Wednesday, November 25, 2015 

The lucky chancellor, and the hopeless opposition.

Some say you make your own luck.  Football managers often claim that any refereeing decisions that wrongly go in their favour average out over a season.  Others still will claim that when you're on a downward trajectory anyway, fate tends to intervene all the more.

Then there are those who are just plain lucky.  George Osborne is such a person.  Whenever he's found himself in a hole, someone or something has always heard his pleas and prayers for help and came along to pull him out.  It would be remiss to not admit that some of his luck is of his own making, as whenever he has done something stupid he's recognised his mistake, whether it was the litany of errors in the omnishambles budget, or today with tax credits.  As the autumn statement and spending review demonstrates, the usual wisdom that making a full 180 always damages a politician is wrong, so long as the reversal is made early enough and is a total one.

Had the Office for Budget Responsibility not of course discovered there was £27bn down the back of the Treasury settee, Osborne would have been in complete stuck.  As well as upping its forecasts as to what income and corporation tax will bring in, a mammoth 2/3rds of the £27bn "windfall" comes from the OBR altering its tax modelling.  While there is nothing to suggest this wasn't solely the doing of the OBR, it does bear mentioning that the OBR figures are based on government finances up till the end of September, and not the ones from October that showed a large year-on-year rise in borrowing.  Whether they would have changed the OBR's working substantially or not is less important than how it demonstrates once again Osborne's good fortune.  He is the lucky chancellor.

Eventually though your luck must run out.  Whether that happens before Cameron exits Number 10, or it happens once Osborne moves next door, as is increasingly odds on, it will happen.  You can't go on acting with as such arrogance as Osborne did on tax credits, believing that no one would cotton on to how he was shafting the very people the Tories claimed to help and keep getting away with it.  You can't keep insisting on cuts to unprotected government departments that in the case of the Department of Transport will amount to 75% by the end of the decade, or an even more eye-watering 77% in the case of local government, without something breaking, and breaking irrevocably.  You can't have such luck as to get a £27bn windfall, and then still preach of the absolute necessity of running a surplus of £10bn by the time of the next election.

For now at least Osborne can sit back and enjoy for the umpteenth time paeans not just from the Tory press but the majority of the media.  How does he keep doing it they wonder?  Much of the answer is in how, as Aditya Chakrabortty points out, we've fallen for the same trick each time.  The Tories brief of how drastic and severe their cuts are, how tough it's going to be, then turns up George to tell us it's not going to be so bad after all.  Since the autumn statement last year each time Osborne has stood at the dispatch box, the Commons listening rapt, he's reduced the amount needing to be cut.  He's done it in different ways, whether through today's mixture of windfall and tax rises, to go with the tax rises he'd already announced back in July, but achieved it he has.  The amount of departmental cuts has now been reduced overall to a "mere" £10bn, and with the police also now protected, from fewer sources.

The usual budget day/autumn statement smoke and mirrors have naturally been turned to also.  The tax credit U-turn isn't a true one as Osborne has not abandoned his £12bn of welfare cuts; instead universal credit has been raided again before it properly rolls out, if it ever does such have been the problems associated with it.  Hidden within the wider good news is that the OBR revised downwards its forecast for both household disposable income and average earnings, making clear that the tepid growth of the last few years is here to stay.  The increases in the money for social care and for the police are also dependent on councils introducing precepts on both through council tax, which as Jo Maugham points out is highly regressive.

Once that mist has cleared, the Tories' priorities will be as clear as ever.  There was money showered on housing, but only on housing to buy; as for those who want to rent or won't ever be able to afford to buy, their options will dwindle further with the extension of right to buy to housing associations.  The 3% surcharge on stamp duty for second homes or those buying to let is welcome in the case of the former, but will almost certainly lead only to further increases in rent on the latter.  Post-2012 students will find the threshold at which they start paying back their loans has been frozen in spite of a consultation.  With the state pension increasing by £3.35 a week while other benefits will be frozen in line with inflation, it will once again be those most likely to vote who gain most.  As government spending heads south to 36.5% of GDP by 2020, 42% of that spending will be on either health or older people.  Of all the spending described as unsustainable in the past few years, surely that level on one department and one part of the population will prove to be so before much longer.

Osborne's plans at heart remain a huge gamble.  If it turns out the OBR has got its revenue forecasts wrong (again) then he has little room for manoeuvre, unless he makes the ultimate U-turn and cuts back on his dream surplus.  He could ask for further departmental cuts, but from where?  He could make further welfare cuts, but it's not even clear where the £12bn is going to come from now that tax credits are protected.  He's raised taxes on every area possible other than on income, national insurance and VAT, which the government plans to make illegal, it's worth remembering.  He could put corporation tax back up, but that would be a further U-turn and would anger business, already quietly seething both about the "national living wage" and now the new apprentice levy, or as the Tories would describe it were they in opposition, a jobs tax.

Sad as it is to say, a proper opposition would be pointing all of this out.  A proper opposition would have made as much as it could, not just out of the tax credits U-turn, but also how it means Osborne has fallen into the very welfare trap he laid for Labour, breaching the cap he foolishly legislated for.  A proper opposition would be asking where the £12bn in cuts to welfare will now be coming from, as the answer can only be through taking an axe to housing benefits, cutting employment and support allowance or hacking even further at JSA.  A proper opposition would while emphasising Osborne's miserable failure to clear the deficit in a single parliament also be setting out what it would be doing differently.  

What the opposition cannot keep doing is providing gifts to the government like John McDonnell quoting from Chairman Mao's Little Red Book, regardless of his point or it being a joke.  No wonder the Labour benches looked so grim as he threw it across the Commons; no wonder George Osborne looked as though all his Christmases had come at once.  You can point the finger at the media and the anti-Corbyn majority in the PLP all you like, as I have and will keep doing; there's no getting away from how the real joke at the moment is the Labour (non)-leadership and its failure to do so much as the bare minimum.

Osborne will finish up laughing on the other side of his face.  When that will be when the opposition is so hopeless and the wider media so in awe of an opportunistic and lucky but otherwise mediocre chancellor remains to be seen.

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Thursday, November 12, 2015 

Cameron has always been the PR man. Osborne isn't.

The much commented on, if not as widely reported exchange of letters between David Cameron and Oxfordshire council leader Ian Hudspeth is unquestionably brilliant.  It's not often a prime minister is treated like an especially boneheaded teenager might be by an exasperated teacher, with Hudspeth having to explain one more time exactly why it is that he cannot follow the "best practice" of other Conservative councils as Dave suggests.  Oxfordshire has already made back office savings, dispensed with "surplus assets", cut everything other than social care.  Spending has not increased, Hudspeth makes clear, and the council has not cut only a mere £242m so far.  £242m was not a cumulative figure, as Dave wrote, the cumulative figure in fact being £626m.

As Rick says, the prime minister's advice is the equivalent of a quack applying more leeches to a dying patient.  He seems to believe the same solutions as were proposed back in 2010 are still valid now.  He's far from alone in this of course, with Theresa May crowing about how the cuts to the police have proved once and for all that more can be done with less, at the same time as forces consider sponsorship deals to bring in cash and as residents in rural areas are employing private security to patrol.  Just today the sports minister Tracey Crouch advised people having difficulties making ends meet to cancel their Sky subscriptions.  Some doubtless would regard giving up Sky as a breach of their fundamental human rights, but the idea many living on the breadline, relying on food banks or worrying about cuts to their tax credits are paying their dues to Rupert Murdoch doesn't fly.  Many of those people would be in an even worse position if they couldn't access the internet, something satellite and cable providers also happen to provide.

