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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Windbag Cameron is afraid to give us the facts

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Leading us down the garden path: Cameron wants us to believe the economy is growing but, like a bad gardener, he hasn’t fertilised it, and has allowed it to be overrun with weeds. [Image: Andy Davey http://www.andydavey.com]

“The week before the autumn statement, and the right honourable gentleman [Ed Miliband] cannot ask about the economy because it is growing. He cannot ask about the deficit because it is falling. He cannot ask about the numbers in work because they are rising. People can see that we have a long-term plan to turn our country around.”

Strong words – uttered by David Cameron during Prime Minister’s Questions yesterday (November 27).

What a shame he chose to give Parliament bluster instead of facts.

Does he think that the economy is growing because of the housing price bubble engineered by his deranged Chancellor via his ‘Help to Buy’ scheme? It is massively increasing the cost of housing in London but will inevitably lead to a crash and the loss of serious amounts of money for both buyers and the government (as mortgage underwriter). The Bank of England has revealed that it has no power of veto and can only advise on whether the scheme should continue – it is for the Conservative-led government to decide how long it will last.

Gideon’s ‘Help to Buy’ offers unsupported mortgage guarantees to buyers and lenders. He has not said where he will find the money for it. Critics have warned that this is simply creating another housing-fuelled debt bubble that will burst in a couple of years’ time, leaving even more people in debt than after the financial crisis hit us all.

Michael Meacher has read the £130 billion scheme right – as we can see from his blog: “Where does that sort of money come from when the public accounts are under extreme pressure to make enormous cuts? State-subsidised mortgages for the well-off (houses valued at up to £600,000) seems, even for Osborne, a strange decision when some of the poorest tenants in the country are at the same time being expelled from their homes by the bedroom tax.

“It can only be explained by Osborne panicking at the time of the March budget this year that the economy showed no sign of recovery in time for the 2015 election, made worse by his mistaken increase in VAT and big cuts in capital spending. He chose a big artificial stimulus of the mortgage market to kick-start the moribund economy, repeating the mistake of every previous boom triggered by consumer borrowing and a pumped-up housing market, an inevitable forerunner eventually of yet another round of boom and bust.”

Does Cameron really think the deficit is falling fast enough to revitalise the nation’s economy? In October, borrowing (excluding the cost of interventions like bank bailouts, so we’re already in the realm of made-up figures) fell by two one-hundred-and-thirds, from £8.24 billion in the same month last year to £8.08 billion.

We are told the aim is to keep borrowing for 2013-14 at £120 billion or below. In his ‘Emergency Budget’ of 2010, Osborne predicted that borrowing this year would be down to half that – at £60 billion, and estimates have been rising ever since.

The 2011 budget had the 2013-14 deficit at £70 billion; in 2012 it was expected to be £98 billion; and now £120 billion – double Osborne’s prediction when he became Chancellor.

As for the numbers of people in work, let’s ask Cameron: If more people are working, why has productivity fallen back to the level it reached in 2005? Is it because employers are taking on workers in part-time, zero-hours or self-employed contracts, rather than full-time, in order to take advantage of the opportunity to get out of their holiday pay, sick pay and National Insurance obligations? This seems most likely.

Average wages have been cut by nine per cent since 2010, in real terms, and are still falling. Should Cameron really be boasting about this?

Now German-owned energy firm Npower is cutting 1,460 British jobs. It seems customer service and back-office functions will be outsourced to those well-known friends of the UK government, Capita and Tata.

Kingfisher, the owner of DIY chains B&Q and Screwfix, has suffered a five per cent drop in share values after profits dipped.

And Hibu, the company that owns Yellow Pages, has gone into administration with £2.3 billion of debts. Another old friend of the UK government – Deloitte – will profit from this as administrator – but who knows what will happen to Hibu’s 12,000 employees?

These are just today’s business headlines on the BBC News website – the day after Cameron boasted that the economy was on the rise, the deficit dropping and employment was soaring.

