Monday, December 15, 2014 

Oh the joy (of the next 5 months).

There are a couple of reasons why l spend inordinate amounts of time slamming away at a keyboard instead of advising the Labour party.  First off, I'm not American, nor have I been parachuted into a safe seat, more's the pity.  Second, I cannot for the life of me work out why you would effectively launch your general election campaign in the middle of fricking December when most people's minds are even further away from politics than usual.  Presumably, and I'm really clutching at straws here, the idea is to get a head start on the other parties and begin the process of drilling the 5 key pledges Labour has decided upon into everyone's skulls.  Come May, all concerned will march to the polling station, their minds focused on controlling immigration fairly and cutting the deficit every year while securing the future of the NHS.

The words under and whelming come to mind, as they so often do when the topic shifts to Labour.  If you wanted to be extremely charitable, you could say it's an indication of just how spectacularly the coalition has failed that Labour seems to have pinched wholesale two of the Conservatives' pledges from 2010.  Alternatively, you could point out it's spectacularly unimaginative and an indication of Labour's chronic lack of ambition for it to be defining itself in the exact same way as the hated Tories did.  5 fricking years ago.

Again, to be fair, we're promised Labour is getting the less pleasant of its pledges out first, with the more unique ones to follow, defined by those all time classic Labour values.  Quite why Labour has decided upon the pledge approach in the first place is a difficult one to ascertain: presumably modelled on the 1997 pledge cards (and Christ alive, the photo of Tone on the card is easily as terrifying as this year's Christmas effort), is it meant to bring to mind the good old days when Labour could win a vast majority on the most vacuous of aspirations?  They're not even pithy, as the actual pledges amount to three sentences of deathly prose.  Cutting the deficit every year while protecting the NHS would be great, if the exact same message hadn't been plastered around the country accompanied by Cameron's suspiciously taut forehead.

Dear old Ed today gave what must rank as one of the briefest speeches of his career, outlining the second pledge, emphasising how he wouldn't repeat Cameron's promise of getting migration down to a specific point, only that Labour would control it, and fairly, that distinction apparently intended for both those pro and anti to interpret as they see fit.  Call me picky, but saying you'll control something you cannot still makes you a hostage to fortune in my book.  Miliband's audience helped by moving the debate swiftly on, similarly to how the campaigning against UKIP document leaked to the Torygraph suggested Labour candidates do when the topic is broached on the doorstep.

As pointed out by Andrew Sparrow, the briefing paper is about the most sensible thing Labour has said about immigration in months if not years, recognising they're not going to win over the virulently opposed while also suggesting for most immigration is "used as a means to express other concerns".  Except as it sort of implies people aren't steaming about immigration directly, and the party for whatever reason has decided to so much as suggest this is the equivalent of not taking legitimate concerns seriously, shadow ministers have all but disowned their own strategy.  It's also meant the media can talk about the distraction rather than a boring old policy Labour are only re-announcing anyway.

Still, what a jolly 5 month long general election campaign we have to look forward to.  Already the dividing lines are set between Labour, Tories and Liberal Democrats on the economy and the deficit, and they are of course the most absurd caricatures of actual stated policy imaginable.  Special marks for dishonesty must go to David Cameron, who managed to scaremonger about a difference between his party and Labour of about £25bn in borrowing terms in the most hyperbolic way possible.  Just imagine if there was another crash and Labour was once again racking up the debt!  Except, err, if there's another crash and borrowing is only falling by as much as the Tories are projecting it will, there will still be problems, although nothing as compared to elsewhere.

Labour meanwhile is making as much as possible out of the 1930s comparison on everyday spending, which is technically correct, again if the Tories mean what they say, just not particularly illuminating.  A better approach would be, as Ed Miliband somewhat tried last Thursday, to set out exactly what sort of state it is most people want.  If George Osborne carries through and magics into existence his surplus, parts of government will be left barely functioning, which really isn't to scaremonger: cutting the budgets of departments other than health, education and foreign aid (which surely won't continue to be ringfenced) by as much as needed doesn't look remotely plausible.  When the best minds are baffled by what the chancellor is up to, apart from mischief, it deserves highlighting.

