Monday, September 29, 2014 

I chose not to choose Osborne.

If his actions hadn't been so unfathomably stupid, you could almost feel sorry for Brooks Newmark.  Chris Bryant is still constantly reminded of his posing in a pair of y-fronts for his Gaydar profile (and I, err, seem to have also just brought it up again), but at least he kept his pants on.  Newmark, being the archetypal Tory rather than a wannabe vicar turned MP, was just a touch more classy in his exposing.  Not by deciding upon a sepia filter or anything though, which might have been trying just a little too hard.  Instead he flopped the old johnson out of his dark blue and red paisley pyjamas, apparently convinced this would ignite fires of passion in his correspondent on Twitter.  Who just happened to be a freelance hack trying his luck with the old honeypot ploy, rather than Sophie Wittams, blonde Tory PR bombshell.

Cue many complaints about entrapment and all the rest of it, moans which were few and far between when Mazher Mahmood finally met his match in Tulisa.  Admittedly, they have a point: rather than a targeted operation against someone known to be liberal in their sending of private images, this seems to have been a fishing expedition, with "Wittams" contacting a number of Tory MPs.  All the same, I can't be the only one thinking it wasn't so long back Lord Rennard was being denounced for his (alleged) threatening sexual behaviour and touching of prospective Lib Dem MPs.  Even if this was a consensual exchange of pictures, should an MP be doing such things in any case, or indeed, shouldn't it be seen as indicative of a lack of judgement?

Newmark being ensnared by the Sunday Mirror would have been bad enough for the Tories on the eve of their conference, only for Mark Reckless to join his compadre Douglas Carswell in defecting to UKIP.  Much as we could just defer to nominative determinism on this one, as many others have, it says much about the state the Conservatives find themselves in that Nigel Farage's merry band has proved more attractive to not just one but two Tory MPs with healthy majorities.  Reckless could no longer stand being in a party apparently doomed to defeat at the next election, so he's joined one that's err, even more doomed to defeat at the next election.  Still, at least he can now be happier in his own skin, no longer forced to defend his party to those in Rochester who believe themselves to be "over taxed" and "over regulated", those key complaints on the doors.  As for the cost to the taxpayer of his decision to resign and seek re-election when he could have waited a few months and done exactly the same thing at the time of the general election, more important is the Farage bandwagon.  Quite how this is championing his constituents' interests rather than his new party's isn't clear, but no doubt he can justify it to himself somehow.

Yesterday in Birmingham then felt more like a conference of a far-left sect than it did that of the main governing party, with Reckless being denounced from the platform for his lies and betrayal.  Not that you could ever imagine Grant Shapps, aka Michael Green, aka Sebastian Fox being a leftie agitator, mainly as he comes across as far too dim.  Nothing is too obvious for Shapps, no sentiment too trite, no soundbite too overcooked.  If all else fails he can perhaps look for work at GCHQ, as the Tories now do a sideline in recording phone calls without the other person's knowledge and then playing them to all and sundry.  More the actions of an authoritarian one party state than the Tories of old, but needs apparently must when it comes to exposing the double dealings of those who are Reckless.

It was still preferable to what's become the Monday ritual, the delivering of the George Osborne gospel.  Worth keeping in mind is by some difference Osborne is now the most popular and also the most successful of all the coalition's ministers: that he's been a miserable failure when judged by the goals set by err, George Osborne doesn't matter when the competition is even worse.  By any real measure Michael Gove would rank as most successful such has been his impact on education, only for his charms to be deemed just too offensive to teachers and in turn voters.  Osborne by contrast, who must inspire thoughts of doing a Mantel in many, remains in place and dividing and ruling the same as ever.

Having got off relatively lightly of late, one would hope due to the Tories realising just how unpopular the bedroom tax has become, those on benefits whether in or out of work are due to cop it once again.  Should the Tories get a majority the under 21s will face the equivalent of "community payback" once they've claimed JSA for 6 months, while they also won't be able to get housing benefit.  The benefit cap as a whole will be lowered to £23,000, while only those in the support group of ESA will see their payments rise in line with inflation for a further two years.  Meanwhile, those under 40 who can afford to buy their own home could potentially get a 20% discount whether they need one or not, and another "death tax" will be abolished, with what's left of a pension pot no longer taxed at 55%.  It really couldn't be any more stark: if you're "one of us", aspiring to own your home, wanting to pass on money to your kids, Osborne and pals will be more than glad to help.  If you're struggling to make ends meet, claiming anything from the government whatsoever (with the exception of those able to jump through the hoops of the work capability assessment and everyone lucky enough to be 65+), you're on your own.  We hear that nice Mr Miliband, the same one who couldn't even remember the deficit, instantly disqualifying him from entering the room of the Very Serious People, will be happy to have you.

You could understand Osborne's gambit more if the £3bn estimated to be saved by these changes went a lot of the way to making the savings Osborne claims they will.  The problem is this is just £3bn of the £12bn total from welfare, with another £13bn to come from savings from the non-protected government departments.  Neither figure seems likely to be achieved without extreme pain, nor does it seem realistic taxes won't have to rise in some way, despite all of Osborne's fine words, if that is he means what he says about running a surplus.  It could be just as he's failed miserably to get rid of the deficit in a single term, he could relent once the election has been won.  Equally, he could raise taxes straight away to get it out of the way, even if it was to break his promises.  Or it could be he means what he says, and to hell with the consequences.  Whichever it is, there's no evidence making his stand now will win the support he believes it will from those who favour the Tories on the economy.  Keen as he apparently is on paraphrasing Trainspotting, no doubt to Irvine Welsh's ire, he and the Tories shouldn't be surprised if we decide to choose something else.

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Wednesday, May 14, 2014 

The scandal hiding in plain sight.

Anyone surprised by the Labour Force Survey figures confirming there hasn't been an influx of Romanian and Bulgarian workers since the restrictions on free movement were lifted at the beginning of the year?  No?  Thought not.  To listen to Danny Alexander though, you would have imagined he and the rest of the main political parties had always rejected the idea there would be a similar movement of labour as when the A8 countries joined back in 2005.  "Gives the lie to UKIP's scaremongering," apparently.  Forgive me for having a memory slightly longer than a gnat, but that most certainly wasn't the message coming across last year, when politician after politician lined up to say they were taking the issue very seriously indeed, and people were right to be concerned. Didn't Tory backbenchers force a vote in an attempt to reintroduce the restrictions? Were they told to stop being so damn silly? Ask a stupid question.

Not that we should think this one survey puts the matter to rest. The numbers might yet pick up, and it could be there have been a few thousand unemployed Bulgarians/Romanians who've made the journey without being counted by this particular survey. That there's been a drop in the first quarter seems a good indication this probably isn't the case, and bears out what some of us argued: why would they come here when the whole of Europe would be open to them? The fall is probably attributable to some moving closer to back home, the countries that had more stringent visa programmes now being as open as everywhere else.

Besides, the issue never was actual immigration, as I doubt Farage or the tabloids believed their own rhetoric, unless they fell into doing so after repeating it so often. It's that those 26 million Europeans can and could come here and we can't do anything about it. Anyone making just the economic argument is part of the problem, not understanding it's the speed of change, the perception of unfairness, the stories about migrants working for a pittance, putting locals at a disadvantage.  What does it matter if it's not affecting you personally when you simply know it's happening?