What we’re seeing is not a Prime Minister and Chancellor leading the country back to prosperity.

It’s time we realised that these two chancers have been leading us down the garden path.

Government talks tough on tax-dodging – while helping corporations cut bills

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Public unrest: Thousands of people across the UK have demonstrated against government decisions that have increasingly burdened poor people with higher taxes while the rich, and fabulously wealthy corporations, have received tax breaks. The government’s response has been to order water cannons from Germany. Think about that.

How long does George Osborne expect us to believe his blather about cracking down on corporate tax avoidance when we have evidence all around us that he is helping multinational firms to get out of paying the tax they owe this country.

This is taking place at a time when the UK tax take should be maximised, in order to get borrowing down and help the country pay its bills.

And it is being organised by the Chancellor of the Exchequer – the government member whose principle job is to ensure that those bills can be paid.

All this doubletalk suggests he has a personal agenda that is different from what he’s been telling us, doesn’t it?

Vox Political has already dealt – at length – with the fact that the Coalition government has legislated to make it easier for UK-based multinationals to shift their income into ‘mailboxes’ in tax havens, in order to avoid paying tax in this country.

Why is Osborne doing this, when he knows we need the money?

We know that Osborne has cut Corporation Tax by a quarter – from 28 per cent to 21 per cent – during the course of this Parliament, even though changes in the rate of this particular tax have been proven to have no effect on economic improvement. Look at the USA, where a Corporation Tax rate of 40 per cent has done nothing to hinder the resurgence of that country’s economy.

Why is Osborne doing this, when he knows we need the money?

Meanwhile, we have been hit with a large increase in sales tax (VAT) which hits poor people hardest. As a result, they have to reconsider their purchases and buy fewer items, meaning the Exchequer takes less money, with this tax, than it should.

Why is Osborne doing this, when he knows we need the money?

The European Commission reckons it has declared war on tax evasion and avoidance – but has instructed member nations to single out only non-EU countries as havens, even though member states including Luxembourg, the Netherlands, Ireland and Belgium are known to have engaged in potentially harmful tax behaviour.

Why are these countries doing this, when they know they need the money?

Beginning in 2009 (meaning we started this under a Labour administration, please note), the UK began switching from taxing worldwide income to solely taxing profit that companies claim is earned within the country, a so-called “territorial” system. It eliminated taxes on dividends paid to a UK company, even if coming from a subsidiary in a tax haven.

Why is Osborne continuing with this, when he knows we need the money?

Beginning last month, the UK slashed the tax rate to 10 per cent from the regular 23 per cent rate on profit attributed to patents and intellectual property.

Why is Osborne doing this, when he knows we need the money?

Here’s why, according to Yvette Hodgson, a spokeswoman for the Treasury. She said the government is “committed to creating the most competitive corporate tax system in the G20.

“Global tax rules have stood still for almost a century. Britain is leading the international effort to bring them into the 21st century.”

So 21st century taxation means beggaring not only populations but governments as well, while allowing multinational corporations to make off with all the cash?

No wonder people in Britain are so angry. We have every right to be.

Whoever said Labour has no policies: Prepare to be embarrassed!

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The end of austerity should be Labour’s flagship policy, according to Michael Meacher MP. Don’t get too excited – Labour has to get into office first, and we’ve no idea how bad the Conservative-led Coalition will wreck the systems of government before May 2015.

This is turning into a very bad weekend to be a Conservative.

The Nasty Party has lost control of 10 councils, with hundreds of councillors unseated. Its claims about people on benefits are falling flat when faced with the facts. It has fallen foul of UK and EU law with its fake psychometric test, which turned out to have been stolen from the USA. Its claim that Labour has no policies has proved to be utterly unfounded.

… What was that last one again?

Yes, you must have heard at least one Tory on telly, rabidly barking that Labour can’t criticise the Coalition if it doesn’t have any policies of its own. Those people were not telling the truth – even though they probably thought they were (poor deluded fools).