While some in the government might be oblivious or ignorant as to exactly what it is they're asking of both their colleagues at the local level and of the very people they've been elected to represent, there's also those who are very much aware.  George Osborne for instance, who earlier in the week celebrated those departments that have already outlined the amount they can save two weeks ahead of his comprehensive spending review.  Should his attempt to cut tax credits be scuppered or the amount due to be saved fall in the effort to soften the blow, that money will have to be found elsewhere.  With the triple-lock on pensions, all the ring-fenced departments and tax rises verboten, although not as a result of the public being opposed as Ken Clarke claims, rather due to politicians refusing to make the political case for doing so, the only areas left to target are those cut to the bone already.

Indeed, the "impossible constraints" Clarke talked about are entirely of Osborne's own devising.  Running a surplus is a choice, rather than an imperative central to our economic security as the chancellor claims.  As the Guardian's leader today argues, it's true Osborne is not the crude neo-Thatcherite as he is sometimes painted.  He has been more flexible than that, and has stolen Labour and Liberal Democrat policies when it's suited him.  He has also though presided over a hollowing out of the state, to the point where it looks to be perilously close to collapsing in on itself.  Hudspeth is far from the only council leader worrying about where it is he's going to make further savings from, not least when raising council tax above 2% requires a local referendum to be held.  Asking for cuts of 30% on top of a reduction in funding which has amounted to 37% so far, according to the National Audit Office, can mean the only place left to make savings is by cutting the frontline.  So far, in part thanks to how Labour did "fix the roof while the sun was shining", most services have held together.  You wouldn't bet on the same being the case come 2020.

Rest assured however that as the NAO report also found, the Department for Communities and Local Government is on the case.  The DCLG in their words has a "a limited understanding of the financial sustainability of local authorities and the extent to which they may be at risk of financial failure" and also "does not monitor the impact of funding reductions on services in a coordinated way."  Like the prime minister, they haven't got a clue.  Still, by 2020 all things going well Osborne will be our new overlord, primed and ready to explain why absolutely nothing is his or the Tories' fault.

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Monday, October 26, 2015 

Hubris, but not yet nemesis.

It wasn't meant to be this way.  Despite the slightness of their majority, the Conservatives were euphoric at their victory in May.  They had triumphed in spite of themselves, in spite of 5 years of austerity, in spite of the opinion polls.  To add to their delight, the opposition went into full on meltdown: the main leadership contenders and many others in the party seemed to be accepting almost completely they had lost because they weren't the Conservatives.  Interim leader Harriet Harman whipped her party to abstain on the welfare changes the new government pushed through at the first opportunity, as to oppose them would to be disagree with the electorate's verdict at the ballot box.  George Osborne was feted as a strategic genius, taking any opportunity given to lead his opponents into political traps from which there was no escape.  With the utmost chutzpah, the Tories declared themselves the true workers' party, the only party able to deliver true equality.

Hubris almost always leads to nemesis.  The government's defeat in the Lords tonight on tax credits is without doubt a result of the Tories' hubris, but nemesis has not arrived yet.  One defeat does not a crisis make.  It does however show that beneath the façade, the Tories' ability to get their legislation through parliament is slight.  The claims from the Tories that the Lords voting to block the cuts until the government sets out how it intends to alleviate the losses working families will suffer is a constitutional outrage is nothing more than a distraction technique.  This is mess of their own making, and they know it.  Osborne, the master manipulator, has stumbled right into one of his own traps.

Opinions vary on whether or not the intention always was to cut tax credits.  Certainly, as Rick has pointed out, cutting tax credits by £3bn (others are saying the cuts amount to £4.4bn) is the only way Osborne can eliminate the deficit by 2019-20 without cutting public services further or raising taxes.  The refusal to set out exactly how welfare would be cut by £12bn during the election campaign may have been just another part of the grand negotiation strategy they believed they would have to enter into with the Liberal Democrats for a second coalition.  Given a surprise majority mandate, rather than back off from the extremes promised in their manifesto, they've for the most part steamed ahead.

Except of course tax credits weren't in the manifesto.  While David Cameron didn't specifically say tax credits would not be cut, he did say that child tax credits would not be.  This nonetheless created the impression that tax credits themselves would be spared.  Come the budget, while still announcing the now expected cuts, Osborne pulled from his hat the new "national living wage".  It soon became obvious this higher minimum but not true living wage wouldn't come close to making up for the cuts to tax credits, but praise was lavished on Osborne for this stealing of Labour's clothes regardless.

Rather than put the cuts through the main finance bill following the budget, the government instead opted to implement the changes through what's known as a statutory instrument, in this case using the initial legislation that brought in tax credits, through which it can delegate changes to the rates and thresholds.  It's rare for the Lords to vote down a statutory instrument, but not unprecedented by any stretch of the imagination, despite what the Tories are now claiming.  In any case, the "fatal" motion in the Lords failed, with the two "regret" motions, which essentially ask the Commons to think again passed.  In any case, it's always amusing to hear ministers complain about "constitutional outrages".  Once we have a written constitution which definitively has been breached, then we'll get angry.

If the Tories had a whopping great majority then it might have more of a case.  It doesn't.  If they had set out the cuts in their manifesto the Lords would have only been able to block the plans for a year, before the parliament act could then be used to force it through.  If Osborne and Cameron hadn't been so hubristic as to claim they were now the party of working people, when one of their first major acts would be to screw those very people over to the tune of thousands of pounds, they wouldn't now be forced into such a humiliating u-turn.

How Osborne can then protect the lowest paid while still making the savings required to fill the gap in his overall economic plan isn't clear.  Unless he relents on reaching his surplus, as any sane chancellor would do, then he has to either cut further or raise taxes elsewhere.  If the Lords decides that his changes don't go far enough, they are perfectly entitled to reject them again, meaning they will have to go some way to meeting the Institute for Fiscal Studies test.  Whichever way he goes about correcting his mistake, it isn't going to be cheap.

In less than a month the Tories have gone from looking impregnable, the media for the most part lapping up Osborne and Cameron's speeches at the Conservative party conference despite the air of unreality to both, to being breached by a load of doddery old unelected peers.  It's an especial blow to Osborne, who refused to see the portents of defeat, from Michelle Dorrell on Question Time to Tory MP Heidi Allen using her maiden speech in the Commons to voice her and many other Conservative MPs fears over the cuts and the effect they would have.  Cabinet ministers claimed he was in listening mode, as though Osborne listens to anyone other than those who tell him what he wants to hear.  Just as he went ahead with all the various stupidities in the "omnishambles" budget, thinking he was the smartest guy in the room, so too he has been shown up now.

Damaging as this is the short term, it's by no means fatal.  The parliamentary Labour party had little to no role in the defeat, as it's still far too self-obsessed at the moment to offer a real challenge to the Conservatives, let alone encourage Tory MPs other than David Davis to vote with them.  Indeed, in the longer term, the cuts being defeated can only be to the Tories' advantage.  Had they passed the Lords unscathed, Labour would have had an issue they could have coalesced in opposition against, the obvious unfairness of the measure and the way it penalised those doing the "right thing" an open goal.  So long as Osborne's compensatory measure does what it's meant to, the attempt to penalise workers will soon be forgotten.

It ought also to knock some sense into the Tories: regardless of the opposition or lack of as it is currently, the idea they can stroll to 2020 and another victory is ludicrous.  The media's lovebombing lulled them into a false sense of security, when the truth is their majority could easily disappear over the course of a couple of years.  Should another worldwide economic crisis occur, as more and more commentators fear could be on the horizon, there's hardly any room for manoeuvre on policy, as Osborne must know.  Hubris can all too quickly turn to nemesis.  Or, even worse, Boris.