There is always something easier to blame.  It's all the stranger when you consider the latest employment figures suggest the coalition might be encouraging something on the scale of the parking of the long-term unemployed on incapacity benefit in the 80s.  Scratch beneath the headlines of a "jobs boom" and the most people in work ever, and the massive rise in the number becoming self-employed stands out.  In the year to March, 375,000 designated themselves as such, more than the number entering work in the private and public sectors.  This has been hailed by some within the coalition as a example of entrepreneurial zeal, only research by the TUC suggests the number starting their own business has in fact fallen.

Some of this rise can be explained perfectly normally, with agency workers for instance being pushed into self-employment.  Others have set themselves up on eBay, selling the odd thing to keep the wolf from the door and away from the ever harsher Jobseeker's Allowance regime.  Another explanation becomes clearer once you take a look at the also released today numbers of those sanctioned, i.e., had their benefits stopped in the last three months of 2013.  Incredibly, this had risen to 227,629, or almost a quarter, yes, a quarter of those who were claiming JSA in November.  Back in February of last year there were reports Work programme providers were pushing people into self-employment, getting the clients off their book, a payment for their company and delighting the DWP in the process.  The "customers" were told to claim working tax credit, especially if they had children as the additional child tax credit would almost certainly take their overall payment above the amount they would get normally on JSA.

With Jobcentre advisers under intense pressure to issue sanctions for non-existent infractions, life on any sort of income, even if below the £72.40 a week pittance JSA provides suddenly becomes attractive.  This also ties in with the crash in earnings of the self-employed since the recession, not all of which can possibly be put down to an increase in people fiddling their incomes.  With the ironically named "Help to Work" scheme rolled out at the end of last month, the aim of the programme being fairly transparently to stop those who have been out of work for 2 years claiming at all, or to sanction them when they fail to show up at the Jobcentre every day, it wouldn't be a surprise if the more sympathetic at the dole office were informing their customers of this almost government backed alternative.  Keep in mind also that those on workfare schemes are counted as in work, rather than unemployed, and the fall in unemployment no longer looks quite so impressive.

The only problem for the coalition (as opposed to those who are being left reliant on food banks, which the DWP insists is not due to the mass sanctioning of JSA claimants) is this dodge can't last, thanks to Iain Duncan Smith's own Universal Credit wheeze.  As Johnnyvoid explains, once fully rolled out only those earning the equivalent of someone working full time for the minimum wage will qualify for the UC replacement for tax credits.  Should UC ever be fully introduced, or indeed if the Tories are still in power, this has the potential to suddenly and apparently inexplicably increase the unemployment rate.  Hopefully by then Labour or even UKIP might have realised a real scandal is hiding in plain sight.

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Thursday, May 01, 2014 

How privatisation works.

1. Deciding Royal Mail cannot stay in public ownership as it needs access to private capital, the government seeks the advice of investment banks and other masters of the universe on selling off the Queen's head.  Most of these institutions said shares in Royal Mail should not be sold for less than 300p.  The one dissenting voice was Lazard & Co, the corporate advisory arm of Lazard Asset Management.  They advised shares should instead be sold at a range of between 212 and 262p, and repeated this sentiment even when it was apparent that the business could have been bought outright by small investors, with the public offering massively oversubscribed.  Despite the government setting the cost at 330p a share, Lazard & Co are paid £1.5 million for their help.

2. The government decides to provide "priority" access to the shares to 16 investors on the proviso they are to hold on to them in the longer term.  Among those lucky enough to be chosen for this privilege were Lansdowne, a decision clearly not based on how the co-founder of the firm has donated £700,000 to the Conservatives, or how Peter Davies, the co-head of developmental strategy, was a certain George Osborne's best man.  Also included were Lazard Asset Management, who bought 6m shares at 330p.

3. The priority investors almost completely ignore the gentlemen's agreement and join in the bonanza when the shares go on sale.  By January of this year only 12% of the shares were still held by them.  Among those making a killing, albeit for their clients and not themselves, making it perfectly all right, was Lazard Asset Management, selling their shares less than 48 hours after they went on sale, generating a profit of £8.4m.

4. The chief executive of Lazard & Co denies any wrongdoing or conflict or interest in front of the Public Accounts Committee, despite admitting he knew that Lazard Asset Management had been allocated the shares as there was a "Chinese wall" in place between the two different arms.  The government also refuses to accept it could have handled the sale better, with David Cameron continuing to insist the sale was a great success, regardless of how pricing the shares higher could have brought in anything up to a further £750m.

5. Shares in Royal Mail closed today at 538p.

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Wednesday, April 02, 2014 

£750m? Who needs that?

No taxation without representation.  It's one of the most basic tenets of parliamentary democracy, although the cynical, myself included, will point out that when you have what is still in most places a two-party system, plenty of people do go unrepresented.  Still, it's a principle that is as powerful now as it was 250 years ago.  By the same token, when the government of the day is seeking to massively cut spending and is doing so through squeezing the poorest until the pips squeak, the very least you can expect is it will seek the highest possible return on any publicly owned business it sells off.  According to the National Audit Office, at the very top estimate, the privatisation of Royal Mail could have brought in an extra £750m.

The reasons for why the government decided to sell shares at 330p are wearingly familiar.  Seeking the advice of a range of investment banks, most prominently Lazard but also Goldman "vampire squid" Sachs, Barclays and Merrill Lynch as well as other hangers-on, none of their analysts suggested the shares were worth less than 300p.  Despite this, Lazard's advice was that shares should be offered at between 212 to 262p, and when the government wavered at the last moment over whether it should up the price to 350p, having apparently realised how they were likely to be oversubscribed, Lazard advised against.  The government's error, if we're being charitable enough to describe it as such, was compounded further by giving priority access to 16 "long-term" investors, on the proviso that they be just that. Predictably enough most of these pension funds, not quite believing their luck, quickly disposed of their shares and cashed the easiest profit they're ever likely to make. As Chuka Umunna had it, the same spivs and speculators Vince Cable once denounced have made him and his department look like utter fools.

To give the government the benefit of the doubt, we can't know if the shares would have sold had they been priced at the 455p they ended up at after the first day's trading and so provided the extra £750 million the NAO points towards. Even if we halve it though, £375m is hardly an inconsiderable amount. It's also not as if Cable is a dilettante with little in the way of business experience; he was Shell's chief economic adviser for two years, for goodness sake.

Or maybe that's the point. When you seek the advice of asset strippers and tax avoiders extraordinaire, why on earth would they suddenly decide to go against their very nature?  Besides, the entire sale was predicated on the false claim that Royal Mail could only survive if it was able to have access to private capital, despite the government being able to borrow far cheaper than any company.  As the Economist pointed out at the time, listing Royal Mail publicly was asking for exactly the sort of short-termism we've seen.  All Cable was worried about was the sale failing, despite it becoming glaringly obvious it was never going to when the public on their own requested enough shares to buy it outright without the stock market getting a look in.  Cable also insists that the share price is inflated at its current 563p; it might well be, but that's not an excuse for selling on the cheap when market exuberance could have been taken advantage of.

Not that there's anything to suggest Labour would have done a better job.  For those like me just a little tired of those who in hindsight bang on about Gordon Brown selling off our gold reserves, there's the more relevant privatisation of Qinetiq, also criticised by the NAO and defended in almost exactly the same terms by the ministers of the day as flogging Royal Mail has been.  Both we're meant to believe have been great successes, bringing in millions and billions for the taxpayer respectively.  We could have gotten more, but we should be glad it all went smoothly rather than complain of what might have been.  Little things like how £360m is the amount of savings projected from the bedroom tax for instance, a policy causing complete and utter misery, something that could have been covered by the sale won't worry the dunces of Downing Street as it was never about preventing cuts elsewhere.  A publicly owned potential liability has been got rid of, the City was most pleased, and a handy £2bn was brought in.  That's all that mattered.  As for whether the service declines, as already seems to be happening, or whether it could have been done better, that's for a future government to worry about.  Few are going to base their vote on selling the Queen's head.  And thus the orthodoxy of the past 30 years remains unchallenged.

