Labour must turn and fight now – or give up its electoral hopes altogether

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Struggling to make an impact: Ed Miliband must reject the Tory Party’s narrative about the need for austerity and bring forward a vision for the future that really does make us ‘One Nation’ again, rather than hanging on David Cameron’s neoliberal coat-tails, as many former Labour voters believe.

The political debate is all about the Labour Party again today – as it has been since the Budget.

The newspapers and websites are full of advice for the party, which is now clearly seen to be struggling to gain any kind of a foothold with electors who have become disillusioned at what might best be called the Party of Very Little Opposition.

Labour “must adopt new principles” according to an alliance of thinktanks and party intellectuals who have written to The Guardian; Ed Miliband has been told “don’t play safe” with the party’s manifesto according to an article on the same paper’s site.

The BBC News site has words from left-wing MP John Mann, calling on his party leader to stop trying to be “too clever” and be “much clearer” in setting out his policies.

We can probably discount the Telegraph article by Dan Hodges, claiming that Labour is “closed for business”. It plays to right-wing readers’ prejudices just a little too much.

Will Ed pay any attention to these pleas? Evidence suggests he will not.

I should clarify from the outset that, as a Labour member, I want the Party to win in 2015 (and also to gain the lion’s share of the vote in May’s European elections).

But Miliband seems to be living in a world of his own, insulated from the rest of the Labour Party – not to mention supporters of Labour ideals who are not members – by a small group of (not-so-special) advisers who, it’s claimed, intercept any decent ideas before they get to the party leader and spin them until they turn to drivel. Whether this is true or not seems immaterial as this is the perception of the general public.

And perception is everything.

As I write this article I have just received a comment stating that “Miliband’s strategy for the next election seems to be a) to accept the Tory frame of reference for any given argument and b) to then concede the field of battle on that issue, whatever it is, without a shot being fired.” This is a common complaint, and Labour has no answer to it.

Why do Miliband, Balls, Tristram Hunt (notably), Rachel Reeves (lamentably) and all the other Labour frontbenchers blithely accept the Coalition’s terms of reference on any issue, against the wishes of their own backbenchers, their party as a whole and the public at large?

Are they really just a gang of greedy moneygrubbers, determined to screw the country for whatever they can get? That in itself would be a betrayal of Labour Party ideals and their constituency parties should deselect them if members believed that to be the case for one moment.

Are they a gang of neoliberals, their political philosophy so close to that of the Conservatives that you can’t get a credit card between them? This rings threateningly true in the cases of Oxford PPE graduats Ed Balls and Yvette Cooper, ex-Bank of England employee Rachel Reeves and Tristram Hunt. But Ed Miliband is (famously) the son of a Marxist. He, above all, should know better.

The trouble is, David Miliband is the son of the same Marxist and he was as much a part of the neoliberal New Labour Red Tory deception as Tony Blair and Gordon Brown.

Oh look – another comment has just arrived. “More people don’t bother to vote because they feel that we as a people have moved on and all we really want is people who will represent us honestly, by majority and with no hidden agendas, backhanders or lobbyists pulling the strings. I don’t see any evidence that the present government or the Labour Party are capable or willing to do just that… They should have the courage to change and become the voice of the people.”

Become the voice of the people. The meaning is clear – Labour is not currently representing anybody at all.

Is this true? Let’s look at some of the other comments on my (left-leaning, let’s not forget) blog. These are from people who are generally sympathetic to Socialism and who should, therefore, see Labour as the natural home of their vote. What do they say?

“[Is it] any wonder [that] 1. People don’t vote because they are seen as “all the bloody same”? and 2. The perceived differences have become so minuscule?”

“Until Labour wakes up and realises it is the welfare cuts that are a major concern to most of us and to anyone who has a conscience, they will lose the next election due to apathy.”

“Labour have to do something different to what they have up to now but they don’t seem to want to. Are they scared of being in government over a country in the state it is?”