I am indebted to Michael Meacher MP, for posting information on the following in his own blog. He lists Labour promises, as revealed to date – and it’s quite a long list. Much – or indeed all – of it may have also appeared in an article on the Green Benches site, I believe. So let’s see…

Labour has already promised to:

• Repeal the Health and Social Care Act (otherwise known as the NHS privatisation Act)
• Build 125,000+ homes
• Regulate private rents
• Promote a Living Wage for public sector workers and shame the private sector into following that lead
• Offer a minimum 33-40 per cent cut in tuition fees
• Limit rail fare increases to one per cent
• Reimpose the 50p rate of income tax for the super-rich
• Impose a mansion tax on the rich
• Repeat the bankers’ bonus tax
• Reverse the bedroom tax
• Scrap Workfare and replace it with a ‘compulsory’ Jobs Guarantee (I’m not too keen on this one but it’s been promised)
• Offer a VAT cut or a ‘temporary’ VAT holiday
• Implement the High Pay Commission report in its entirety
• Scrap Ofgem and bring in proper energy price regulation
• Break up the banks and set up a National Investment Bank, and
• Support mining communities and clean coal technology.

In his article, Mr Meacher suggests that Labour needs to go further, with a really strong hook on which to hang all these policies. He suggests the following:

We will end austerity.

Yes, I thought that might stun you. Let’s have it again:

We will end austerity.

Now that you’ve had time to get used to the idea, I hope you’re applauding as much as I was when I read the article. Why not end austerity? The squeeze on public spending and services that David Cameron and his Boy Chancellor imposed in 2010 has not worked at all. There is now no basis for it – I wrote to Mr Osborne, requesting information on the other foundations of the policy after it was revealed that his main justification contained a huge error, and he has not replied, so clearly he has nothing to say. Its loss will be unlamented and can’t come soon enough.

There’s more in the article so I invite you to visit Mr Meacher’s site and read it yourself.

As for Mr Cameron… he’s a survivor but he’s starting to look tired and the number of his own party members who are stabbing him in the back is growing – Lord Tebbit has stuck his own knife in (again) during a BBC interview.

I wouldn’t bet any money that Cameron will still be PM by the end of the year.

GDP figures due – will Gideon have anything to show for his austerity idiocy?

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Triple-dip breakfast: Will we all be dining on the sour cereal of recession again, when GDP figures are published on Thursday morning?

Thursday will be another ‘crunch’ day for our part-time Chancellor of the Exchequer – he’s having quite a lot of those lately, isn’t he?

Only last week, the academic justification for his austerity policy was disproven by an American student (oh, the shame!), and then his former allies at the International Monetary Fund distanced themselves from him (oh, the betrayal!) saying he should calm down a bit.

That’s the best advice this columnist has ever heard the IMF provide; if not for his own health, then for the nation’s.

Thursday, though, is a really big day. On Thursday, GDP figures for the first quarter of 2013 will be published.

It is a sign of how low expectations have fallen, that all the economic commentators are saying the best we can expect is to have kept out of a triple-dip recession – with falls in output due to the weather, among other things, making that unprecedented outcome more likely.

There is a problem with all of these predictions, which should be obvious to those of us living in the real world: Short-termism.

It’s all about how the UK managed in the last quarter, how it will manage in the next; what the situation is today. What about six months from now? What about next year? What about 2015, when we’re all expecting an election and the chance to banish this nightmare? What about 2017-18, when 0sborne still reckons he’ll have eliminated the budget deficit (fat chance)?

The fact is that the only options open to a Chancellor in the current climate are unpalatable to the Boy.

He could boost investment in infrastructure, in a bid to make this country a better place to open – and carry out – business. The trouble is, this tends to be a long-term project and he no longer has the time. His chances would have been better if he had started this in 2010, but his government cancelled as many such projects as they could back then, claiming it was more important to cut public spending in order to balance the books.

That was a vain hope. Without new investment, the country has lost revenue.