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Thursday, March 20, 2014 

The return of the stupid party.


There is only one thing to draw from the Tories' BINGO! ad, as tweeted by Michael Green Grant Shapps, and it's not that the party itself has a pretty dim view of those it's attempting to appeal to, as we already knew that. It's rather that the party's advisers and advertising partners seem to be similarly crass and thoughtless. Is this really the same party that, regardless of what you thought of it, could at least be relied on in the past to commission effective, even iconic campaigns? Compare it to the viral video released by Labour a few weeks back, which used the template of Facebook's otherwise deeply creepy auto-generated history videos to look back on the coalition's four years in an both amusing and critical manner.  Forget patronising, Shapps' tweet was downright stupid, the only surprise being it hasn't been deleted.

Thankfully, we don't just have to rely on the Tories' own chairman to show up the coalition, as the Institute for Fiscal Studies has once again cast their eye over the budget. As last year, they condemn George Osborne in wonderfully understated language, as he continues to find money for tax cuts and spending without it being made clear where the money's going to come from.  "A Chancellor focussed on sound management of the public finances over the long tern would not make a habit of repeating these sort of manoeuvres," Paul Johnson said (PDF), but then it's been clear for some time that Osborne is no more focussed on the future beyond the next election than Gordon Brown ever was. The IFS notes there was again not even the slightest reflection on whether the scale of cuts required from non-protected departments are achievable, as they and many others doubt. Such shocks, whether they be tax rises, further cuts or both are to be left until after 2015.

Nor were the more widely praised changes to pensions spared. Despite the best efforts of the coalition and their supporters in the press to say so, it is not patronising to ask whether some will underestimate the amount they'll need to live on come retirement, nor whether the result will be a rise in the cost of annuities for those who do want them.  As Paul Johnson also pointed out, the Treasury expects the amount brought in from allowing people to cash out their pension pots if they so wish to increase in the short term, then reduce over time.  The real worry is not that those approaching retirement age will run out and buy Lamborghinis and then rely on the topped up state pension to live on, but as Tode says, it will spark a further round of buying to let, further limiting the opportunity of those on low incomes to purchase their own home.  Having already made it almost a right for parents to pass their homes on to their children, now it seems they'll be able to bequest their property portfolio as well.

Not that everything is entirely rosy for the comfortably off.  The additional 2 million who have found themselves dragged into the 40p tax band since 2010 have but one person to blame: the chancellor who has slashed corporation tax and abolished the 50p rate for the mega rich, meaning the shortfall has had to be made up somewhere.  Even so, the IFS makes clear whom has suffered the most under the coalition, and it sure isn't middle earners: with the exception of the top decile, who can more than shoulder their share, the poorest have been hit hardest.  It's worth remembering that this was Alistair Darling's plan for closing the deficit, almost the model of progression.  The coalition by contrast has assaulted the poor and got away with it, helped along by those who've focused on Benefits Street rather than the Square Mile.  Still, "they" can be bought off with beer and bingo, right?

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Wednesday, March 19, 2014 

Very much a country for old men.

Well, now we know.  The Conservative plan to get re-elected is devastatingly simple: bribe older people, bribe them now, and bribe them often.

To give George Osborne some credit, today's budget was far smarter than just throwing money in the general direction of the 55+ vote.  It was also the work of a politician who still wears the scars on his back from the 2012 omnishambles, when he put into action almost every old suggestion made by the civil service, many previously rejected by Labour as being either a nightmare to enforce or liable to result in an almighty backlash.  Add on the scrapping of the 50p rate, something most people aren't attached to in the long run but was symbolic of the well off needing to pay their fair share, and the Tories still haven't fully recovered.

Whether it will have the desired effect is far more difficult to predict.  Where Osborne gives with one hand, he takes with the other.  He makes much of his new "pensioner bonds", where those over 65 can wedge a cool 10k of their savings and on a three-year deal expect a return of 4%, while those who want to take advantage of his doing away with the need to take out an annuity and instead take a cash lump sum will be heavily taxed for the privilege, a measure predicted to raise a very handy £1.2bn by 2018/19.  This is especially clever for the reason that it looks as though everyone with a pension or significant savings is a winner: as Rick pointed out last week, it's arguable that in some areas it's been spending by pensioners keeping whole towns afloat.  Making this cash even easier to access makes sense, at least in the short term, especially when the much trumpeted recovery has been been reliant (so far) on consumer spending.  That simply can't continue for too long, unless you make it attractive for those who previously haven't splashed out to do so.  Little wonder the more cautious are expressing concern at how this could mean the state having to step in should things go wrong, but this obviously doesn't worry Osborne when he's relying on an immediate gain.

Then there were the utterly shameless measures.  There's very little reason why the tax on bingo should be reduced by 10% while that on fixed odds betting machines should be increased to 25%, unless we're falling for the out of date stereotype that only little old ladies play bingo while just those who can't afford to shove their pounds into slot machines.  There's an arguable case that bingo halls offer a wider community benefit, but this ignores how most will now offer both side by side. By the same measure, it also bewilders why the alcohol duty escalator is being scrapped while the one on tobacco remains, especially when counterfeit tabs and tobacco are far more abundant than knocked off booze. Taking another penny off beer is the kind of gesture that costs money while not being passed on to the consumer, making it worse than useless. Makes for a good headline, though.  Just as dubious is yet another scrapped rise in fuel duty, making it all but unthinkable the next government could restore the polluter pays principle.

For pretty much everyone else there was very little to cheer in George Osborne's screed. We heard once again about how this was a budget for the makers, the march of the mallards makers previously announced having not yet materialised, with the Office for Budget Responsibility later setting out how the sector was likely to continue to decline. A further, belated £2bn was found for investment, the coalition having first cut it, without it being explained where the money was coming from. Welfare spending excluding pensions, JSA and linked housing benefit is to be capped at £119bn, rising with inflation, which while not as draconian as feared is only likely to be the first assault on tax credits and housing benefit for those in work, the Tory proposal to exclude the under-25s from claiming it a spectre in the background.

Unless Osborne is planning something truly spectacular for next year, by which point many will have already made up their minds, the reasons for why the young and the low to moderately paid should even consider voting for either coalition party continues to diminish. The reality is unless you're married, have children, you both work and can afford to save you might as well not exist in Osborne's "resilient" economy, as any gain from the further rise in the personal allowance is swiftly snatched back through the withdrawal of tax credits, while middle earners gain more. The Lib Dems seem to have realised their cherished policy isn't all it's cracked up to be, just too late to do anything about it.  There was nothing to help ease the housing crisis, just re-announced old pledges to build. Any hope the much heralded "surprise" would be cutting VAT was soon dashed.

Which leaves just the recovery itself. Delayed thanks to Osborne's austerity fetish, we are still 5 years from the elimination of the deficit he promised by the end of this parliament. As welcome as the continued drop in unemployment is, it masks how those on the various workfare schemes are counted as in work, while those sanctioned are removed from the JSA figures. What it can't hide is the massive rise in self-employment, which far from suggesting entrepreneurial zeal suggests desperation, as well as exploitation on the part of companies, locking new workers out from the usual benefits. 60% of the cuts are still to come, ones which look all but impossible in the timescale without the collapse of services, and while there are reasons to doubt Labour's figures, there's probably much truth in their claim that most people will be worse off in real terms come the election.