“Labour have had four years to do something – anything – to fight against the welfare cuts, and to help the people they are supposed to be the party for! They’ve really done nothing when all is said and done.”

If Ed Miliband was reading this, I would be asking if he was getting the message yet (are you, Ed?) and what he proposes to do about it. You think not? Let’s have some more comments from people who should be supporting Labour – I’ve got plenty of them!

“There has been absolutely no fight in this opposition and I am ashamed of them.”

“People need a reason to apply their votes to Labour and Miliband-Balls are not providing them with one. They are sleepwalking into another hung Parliament and a very real risk of the Tories teaming up with UKIP. Then we’ll really see Nazism grip this country.”

“The would-be voters demand change and need bold new policies to blunt the Tory cutters. If the Labour Party cannot come up with policies which are radical then they don’t deserve to be in power at the next election, or ever.”

“Ed Balls worries me because he seems intent on copycatting Osborne. For example Osborne says he will run a surplus by the end of the next Parliament and Balls promises the same. Osborne say he will be introducing a Benefit Cap on social security spending on working age benefits (which could have devastating effects and lead to real terms cuts in benefits for years on end) and Balls says that Labour will vote with the Coalition to introduce it.”

“Surely we need some clear red water between Labour and the Tories? Surely Labour needs to differentiate itself more from the policies of the Coalition?”

“I sent an email to the Labour Party asking for its policy on TTIP (the rightly-feared Transatlantic Trade and Investment Partnership that will force employment standards down to third-world levels, or below), amongst other things. They were decidedly equivocal and I felt no reassurance at all. I think it’s about we faced facts, Labour aren’t being coy in a pre-election year to avoid frightening the horses, they really are just another pack of neoliberals.”

This is how left-wing voters (and the squeezed-middle waverers to whom Ed Miliband keeps trying to pander) see the modern Labour Party: Carbon-copy Tories with no fresh ideas who aren’t worth the effort of voting.

If any of Ed’s shadow cabinet is okay with that description, he needs to sack them and bring in someone with a clue. And he needed to do it last year.

If the Conservatives win in 2015, it seems clear that responsibility will lie as much with Labour’s failure to provide any clearly-visible alternative.

We have already seen carnage inflicted on the poor, the sick and disabled, and a Conservative-only government (or in collaboration withUKIP) would increase that bloodshed tenfold (senior citizens take note: the bribe you were given last week was a trick and if you vote Conservative, many of you will not live to rectify your error at another election).

Unless Ed Miliband sorts out his party – pronto – that blood will be on his hands as well, and the people will not forgive him.

Note that I did not say they won’t forgive Labour. I said they won’t forgive Ed Miliband.

Words cannot describe the way people feel at what has been done to them by the Coalition. If Labour reveals even the slightest element of complicity, I wouldn’t give a farthing for Miliband’s safety.

That goes for the rest of the shadow cabinet too.

Follow me on Twitter: @MidWalesMike

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Coalition drags out the pain with promise of many more cuts

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The BBC has reported findings by the Institute for Fiscal Studies, showing that the Coalition government will be less than halfway through its planned spending cuts by the end of the current financial year (March 31).

The organisation said 60 per cent of the cuts were still to come.

This raises a few urgent questions. Firstly: This government was formed on the promise that it would balance the books by 2015, which presupposes that its entire plan for doing so would be in place long before then. We know that this ambitious claim was dismissed after years of failure, but part of the reason for this failure was that George Osborne stopped a recovery that was already taking place, and which would have led to economic growth of 20 per cent by now, if it had been allowed to continue (according to Michael Meacher MP). My question, therefore, is: Have the Conservatives been working to ensure that they would have an excuse to make more cuts, rather than to restore the economy and balance the deficit?

Secondly: We may presume that these further cuts will be inflicted over a period of years (as even the Tories know it is important to enact change gradually, rather than inflict sudden shocks on the economy that could create entirely unforeseen consequences). Are the Coalition parties assuming that they will be re-elected next year, and is it not supremely arrogant of them to believe this, considering the harm they have caused so far?