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Wednesday, October 21, 2015 


This might just be me, but there are days when such is the weight of general arsebaggery and overall cuntitude, you pray to the empty sky for a cataclysm.  Our great country has after all played host to many shows of depravity down the years, some in recent memory.  Few though have been quite as revolting or nauseating as the transformation of central London into little Beijing for the duration of Xi Jinping's state visit, the Chinese premier treated in a way usually reserved only for US presidents, and even then it feels embarrassingly over the top.  Generally, the criteria for addressing both houses of parliament if you've not been elected yourself is to be the monarch; such niceties can however be suspended if you're about to sink massive amounts of cash into nuclear plants.

It's not just that Jinping has been welcomed in a style so sycophantic that it makes our usual shows of pageantry look restrained, it's the way in which our representatives and then those reporting it have gone about doing so also.  For John Bercow and Prince Charles to be the heroes of the day, for respectively introducing Jinping while making reference to Aung San Suu Kyi, flawed as she is, and finding something else to be doing rather than attending the banquet, is something in itself.  Not his old man's mutterings for Wills however, who bravely brought to the attention of Jinping the suffering of China's wildlife.  Kate meanwhile wowed the tabloids by wearing red, clearly demonstrating her dedication to Marxist-Leninism, topped off with a tiara that the Chinese first lady, Peng Liyuan, probably thought a bit proletarian.  Queenie for her part was given two whole albums worth of Liyuan's popular folk warblings, to be filed alongside her Slayer CDs.  And while Cameron and Jinping discussed their mutual passion for keeping the workers down, being served up for their delectation was roasted loin of Balmoral venison, most likely shot by Philip himself.

This was all happening as Tata laid off workers at three of their steel plants, in part down to China dumping its own excess onto the world market at rock bottom prices.  One union representative appeared on the news to state that he and the company's representatives had calculated that even if they worked for nothing, they still wouldn't be able to compete.  Having boasted at the beginning of the year of the success of the steel industry thanks to the strength of the rest of the economy, any help beyond commiserations from the government has been solely lacking.  Sajid Javid stood up in the Commons and stated this wasn't something governments could do much about, rather than it being something that governments have made the choice to leave to the market.  In the words of Simon Crutchley, at the Scunthorpe plant collecting a delivery, "he's ruining fucking everything, Cameron".

Not that he could give a stuff.  Unfortunate as it is that the nation's steel industry is collapsing just as the leader of the country principally responsible arrives to be fawned over, and bad as it looks, Dave can rest safe in the knowledge that those workers, their families and all the other people the plants will have supported are not likely to have voted Tory.  It makes something of a mockery of George Osborne's beloved Northern Powerhouse™ also, but really, what's more important, Chinese investment in nukes or laughable claims about revitalising a whole area of the country?  We couldn't possibly borrow the money at still historically low rates rather than put something as vital as new nukes under the control of the Chinese, and besides, doesn't it make perfect sense to ask the Chinese and French states to build power plants rather than doing so ourselves?

Our politics has become so deranged on the fiscal front that keeping on the lights has been put in the hands of a French company majority owned by the French state which has not yet completed any of the plants of the European pressurised reactor design mooted for Hinckley Point (the Chinese plants of the same design are also yet to come online).  Moreover, once it is up and running, which will be 10 years time at the earliest, we'll be paying the Chinese and the French twice what the market rate was in 2012, not including inflation.  This could only make sense to politicians who have made a fetish out of the deficit at the expense of everything else.  The Conservatives claim to be acting in the interests of the country's economic security, and yet have concluded a deal that will see future taxpayers' money going straight into the coffers of an authoritarian state that can be trusted about as far as it can be thrown.

Like the cancelling of the contract for a training programme for guards in Saudi Arabian prisons, which led to Michael Gove being feted for his role when surely the idea ought to have been so demonstrably wrong that not helping one of the most repressive governments on the planet torture its citizens is the bare minimum we expect, so too the Chinese have promised in return for handing over vast wads of cash to not steal any British company's intellectual property.  Chinese cyber-attacks are more than likely exaggerated by those with an interest in doing so, but if we're equals why on earth is such an understanding so much as required?   As others have pointed out, there has been next to no debate about this sudden decision to place our faith and our infrastructure in the hands of a state that so many of our traditional allies are suspicious of, rightly or wrongly.  It wouldn't be as bad if this was being done because we genuinely could not do it any other way; instead, this is a choice by politicians who are determined at the same time to renegotiate our relationship with Europe.

Forgive me then if the attention paid to reaching an arbitrary date in a film and still not having a fucking hoverboard does smack a bit of well, decadence.  Just as it's a reflection on us as a people that the politicians we produce regret not their inability to stop the government of the day passing things like the bedroom tax, but instead not projecting our strength as a nation by launching a military attack that would have achieved precisely nothing.  As the Roman empire collapsed, so the distractions, the circuses, became ever more exotic.  This tends to be how these things end.

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Tuesday, July 21, 2015 

Violent sexual imagery: the only way to respond to that abstention.

There's an episode of The Thick of It where, enraged by that day's disasters, Malcolm informs Nicola and Terri that he will be using an awful lot of "violent sexual imagery" in order to make them fully understand the level of his unhappiness.

Labour at the moment needs a Malcolm.  It needs someone to set out in the most uncompromising terms just how suicidal yesterday's decision to abstain on the welfare bill was, and how incredibly, mindblowingly fucking stupid it is being in general.  Some at the very top of the party have been so mindfucked by the combination of losing the election, the glee of the right-wing press at that loss and their analysis as to why, and George Osborne's frankly pitiful efforts to "trap" them that they seem to have forgotten the very reason the party came into existence.  If Labour does not stand up for the interests of the ordinary working man, it may as well announce its dissolution.

The party leadership has no excuse then for its failure to vote against the welfare bill.  The act explicitly redistributes money from the working poor to the wealthy in order to pay for the all but abolition of inheritance tax.  It paves the way for the social cleansing of not just London but whole areas of the country, as the new lower cap on benefits makes those places unaffordable for the low paid and temporarily out of work.  It breaks Cameron's twin promises not to cut the benefits of the disabled and sick, as it reduces the payments of those in the work related activity group of ESA to the same as JSA, and to not touch child tax credits.  It makes clear that the end result of these changes will be a rise in child poverty, as the government is at the same time abandoning the target to reduce it by 2020.  It demands sacrifices only from those of working age, rather than asking any from those whom most of the social security budget is spent on, pensioners.  It makes clear the Conservatives don't wish only to play divide and rule between the unemployed and those in work, but between the working poor whom have their wages topped up by tax credits, and those in work who are lucky enough not to need to claim anything.  It says some families are worth less than others, that having a third child is always an active choice, and so it's perfectly acceptable for that child to be denied the same support their siblings received.  It is one of the most regressive, most reprehensible pieces of legislation to go through parliament in a very long time.

You might have thought yesterday's op/ed by George Osborne in the Graun would have concentrated a few minds.  Rarely is there a piece by a government minister that is quite so brazen in the number of outright lies, distortions and misleading statistics it contains.  Cutting an "unsustainable" welfare system is according to the chancellor a progressive measure, and welfare reform is not just about saving money, but transforming lives and social justice.  Let's be clear: this isn't a trap, this is one step up from the very lowest grade of trolling.  You don't respond to trolling, you ignore it.  If you must respond to it, what you most certainly don't do is accept the troll is making a legitimate argument.

And yet somehow, unconscionably, only 48 Labour MPs went through the no lobby last night.  Whatever it was Harriet Harman tried to achieve by saying Labour couldn't afford to ignore what she claimed was the will of the public in both giving the Conservatives a majority and twice rejecting her party, to act in such a cowardly, incoherent way is near to being unforgivable.  The Democratic Unionists, yes, some of the most unpleasant and antediluvian of all the MPs in the Commons, voted against it.  The SNP voted against it.  The Liberal Democrats, fresh from propping up the Tories for five years, voted against it.