Who then can blame the Tories' gambit? It ought to be their only hope. The fear has to be of the most likely alternative: another hung parliament, another coalition. 5 more years of the Lib Dems pretending not to love the cuts. Should it happen, can someone please put me out of my misery?

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Monday, January 27, 2014 

Walking into Osborne's man trap.

It isn't always the case, but generally if you get a whole section of industry spitting tacks and issuing threats when you announce a new policy, it's generally a sign that you're doing something right.  It happened when Ed Miliband announced his intention to cap energy bills, when the big six squealed that preventing them from raising the cost of energy for 20 months would result in blackouts and a collapse in investment, and regardless of the merits of specifically capping bills, it focused attention on a monopoly that needs breaking up.

The fact that the usual suspects have been decrying Ed Balls' announcement he will bring back the 50p top rate of income tax should Labour win the next election, while being exactly what you would expect, also suggests that there's something in it.  It can't be that it'll raise almost no money while driving away business or cause those fabled wealth creators to flee due to having to pay an extra 5p in the pound.  Of course, it might raise hardly anything due to the fact that so many will use various dodges to avoid paying it, but that isn't the same thing.  The Institute for Fiscal Studies, while agreeing with the government that the £10bn Balls quoted isn't associated with the 50p rate, accepts that the evidence for how much it could raise or cost is uncertain.  The best insight is from HMRC itself, and associated with the 50p rate the coalition inherited and quickly binned.  Plenty of those who knew they were about to be affected gave themselves a windfall the year before it was introduced, while Osborne's announced abolition of the rate enabled them to repeat the procedure, only delaying it by a year instead.  The only way to know how much it raises is to give it a few years without messing around with the rate.  As Chris also points out, much of the reaction is just nonsense: top rates of 80p or more up until the 80s didn't affect the overall growth rate.

As much of a break with the past 20 years it will be for Labour to have an election manifesto that promises to put up income tax, it's insignificant compared to Balls' other announcement, that the party would ape the Conservatives and also aim to run a budget surplus come the end of the next parliament.  There was one important caveat, that unlike George Osborne Balls would seek to borrow to invest, and so only day-to-day spending would be capped rather than spending overall.  The Graun suggests it's the other way round, as budget surpluses have only been ran briefly in the past half century and are as it puts it, unnecessary.  Hopi Sen by contrast agrees with me.

The Graun is surely right when it calls Osborne's promise a hollow one.  To achieve the reduction in spending needed for his surplus the cuts would have to go far beyond anything the coalition has attempted so far, and even if the Tories manage to get a majority at the next election, you just can't see the politics being acceptable, even after the shit-kicking the poor and sick have received over the past few years.  When Osborne delays his fiscal consolidation even further, as he almost certainly will, the only people calling him on it will be Labour.  Just as no one has taken any notice of how Osborne has comprehensively failed to achieve even the reduction of the deficit foreseen by Alistair Darling, the same plan denounced by Osborne as being no plan at all and which would lead to us following Greece towards bankruptcy, so will everyone ignore the coming failure.

Should Labour win the next election though, the Tories and the right-wing press will constantly remind Balls of his rash promise.  We all knew there were going to be cuts, but to pledge to follow Osborne's lead, even while leaving himself more wriggle room was to walk straight into Osborne's trap.  Even if Balls were to call an emergency budget immediately after the election and row back completely on his pledge, getting the "bad" news out of the way straight off and setting out how he would really be aiming to reduce the deficit, such as through a more balanced mixture of cuts and tax rises, it's dubious as to how such a strategy would would play out.  The dishonest approach at the moment is to give the indication that you can make these drastic reductions in spending without it hurting when it simply isn't possible.  Better to set out how you would get the deficit down in time, in a realistic fashion.  It's surely a better option than getting involved in a game of who can make the most ridiculous gesture with Osborne when someone is going to lose horribly.  Despite everything, it still remains unlikely to be the chancellor.

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Monday, January 06, 2014 

A bad omen.

As omens go, the extremely sad passing of Simon Hoggart just 5 days into the new year is hardly the best for the 12 months to come.  I did wonder why his parliamentary sketches in the Graun seemed to be appearing ever more irregularly, replaced by the able and amusing but nowhere near as witty Michael White, and now we know.  The only indication he gave that he wasn't well was in November, and even then he didn't so much as begin to spell out he was slowly dying from pancreatic cancer.  He still managed to return, and filed this superb column less than a week later, a wonderful distillation of his craft for anyone not familiar with his work.  As it's worked out, he died less than 2 months after Araucaria, aka cryptic crossword setter John Graham, who also succumbed to cancer.

Hoggart's gift was to be able to ridicule the bombast, pomposity and silliness of politicians without ever suggesting that parliament or politics itself should be held in the same contempt.  I have to admit to stealing a couple of his more cutting put-downs, one being his "unpopular populist" formulation,  as well as his war on absurd rhetoric, the kind rendered meaningless or worse when reversed.  When we have a government that thinks it spectacularly clever to continually define itself as being for those whom "work hard and get on", it's nice to think if there was any justice there would also be a party for those who do the minimum possible and are more than happy to just drift through life.  With his death the Graun has undoubtedly lost one of its most distinctive voices, as well as one of the few contributors who make the paper still worth buying.

His return to dust is given all the more poignancy for how desperately we could do with more of his ilk to mock the dishonesty currently being perpetuated by the two sides of the coalition.  If it hadn't been apparent enough already, George Osborne's speech today signalled the start of the 2015 general election campaign, a mere 17 months and one day before the nation goes to the polls.  This has always been the problem with fixed term parliaments, as evidenced by the absurd electoral cycle in the US, where the knowledge of the date of the next election means anything up to 2 years is wasted preparing the ground for the ballot.

The Tories seem convinced that the only way they can possibly get a majority is to, err, all but completely dispense with an entire section of voters.  Signs are that their wizard wheeze to abolish housing benefit for those under 25 isn't popular, and yet they continue to insist that saving a relatively slight £1.9bn is an essential contribution to cutting the deficit, while the more populist telling those earning £65,000 or more a year to move out of their council digs is likely to recoup even less.  Chris warns against falling into the trap of viewing the promise from Cameron to keep the "triple-lock" yearly increase in the state pension as being a bribe to those who do go out and vote, and yet it's extremely difficult for those just entering the job market to rationalise how they will one day also benefit, presuming of course the policy doesn't change between now and their retirement, and that they live to be 70.

Then we have the Lib Dems, whose mission between now and May the 7th 2015 seems to be to pretend to be against everything the Conservatives are proposing, while at the same time having supported the policies that have laid the foundations for such draconian cuts should they come.  Clegg complains of how he doesn't know a single serious economist who supports the "lopsided" Tory ratio of cuts to tax rises, and yet he's the one who's signed off on the spending round up till 2016 which puts those plans in motion. In fact, as other far superior bloggers have pointed out, the Osborne strategy seems to be a fantasy.  Cutting spending back the way he proposes simply isn't feasible without public services collapsing, meaning he will either have to raise taxes, or more likely, further delay the point at which the deficit is eliminated.  The point is to hope we won't worry our little heads about the potential paring back of the state and instead focus on the recovery, leaving the unpleasant decisions to either after the election or his successor.