But if that is unpalatable, the other alternative is likely to make him choke on his pate de foie gras (or whatever it is these posh boys ingest): Increase the spending power of the poor.

It is known that the ‘trickle-down effect’ is a myth – giving all of a country’s money to the very rich, in the belief that they will spend it, boosting the economy and the income of the poor, is nonsense. What they actually do is bank it – in offshore tax havens, most likely. That is what 0sborne has been doing; it is another reason the economy has bombed.

It is also a rock-solid fact that poor people do spend their money – or as much as they can get their hands on. When you are constantly struggling to make ends meet, it’s very hard to keep cash in the bank – you have to spend it on food, clothes, rent, heat, light, water… the list is endless, because it constantly repeats.

When you don’t have much cash, as Edmund Blackadder once said, you feel like a pelican. Everywhere you turn, there’s a large bill in front of you.

That money does work for society. It reinvigorates the economy as it filters through different hands. And it brings with it the extra joy of fiscal multipliers – every pound that gets put into the economy is worth more after it has been through.

The trouble is, Gideon shut off that money supply. He raised VAT, making it harder for working-class people and those on benefits to buy certain economy-boosting products, and then he and Iain Duncan Smith spent the last few years on their project to depress wages.

(For clarity, it goes like this: The DWP makes the benefit system so difficult to navigate that people in receipt have to do their utmost to get off-benefit as soon as possible. This means they are constantly looking for jobs, which in turn makes it possible for employers to refuse pay rises for their workforce, with the classic line that “there are plenty of other people who’d be happy to have your job, you know!” You didn’t really think the benefit cap was about making work pay, did you?)

Say what you like about Labour, but they’ve got the right idea when it comes to the money supply. Ed Balls wants to cut VAT; he wants to bring back the 10 per cent tax rate for the lowest-paid; he wants to bring in a National Insurance holiday for companies that agree to take on new employees.

These are measures that will help.

What is Gideon going to do?

Woolly mammoth to be new leader of Conservatives?

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The police welcome David Cameron to the Conservative Party Conference in Birmingham. His austerity cuts are expected to cripple forces across the country, with part-privatisation already an unwanted reality for some.

So is everyone having fun atmaking fun of the Conservative Party Conference?

The event has been unfortunately-timed, as it turns out a mammoth has been found, frozen in Russia, after 30,000 years. Inevitably it will be the subject of much scientific study and debate, but really, if they wanted to look at a species of woolly monsters long overdue for extinction, they need only go to Birmingham.

Further evidence of unfortunate timing can be found in the International Monetary Fund’s latest report, which shows that the Conservative-led austerity policy has utterly failed to restore confidence and there is “considerable” risk of further deterioration in the economy. Its forecast for the UK in 2013, which stood at 0.2 per cent growth, has now been downgraded by 0.6 per cent to minus 0.4 per cent. That’s a lot, in economic terms.

UK Prime Minister – and Conservative leader – David Cameron, said the UK economy is “slowly healing”.

It is comments like this, along with the general direction of his – let’s try to call it – ‘leadership’ that probably prompted polling organisation YouGov to headline its latest press release ‘Cameron needs a miracle to win’. The poll of voting intentions shows that the Conservative share has slipped to 31 or 32 per cent – the same as in their “crushing” defeats of 1997 and 2001. Any question comparing Labour leader Ed Miliband with Mr Cameron shows significant advances for the Labour leader.

Other poll results are confirmed by comments on the Conservative conference (which I have lifted from Twitter. I don’t intend to give attributions – is yours among those below?).

Fewer than 30 per cent think [the Conservatives] have done a good job on health, education, transport or reforming welfare benefits: “‘We’ll end something for nothing culture’- Tory rich boys who inherited wealth and claimed disability benefits they didnt need”; “I could save 10bn by cutting MPs’ expenses, grace and favour housing, government contracts, offices that are never used etc etc”; “Labeling those on welfare as lazy layabouts is defamation of character and those responsible should face the full force of the law”.