Even if we look at Labour's plans in the most flattering light, Ed Balls is still promising to run a surplus as soon as possible, not because it's good economics but as a result of the way the debate has been framed.  Doing so is still going to require huge cuts, savings which the party has done the least of the main three to outline.  In the grand scheme of things, as Chris and Alex Marsh have so persuasively argued, this doesn't really matter.  The real issues affecting the economy are the collapse in productivity, and with it the decline in wages growth.  We are though operating in a climate where the difference is between "colossal" and merely "eye-watering" cuts, where the Tories claim to have succeeded on the basis they've more or less reduced the deficit to the level Alistair Darling pledged to, except they've done so on the backs of the poorest, and where it seems personal taxes will never have to rise again, despite government having apparently decided not to bother taxing companies properly either.

There's a third reason I'm not advising Labour.  I'd be even worse at it than the current lot.

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Thursday, December 04, 2014 

You're talking hyperbollocks.

It must be awful being George Osborne.  There you are, making gags in the Commons that would frankly disgrace those £1 packs of crackers (gosh, Ed Miliband looks a bit like Wallace, how original, and rich, coming from someone whose nose more than resembles an arse), the right-wing press mostly lapping it up, and then you have to go on the BBC after Norman Smith dares to suggest that if you scratch beneath the surface you quickly find the cuts projected amount to a "book of doom".  Perhaps even Road to Wigan Pier-esque.

Hyperbolic, raves George, expressing much the same line of faux indignation as regularly voiced by Iain Duncan Smith.  Why, the BBC were saying exactly the same thing back in 2010, and has the sky fallen?  No, we're on the way back to the sunlit uplands, the public services have not collapsed, and if anything they're more highly regarded than ever.  The NHS only needs an extra £8bn a year, which no party has yet come near to explaining how they'll find, despite agreeing with Simon Stevens on how necessary it is, and well, who cares about how beds can't be found for 16-year-olds with mental health problems, instead forced to spend an entire weekend in a police cell?  As for actual lags, prison is meant to be about punishment.  If you don't want to spend 22 hours in a cell every day, don't do the crime in the first place.  Chris Grayling knows what he's doing.

Osborne and Downing Street's ire couldn't possibly be connected to how the BBC's journalists were for once bothering to do their jobs properly.  I even filched the title for yesterday's post from Nick Robinson, who himself had stolen it from elsewhere.  The harsh reality is Osborne's cuts are unachievable, as he knows all too well.  When the Institute for Fiscal Studies describes them as "colossal" and if put in place will by necessity force a "fundamental re-imagining of the state", the kind of statements the IFS simply doesn't make unless the situation is that stark, he really shouldn't have anywhere to hide.

The truth is Osborne can't be straight on just how tough the economic situation will be after the election as it would expose his deficit reduction fetish, undermine his insistence on "trapping" Labour, and worst of all, be to admit his own failure.  The best option would be to push back further the point where the structural deficit will be eliminated, as the markets show not the slightest indication of putting up borrowing costs any time soon, not least when Europe slumps once again into recession, and to bring the cuts/tax increases ratio to something approaching parity.  He can't and won't as Cameron has already insisted on promising the very opposite as soon as the magical surplus is achieved.  Labour, rather than pointing out the impossibility of Osborne's plans, continue to insist they will do things slightly fairer and in much the same time scale.  How and why they don't explain.  As for the Lib Dems, what more can be said about a party whose leader was elsewhere as the statement he agreed to was delivered?  Vince Cable meanwhile whines and moans in the same way as he's done for the past four years, while continuing to stay in government with people he considers to be economically insane.  With politicians like these, is it any wonder so many are looking at the only slightly loopier option?

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Wednesday, December 03, 2014 

The candour deficit.

(Anyone lucky enough to have "discovered" the blog recently might want to give this post one more look.)

On Monday, Gordon Brown formally announced he would not be standing for re-election next May.  It was hardly a surprise, considering he rivals George Galloway in the rarely attending Westminster stakes, not that many other former prime ministers have knuckled down to life on the backbenches either.  With Brown leaving parliament and a whole host of other New Labour figures also heading for the exit, it pretty much signals the end of an era of politics which came to be defined by spin, media management, never-ending war (so no change there then) and whisper it, continuous growth.