Abstaining when you know precisely what a bill will do to those you were supposedly sent to Westminster to represent is a betrayal.  That's what it is.  Not only is it a betrayal of those who will suffer as a result, it's a betrayal of everyone who argued that a vote for Labour still meant something.  That Labour was a vote for a fairer, more equal society, in spite of all the snide remarks, disbelief and cynicism.  It's a betrayal of those who faced down the SNP, with all its claims of being the true progressive, radical force, or who criticised the luvvies who say Labour left them, not the other way around, and did so right at the moment the party needed them the most.

If anything was ever going to legitimise the SNP's claims of being the official opposition, prove Mhairi Black right, or drive those who have long flirted with the Greens fully into their arms, this was it.  Those currently leading the party, or rather not leading it have convinced themselves that only they have the answers, that only they are the responsible ones, and that to merely oppose for the sake of opposing is to not listen to "the very strong message sent by the electorate".  They have convinced themselves that elections are not won or lost during the last year of a parliament, but by how the opposition responds in the immediate aftermath of a defeat.  This is to completely misread what happened in the summer of 2010, as the coalition set out to prove the size of the deficit and the state of the economy were entirely the fault of Labour, rather than a global economic crisis.  This was achieved not through acts of parliament, but by how the message dominated everything the coalition did.  Labour's failure was to not respond ferociously, to fight the accusation, to debunk the lie.  Instead they accepted it.  The party leadership is repeating the mistake.

Only this time it's far more serious.  Labour has never seemed more divided between the "realists", epitomised by Chuka Umunna describing those disagreeing with his and the "modernisers" analysis as the equivalent of petulant children, and those daring to believe that Labour has to be, must be more than just the Conservatives with a kinder face.  The view that nothing can be achieved without power is spineless rubbish.  Rare is it that a government just falls apart, and even when they do it's not certain the opposition will automatically benefit: nothing more affects a government's authority than a failure to be able to pass legislation.  To give up even the pretence of opposing a government's worst excesses this early is an astonishing act of capitulation, a failure of belief that demands those responsible be held accountable.  That no one has said Harriet Harman has clearly lost the confidence of her own MPs in a matter of weeks is equally surprising.

It's not as though any of this is difficult.  The welfare bill is about making the poorest poorer, the working poor poorer, and the sick and disabled poorer.  Indeed, it's about making anyone who claims tax credits poorer.  This is not in dispute: Osborne is painting it as being fair and fixing a broken system but not denying the end result, whatever the claims made about the increase in the minimum wage.  Labour has somehow managed through sheer incompetence and the beyond moronic idea that being "sensible" at this stage will win dividends later to make the story not about the Tories doing what the Tories do, but about Labour being split over the most basic of issues.  As Flying Rodent has it, Labour is more afraid of not being shitty and vindictive enough, so convinced has it become that you only gain respect and win back votes through being "tough", than it is of going too far.  The leadership still seems to believe that it can ignore the wishes of its supporters and core voters as they have nowhere else to go.  The election results, the same ones that have apparently convinced them of the wisdom of this masochism strategy, prove the opposite is the case.

So yes, Labour needs a Malcolm to get through the otherwise most impenetrable of skulls just where such an approach will lead, and it most certainly isn't to victory.  It also though needs someone to soothe it, to reinforce that its heart is in the right place, and that it hasn't lost its values.  It needs someone like, oh, Alan Johnson, to play more of a role, to argue against the more out there ideas some on the left do have, like how an EU exit wouldn't be all that bad really.  Failing that, it's difficult to see where the party goes from here.  Under siege from all sides, some prefer surrender to carrying on the fight.

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Monday, July 13, 2015 

Voters are often wrong. Politicians need to tell them so.

There is, I would argue, an extremely big difference between being exceptionally cynical about almost everything, and just straight up indulging in conspiracy theories.  Would the government really for instance suddenly declare Tunisia to be a no-go area just to distract attention from how the budget was falling apart, especially when it had been received in such raptures from the press?  Would it really decide to wreck the holidays of thousands of people on completely spurious grounds, and not come up with a better explanation than saying intelligence suggested there was a very high chance of another attack, despite there err, being no specific intelligence?  Would it really send the message that in actual fact, terrorism does pay, and that already struggling countries should buck their ideas up, despite it being you know, sort of our fault Libya is now a failed state?

Probably not, but never underestimate a government's propensity for being completely and utterly stupid.  Tunisia it seems should follow our lead: hold a few more training exercises, put a few more bollards in front of buildings to prevent a truck or car bombing, despite jihadists' major problem long having been their failure to obtain explosives in any sort of quantity, and you're laughing.  There's not much you can do to prevent an attack by a lone gunman with an assault rifle and (possibly) some grenades other than putting more armed police and security guards on the streets and increasing surveillance, policies that might in fact cause more problems than they solve, but such measures are not apparently good enough for us Brits.  Fine for the French and Germans, but not us.

Was then Harriet Harman in fact being rather sneaky in her interviews yesterday, saying the party she is temporarily leading could not oppose cuts to child tax credits and the new lower benefit cap, as to do so would be to ignore the voters who have now twice rejected that party?  Again, probably not.  It has though had the twin effects of riling up the usual people on Twitter who spent plenty of time during the election campaign complaining about that mug, and has also redirected attention onto the interminable leadership election, with yet another hustings held today.  The Liberal Democrats, incidentally, are to announce whether Tim Farron or Norman Lamb is to be the party's new leader on Thursday.  The reasoning behind Labour going for a longer contest was supposedly about confronting why the party had taken such a mauling, only for all  the candidates to have concluded why within hours of the defeat.  The "debate" since has focused on repeating those positions, and predictably there's been nastiness happening behind the scenes as a result.

You can of course if you want interpret the Tories' win as being a thumbs-up for their policies as a whole, just as if you like you can believe people voted UKIP because they wanted a referendum on EU membership, or SNP because they thought Nicola Sturgeon was a fresh, inspiring leader.  Except, oh, that last one probably is something approaching the truth.  Equally, you can take Labour's defeat however you want, and if you really want to believe it was because Labour wasn't either left-wing or right-wing enough, that's fine too.  The real lesson of the election was in fact what happened to the aforementioned Lib Dems.  The party that had previously meant all things to all people, acting as both a protest vote that wasn't entirely wasted and as a leftish alternative to Labour collapsed once everyone realised there was little to no difference between them and their coalition partner.  This doesn't mean they wouldn't be making something of a difference if they were still in government, as they almost certainly would.  They wouldn't though alter the overall tenor, just as Osborne stealing the best melodies from Labour's song book can't cover up the discordant screeching of his compositions.

The most convincing overarching reason for why Labour lost is Ed Miliband was not seen as a realistic prime minister and in turn was not trusted with the economy.  It's as simple as that.  Could Ed Miliband have been seen as a realistic prime minister and trusted with the economy had the party fought harder against the caricature of spending too much, crashing the economy and leaving behind no money?  I think so.  Then again, I still think Miliband would be a better leader than any of the 4 now on offer, and that time will prove him to be another of those best prime ministers we didn't have, so you can safely ignore me.

This is not to deny there is an awful lot of seething, if not outright detestation of benefits claimants.  If there wasn't there wouldn't be those TV shows, there wouldn't be the support for the cap which takes absolutely no account of exceptional, temporary, individual circumstances, or for little things like a family having lived for generations in an area they are now told they can't afford.  All that's seen is that figure of £20,000 or £23,000, rather than how a hefty proportion of that will be going straight to a landlord rather than for the family to spend on huge screen TVs or iPads.  Those women who apparently told Harriet Harman and the others that they didn't think they could afford to have more children while those less careful just had them anyway, which is to put about the nicest possible gloss on it, seemed to be more justifying not having more children to themselves rather than making a realistic case about the state rewarding the feckless instead of the striving.  When the cuts start affecting real people though, as we've seen with the bedroom tax, or when they specifically target children, it doesn't take much for what was once seen as sensible to begin unravelling.