71 per cent think the gap between the richest and poorest has widened since the Tories came to power; and by two-to-one, people think the north-south gap has also widened (Northerners themselves agree by three-to-one): “Misery to those without whilst ensuring prosperity for those who have. They don’t even try to hide it!”.

Just 13 per cent say the government has met their expectations that Britain would be governed well; far more – 34 per cent – say ‘I expected them to do well, but they have been a disappointment’.  Half of those who voted Conservative in 2010 share this sense of disappointment. Most people think they have made no progress at all to get Britain out of recession, reduce immigration, clean up politics, or fulfil their pledge to make theirs ‘the greenest government ever’: “This government should have come with a public health warning the size of a trillion fag packets.”

Let’s look at some of the speeches. I am grateful to the Tweeter who labelled his comments on the Chancellor’s speech ‘Osborne porkies’, pointing out some of the inconsistencies between Gideon’s words and the facts. So: “Attacks Ed M for not mentioning deficit when Labour leader mentioned the debt. ‘We were straight with voters before election’ – Except about NHS, VAT increase, child benefit. ‘Blair achieved nothing in a decade’ – Except minimum wage, devolution, academies, Northern Ireland agreement etc”.

Osborne’s big idea – the plan to offer employees shares in the company where they work, if they give up their rights to, for example unfair dismissal tribunals, came under bitter attack: “‘We’re all in it together’ – unless you’re an employee”; “Osborne’s shares for rights plan shows he’s never employed people. If first thing you say is ‘I want the right to sack you’, people will go”; ” So you get shares in a company… Lose your rights… get sacked with no comeback and paid pence for your shares”.

(This last comment is the nub of the matter. Osborne says the amount of shares on offer could be worth between £2,000 and £50,000, therefore it is possible that employers will try to get workers to barter away their benefits for what is, in the current economic climate, peanuts. Do these people really think we are monkeys?)

Today (Tuesday) Boris Johnson, the Mayor of London, made a speech in which he tried to appear to be supporting Mr Cameron while in fact setting out his credentials as a possible future leader. His comments about the Conservatives being the tools to clean up the national mess drew scorn: “Boris the mop, Dave the broom, Osborne the dust pan, Gove the Jay cloth and Hague the sponge – the cabinet according to Boris!”

His self-congratulation about London’s bus conductors attracted this: “Doesn’t mention they will cost £38 million a year and won’t be able to collect fares”; and on his comments about Labour spending: “Yes, Boris, Labour was so excessive in its spending that your party pledged to back its […] plans right up until 2008”.

Final comment on the conference so far: “Tories laugh at Boris being an incompetent buffoon… Clearly the required skills to lead a country!”

Back in the 1980s, on the best radio panel show in the world (I’m Sorry I Haven’t A Clue), Tim Brooke-Taylor once defined ‘politician’ as “A liar, cheat, double-crossing two-timing scoundrel and lover of nude women. Oh, it’s also a snub-nosed toad.”

All I can say about that is, bring on the snub-nosed toad. I’ll let the nude women pass. They might be Theresa May and Nadine Dorries. Or Maria Miller (that would be REALLY grisly, wouldn’t it?)

New benefit plan has no heroes – only zeroes

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Shall we play a game? This one’s called join-the-dots. I didn’t really like it when I was younger and I doubt that you will, after you see the picture we’ll be creating.

We’ll start here: The government wants to cut another £10 billion from the welfare budget – that’s the bit of public spending that keeps millions of people off the streets, if only on the breadline. The government could, alternatively, try stimulating the economy to make that money in taxes, but policy seems to be pushing hard the other way, as we’ll see shortly.

So: cuts are coming. How to perform them? Draw a line to where the government announces it wants to break the link between benefits and inflation, and link them to average earnings instead.