Thirdly: If the Coalition parties do want to be re-elected, it is clear that they will need to try to bring a majority of voters back on-side. Therefore we may reasonably expect to see all sorts of gifts coming our way over the next year – tax breaks or whatever else they can devise – aimed at increasing the amount of money in our pockets. However, knowing that 60 per cent of the Tory/Lib Dem cuts process is still to come, this means they will want to make even more cuts if they are returned to office. Why would we want to give them our vote, in return for presents they’ll grab back as soon as they’ve got what they want?

Fourthly: Iain Duncan Smith has inflicted £28 billion of cuts on people receiving benefits from his Department for Work and Pensions. If the IFS statement is accurate, then the total amount he’ll want to cut is a staggering £70 billion. If we consider that the amount spent on pensions (more than £100 billion) is safe, this leaves only tiny amounts for all the other benefits supplied by the DWP. Are people currently on Jobseekers’ Allowance to get nothing in the future? What about disabled people getting DLA or PIP? How about all the many, many people on Employment and Support Allowance, including those currently going through the appeal process because of wrong decisions? Mr… Smith might claim that all these benefits are being rolled into Universal Credit, but that won’t happen until 2016 or 2017 according to his own estimates, and the rest of us know that it’s not going to happen at all. Will we have any benefit system left if these cuts continue – or will the Tories try to trick us into buying duff health and employment insurance policies from their friends at Unum instead?

The BBC report said George Osborne wants a budget surplus by 2018-19, but “additional spending, population growth and extra demands on the NHS meant more cuts were needed”. This statement is not supported by any source material and we may take it this is a further sign of BBC right-wing bias.

The additional spending was made necessary because of unintended consequences of the cuts – the Tories got their sums wrong. Population growth, if due to the EU immigration that everyone complains about, will have led to a net growth in the economy as it has been proved that migrant workers from the European Union contribute more to the Treasury than they ever take out – so this is not a cause of increased spending. If the indigenous British population has been growing faster than expected, let us remember that Child Benefit is to be restricted to the first two children in a family (Cameron has denied it so it must be true) and therefore any further growth in individual families will have no bearing on the government’s bank balance. Extra demands on the NHS are a thorny subject as the Coalition promised to inject billions of pounds into the health service but no evidence has yet appeared to show that it has. Since this money was promised many years ago, it should have been included in national budgets and should not be a burden now.

The IFS also reports that there is no evidence of a housing bubble in the UK, as a result of Osborne’s ‘Help To Buy’ scheme. This was introduced last year, when Osborne realised that his austerity programme had failed and resorted to a Keynesian ‘pump-priming’ scheme to boost the housing market. Fears that this would lead to a debt-fuelled ‘bubble’ made commenters like myself cautious about the plan.

However, if there are no signs of a debt-fuelled bubble, then we should consider this to be proof that Keynesian economics was always the way forward and austerity has led us up an economic dead-end for the past four years.

This means none of Osborne’s ridiculous cuts were necessary (barring a few to eliminate waste and corruption – but under a Conservative-led regime we have no evidence that these took place and every reason to believe the opposite to be true. Look at the current ‘cronyism’ row over the appointment of Conservative ‘yes’-people to senior quango posts).

It also means the government and the right-wing media have been lying to you for four long years – and will continue doing so in self-justifying stridence for another 14 months to come.

Let them talk.

But don’t ever let them convince you their cuts are necessary.

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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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Bedroom Tax Tories: What they said and why they were wrong

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Demonstrating for justice: Campaigners against the Bedroom Tax gathered outside Parliament while MPs debated it inside.

“I’m amazed Labour have chosen to spend their allotted day in Parliament arguing for more unfunded spending on housing benefit.” That’s what Matt Hancock, Conservative MP for West Sussex, had to say about the Opposition Day debate on the Bedroom Tax in the House of Commons on November 12.