Politicians cannot however tell voters they are wrong, unless it involves bombing yet another Middle Eastern country.  They can tell their own parties they're wrong, but never that the public is.  It doesn't matter how wrong the public is: whether it be the obvious lesson to take from the tube strike, which is that stronger unions and collective bargaining result in higher wages, while moaning and complaining about how because you don't want to waste time with that nonsense no one should results in nothing; or in Greece, where the people want to stay in a currency that condemns them to unending, self-defeating austerity, rather than face the temporary uncertainty of a default and return to the drachma; to argue with the apparent reached consensus is a sign of madness.

Arguing against something that has become an orthodoxy is all the harder when you're faced with a media so unutterably biased against you, it's true.  When the press either swallows its pride about Osborne's further restrictions on non-domiciled status, having denounced it as leftist lunacy when suggested by Labour, or actively welcomes policies it criticised in the harshest terms mere weeks ago, it's always going to be a struggle to win back the initiative.  This doesn't mean it can't be done.  If Labour had any sense, they would be contrasting the manifest unfairness of the raising of the threshold of inheritance tax with the losses of income those on tax credits will face under Osborne's plans.  They should be making clear how companies that already do their best to avoid corporation tax are being rewarded for doing so with a further cut while the working poor are having their benefits raided to fund it.  They should be making short YouTube videos about it, hiring billboards, running poster campaigns.

Instead, the party keeps apologising, or drawing the wrong lessons.  Andy Burnham today accepted the deficit was too high in 2007; it wasn't.  Even if it was, these cuts are being made out of choice, not because they are necessary to reduce the deficit.  Not opposing the harshest budget in a generation out of the belief it's what the public voted for is nonsensical.  Osborne thinks he has Labour trapped; Harman's response is the equivalent of jumping straight into a spiked pit.  The only people who will remember in 2020 whether Labour opposed the cuts are precisely those it cannot afford to lose.  If the party truly is existentially threatened, and the lesson from the continent is traditional centre-left parties are, the worst thing it can possibly do is tell its sympathisers and supporters they're wrong.  Take on the public, not the grassroots.  It might just work.

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Thursday, July 09, 2015 

All hail the new Tories.

If it wasn't for how it demonstrated beyond doubt just how pointless the Labour party has made itself in such a short time, yesterday's cognitive dissonance at George Osborne's theft of large parts of the Labour manifesto would have been hysterical.  The same document only Andy Burnham and Jeremy Corbyn have seen fit to defend as everyone else, Blairites especially have all but blamed it for the defeat was used in a (futile) attempt to make up for the use of the very worst parts of the Tory manifesto.  Alistair Darling has said Labour's disarray is a result of the failure to articulate a coherent economic policy, except err, in large part Osborne took Labour's apparently incoherent economic aims and made them his own.  Ed Balls' promise was to balance the budget as soon as possible; voters might not have believed it, but that was the policy.  Osborne accordingly put back by a year his surplus plan, reduced the amount to be raised through cuts in departmental spending and also, most shockingly, is borrowing more.  An Ed Balls budget would have obviously done things much differently overall, but he would have without doubt followed the same basic themes.

Osborne's budget was not of course an even vaguely left-wing one.  Nor, however, was it an out and out Thatcherite one.  How Osborne achieved this hasn't really been acknowledged enough.  Most chancellors after all go into elections promising jam tomorrow and then clobber everyone once re-elected.  Osborne by contrast was completely open about how everyone voting Tory would end up being shafted, not expecting for a moment that he would be delivering the first sole Conservative budget in 19 years less than 4 months later.  Both the March budget and the Tory manifesto were put together in the expectation of another coalition.  They were bargaining chips, as proved by allowing the Liberal Democrats to set out what their priorities would be from the dispatch box.  Amazed to be handed a slight majority, the problem was how to not alienate those who voted Tory but had done so for reasons very much other than the contents of the manifesto.

Most in the circumstances would have blanched at going ahead with the £12bn in welfare cuts.  It was never a serious commitment, until it was decided it was, and for the opportunity it provided.  Despite not thinking it would get them a majority, the Tory electoral plan was simple: ensure those most likely to vote, i.e. pensioners and the boomers coming up to retirement age were overwhelmingly on their side by promising not to touch their perks, emphasise the risk everyone would be taking with a unreconstructed Labour party, and then hope something else would turn up.  It did, in the form of the SNP, and it just about took them over the line, thanks mainly to the utter collapse of the Lib Dems.  This targeting has duly become the party's raison d'etre: for all the talk of blue collar Conservatism, one nation and all the other rot, the Tories seem to have come to believe they can remain in power in perpetuity so long as they keep the upper middle, the wealthy, and the old on side.

Yesterday's budget was put together with this at its core.  Not for Osborne or Cameron's Tories the old Thatcherite belief in social mobility, or at least not without pulling yourself up by your bootstraps, as hardly anyone who made it truly did.  No, instead their aim is for society to remain almost completely in aspic: why else would they as Jonathan Portes notes, removed the very incentives to work and earn more that were there in the tax credit system and were already affected negatively by universal credit?  Why else would they continue to do absolutely nothing about the dire shortage of housing?  If anything, their aim seems to be further inflate the bubble; buy-to-let landlords rightly come in for much criticism, but as the IFS points out, the lack of supply is not going to be helped by reducing their tax incentives while allowing property owners to pass their estates on tax free.  Why else remove the grants for poor students?  Why else generally treat the disadvantaged young disgracefully, whether by removing their access to housing benefit, or capping child tax credit at two children for new applicants?  Potentially helping youth unemployment by not extending the "national living wage" to the under-25s doesn't even begin to make up for it.

Going on alongside this targeting and othering, as that's what it is, are disinterred Victorian notions of morality and poverty.  Tim Montgomerie, now of the Times, tweeted his support for Iain Duncan Smith's "rejection of the Left's materialistic idea of poverty for broader understanding of basis of a good life" last week in response to the moving of the goalposts on child poverty.  Rarely is so much explained about a world view in so short a sentence.  It shouldn't shock then when a close reading of the budget red book shows Treasury officials will allow rape victims made pregnant by their attacker to keep their child tax credits if they decide not to abort the baby and already have two children, as clearly in such an instance the mother is blameless.  Having a third child in any other circumstances when already not well off is clearly a choice, and a choice that has to be punished.  No other factors come into it, not least that the child itself is blameless.  To be on benefits is also a choice; ask not what you can claim, but what it is you can do.  Hence why those who cannot work currently, but might be able to shortly will from now on get the same pittance as those on JSA.  Claiming anything, even being employed by the state, is to be inferior: 1% extra a year is all such people are worth.  Don't argue this isn't still a generous safety net: the same politician yesterday pumping his fists as the rebranded minimum wage was announced says it's so.

This point couldn't have been reached thanks solely to an election victory, naturally.  We've arrived here thanks to what always happens following an economic crash: the public biting downwards, rather than up.  The poor are to be envied for the little they have, asked why it is they get something for nothing, equally fetishised and demonised.  Just this week Channel 4 brought us a new series of How to Get a Council House, where the deserving and undeserving are neatly boxed and delineated, while Channel 5 showed Benefits by the Sea: Jaywick.  The Sun, most of whose readers will be receiving tax credits and duly face losses in the region of hundreds of pounds thanks to yesterday's budget are told this is a "WELL FAIR STATE", while the Mail depicts Osborne as no less a saint than the mythical George himself, slaying dragons.  And again, the fact is a majority, albeit a slim one of those who bothered to vote, signed up for this.  You're not supposed to blame the electorate, but it's not as though the Tories hid their intentions.  Like it or not, they wanted it, they've got it.


