the most profligate snout-in-trough overspenders ever to worm their way into public office and then inflict a harm-the-defenceless agenda on the nation, that will be the biggest lie of all.

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