Hancock is, it seems, author of a book entitled Masters of Nothing, which sums up his understanding of the situation rather well. He clearly has not mastered the fact that the State Under-Occupation Charge will not save money. He has not mastered the fact that emptying dwellings of their current owners will not make them available to new familes as these people are afraid they will themselves be tipped onto the street when their circumstances change – instead the premises will be left empty, at huge cost to social landlords; and he has not mastered the fact that anyone evicted because of the tax will become a burden on local authorities, who have a duty to rehouse them in bed and breakfast accommodation, even though the money provided to them for this purpose by the government is ludicrously inadequate to the task.

Hancock is not alone in having misconceptions about the Bedroom Tax. Most, if not all, of the Conservatives who spoke during the debate uttered howlers – and the purpose of this article is to name them and explain why they should be ashamed of their words.

Please take the opportunity, Dear Reader, to look for your own MP in the catalogue of calamity that follows, then use it to attack them in their own consituency. Let’s make them realise that actions have consequences.

If you don’t have a Tory MP, feel free to use what follows in order to make sure you never have to put up with one.

We begin with Tobias Ellwood (Bournemouth East) who asked of Rachel Reeves: “What does she say to the almost 400,000 families who are living in overcrowded situations when they look over their shoulders at the almost one million spare bedrooms in Britain?”

The Shadow Work and Pensions Secretary responded without hesitation: “I say that instead of presiding over the lowest rate of house building since the 1920s, this Government should get on and build some houses.”

This is the fact of the matter. Conservatives throughout the debate berated Labour for building too little social housing, while ignoring their own abysmal record. In the 2012-13 financial year, only 135, 117 new homes were completed – the lowest number on the books.

The Minister of State, Steve Webb, came back to this point later, saying: “Who was doing the house building for 13 years?” Well, we all know who hasn’t been doing it for the last three.

Mr Ellwood said the Tax was brought in because the cost of housing benefit was rising alarmingly: “After 13 years of Labour the cost of housing benefit doubled to £21 billion. That is unacceptable. The cost to taxpayers was £900 per household. The system was getting out of control.” His failure is that he refused to accept the explanation offered by Labour’s Katy Clark – that this was due to the rising cost of rent in the private sector (private rents have indeed been rising massively and the government refuses to take action because this would interfere with the market. Bizarrely, the Conservative-led Coalition seems to believe it is acceptable to pay huge gobs of housing benefit to private landlords – who make unreasonable demands – and then blame social renting tenants for it). He also, by inference, rejected the evidence that the Bedroom Tax will not save any money.

Mr Ellwood also referred to the deficit run by the Labour government of 1997-2010. He said: “Labour lived beyond its means. In 2002-03, it spent £26 billion beyond its means. Four years later that rose to £33 billion. In its final year of office, the deficit rose to £156 billion. That always accumulates.”

This is disingenuous. As he must know, not only did Labour run a lower deficit than the Conservative governments of both Thatcher and Major (average 41 per cent of gross domestic product) from 1997 to 2007, it also made a surplus in the 2000-2001 financial year – something that the previous Conservative governments never did. This means Labour actually paid off some of the debts that had been accumulating. With that pedigree, even the 43 per cent deficit of 2008 looks respectable. The higher deficits of 2009 and 2010 were entirely caused by the bankster-instigated financial crisis, when the actions taken by Labour were entirely supported by the Conservative Party.

He went on to condemn Labour for voting against £83 billion of welfare savings; if the reasoning for them was as shaky as that for the Bedroom Tax (and it was; see previous VP articles) then Labour was quite right to do so!

It should be noted that the Secretary of State for Work and Pensions, Iain Duncan Smith, was not present at the debate. RTU (as we like to call him) was woofing it up in Paris, rather than accounting for his misbehaviour to the taxpayer.