Contained in the IFS's analysis of the impact of yesterday's budget reforms is the starkest of truths: the only people to gain are those in income decile group one removed from the richest.  Those right there are the people the Conservatives are governing for, the only people they imagine they need to govern for, as everyone else is either stuck with them or written off.  The poor either don't vote or vote Labour or UKIP; public sector workers vote Labour; the young either don't vote or vote Labour or Green; they're all lost causes.  Everyone else, well, why would they vote for a Labour party that only represents those people?  Such is the new Conservative way of thinking.  Such is the space a Labour party that has taken all the wrong lessons from its election defeat has left its opponent to move into.  If they won't defend their manifesto, we'll take it.  Osborne isn't a genius, he's an opportunist and a strategist.  Shrinking the state is secondary to winning.  Ideology helps to explain, but doesn't tell the full story.

All hail the new Tories.

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Wednesday, July 08, 2015 

The rat and the rabbit.

After all the leaks, the raid on the BBC, the talk of how this one nation Conservative party would be creating a low tax, low welfare, high wage economy, there was only one real question left to be answered by George Osborne's wholly unnecessary second budget in three months: what's the fucking rabbit going to be?

First though, if on presentation and build-up only, today's budget is difficult to fault.  Almost all the nasty stuff was briefed about in advance, from the swingeing cuts to both tax credits and child tax credits, the reduced benefit cap and the abolition of inheritance tax for all properties under £1m.  There were still some extremely devious measures that weren't announced beforehand, like the abolition of grants for the poorest students, to be replaced with loans, but in the main all the changes to welfare were expected, leaving the way open for Osborne's surprise to dominate the headlines.

This budget was then all about him.  That Osborne is an exceptionally overrated politician, and unlike some of those also lauded by the press and commentators, believes his own hype, matters little.  Despite loathing him, he is more than the heir to Gordon Brown, only unlike Brown he hopes to make a success of taking over from his predecessor.  The difference is that whereas Brown and Osborne are remarkably similar beasts in how they always put personal political advantage ahead of everything else, Brown had the nous to recognise when he had gone too far, and also to act in a crisis.  Osborne by contrast just keeps on pushing ahead regardless, covering up his mistakes as he goes along, hoping no one will notice.

That something would materialise to sugar the pill was then apparent; not even with the backing of the majority of the press, a cowed opposition and a BBC in disarray would Osborne have got away with making the poorest undeniably poorer while cutting inheritance tax and raising the 40% threshold.  That Osborne decided to steal almost directly from Ed Miliband's Labour manifesto, the one that apparently no one can defend such was its rancidity, ought to have surprised no one.  Rather than abolish non-dom status outright though, perhaps the most obvious choice, Osborne opted to filch Miliband's minimum wage rise policy instead.  Only he went even further, promising that whereas Miliband outlined a rise to £8 an hour by 2020, Osborne's new "national living wage" will be £9 an hour by then.

Except, of course, Miliband's proposed rise in the minimum wage was meant to operate alongside the living wage, with sweeteners for businesses that opted to pay the latter.  Osborne's national living wage is nothing of the kind, for a whole host of reasons.  First, the living wage in London is already calculated to be £9.15 an hour.  Second, the living wage has always taken into account tax credits; remove them entirely or cut them viciously, as Osborne has done, and it would need to be even higher.  Third, as the IFS has already pointed out, not all businesses, especially small ones, can afford to pay the living wage, or at least not without raising their prices dramatically.  The further cuts in corporation tax will not help them one jot.  Workers over 25 will either have to be replaced with younger ones still on the lower rate, or another slew of smaller retail businesses are likely to be forced to close, or break the law to survive.

The distributional analysis from the Office for Budget Responsibility lays it bare: just as with the continued rises in the personal allowance, those who will gain the most are once again the already comfortably off.  The end result is that regardless of the rise, the cuts to tax credits will mean the vast majority will still be worse off, albeit by perhaps half as much as they otherwise would have been.  The poorest in society are in effect being asked to subsidise what David Cameron described as the "most basic, human and natural instinct", i.e., to pass on what even they themselves may have received entirely tax-free, at a cost estimated at £940m by 2020.  This truly is, as Chris said, the something for nothing culture in action, and as Rick argues, sets the Conservatives out not as defenders of wealth creators, but those who buy a commodity and do nothing with it other than just watch it grow in value.

Much the same thinking is presumably behind the cutting of rents in social housing by 1%.  What looks on the surface to be about helping the low paid is more than counteracted by how the OBR points out this is likely to reduce further the building of social housing.  Combined with the government policy of extending the right to buy to housing associations, this seems destined to further inflate the housing market bubble, and indeed in turn, the housing benefit bill, despite the motive being the opposite.  The new lower benefits cap will also have an effect, and is likely to lead to more landlords rejecting housing benefit claimants outright.  That buy-to-let mortgages will only be able to be offset against the basic rate rather than higher rate of tax is also likely to lead to a race to do so before the measure kicks in in 2017, further overheating the market.

Underneath all the wounding cuts to benefits and the rise in the minimum wage is the fact this was a tax-raising, rather than a tax-cutting budget.  With the major taxes off-limits, as promised and set to be legislated upon so they cannot be touched, Osborne has resorted to the stealth taxes Gordon Brown was so pilloried over.  The big money raisers are the tax on dividends, forecast to be bringing in nearly £2bn a year by the end of this parliament, a rise in the tax on insurance premiums, which should raise £1.5bn a year, and the changes to vehicle excise duty, meant to gain the Treasury by a similar amount.  Some of this though is going straight back out the door thanks to the further, unexpected cut in corporation tax to 18%, estimated to cost almost £2.5bn by 2020.  As Aditya Chakrabortty has been setting out in the Graun, this is in spite of the estimated £93bn a year given out in corporate welfare.

Osborne has then all but abandoned the plans he set out in March, opting instead for a smoother path to his idealised surplus, coming a year later than planned.  The cuts to government departments will not be quite as severe as anticipated, almost certainly down to how there's so little meat left to cut.  £18bn will nonetheless still have to be found, and with the defence budget now also protected, that leaves one area less from where money will be taken.  This has also only been achieved thanks to overall savings in welfare of £34.9bn, the difference made up by the continued freeze on yearly increases to benefits of 1%, and changes to universal benefit before it has even been introduced.  All this is predicated on Osborne's savings and cuts being achieved: when £5bn is again meant to come in from clamping down on tax avoidance and evasion, this looks extremely dubious.  The OBR also rates the chances of most of Osborne's tax rises raising what the Treasury says they will as having a "very high" uncertainty.  Should they not, will Osborne again postpone reaching his surplus, raise the taxes he's legislated not to, or cut benefits even further?  Take a wild guess.

George Osborne's task today was relatively simple, despite all the talk of how clever he's been and the boost to his chances of taking over from David Cameron.  All he needed to do was get the pain out of the way, disguise it as best he could and hope that by 2020 what voters remember is not how he picked their pockets, but how their wages have now increased thanks to his living wage.  The fact is Osborne has been a remarkably lucky chancellor: the "omnishambles" budget would have been the downfall of other politicians, as would his abysmal failure to eliminate the deficit in a single parliament, or indeed how he cut too far and fast in the first couple of years and stalled the recovery.  Thanks to a very friendly press, a weak Labour party and the Liberal Democrats covering for him, he's still in place.  Moreover, he's only implementing what the Tory manifesto promised.  Those who voted Tory might not have expressly wanted a crueller, smaller state, where everyone who earns below the 40% threshold can essentially go hang, and the aim is to ensure the moneyed and propertied stay that way, the drawbridge permanently raised up, but that's what they've got.  The only thing that can blow Osborne off course now is another downturn, and the further suffering that would entail hardly bears thinking about.  Such is the position of strength an exceptionally weak government finds itself in.  Such has been the failure of all opposition to austerity.