The irony of Osborne describing this as a "year of hard truths" while projecting his fantasy would not have been lost on Hoggart.  He would also have seen the inherent absurdity in Nick Clegg one moment talking about how his party and the Conservatives are "co-authors of fiscal responsibility", then in the next talking of how the difference between them is they would do things "fairly".  The party that made the bedroom tax possible, that still believes there are further ways to "sharpen the incentives to work", i.e., going along with Osborne's Help to Work scheme, which claims the Tories couldn't have delayed the recovery without them, yet again claiming to be on the side of the downtrodden and vulnerable.  Only he would have expressed it without sounding bitter or dejected.  Simon, RIP.

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Thursday, December 05, 2013 

No country for young men.

One of the coalition's lesser arguments for why austerity was necessary was that it wouldn't be fair on our children and indeed our children's children if we didn't deal with the deficit and our debts now.  It was always fallacious for the reason that Labour didn't oppose eliminating the deficit; Alistair Darling's plan, derided by George Osborne and others as the sort which would have invited a run on the pound, the loss of our triple A rating and a Greek-style economic meltdown would in fact have dealt with it years before Osborne now promises to.

What sort of country will our children and their children have to look forward to thanks to Osborne's plan finally beginning to "work"?  It's one where it's possible those born today will have to work until they're 77 before they'll be eligible for the state pension, whereas those lucky enough to be entering the workforce now will merely have to trudge on until they're 70.  For those 18 to 21-year-olds who haven't been able to find a job despite the millions created in the private sector, then after six months on Jobseeker's Allowance they will have to start a traineeship, work experience (workfare) or community work (workfare) or lose their meagre benefits of £56.80 a week.  Should the Conservatives win the next election, it seems certain those under 25 will no longer be eligible for housing benefit, regardless of whether they are in work or not.  As for those who find themselves sick, welfare spending excluding pensions and JSA is to be capped, as we simply can't afford it any longer.  Should you not be able to work until you're 70, and considering the current life expectancy in certain areas of the country is below that it's likely many won't, then ATOS or their successors will certainly listen to your plight, and then deem you fit for work regardless.

As David Cameron promised from a golden lectern, austerity is to be permanent.  Come 2018/19, failing any further economic turbulence, we'll be running a surplus.  This will have been achieved through cutting spending to the point where it will make up the smallest share of GDP since the days of Clement Attlee in 1948, when there was still rationing and the NHS had just been established.  It was also the year my parents were both born.  9 years later Harold Macmillan said Britons had never had it so good; 57 years on and his statement most certainly rings true, at least when applied to the majority of pensioners.  Come April next year the state pension will increase by £2.64 a week, adding to the gains made by median retired households over the past 5 years, whose incomes have increased by 5.1%, while the median income for the non-retired has fallen by 6.4%.

This isn't about playing generation against generation, of course.  Except, as the Conservatives have clearly calculated, with the Liberal Democrats apparently going along with it, seeing as the young either tend not to vote or not to vote for them, they might as well drop the pretence and just go all out for the grey vote.  They might be taking into account that on the surface the young are suspicious of the welfare state, but it's only an extremely minor factor.  As Owen writes, it's almost as though the Tories want Russell Brand to be proved right: why vote when politicians are either indifferent or downright hostile to the young? Why get involved when almost no one speaks for you?
Why rejoice in a recovery that is all but meaningless to the precariat, or if we're being optimistic, listen when instructed not to let those who would abandon "the plan" ruin everything all over again?

George Osborne was always going to use today's autumn statement to claim he had been right all along.  Any politician would have done.  Some, however, although probably not the man Osborne supposedly detests yet models himself more and more on, would have been just a little more cautious.  The recovery, such as it is, is built on sand.  The vast majority of the 0.8% growth clocked up in the last quarter was down to consumer spending and the revival in the housing market.  Exports and business investment continue to either decline or flatline.  Productivity is in a slump.  All three of these things might well pick up next year, and we could see the beginning of the rebalancing Osborne once said he wanted, but it most certainly hasn't happened yet.  There was going to come a point where everyone got fed up with paying off their debts or watching every penny, and accompanied by the coalition's determination to get any sort of growth before the election, the Help to Buy scheme being the chosen device, that's what's happened.

Unfortunately for Osborne, his great moment of glory has been rather overshadowed first by the storm and now by the passing of Nelson Mandela.  Neither the BBC News or Newsnight so much as mentioned his triumph, and so beyond the eye-catching details leaked well in advance, such as the energy price freeze, the rise in the pension age, not to mention the incredibly limited but still ridiculously outdated married tax allowance, little will probably end up being remembered.  The history books might though record today as something more than a footnote: the day when the post-war settlement, the one Thatcher wanted to dismantle but couldn't, was ripped up.

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Wednesday, October 02, 2013 

Land of misopportunity and Tory.

If there's just one thing to be taken from this year's Tory conference, it's that the supposed natural party of government is stuck in a quandary.  Far from the predictions this week would see one half of the coalition in a buoyant mood, the economy finally growing in what looks to be a sustainable manner, if anything the Lib Dems had a more enjoyable week up in Glasgow, which is really saying something.  Having installed Lynton Crosby as pedlar of lowest common denominator Conservatism and statements of the bleeding obvious, for which see the highly questionable "achievements" plastered all over the walls in Manchester, the more thoughtful are quite rightly wondering how resorting to a core vote strategy this early in the electoral cycle is going to win the party the increased share of the vote they need to form a majority government in 2015.  It didn't work in 2005, exactly the reason why Cameron tried to shift his party towards the centre in 2010.

Regardless of the show they put on for the cameras, the party is also clearly worried about Ed Miliband and Labour.  After the party's wretched summer, they didn't expect Miliband to pull the energy prize freeze policy out from seemingly nowhere.  Nor was the party helped when the big six then spat their dummies out, their pathetically petulant outbursts threatening blackouts persuading no one, while the fact the markets fell due to the potential for a cut in their profits made clear they regard a Labour victory in less than 2 years a very real possibility.  Whether or not the policy would work in practice doesn't matter for now, just as it didn't matter when Osborne pulled his inheritance tax stunt back in 2007 as Gordon Brown dithered over calling a snap election.  Thanks to the Mail's startlingly cackhanded attempts to do the Tories' dirty work for them, Miliband's battle with the paper has also overshadowed their big week, leading bulletins while their turgid mastications have been well down the running order.

Just how many of the continuous attacks on Labour emanating from the platform were written well in advance and how many were hastily pasted in after the opposition's successful week in Brighton is difficult to tell.  The vicious and entirely partisan nature of the relentless assaults have though taken even me by surprise: every single main speaker has either peppered their entire address with screeds of blame, or dedicated at least one section to doing so.  According to Jeremy Hunt, everything that went wrong with the NHS during Labour's last term was the fault of Andy Burnham, even as the coalition kept on the NHS chief executive who actually was in charge during the crisis in care at Mid Staffs hospital.  Eric Pickles found it hilarious to create a parallel universe in which Labour had gone into coalition with the Lib Dems, except instead of the "land of opportunity" we're now entering, in this opposite dimension the country was, naturally, in rack and ruin.  George Osborne meanwhile, when not setting out how he'd run a budget surplus despite failing to succeed in eliminating the deficit in the timescale Alistair Darling initially planned to, was blaming Labour entirely for the crash, not mentioning how he and his party pledged to match the government's spending plans they now maintain caused it in the first place.

The prime minister's speechwriters however saved the worst for last.  No one quite seems to want to say it, but regardless of how incongruous it sounds (and is, considering his £139 bread maker), Cameron's conference addresses mark him out as the poor man's Tony Blair.  Blair's great skill was in making in either a mediocre or dreary speech sound good; everyone had forgotten everything in it the next day, but it worked at the time.  Cameron can't even reach those levels, as his speeches are erased from the memory within minutes; I had to look up what he said last year to recall any of it.  Compare that with Miliband, who has improved his delivery and message year on year, while you can actually remember what he said (predatory capitalism; one nation; Britain can do better than this) and it rather shows the prime minister up.
 