Mrs Anne Main (St Albans) echoed a comment by Mr Webb, but did it in such an inept way that we’ll look at her words rather than his. Following Labour’s Stephen Twigg, she referred to the too-low allocation of Discretionary Housing Payment to families having to cope with the Bedroom Tax: “Perhaps he would like to speak to his Labour-run Liverpool council and ask why, when it received £892,000 in discretionary housing payments last year, it actually sent back £337,000.”

Mr Twigg put her straight: “Does she accept that the figures that she has given are from before the bedroom tax was introduced? This year, Liverpool city council will certainly spend the entire discretionary housing pot.”

His words echoed fellow Labour MP Lucy Powell, who had previously berated Mr Webb: “The Minister incorrectly gave figures for last year—the bedroom tax was introduced only in April. I was talking about money that will come back this year. I can guarantee that the Minister will not be getting any money back from Manchester this year — the year of the bedroom tax.”

Referring to the 400,000 disabled people affected by the Bedroom Tax, Mrs Reeves said 100,000 disabled people live in properties specially adapted for their disability, but the average grant issued by local authorities for adaptations to homes [when they are forced to move out by the Bedroom Tax] stands at £6,000. The total cost of doing the adaptations all over again could run into tens of millions of pounds.

At this moment, Heather Wheeler (South Derbyshire), said while seated: “They’re exempt.”

The response: “The hon. Lady said from a sedentary position that disabled people are exempt, but she would not say it when she was on her feet because she knows it is not true.” In Vox Political‘s home constituency, at least one disabled person has already been evicted because of the Bedroom Tax.

Philip Davies (also known as ‘Stupid of Shipley’) weighed in with a shocking error, in an attempt to attack his local housing association and its director, a Labour MP: “Does the Minister agree that the spare room subsidy is one reason why we do not have the right mix of housing? Social housing providers could build houses as big as they wanted, knowing that the Government would cover the full bill irrespectively. In that respect, does he deplore the social housing provider in my area, of which a Labour MP is a director? It complains on the one hand that it has too many three-bedroom houses—”

That’s as far as he got, and just as well. Let’s go through this one more time: The ‘spare room subsidy’ is a fiction. It never existed and therefore could never have been abolished by the Conservative-led Coalition government. Being entirely make-believe, it could never have affected the decisions of social housing providers. This is just one of the many reasons why Mr Davies is rightly considered to be one of the biggest twits in the Tory Party (among hefty competition). Another might be his claim that disabled people should work for less than the minimum wage.

David TC Davies (Monmouth) complained: “Opposition Members… do not want to talk about the fact that they introduced a measure like this for the private sector.”

He was among many Tories who complained about this apparent double-standard. Labour members reminded them that the Bedroom Tax is retrospective (affecting people currently in social housing) while the private-sector measure was for new tenants only. One may also ask why, if these Conservatives were so disturbed by the apparent discrepancy, they were not calling for this earlier measure to be scrapped as well.

George Hollingbery (Meon Valley) said: “We need to pose ourselves a question: what is dealing with the spare room subsidy about? Is it about reducing the housing benefit bill? Yes, of course it is. The Government propose a £500 million saving, which is important.”

It is important, because Conservatives seemed confused throughout the debate about whether they were trying to sort out overcrowding by putting people into appropriate accommodation, or trying to save money. The two are mutually exclusive. The only way to make money on the policy is for people to remain locked in housing that, thanks to the Bedroom Tax, is now too expensive for them – but this cannot last because they will soon be evicted for non-payment of rent. Moving people around, so that nobody is under-occupying, will result in a higher housing benefit bill because more people will be claiming – the original tenants in their new properties (which, if they are run by private landlords, will be more expensive) and the new tenants who will be occupying to the limit of a property’s capability and therefore may claim the full amount of housing benefit. Either way, Mr Hollingberry’s claim of a £500 million saving is pie-in-the-sky.

Margot James (Stourbridge) made a proper fool of herself. She said: “The Opposition… want to position the end of the subsidy and the creation of a level playing field between all recipients of social housing support as a modern day poll tax.” This is the least of her mistakes as some Labour members may have suggested such a thing; in fact it is Eric Pickles’ Council Tax Reduction Scheme that is the modern-day Poll Tax, because every household must now towards it.