For one suspects that regardless of how Brown is viewed now (indicative of the general tone is how a goddamned zombie comic portrays him in about the most sympathetic light of anything), history is likely to judge him far more kindly than it will either Blair or Cameron.  Jonathan Freedland fairly sums up why, and while you could argue that Blair and Brown are inseparable, as no doubt some of the accounts to be written shall, it remains the case Blair's failures were principally his own while Brown's were collective.  No one except the odd Cassandra said banking regulation should be tightened, nor warned they were becoming too big to fail.  Yes, Brown without doubt encouraged the City to let rip, to keep expanding, was pals with Fred Goodwin and so forth, but so would any other chancellor of the exchequer been.  The Conservatives it's worth remembering wanted to pare back regulation further.

Brown's departure will nonetheless leave us with those who love to emulate his worst traits while despising his best.  Each time George Osborne comes to the dispatch box for either the budget or the autumn statement, he morphs a little more into his supposed nemesis.  Each time he manages to confound those who said the deficit was going to be up, at least until you read the small print.  Each time he succeeds in finding a gimmick of some kind or another, usually one designed specifically to appeal to the middle-class, aspirational voters the Tories need to reject both UKIP and Labour if they are to ever win a majority again.  Each time he insists none of this would have been possible without the coalition's "long-term economic plan", a plan that has been altered radically from the one he presented in his first "emergency" budget.  And each time, he seems to get away with it, helped by a media obsessed by the very things he targets, and whose bias against Labour seems to only grow.

Osborne has after all failed miserably when judged on that first budget.  He promised a single parliament of pain, after which happy days would return.  Instead he's been forced into claiming everything's coming up Osborne despite how the country now won't be in surplus until 2018.  His big mistake, frontloading cuts in spending on infrastructure, choked off the slowing recovery and gave us two years of stagnation.  Even now, with Britain judged to be growing the fastest of any G7 economy, the quality of the jobs created is so poor and wages so low it's failing to bring in the income tax receipts necessary for borrowing to come down.  By rights, and if these were usual political times, all Labour should have to ask voters is whether they are better off than 5 years ago, and then sit back and wait for the inevitable.

Only they aren't, and if the coalition has succeeded in one area, it's in blaming Labour for the recession and everything since.  It was all the "spending, borrowing and welfare" that got us into this mess, not the most serious worldwide economic crisis since the great depression.  It doesn't matter that borrowing is now higher than it was under Labour, or indeed that the welfare bill remains stubbornly large despite the coalition's attempts to slash it, demonising the most vulnerable in the bargain, as those determined to err, do exactly what Osborne has done will never be trusted with the public finances again.  We are on the road to surplus, to prosperity.

Hidden away in the Office for Budget Responsibility's report is what it thinks of the cuts Osborne is proposing to get us there.  As they put it

The implied cuts in RDEL during the next Parliament would pose a significant challenge if they were confirmed as firm policy, one that would be all the greater if existing protections were maintained. But we do not believe that it would be appropriate for us to assume, ex ante, that these cuts would be inherently unachievable and make it our central forecast that this or a future Government would breach its stated spending limits if it chose and tried to implement them. But... we might need to include an ‘allowance for overspending’ in our forecasts, similar to the ‘allowance for shortfall’ that we currently incorporate to reflect likely underspending against DEL plans.

In other words, they're a fantasy.  All the obvious fat has already been sliced off.  Already it's resulted in this sort of situation in prisons.  Day to day spending on public services is projected to fall to 12.6% of GDP by 2019/2020.  Total public spending meanwhile as a proportion of GDP will fall to its lowest in 80 yearsAs Rick says, were this to happen it wouldn't mean shrinking the state, but closing sections of it down.

Clearly, this isn't going to happen.  Osborne is many things, but suicidal isn't one of them.  He most likely will look to further cut benefits, as he says, only as we've seen doing it in practice is far harder than in theory.  He could slow the pace of reduction further, except Cameron has already promised tax cuts once the surplus utopia is achieved, and Osborne is set to force a vote in the new year on whether Labour will sign up to his plans.  That leaves only raising taxes, with VAT being the most appealing to a Tory who won't countenance putting up the top rate of income tax, as demonstrated by his swift removal of the 50p rate.