George Osborne thinks this is a good idea because inflation hit 5.2 per cent last September, much higher than rises in earnings – remember, the man who won’t do what his initials demand (GO) has kept public sector wages frozen for the last few years and private sector wages are also stagnant. As a result, Gideon has been paying out more than he thinks he should to people who, honestly, deserve a break from his miserly administration.

Now draw a line to the results of the NatCen survey that came out earlier this week, stating that people do not want to see more money being spent on welfare than is being spent already. This is the excuse that Mr Osborne wants to use – he can say there is polling evidence that puts significant numbers in support of an end to so-called benefits uprating. Never mind that only 3,000 people were asked or that none of the main parties ever intended to increase the proportion of government spending that goes on welfare; this is his justification and he’s sticking to it.

I wonder what will happen if wages start to rise faster than inflation? Will the Nasty Party write a new clause into the contract, that benefits should rise along with inflation or wages, depending on which is lower? Officials have already stated that they do not want a huge increase in benefits if wages start to climb sharply, so they are already working on ways to ‘fix’ the linking mechanism. Evil, isn’t it?

Never mind; the current plan uses wages, so now draw a line to this: The government still wants to introduce regional pay settlements for the public sector. The Tories – sorry, the Coalition – believe that national pay settlements inflate public sector wages in certain parts of the country far beyond what their private sector counterparts can manage. They also believe that forcing regional settlements on us will save them a fortune in salaries.

Think what this will achieve: The ghettoisation of much of the UK. With regional pay deals, people will have less money available for things other than necessities, meaning fewer trips to the shops (which have already suffered thanks to the idiotic VAT increase to 20 per cent, which cut a large chunk of growth out of the economy). What happens then? The shops shut and their suppliers go out of business too. More people end up on benefits and looking for work.

You see, this right-wing government does not accept the simple fact that welfare benefits help keep the economy stable. Yes, government spending increases as payments are made, but businesses keep their customers, the economy stays afloat and the country as a whole avoids a terminal spiral of decline.

Cutting welfare, thereby reducing the incomes of society’s poorest, creates fiscal hindrance. As billions of pounds (£10 billion in this case) are taken from the active economy, businesses lose customers and lay off staff.

In a recession, increased welfare spending benefits national income so that each pound is worth £1.60 when it has worked its way through shop tills and paycheques. When welfare is cut, this works in reverse, so cutting £10 billion from benefits will increase the UK’s recession by more than one per cent.

This means a longer recession, a larger deficit and more debt. (The above information courtesy of the False Economy website, which has produced a handy factsheet for you to download, keep, and show to anyone spouting Tory propoganda)

Now draw a line to: The government wants to cut more money from the welfare budget.

Look at what you’ve drawn. A big, fat zero.

This is what the government’s plan will achieve for the people, and economy, of Britain.

A tale of two plans

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This person is building a conservatory. Are the Tories seriously suggesting that he is helping solve the financial crisis?

Both the Labour Party and the Conservatives have unveiled new plans to revive the UK economy, in the wake of last week’s deeply unimpressive Cabinet reshuffle. Let’s take a look at them.

Labour is offering us the impressively-titled ‘Pre-distribution’ – a system which asks employers to pay their staff more money in wages, in order to eliminate the need for the government to take higher taxes and then redistribute the wealth, thereby lessening the huge differences between the benefits enjoyed by the very wealthy and the privations suffered by the very poor.

Labour leader Ed Miliband, announcing the policy, called for firms to be responsible in their attitude to wages, and to focus on the long-term.

He said it would require a major shift in philosophy for the Labour Party, as many redistribution options – for example, increasing tax credits – will not be possible when Labour next returns to power, although redistribution of tax wealth will always be necessary.

He said pre-distribution – a term he has taken from US economist Jacob Hacker – is about lifting the UK away from being a low-wage economy, because this has made us unable to pay our way in the world. We must have higher wages – and therefore our workforce needs higher skills.

In fact, this is just an impressive title for something Labour has already spent a considerable period supporting – the ‘Living Wage’. The idea is that, while the minimum wage went some way towards lifting people out of poverty, it did not finish the job.