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Wednesday, July 01, 2015 

Oh for an incompetent government.

Government, we tend to think, is at its worst when it's either incompetent, or obtuse.  Well, excepting those who really do believe, as the Gipper put it, the nine most terrifying words in the English language are "I'm from the government and I'm here to help"Philip Hammond wringing his hands about how the Tunisian gunman Seifeddine Rezgui was likely trained in the "ungoverned spaces" of Libya and then in his next breath defending the intervention that led to that very space being ungoverned is pretty much par for the course.  We expect government to defend itself despite knowing full well it had more than a hand in how the current situation came about.  It's just how it works.

The same goes for the foisting of the legal requirement on schools, hospitals and prisons to prevent extremism, and the ridiculous official definition of what constitutes "extremism" ("the vocal or active opposition to fundamental British values, including democracy, the rule of law, individual liberty and the mutual respect and tolerance of different faiths and beliefs").  The path to radicalisation is different in almost every case, and the idea that a teacher reporting up the chain that one child has an exceptionally negative view of homosexuality could ever prevent something further down the line is completely absurd; the government knows this.  Nonetheless, Nicky Morgan, forever looking as though she's just put a hot chip in her mouth seconds before being dazzled by studio lights, must go on television to insist that black is in fact white, as government has to be seen to be doing something.  It isn't simple coincidence this has the effect of putting more responsibility on the shoulders of teachers, transforming them yet further into social workers, as it couldn't be clearer the Tories hate the entire profession with a passion, but it's a happy side effect.  The government approach to radicalisation seems to be that so much as discussing what might lead to it in schools is tantamount to a betrayal of British values, and if you don't talk about it, clearly it doesn't exist.  Job sorted, now we can get back to putting the blame wholly on Muslims as though they're a homogeneous entity?

No, government is most definitely at its worst when completely and utterly open about what it's doing, and yet still lies about it.  George Osborne's second budget of the year, now only a week away, should finally start to set out precisely where the £12bn in welfare cuts are going to be found.  As has been apparent for quite some time, if you're going to protect pensioners, the disabled and not cut child benefit, the only possible way to get close to that figure is to do something very drastic indeed to both tax credits and housing benefit, both of which are mainly claimed by those in-work.  David Cameron started the softening up process last week with his deeply disingenuous speech about putting an end to the "merry-go-round" of those on low incomes being taxed only to then be handed the money straight back.  It didn't seem to matter that's how the tax system in general works: you are taxed, and services are there as and when you need them.

The obvious problem with cutting child tax credits back to the level they were introduced at back in 2003, one of the most efficient ways of clawing back £5bn, as identified by the IFS, is that you're not hitting the nasty undeserving poor, the scummy mummies and the perpetually drunk, but the strivers at the heart of the "one nation" the Tories have suddenly discovered they stand for.  Even worse, there is or rather was the small problem of the 2020 child poverty target that Gordon Brown managed to get enshrined in law in the dying days of the last Labour government.  One of the targets, long criticised by Iain Duncan Smith, was the aim to reduce relative child poverty, defined as family income 60% below the median, to less than 10%.

What to do?  Even at this point rethink the cuts?  Perhaps not sell off RBS until the share price means the taxpayer won't lose the equivalent of £13bn, as Osborne wants to?  Don't be silly.  No, you just scrap the target entirely, as IDS has today done.  You see, the aim of reducing relative child poverty has led to "unintended consequences for good reasons", namely the increase in tax credits.  And this hasn't really had the effect of dealing with poverty; after all, if you're only £1 better off than the 60% below benchmark, you're still damn poor, aren't you?  Besides, there are the perverse side effects of the target, such as how when everyone is worse off, such as after a recession, it means there are supposedly fewer paupers than there were before.  Or if the government puts pensions up, the opposite becomes true.

Instead the government will focus entirely on getting social mobility going.  Measured will be worklessness and family breakdown, as well as debt and drug dependency.  IDS has long been obsessed with worklessness, and for good reason: as Rick pointed out, and recent studies by the Resolution Foundation have found, worklessness, let alone the long-term worklessness the Tories have so often identified as being the root of all evil in the benefits system, barely exists any more.  There are more people in work in poverty than not, for the reason that work has become that much more insecure and low paid.  Tax credits have duly gone up to compensate.  As commentators pointed out after David Cameron's speech last week, it was Ed Miliband who tried to flesh out an alternative with his clumsy predistribution.  Now the Tories have their majority they don't need to bother to find that alternative: they can just cut tax credits as a whole, say you voted for this, and argue their great economic plan will see everyone's wages go up.  Eventually.  IDS getting rid of the child poverty target was simply the final hurdle.  He's been completely open about why he's done it, while still putting in place a diversion.

Next week the government will announce that the poorest are about to get poorer.  It won't of course be presented like that, and no doubt another rise in the income tax threshold will come alongside it, which will mainly benefit those on middle incomes but will look as though it's helping those on low wages.  The blame will be put not on those who caused the crash, who might in fact be rewarded with another cut in the top rate of income tax, but the Labour party.  Labour in turn might find the remaining fire in its belly, but the leadership contest so far has revolved around accepting the narrative set by the Tories and the right-wing press, so it's unlikely to last long.  Besides, summer's here, parliament's about to go into recess, and by the time it returns it's practically time for the conferences.  Osborne and Cameron some say aren't ideological, that the cock-up version of history is always more convincing the conspiratorial one.  Even if true, it doesn't alter the fact the Tories are doing this because they want to, not because it's the best, let alone fairest way to reduce the deficit.  Give me incompetent government over this any day.

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Wednesday, June 10, 2015 

The intoxication of power, via the Simpsons.

You know what we haven't done for a while?  Quoted from the Simpsons, so let's remedy that.  In the New Kid on the Block episode, Bart foolishly asks Homer for advice on the opposite sex.  "A woman is a lot like a beer.  They smell good, they look good, you'd step over your own mother just to get one.  But you can't stop at one, you want to drink another woman!"

Homer could just have easily been talking about the intoxicating effects of power.  Only it wouldn't have been funny or made anything approaching sense, so would have came from a more recent season of the show.  Yes, I just made a the Simpsons ain't what it used to be joke.  Another philosopher, arguably one not quite on the level of Homer but thereabouts, wrote the slave begins by demanding justice and ends by wanting to wear a crown.

Very few once they have tasted power find it within themselves to either give it away or relinquish it, at least not without a fight (The War Nerd in his latest post wonders if the Soviet Union is the only empire to have collapsed without a shot being fired, although that's a questionable version of 1989-91).  Politicians for decades have promised to devolve power to cities and local communities, only to decide not to once they themselves have power, or find those they want to empower in fact don't really like the idea of mayors or regional assemblies much.  London and Scotland are the exceptions that prove the rule, and as we have seen, once given demands for further powers only increase. 

A case in point is the attempt to force a by-election in Orkney and Shetland, under the specious reasoning that Alistair Carmichael lying about not leaking the comments supposedly made by Nicola Sturgeon to the French ambassador means the contest should be rerun.  It's a campaign ran by SNP supporters, but obviously the SNP themselves have nothing to do with it.  56 seats out of 59 just isn't enough when they could they have 57 instead.  Not that it's fair to pick just on the SNP, or the Tories with their legislation on trade unions designed to damage Labour, or the likely at some point boundary review.  All parties are determined to make life as difficult as possible for their opponents, only realising too late that domination builds resentment and the seeds of eventual downfall. 