That's all for after the election though, when a Tory government or led coalition can do whatever it likes.  Trapping Labour just as Gordon Brown stitched up the Conservatives is Osborne's game now, even if it costs him money as the stamp duty cut will.  Nothing is too much for the aspiring classes, boosting the housing market once again just as it looks to be cooling.  It also helps those buying to let, and could have the perverse effect of making those about to exchange contracts think again now the £250,000 mark won't see the stamp duty to be paid leap.  Ed Balls was smart enough to say this was Osborne catching up with the idea of taxing expensive property more, just that it wasn't enough, as indeed it's not.  The best option would still be a complete revaluation of the council tax bands, only the howling about the proposed mansion tax would be nothing compared to the wailing should any politician dare to suggest those who have seen their home double or triple (or more) in value since 1993 should be contributing more to local services.  It also wouldn't reach the Westminster coffers, another reason it's not going to happen.

As for what further damage this approach will cause to politics once everyone realises they've been had again is anyone's guess. Only the Lib Dems came near to being frank in the 2010 campaign over the scale of the cuts that were to come, and it could be the same again this time.  What made Gordon Brown more than just a cunning, always out for political advantage strategist was he thought long-term also.  Without the funding poured into public services the cuts imposed so far would have been truly devastating; had we joined the Euro we'd facing the same problems as the rest of the Eurozone; had Brown and Alistair Darling not recapitalised the banks the chaos doesn't bear thinking about.  Osborne and Cameron by contrast have no long-term vision despite their "long-term plan".  Their approach has been to mortgage the future and use us as collateral.

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Wednesday, October 01, 2014 

The Tory cult of insincerity.

At the very first opportunity, the language of modern warfare descends into euphemism.  It has to, such is the mundane, horrific reality it hides.  Places where fighters might be sheltering become "command and control centres"; "a heavy weapon position", which could mean a tank or more likely, some form of artillery, is "engaged"; reports that civilians may have been caught up in the bombing are always "being looked into", while raids are invariably "intelligence led", as opposed to being carried out on the off chance.  War is a business, and since 9/11 business has been extremely good: how can it not be when a single Brimstone missile, used yesterday by the RAF to destroy an "Isis armed pickup truck" costs over £100,000?

War all the time, all of the time.  Our enemy is always intractable, impossible to negotiate with.  Always we try every possible step first, always we go into combat with a heavy heart.  Always those who rightly become ever more indignant with each new conflict are mocked, shouted down, asked what their solution is, have their arguments misrepresented.  It takes a lot for me to agree with George Galloway these days, but every single thing he said in the Commons on Friday was right.  Islamic State could not have established itself in either Syria or Iraq without the support of some of those it operates alongside; he wasn't claiming for a moment the Yazidis, Christians or Kurds were quiescent in the face of their onslaught.  The Obama strategy, our strategy, offers no solution except a fantasy one where a mythical "moderate" force in Syria overcomes IS while the Kurdish peshmerga and Shia militas that are now the de facto Iraqi "army" make nice over the border.  The one realistic option, a truce between the Syrian rebels and Assad, is off the table, such is the Syrian president's lack of "legitimacy".  As compared to what, exactly?

As for matters closer to home, the threat will once again be used to justify otherwise unthinkable restrictions on free speech and liberty.  Give credit to Theresa May: she coated her speech to the Tory conference yesterday with so many platitudes and doths of the cap to liberalism you could have almost missed she was proposing the equivalent of 19th century controls on activists and political campaigners.  If necessary she would legislate to enforce the limiting of stop and search; she quoted from the Quran in an effort to prove that the Islamic State is not Islamic (which is a completely baffling line of argument: no, IS is not in any way representative of Muslims, but to claim it has no connection whatsoever to Islam is just as ludicrous, and seems as much as anything a way of distracting from how our friends in Saudi Arabia are most responsible for spreading the Wahhabism IS and al-Qaida are indebted to); and even at times seemed to be coming near to criticising her party's own foreign policy.  "We can't just remove dictators and assume liberal democracy will follow," she said, to which you almost felt she was dying to add, like we did in Libya.