Consider workers who do 29 hours a week on minimum wage. They do not qualify for tax credits and the amount they earn may not cover their outgoings. How do they survive?

Under the current government, the only choice is to borrow, if they don’t have savings. So they go to richer family members and ask for a handout (a humiliating experience, made worse if a person is working full-time) or, much worse, they go to loan sharks.

Recent reports have indicated that people working full-time – 37 or more hours a week – are still not earning enough to cover their overheads and are having to do the same.

The current system therefore makes it possible for people to get into phenomenal amounts of debt, and we know that debt is what caused the global credit crisis of 2008. As more and more people go overdrawn, banks will fall into trouble. The amounts might not be as much – individually – but cumulatively they become a problem.

Also, consider the working atmosphere created by the current attitude to wages. Employers have enjoyed wage increases that have multiplied their earnings by – what is it – eight and a half times over the last 30 years. Employees have seen theirs rise by something like 27 per cent – less than the rate of inflation. Therefore their earnings have dropped in real terms, and that’s why we see the problems I have outlined above.

As a result of this, workers become demoralised. What’s the point of going to work for a business where the bosses make out like bandits and the people who actually create the wealth are treated like dirt? As a result, productivity slumps. Of course it does. Where’s the incentive to produce high-quality work at high speed? This leads to a drop in sales as orders fall off due to dissatisfaction. If the trend continues, the company fails. I have seen this happen to a major employer in the town where I live. It has been forced to remodel itself, cutting back and back, but still fell into receivership and may now be under its second new owner within 10 years. The problem for managers is they never decide to cut back on the source of the problem – poor managers who take too much of the profit; they always cut down the workforce, reducing their chance of profitability still further.

This is also what happened with my last employer – a newspaper company that is struggling because it is top-heavy. I left because bosses ignore my advice and went ahead with a plan that I knew would harm sales of the edition where I worked. Sure enough, within a few months it had merged with another edition. The solution from management? Cut down on anything other than management. Ridiculous.

And, by the way, British industrialists: A saving is not a profit. If you cut back one year in order to keep your head above water, what do you do when it doesn’t carry over into the next?

Labour’s alternative would pay workers enough money to have something left over, after they have covered their costs. They will have spending power. This means they will be able to buy more, invest more – they will have breathing space, and a sense of personal worth. From that will come a sense of pride in their work and a feeling that they are valued by their bosses. Productivity improves, as does the quality of the product. Orders increase. The company flourishes and is able to employ more workers. The cycle of growth then repeats itself.

Isn’t that better?

The plan also shows up the Conservatives’ lie that cutting benefits will ‘make work pay’. Forcing people off of a benefit system that doesn’t pay their costs and into a job that doesn’t pay their costs is no solution at all and any Tory who spouts this nonsense in the media is to be mocked and targeted for unseating at the next election (in my opinion).

In contrast, the Conservatives have announced that home owners will be allowed to build large conservatories and extensions without needing planning permission. The Tories hope a home improvements boom will stimulate the economy.

Don’t laugh; they’re serious.

They haven’t realised that this will only benefit those who, firstly, own their houses; secondly, have enough spare cash to pay for what has been described as a “large” extension to their dwelling and; thirdly, want one. Apparently there are around 200,000 applications a year – that’s a drop in the ocean when you live in a country of more than 60 million.

The relaxation of planning rules will only last until 2015, because the Tories want to persuade homeowners to get on and build these extensions as soon as possible – again, failing to realise that we are in the middle of a time of fiscal austerity, which they are enforcing, and we simply don’t have the cash.

Therefore, the solution proposed by the government is for private individuals to borrow more, in order to fund the scheme and pay the builders. Isn’t that what the Tories have been mocking Labour for proposing on a national level – even though Labour isn’t currently proposing that?

Also, what about the 20 per cent VAT that goes on home improvements?