Indeed, it's as if he wasn't even trying.  Two thirds of the speech can be summed up as "The Evil That Labour Did", which three and a half years in is really getting tiresome.  The other third was boilerplate Thatcherism, Britain is booming, land of hope and Tory, very well alone self-improvement aspirational heard it all before claptrap.  Cameron doesn't come across so much as a prime minister as Bob the Builder crossed with Tom Cruise's character from Magnolia.  Can we build a land of opportunity? Well, it'll be tough, but together we can tame the cunt!

A case in point is how for the second time Cameron felt he needed to respond to a Russian minister describing Britain "as a small island that no-one pays any attention to." Anyone truly comfortable with our position in the world would ignore such petty cat-calling from an authoritarian state; Cameron by contrast reeled off a point by point rebuttal, and as per spouted bullshit back, seeming to suggest we were the first to introduce women's suffrage (we weren't) and that we offered "blood, toil, tears and sweat" when "freedom was in peril".  The Russians may not have been fighting for their own freedom, but they sacrificed more than any other nation state to destroy the Nazi war machine.

His real failure though was that he had no answer to Miliband. The leader of the one time party of small business misrepresented his opponent's espousal of cutting their tax by putting up corporation tax on large corporations by a whole one percent, claiming it would make them look elsewhere, while he didn't so much as attempt to defend the "spare room subsidy" or that his global race is one straight to the bottom. There was nothing for those struggling to make ends meet in his glorious land of opportunity other than the same empty aspiration he's resorted to before.  That he then pretty much abandoned the under-25 vote by presenting further conditions and an end to housing benefit as "tough love, learn or earn" exemplifies how far removed his party has become from the young.

For all the talk of Miliband shifting Labour to the left, which is extremely questionable when he's signed up to the coalition's spending plans for the first two years after the election, the real story ought to be how far the Tories have attempted to take the country to the right, and certainly would given the opportunity.  Despite their denials, the only way to get a surplus would be either further cuts or tax rises. While the latter can hardly be ruled out when the IFS suggests the deficit can't be reduced without either lifting the ring fences or doing just that, the lie was given today with the announcement on housing benefit.  Combined with the pledge to repeal the human rights act, and presumably withdraw from the ECHR, the use of old racist sentiments on billboards, the commitment to never-ending workfare for the unemployed and the open pursuit of a housing bubble for short-term political gain, the spectre of a Conservative win in 2015 ought to chill the marrow.  Thankfully, and precisely because of the strategy the party is pursuing, that looks just as unlikely as before.

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Monday, August 12, 2013 

August is hell.

Simon Jenkins is right: August politics is hell.  Anyone with even the slightest amount of sense (or a life) is paying even less attention than normal, which gives free rein to the worriers and the bitter to whine about how their party is doomed to defeat.  Earlier in the year it was the Tories that were staring into the abyss, riven by Europe, embattled by UKIP, staring a triple dip recession in the face.  Little more than 3 months later, and things are looking brighter for the party, although nowhere near as good as their chances of winning the next election are being portrayed in certain areas of the Tory press.

Naturally then, it's now Labour and their hangers-on that are having an attack of the jitters.  Quite why is difficult to ascertain: it's not as though things have changed dramatically.  The party still has a lead in the opinion polls, even if it has been somewhat reduced; the economic recovery, such as it is, is hardly secured, and for now is likely a mirage outside of the south east; and despite the best efforts of the Tories, no one out in the real world gave a toss about the supposed selection scandal involving Unite up in Falkirk.  The problem more than anything is that Labour has been relying on both the economy remaining stagnant, despite Ed Balls having accepted there would be growth by the time of the next election, and the Tories remaining about as popular as they are, difference being they're the ones in government.

True, there's more than something in the criticisms from the few backbenchers who say the party doesn't seem to know what it's for, isn't offering an alternative, or managing to make the agenda.  Nor though for the most part is the government doing the latter; when it does, such as with the "go home" campaign, it's also far from clear as to whether or not the effect has been positive.  Policy is stuck in a groove: the Tories characterise it as Labour opposing every cut, while in actuality it tends to be "we wouldn't be doing this if we were in government now but most likely won't alter it if we win the next election".  It's opposition in spirit only, while still taking a hit.

The odd thing is that on the whole, Ed Miliband has set out the general themes that the party needs to be focusing on.  The squeezed middle might be the least well defined social grouping in history, but living standards will undoubtedly dominate come 2015.  He set out a critique of predator capitalism, for which he was widely mocked by the media at the time, and yet tax avoidance by multinational corporations has become an issue as never before, while the spread of zero-hour contracts has exposed what a nonsense it is that employment law is in some way holding business back.  One Nation Labour has not been explained quite as well, but the potential is still there, especially as the Tories look set to go for a doctrinaire right-wing manifesto come 2015.  Should Scotland vote no next year, it certainly won't be due to gratitude for the coalition government.

Labour's problem isn't then just due to indecision within the party itself, it also reflects the sad state of politics more widely in the country.  We're told endlessly that politicians are all the same, yet present the electorate with an alternative and they don't want that either.  Up until very recently they thought cuts were unfair and harming the economy, but they didn't want to take the risk of loosening up, reflected through the lack of anything approaching street opposition as austerity as has been seen elsewhere in Europe.  The closest they've come to approving of an outsider is Nigel Farage for goodness sake, about as alternative as John Bishop is to Michael McIntyre.  This is where some of the criticism of Labour's current position gets silly: John Harris bemoans how Labour has missed the digital revolution, as though "a viral video" or a few more tweets from Balls and Miliband could make the difference.  You might have thought it would have been cleaved into a few skulls by now that only politics nerds and journalists are interested in passing Twitter frenzies, let alone such pointless campaigns as trying to ban page 3, but apparently not.

In effect, the main reason behind the whinges is that Labour isn't doing quite as well as it was.  It's not anything more deep seated than that.  How could it be?  Despite the despair of the likes of Dan Hodges or the equivalent from the opposite side by Owen Jones, the party remains where it is because it doesn't think the general public wants it any further left or right than where it currently is.  What's more, the opinion polls back them up.  Hardly any MPs voice outrage at what the coalition is doing to the welfare state, how Serco and G4S are not that far off from running the country or how the Tories seemed to have settled on creating growth through encouraging another housing bubble, for the precise reason that it's exactly what they would do if they were suddenly foisted into power.  Sure, they might do things ever so slightly differently, but not massively.  The most anger we've heard from a Labour MP recently has been Stella Creasy, and that was about fucking Twitter again.

More pertinently, why make the effort when the next election will be decided in such a small number of seats again?  For the Tories to win a majority they have to increase their share of the vote, something a party in government hasn't managed in a very long time.  They seem to think they can achieve this feat through repeating the same Lynton Crosby-honed themes over and over for the next two years: Labour is weak; Labour got us in this mess; Labour are the welfare party. Given a shorter timescale it might work, but keep it up for too long and it'll just become tiresome, even for those who don't pay attention.  The result we might have to face is another hung parliament, another five years of conglomeration and drift.  And the sad thing is, no one seems particularly upset by the prospect so long as they've got some hold on power.

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Thursday, July 25, 2013 

It's all just a little bit...