Margot James went on to deny that the Bedroom Tax is a tax, saying: “A tax is a government levy on somebody’s income, whereas we are clearly talking about reducing a subsidy.” This is wrong on two counts. Firstly, there has been no subsidy to reduce – unless she was referring to housing benefit in its entirety. The spare room subsidy is, as already mentioned, as mythical as the “unicorns and fairies” to which Anne Main referred when she tried to dismiss the existence of the under-occupation charge as a tax on bedrooms. Both ladies are wrong, because a tax may also be defined as a government levy on property owned or used by a citizen (such as, say, a bedroom). So – not quite as mythical as unicorns and fairies. One has to wonder why Mrs Main mentioned these, as she has clearly been away with the fairies herself.

Kwasi Kwarteng (Spelthorne) breezed in from another committee to provide the benefit of his own ignorance. He asked: “Is it fair that someone on a low income who is in privately rented accommodation should pay taxes in order to subsidise someone else’s spare room? Is it fair to raise taxation from low-paid workers to subsidise other people’s accommodation?”

The answer, of course, is yes. It is fair. In fact, it is a principle of our system of taxation. Everybody pays into the national treasury, in order to allow the state to provide services – such as housing – for those in need. This may be a detail that current Tories have missed, considering the government’s vigorous attempts to write the highest earners out of taxation altogether. If he wanted to help low-waged people in private rented housing, the answer to that is also simple: cap their rents.

And doesn’t he know that the very low-paid have been lifted out of taxation by his own government, as the Coalition has been raising the threshold for payment of income tax every year, aiming to reach a target of £10,000 income per annum by 2015.

At the end of the day, the motion to scrap the Bedroom Tax was lost by 26 votes. Some have already said that Labour could have won it if all members had been present, but that was never really on the cards; the government has the numbers, even if some Liberal Democrats (like VP‘s own MP, Roger Williams) abstained.

So what are we to make of it all? Simply this: The Conservatives do not have a credible narrative to describe what the Bedroom Tax is about. It doesn’t save money; it won’t put people into appropriate accommodation; and it certainly won’t cut homelessness!

Work out what it’s really about, and you will understand why they are so desperate to keep it.

The Magical Land of Os(borne) – fantasy economics

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George Osborne’s claim that his nonsense policies have magically turned the economy around, coupled with his equally-preposterous claim that the UK needs another seven years of austerity before he can balance the books – provides a fine example of the duality at the heart of Conservative economic policy.

He needs to convince you that his choices have made a difference and the nation’s fortunes are changing, but he also need to convince you that we’re in a terrible mess – or he won’t have an excuse to continue cutting more public services and selling them into the private sector so his rich friends can use them to fleece you.

The two claims are not only contradictory of each other – they are self-contradictory. The evidence shows that Osborne’s policies delayed the recovery, rather than encouraging it, and the ‘Starve The Beast’ plan he cribbed from George W Bush has long been recognised as harmful to any country’s economic health; by cutting services he is starving the economy of the liquidity that is its lifeblood.

(This is a point worth remembering: Whenever a TV news reporter says Osborne or the government want to make cuts in order to “save” money, they mean the government will be “taking money out of the economy” – which will consequently be worth less. As a result, some people will have to become poorer. Can you guess who?)

Before we congratulate Osborne in ways that are anything like as effusive as David Cameron’s endorsement earlier this week, let’s look at the facts: According to Martin Wolf in the Financial Times, in three and a half years, the UK’s economic performance has improved by just 2.2 per cent – against a prediction of 8.2 per cent by his pet Office of Budget (Ir)Responsibility. In the second quarter of 2013, Gross Domestic Product was 3.3 per cent below its pre-crisis peak and 18 per cent below its 1980-2007 trend, making this the slowest British recovery on record.