And what about the increased aggro between neighbours, as our quiet leafy suburbs get turned back into construction sites?

So the choice seems to be: Pay workers more, see increased long-term productivity and less concern over debt; or get homeowners to put themselves in debt by borrowing to pay for home improvements they probably don’t need and create a short-term boost in the construction industry.

Which one gets your vote?

Pleading to stay in the government is like begging to be left on the Titanic

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austerity, Baroness Sayeeda Warsi, cabinet, Chancellor, Coalition, Conservative, Council Tax Benefit, David Cameron, David Laws, Eric Pickles, Exchequer, fiscal, general election, George Osborne, Golden Boot Award, government, Liberal, Liberal Democrat, local government, Mike Sivier, mikesivier, minister, Parliament, pasties, pasty, politics, Tories, Tory, Treasury, VAT, Vox Political

The Lady with the curled lip, Baroness Warsi, wants to stay in the cabinet and shouldn’t have to worry – she’s not in your firing line.

It is hard to believe the lengths to which some people will go, to stay in the public eye.

This weekend, Baroness Sayeeda Warsi appealed to David Cameron to keep her on as chair of the Conservative Party in his forthcoming cabinet reshuffle.

Incredibly, she claimed she fits the demographics of all the people the Tories need to get voting for them at the next general election, being a woman, who is not white, from an urban area, in the North, and who is – most unbelievably of all – working class!

Good luck to her. I’ve always found her inability to listen to – let alone respond to – any views other than her own extremely off-putting. Keeping her in place would be the best way for Cameron to lose support from the groups she claims to represent. And I’m all for that.

One person who will, it seems, certainly return to the cabinet is former Treasury minister David Laws. His creative approach to accountancy necessitated his retirement to the backbenches after only 17 days in place, back in 2010. But it seems the kind of crime that would put any other citizen in jail for six months – defrauding the state out of £40,000 – is not serious enough to warrant the continued punishment of an ex-minister.

One thing I’ll say in Baroness Warsi’s favour: At least she’s more honest. She admitted failing to declare rental income (and was eventually let off the hook for it).

The main cabinet posts are also likely to remain fixed, despite some of their holders being unpopular, according to a Vox Political poll. The question was: David Cameron is expected to reshuffle the cabinet in the very near future. Who should he sack?

Before I reveal the results, I should warn you that the number of respondents makes this nothing like representative of general opinion. But it’s fun, so let’s open the envelopes and see the results.

In third place, with 7.7 per cent of the votes, is cabinet pie-muncher and local government minister Eric Pickles! It seems Eric’s plan to abolish Council Tax Benefit and force everyone to pay increased local taxes just to stay in their home has got your goat.

Second, by a massive 30.8 per cent share of the vote, you asked David Cameron to remove himself from the cabinet! Perhaps if he had concentrated more on solving the nation’s problems than playing video games or jaunting off on jolly holidays around the globe, ‘Call Me Dave’ might have avoided the wrath of the public.

But your winner, with an overwhelming 61.5 per cent shareholding, was Chancellor of the Exchequer George Osborne! Gideon’s persistent inability to balance the books, letting his rich corporate buddies off paying their taxes while squeezing the rest of us until our pips have well and truly squeaked, have had you squawking in protest (and tweeting, too). His fiscal austerity plan that forced the UK economy into a nosedive was a serious enough misjudgement, but what really browned you off was his idea to charge VAT on pasties, depending on how hot they were.

George deserves a prize and, considering the nature of this vote, I propose we call it the Golden Boot Award. I’ll be keeping it at my house until he can be bothered to turn up for it, at which point I will gladly bestow it upon his posterior.

Why the Tory-led debt crisis has worsened

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

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

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

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

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

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

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

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

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

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

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

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

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

VAT has been increased, helping to stall the economy.

Inflation has risen.

Income tax and National Insurance have increased in real terms.

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

Public sector pay has been frozen.

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

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

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

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

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

Silly, silly people.

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

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

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

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

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