Considering where we've been almost ever since the coalition came to power, growth of 0.6% in the last quarter isn't to be sniffed at, especially seeing it's not boosted by one-off factors such as the Olympics.  The worry was that we could have slipped into a triple dip recession back in April, only for that low to be narrowly avoided and the double dip itself revised away.  Having took no responsibility whatsoever for the economy flat-lining, blaming every factor other than the cuts and the chill the spectre of austerity sent through business confidence, naturally Osborne and the Tories are more than happy to present what is fairly insipid growth historically following a recession as the economy healing.

On the face of it at least, the signs are encouraging.  All the main sectors of the economy grew in the last three months, unemployment is coming down, albeit very slowly, and Osborne managed to just about reach his borrowing target, once the Office for Budget Responsibility had revised their estimate.  Take a closer look though, and the figures paint a picture of an economy still heavily reliant on the service sector.  With wages not keeping pace with inflation, there's eventually going to come a crunch point when those who have so far kept spending cut back.

Despite Osborne continuing to boast about rebalancing the economy, his actual strategy is far less refined. The plan is to boost the one sector that has remained overheated with prices now rising again: the housing market.  Desperate for any kind of growth, the danger is of another bubble.  If it works for the Tories in the short-term however, helping them win a majority that otherwise looks all but impossible, who cares if it's repeating the same mistakes the coalition castigated Labour for?  Except for us nerds, obviously.  Oh, and economists.  And anyone with any real interest in winning that "global race" the coalition is constantly regaling us about.  Still, politics eh?

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Wednesday, June 26, 2013 

Failure as success.

Very, very occasionally, the BBC doesn't just report the news, it also provides analysis that is all the more hard-hitting because of its rarity.  Of all the comment on today's spending review, Stephanie Flanders' verdict is the most acute. The coalition was formed to eliminate the deficit in a single parliament; today George Osborne set out the cuts to come in 2015-16, and there will be more right up until 2018. By any measure, the coalition has failed abysmally. Except, as Flanders points out, this is also a great success for the Tory right. No one voted for the scale of cuts that have already been made, and yet there has been almost no real protest at the slashing back of the state. Moreover, Labour under the shadow chancellorship of supposed arch deficit denier Ed Balls has signed up to Osborne's overall spending plans, if not the exact details. What was it that Margaret Thatcher described as her greatest achievement? New Labour, wasn't it?

It isn't really worth dealing with much of Osborne's speech then, as we'd heard almost all of it before. We're all in this together, we're moving from intensive care to recovery, despite Osborne having told us we were out of the danger zone two years ago, the most broad shouldered bearing the greatest burden, which is only true when you include the changes Osborne inherited from Alistair Darling. As ever, those who demand responsibility took none themselves: it's not because of austerity or the prospect of austerity that the economy has barely grew since the coalition was formed, oh no, it's all the fault of the banking crisis, the euro crisis and the oil crisis, which is a new one on me.  It doesn't matter that even the IMF has said it's time to loosen austerity, or that they've admitted they underestimated the effect cutting spending would have, Osborne knows better and just plows on.

The same familiar targets are then those to be squeezed.  Another 140,000 jobs to go in the public sector, an end to automatic "progression pay", although many claim they haven't had any increase in years, and another year of 1% pay increases for everyone else.  Then there's "skivers", half of whom will now be required to sign on every week, they won't be able to claim JSA until 7 days after losing a job instead of the current 3, and they'll also have to have a CV.  It doesn't matter if they've just lost a long-term position and so may need help putting together a new one, until they've done that they're to be left penniless.  The obvious beneficiaries?  Those lovely pay day loan companies, about the only growth industry we have under Osborne's glorious stewardship.

As for the much hyped cap on social security spending, it's not clear what it's going to amount to in practice.  There aren't going to be any consequences if it's breached, merely the chancellor will be required to explain why it has.  Presumably the intention is to put pressure on officials to limit benefits, but how this is going to work when housing benefit and tax credits keep increasing exponentially precisely because millions of people in work aren't paid enough to live on isn't explained.

If you're rather perturbed to say the least about how very different this country is going to look come 2015 as a direct result of these failures, then your options for dissent are now rather limited.  What exactly is the point of an opposition that doesn't oppose but agrees?  For months we heard of how Osborne was setting Labour a trap through the spending review, demanding whether or not they would sign up to the overall spending package.  The answer from the two Eds was to walk straight into it, the equivalent of shooting yourself in the head when someone's threatening you with a machete.  It was meant to show that Labour could again be trusted with the economy, but has it had any impact or will it make any difference when the election is still two years away?  Has it heck as like.

Then again, it seems that the vast majority of the public are more than prepared to accept that there is no alternative.  And why wouldn't they?  When the main three parties say there isn't one, and the new fourth one says the answer is to leave the EU, why should we be surprised there's no equivalent mass movement against austerity here as there has been in countries on the continent?  Instead of offering resistance, or failing that, a vision of a better tomorrow, those who formerly advised politicians now suggest that they stop making promises all together.  Why not go the whole way and replace elected representatives with speak your weight machines?  At least they'll never tell lies or make pledges they won't keep or have any intention of keeping.

Nor has there been major opposition from the young precisely because the groups supposedly aligned against the cuts are so woefully led, or rather, aren't led.  Leaders seem to be regarded as 20th century; when absolutely everyone has a voice, or rather a Twitter account, we don't need anything like that, we just need a wi-fi connection.  UK Uncut might have helped changed the debate on tax avoidance, but it was people themselves that shamed Starbucks into paying corporation tax.  As for the other two groups named by John Harris in his piece that notices not all of the young are angry lefties, I'd never even heard of People and Planet before, while UK Feminista are currently campaigning against, err, lads' mags.  In the era of Snapchat and Redtube can you imagine the blow that will be struck against the establishment and the patriarchy if Tesco stops stocking Zoo magazine?  Harris also mentions Owen Jones and Laurie Penny, but to my knowledge Penny hasn't so much as been invited onto Question Time.  Russell Brand has, though.

Unlike I suspect most people my age, I've voted in every election since turned 18.  I spoilt my ballot in the police commissioner elections last year, but I still turned out.  My argument has always been that it doesn't matter who you vote for, as long as you do.  Not voting when on occasion even a single vote can have an impact is to be voiceless.  Come 2015, I'm not sure there now is a point in bothering to put an x in the box.  Regardless of who you vote for, it will be a vote for further austerity, for a state slashed back, for the continued blaming of the unemployed for being out of work even when there aren't enough jobs to go round and for the continued processing of the sick and disabled.  Incidentally, one of the few areas of the state to get an increase in funding rather than a cut is the intelligence agencies.  Not because the terrorist threat has increased, as it hasn't, with not even Woolwich resulting in an increase in the threat level.  No, clearly the government is anticipating an upsurge in activity elsewhere.  It hasn't happened yet, but a few more years of this, and who knows? Something must break.

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Thursday, June 06, 2013 

Just as expected.

I can't help but have mixed feelings about Ed Miliband's big welfare speech, as it's been trailed all week.  The pragmatist in me thinks it was about as good as it was ever likely to be.  It makes some concessions to the way the Tories have attempted to depict everyone on benefits, regardless of what they're claiming, as a scrounger, but for the most part it takes the argument back to them.  This is what we would do to bring the social security (as Miliband repeatedly referred to) bill down, even if it takes time: by reducing unemployment through a job guarantee, building houses, allowing councils to negotiate with landlords on the behalf of tenants, encouraging employers to increase wages through giving them tax breaks via the money saved on tax credits.  What would the Tories do, other than keep eulogising about work while condemning those who are desperate for it?