What is a new tactic is the use of legislation to bind a future government to the same path of righteousness as the current one.  It's an innovation of especial vanity, an attempt to retain control when the people who put them there in the first place might well have slung them out.  It's also, as with so much of our politics now, little more than a gesture when the law can so only easily be repealed by that new government, but it remains a gesture designed to trip up the opposing side in the most petty of fashions.

No surprise then that a man as clearly petty as George Osborne is so keen on the mechanism, having pinched it from that other petty man, Gordon Brown.  First he attempted to trap Labour by legislating for the next government to be required to cap spending on social security.  Then during the election campaign the brilliant idea of making it illegal to raise income tax, VAT or national insurance before 2020 was come up with.  Now Osborne has decided it's a wicked wheeze to go one step further with his deficit reduction fetishism and require all future governments to follow his plan to run a budget surplus, or at least so long as the economy's growing, as he's not a complete bastard.

Cynics might think it takes some chutzpah for the chancellor who failed to eliminate the deficit in a single parliamentary term as promised to propose to tie the hands of his successors.  Considering we're still to be informed also of precisely how the sunlit uplands of the surplus is to be arrived at, demanding all do as Osborne says could be thought of as breathtakingly arrogant.  Nothing though is off the table when it comes to continuing to pin the economically incontinent tail on the soiled old Labour donkey, which is of course the real point of Osborne's jape.  With some of the Labour leadership candidates now accepting the utterly risible idea that they overspent when in government, the obvious riposte to which is to ask exactly what they would have spent less on, and if they answer welfare you reply with a baseball bat with a nail through the top, all the better to demand they sign up to Osborne's completely sensible surplus plan.  And if they won't, as the less self-hating ones won't, you carry on lambasting them for not accepting all this austerity is their fault.

Everyone's a winner, except for oh, the people who will suffer as a result of the shrinking of the state necessary to reach such a perpetual surplus.  The otherwise excellent Flip Chart Rick argues that despite the caricature from some on the left, Osborne and Cameron are not ideological state-shrinkers.  When it comes to Cameron he could be right, mainly because there's never been the sense Cameron believes in anything.  With Osborne, it's becoming ever more difficult to think otherwise.  As Rick has pointed out, both the IMF and the OECD have changed their tune of late, advising governments that are not Greece they can dial down the deficit reduction, especially if the proposed cuts have the potential to affect growth.  Coupled with how everyone assumed that the £12bn in cuts to welfare were to be negotiated away in the coalition talks, Osborne if he wanted has had more than enough opportunities to step back from his surplus now and surplus forever mantra.  Instead, he's gone one step beyond that into the realm of the completely gibberingly stupid.  

That £12bn in cuts to welfare looks unachievable is besides the point: Osborne looks set to try and reach for the top regardless.  The difference between playing political games and acting out of ideological purity is a fine one at the best of times.  The chancellor has surely now shown his true, somehow even ghastlier face to the world.

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Wednesday, April 29, 2015 

The party that cuts off its nose to spite its face.

It always happens.  Just when you think a point of no return has been reached, something comes along and proves there are always new depths to be plumbed.  Yes, politics really has just got even stupider.

Why it surprises each time is a mystery considering the way politics has been conducted over the past 5 years.  As Paul Krugman in the Graun today set out, the entire defining media discourse of the last parliament has been based on assumptions that don't stand up to scrutiny.  Yes, the deficit does have to be reduced, but the time to do so is the boom, not when the recovery has barely started.  Britain has never been in a position even remotely like Greece's, nor is it any danger of being so when we control our own currency.

By the same measure, the Tories' entire pitch to the country is built on a lie.  They claim to have rescued the country from Labour's Great Recession, and yet as yesterday's GDP figures made clear, the recovery, such as it is, has been built mainly on continued consumer spending rather than the rebalancing away from financial services originally promised.  Despite record low interest rates the economy has not bounced back in the way it has from past recessions, suggesting this time might be different.  This could be partially down to said austerity, or it could be what has been called secular stagnation, where the economic growth we were previously accustomed to becomes all but impossible due to various factors including a decline in the working age population and technological advances no longer leading to improvements in productivity.

Either way, to be proposing now is the time for "colossal" cuts as the Tories are, especially when growth is threatening to come in lower than forecast is at best daft and at worst positively dangerous.   Up until today most economists and commentators had concluded they didn't, couldn't really mean what they say.  It's to keep the hardliners onside.  It's to be negotiated away come the talks on forming a new coalition.  Osborne relented once he realised austerity was having the precise opposite effect to the one he claimed it would.  It would be impossible to make the "savings" they're proposing without putting up taxes.

Only, such is the apparent Tory desperation at how their message doesn't seem to be getting through, now the promise not to put up VAT, income tax or national insurance will be enshrined in law if they win the election.  This is so completely deranged it takes a while to sink in.  We've previously had Osborne trying to "trap" Labour by legislating to cap benefit increases for those of working age to 1%, and they've since put in law the very outline of their spending plans.  This though is something else: quite apart from how it seems to be the Tories admitting there's so little confidence in their ridiculous sums they need to make it illegal to not follow their pledge to get people to believe them, it leaves Osborne with next to no room for manoeuvre in the event of another crisis and closes the door totally on much in the way of alternatives to the mooted cuts.

Laws can of course be repealed, but that wastes time that might be of the essence in a genuine emergency.  As a gimmick, which is exactly what it is, it's a self-defeating one.  The obvious assumption is it would be something else negotiated away in coalition talks, which again raises the question of why you would make such a promise only then to drop it at the first opportunity, exactly the sort of move that invites cynicism.  Are the Tories that panicked by how the polls still aren't shifting, with the most likely outcome remaining a minority Labour government into thinking something, anything that convinces a few more people of their sincerity is worth it, regardless of the all the downsides of such a bill?

Apparently so.  Why though do such a thing when it finally looks as if the Tories' bluff on their proposed £12bn in welfare cuts is being called?  The IFS, as exasperated at the main parties' lack of candour in their manifesto as it ever gets, outlined to get anywhere near that figure (PDF) at the same time as protecting pensioner benefits would mean the absorption of child benefit into universal credit, which would save £5bn, while requiring housing benefit recipients to pay at least 10% of their rents could save a further £2.5bn, still leaving a £2.5bn shortfall.  Labour, in what has been a pitifully underreported press conference this morning, overshadowed somewhat admittedly by Miliband's soiree with Fey Guevara, put out their own take on where the axe would fall, deciding cutting tax credits was just as likely, saving £3.4bn along with the aforementioned child benefit cuts.  Tonight Danny Alexander in an apparent valedictory move ahead of the likely loss of his seat to the SNP has given the Graun Iain Duncan Smith's "Welfare Reform Quad Summer Reading Pack" from 2012, when the coalition was arguing over whether to carry on with Plan A.   Again this focuses on child benefit, with IDS having suggested limiting it to two children, removing the higher rate for the first child, removing it altogether from 16-19-year-olds, and finally means testing it, which all told would save £8bn.

The IFS was far from complimentary about Labour's own failure to outline cuts that would save money as opposed to the equivalent of pennies in government spending terms, but then Labour's plans are such that as the IFS has said, they've left themselves enough room for manoeuvre as to barely cut spending at all if they so choose.  The Tories have now had 2 years to come up with something resembling an outline of where they would make their savings, only to respond every time they should be trusted to do so based on their record.  Their record, as we've seen, has been to sell the country the biggest of lies.  That they've gotten away with it, while an indictment of Labour and a servile media, only makes it all the more remarkable they've now been reduced to one of the most idiotic and cutting off their nose to spite their faces gestures in recent memory.  It will be nothing compared to the effect on the country if we end up with a Conservative majority that governs as it says, mind.

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