Osborne and the Conservatives point proudly to the strong increase in private-sector jobs but, as Mr Wolf states, “this is hardly something to boast about”. While employment – on paper – is at an all-time high, productivity has fallen back to the level it reached in 2005. What does this say about the quality of the jobs that are being filled? Are they high-quality, long-term, well-paid careers, or are they part-time, zero-hours, throwaway fillers? We all know the answer to that. Average wages have been cut by nine per cent, in real terms, since 2010 – and they are still falling.

Even by the standards of other crisis-hit, high-income economies, the UK’s performance has been dismal, says Mr Wolf, pointing to work by Spencer Dale and James Talbot of the Bank of England. This indicates that the Eurozone has performed just as badly – but the difference is that the Eurozone countries do not have control of every economic lever that is available to them; Britain does.

Osborne claims that high global inflation and the performance of the Eurozone have impacted on the UK; Mr Wolf’s assertion is that austerity is the reason for this disappointment – and Osborne was just as much a cheerleader for austerity in Europe as he has been for it in the UK. Furthermore, as the Labour Party pointed out in its report, “David Cameron’s out of touch, you’re out of pocket” (2013), inflation in other G7 countries has been lower than in the UK, indicating that high global prices have little to do with the problem.

“Yes, but,” says Osborne, “austerity has kept interest rates down.” Did it? Did it really? In that case, interest rates would have been kept low because of the promise (in 2010) that borrowing would be brought down by 2015. When the Coalition came to power, Osborne said he expected to borrow a total of £322 billion by 2015. In March this year, that figure had risen to £564 billion – an increase of 75 per cent! Meanwhile the deadline for the national debt to start falling has slipped from 2014-15 back to 2017-18 and the level at which the debt was expected to hit its peak has jumped from 70.3 per cent of GDP to 85.6 per cent. The deficit has been stuck at £120 billion a year for the last two financial years, despite the repeated claims that it has been cut by one-third. None of this has affected long-term interest rates and neither did the loss of the UK’s AAA credit rating in February this year.

Here’s why – as explained in an article on this site in June:

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.

“With interest rates at the zero bound, austerity weakened the economy relative to what might otherwise have happened,” wrote Mr Wolf.

“Nobody thought recovery would never happen under austerity, merely that it would be damagingly delayed… This has been an unnecessarily protracted slump. It is good that recovery is here, though it is far too soon to tell its quality and durability. But this does not justify what remains a large unforced error.”

Looking to the future, Osborne has reacted to the new barrage of Labour policies, all of which have been carefully costed against savings in current budget areas, with a series of rushed measures that are entirely unfunded. Remember that, next time a Conservative accuses Labour of borrowing and spending!

The married couples’ allowance, worth less than £4 per week (and less than £2 if you’re on a low income) is unfunded. The promised fuel duty freeze is unfunded. These will cost more than £2 billion and no source has been identified.

And what about the £12 billion stage two of the housing ‘Help to Buy’ scheme, that Osborne rushed forward to this month?

He has pulled £14 billion out of nowhere, but still expects us to believe he will resume his stalled deficit cuts by £35 billion by 2015, £42 billion by 2017-18 and £43 billion by 2020, in order to create a budget surplus.

All the while, he is promising “improved living standards for this generation and the next”. For whom? These cuts must come from somewhere, and they mean removing a cumulative total of £120 billion from the economy each year by 2020. That has to come from somewhere.

Look at the amount by which bosses’ pay in FTSE100 companies has increased in the last three years – 32 per cent, while average worker pay has dropped by nine per cent.

Do you really think the “Have-yachts” will be paying for these cuts?

Further reading: George Osborne’s credibility gap (Alistair Darling, Guardian)

Have the Tories taken leave of their senses? (Michael Meacher, blog article)

From the DWP to the economy – the Coalition’s growing credibility chasm (Vox Political, June 2, 2013)

Treasury responds to Vox’s austerity challenge (Vox Political, May 13, 2013)