Obviously designed as an attempt to win back the support of those who think they are the only ones deserving of benefits while everyone else is gaming the system while also fighting back against the myths the Tories and the right-wing press have propagated, it does seem to have been mostly successful.  If we were to judge by the Tory response, which has been to say the entire thing was vacuous or the same old nonsense from a party that has opposed every welfare cut the coalition has imposed (which isn't true, but never mind), then it seems to have hit the target.  Rather than engage, all they've responded with is ad hominems.  It also seems to have in the main gone down well with both right and left within the party itself, which considering the worry there was that Miliband was going to essentially adopt the coalition's policies is a reasonable achievement.

My idealist side, however, feels this was exactly what we'd feared.  It's one thing to suggest that it appears that some people get something for nothing out of the system while others get nothing for something, it's then quite another to accept that there are a "minority who should be working and don't want to", and then repeat that sentiment again and again.  It would be to deny reality to say there isn't anyone out there on benefits who is able to work but doesn't, but the numbers we're talking about are incredibly slight, so tightened has the system become.

You also have to worry that the party has walked straight into George Osborne's trap by accepting a cap on overall spending.  Miliband said that it would be structural, rather than cyclical, yet this is hardly set in stone.  When Osborne outlines what his cap will be and the benefits it will cover, the demand will be for Labour to accept that as well.  After all, the party has effectively said they'll abide by the overall amount of spending come 2015/16, just not the specific items.  Why should it be any different on this?

Nor was he convincing when it came to ensuring that the most vulnerable are properly protected.  There was no apology or recognition of the damage caused by the work capability assessment, rather Miliband said he'd wished the last government had reformed incapacity benefit sooner.  Yes, there was recognition that the system still isn't working despite changes under the coalition, and that there needs to further changes so that the test recognises what you can do rather than just what you can't, but we've heard all this before.  The sad reality is likely to be that this "tailored help", should it even arrive, will be the same as those on the work programme are receiving, where the stick comes first and the carrot second.  Much the same can be expected for those called into the Jobcentre once their child reaches the age of 3.

There's also little to recommend the section on low wages.  Rather than action, all Miliband promises is more persuasion.  While it's understandable that Labour doesn't want to promise a large increase in the minimum wage towards a living one when the effect could potentially be devastating on some small businesses, that doesn't excuse the failure to act to stop large employers from paying wages that still leave workers in poverty.  Condemning zero hour contracts and brutish work places is meaningless if Labour is unwilling to do something about them.  As welcome as the message is that work isn't always an end in itself, Miliband said nothing that so much as suggests the party knows how to stop business from reling on the state to top up poor pay.

Then again, why should we have expected anything else?  Rather than challenging public perceptions or media narratives, the modern politician accepts them as gospel and adapts their message accordingly.  It was Labour that began this race to the bottom, and now it's desperately trying to catch up.  In those terms, the speech worked.  If it does convince a few that Labour are worth trusting again, great.  Clearly, we should worry about what it means for the welfare state as we know it another day.

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Tuesday, June 04, 2013 

Breaking out of the Tory trap.

Trying to get your head around where Labour stands less than two years away from the election isn't easy. In theory, the party looks to be in decent shape: ahead in the polls, Ed Miliband the most secure main party leader, however strange that seems, and proven right about austerity choking off growth, as even the EU has now acknowledged.

And yet, things could clearly be better. The poll lead is shallow to say the least, Ed Miliband's ratings are as bad as Cameron's, and the party isn't trusted on the economy, despite the coalition's abject failings. Labour Uncut at times reads like a journal of despair. The pessimists know how difficult it is to defeat a government after a single term, even one as unconventional as our unholy coalition, while the optimists cling to the fact that the governing party hasn't succeeded in increasing their share of the vote at the next election since 1974.

If there is one message coming through loud and clear from the electorate at the moment, it's contempt for politicians in general. Nor is this surprising when the economy's lousy, wages are falling in real terms and when there isn't any real alternative on offer from the opposition, let alone the promise of something better to come. It doesn't exactly inspire then when Ed Balls comes out and all but commits to keeping to the level of spending set out by the coalition for 2015/16 should Labour win the election.

For that was the real story to come out of the speech Balls made yesterday morning.  This wasn't the first time that Balls had all but suggested the party would do so, only the last time he did there was such a (justified) outcry from the unions that the subject wasn't broached again.  Yesterday, apart from a few noises from the GMB union, there was no such protest.  Partially, that's down to how things have changed since and how catastrophic the coalition's helming of the economy has been.  An economy that was beginning to recover in 2010 has since stagnated, making the next government's inheritance potentially even worse than the one the coalition had in 2010 and which they have made so much of ever since.  It's also a recognition though that regardless of widespread discontent, there hasn't been anything approaching a unified protest against austerity, unlike on the continent.

It's exceptionally close to being a paradox.  The often heard complaint is that politicians are all the same, and it's certainly true that on most domestic measures there's little real difference between the main three.  At the same time though voters tell pollsters they don't trust a party that's offering a subtle but significant difference to the government's economic policy, leading that party to move to reassure voters they can be trusted by signing up to their overall spending plan.  That doesn't mean they'll spend on the same things, just that the same overall amount will be splashed out.  This, Labour's thinking goes, will be the message that gets through.

Except as we saw, through also looking for specific spending to cut in an attempt to respond to Tory jibes about opposing everything, the media focused on means testing winter fuel payments.  Balls also suggested stopping free schools from opening in areas where there's plenty of secondary capacity already, abolishing police commissioners and cancelling "titan" prisons as other areas where savings could be made, but these strangely didn't have the same impact as stopping payments to well-off pensioners.  Much nonsense was spoken about how this could be the beginning of the end of universal benefits, or how the Tories might exploit Labour's change of position, when it's clear this was designed to be a gesture and little more.

Deserving of far more concern is that Balls floated the idea of having an overall welfare cap that differs according to the cost of housing around the country, meaning effectively it should be higher in London where prices are silliest, very one nation, and that on Thursday Ed Miliband is due to give a speech that is being briefed as Labour agreeing with the Tories on the need for a "structural" cap on welfare spending.  There's no point whatsoever in saving £100m by stopping payments to comfortable pensioners if there are then further cuts to working age benefits that have already been so squeezed by the coalition, as the IFS today made clear.

All this feeds into Labour's biggest problem: the party hasn't worked out where it intends to stand and fight come the election.  Despite the sloganising, Miliband still has failed to set out exactly how he intends to tame predator capitalism, nor has he attempted to define what he means by One Nation Labour.  He and Balls have said they want to bring back the 10p tax rate, but not explained how that would fit in with changes made under the coalition.  The party rightly opposed the 1% freeze on benefits, yet now seems to have decided to give in and ape the Tories.  With the rise of UKIP politics is undoubtedly being pulled further towards the right, and there are plenty within Labour who are perfectly happen to continue with the old policy of triangulation, epitomised by the murmurings over allying with the Tories to get the communications bill through in the face of Lib Dem opposition.


Needed most of all is a vision that contradicts the Tory myth of being in a global race where the only way to compete is by slashing hard won rights and protections.  We already know how the Tories intend to fight in 2015: attack Miliband as a creature of the unions, say all Labour want to do is borrow more, and claim they are incapable of taking tough decisions.  The best possible answer to that is for Miliband to set out how he intends to govern, as the knowledge that he couldn't possibly be as terrible at it as the coalition isn't going to cut it.  Nor is Ed Balls' message that the answer to too much is austerity is more austerity going to suffice.  Labour can win in 2015, but will fail miserably if the best the two Eds can offer is that they'll be the Tories with a kinder face.

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