Only later did it emerge quite what her "banning orders" and "extremism disruption orders" would amount to in practice.  Banning orders the Tories have banged on about for years, constantly threatening to outlaw the likes of Hizb-ut-Tahrir without ever going through with it.  May's extremism disruption orders by contrast seem to have been designed to deal with the Anjem Choudary "problem": i.e. the gobshites who just about stay on the right side of the law and whom the media love to quote for their own purposes.  The police, suitably empowered, will able to apply for an order against someone judged to be a "threat to the functioning of democracy" or as little as "causing alarm or distress", almost exactly the standard currently in place that has resulted in evangelical Christians being arrested under section 5 of the public order act.  If granted, those sanctioned would then have to submit any online communications to the police in advance, and would also be barred from taking part in protests.

Ostensibly targeted against the far-right as well as Islamists, so broadly drawn are the plans they're an authoritarian wet dream, capable of being used against protesters of almost every conceivable hue.  Rather than being out of character, the proposals are of a piece with the Lobbying Act's crackdown on charities daring to poke their noses into politics, epitomised by Brooks Newmark's comments on how they should concentrate on their knitting.  Little wonder the Conservatives are set on repealing the Human Rights Act, knowing full well the orders would be judged to breach it.

David Cameron for his part insisted getting rid of the HRA was all about sticking two fingers up at Strasbourg, "the country that wrote Magna Carta" needing no lectures about human rights.  Not that he mentioned leaving the European Convention itself, meaning those not satisfied with the replacement "British" Bill of Rights could presumably still go to the ECHR, just at far greater expense than at present.  Perhaps the family of Trevor Philpott would like to ask if their action against Essex police would still have gone ahead under the replacement act, or indeed which rights it is exactly the HRA provides the replacement won't have, a question left unanswered before.

Considering just how low the bar was set by Ed Miliband, forgetting the deficit aside, it was always likely Cameron's speech would be seen as a success by comparison.  That doesn't however absolve the media from failing to notice Cameron has delivered essentially the same address three years in a row now.  Last year he contrived to answer the sneering of a Russian politician by pointing out how we battled fascism; this year he related his experience in Normandy with a D-Day veteran, "how when people have seen our flag - in some of the most desperate times in history - they have known what it stands for".  Well, quite.  Last year, as he has repeatedly, he built himself up into a fit of faux righteous indignation over some slight from Labour; this year he did it twice, over Labour daring to suggest the NHS isn't safe in his hands and over Labour's plans to deal with the deficit, or lack thereof.

It was nonsense, but it was nonsense decreed acceptable whereas Labour's nonsense is pounced upon.  Cameron's plea for a majority government isn't so much you've had four years of us and hated every minute, it's either me for another 5 or it's Ed Miliband, as it is I'm a bit shit, you're a bit shit, don't put your trust in someone completely shit.  As Larry Elliott points out, Cameron's tax promises today now make them the party without a plan for cutting the deficit: if cuts of £25bn already look next to impossible without certain parts of government shutting down completely, how can a further £7.2bn worth be found to finance cutting taxes for middle earners?  Just as Cameron says he's a relatively simple man, it simply can't be done, unless that is he gives with one hand and takes with the other.  Which is precisely what he's doing by raising the income tax threshold to £12,500 at the same time as freezing tax credits, hoping the lowest paid won't notice his sleight of hand, or how the continuously rising threshold helps middle earners the most.

For all its manifold, myriad faults, Cameron and the Conservatives have a vision.  It's a vision that ignores the inexorable rise of food banks, the penalising of the most vulnerable through a "spare room subsidy", the fact living standards have fallen and show no sign of recovering despite inflation coming in below 2%, and instead emphasises things could be worse.  You can only be sure of continuing mediocrity with the Conservatives, so long as you're upper middle class like they are.  Everyone just needs to work harder, do the right thing, and they'll get the same rewards.  It's the natural order.  Should they win, they'll make life even harder for those whom continue to oppose them.

Labour, meanwhile, doesn't have anything resembling a vision.  Yet still on choice of party if nothing else it retains the edge.  That's how beatable the Tories are, should be, how people want a vision of something better that isn't cod-Thatcherism from a politician who can only remind you of how much better Tony Blair was at insincerity.  You believed Blair's insincerity.  Cameron can't even pull that off.

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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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