Thursday, April 25, 2013 

Osborne as sadist.

It's a sign of just how grim the economic news has been over the past year that the fact we've narrowly missed out on plunging into an unprecedented triple-dip recession is being regarded as something approaching a minor success.  All it confirms in reality is that the economy remains broadly flat: taking into account the 0.3% decline in the last quarter of 2012, which followed on from the 1% rise in the third quarter that can be almost wholly put down to the Olympics, the economy has barely grown since the slight recovery of 2010/11.  The figures could also yet be revised down, as the full data from March and the impact of the snow has yet to come in.

If anything, it's the worst of all possible worlds.  George Osborne has rightly been under severe pressure over the past week, with a further credit rating downgrade from Fitch, the IMF finally getting off the fence, saying the chancellor's austerity programme should be loosened, and the borrowing figures that showed a minute in real terms drop of £300m.  He's used the 0.3% to claim, against all the evidence, that it's "an encouraging sign the economy is healing".  It could well be a sign that this year will see an extremely modest return to growth, but even if it is it's not going to do almost anything to reduce the deficit, nor is it proof it's his policies that are responsible.

Indeed, for all the coalition's talk of rebalancing the economy and Osborne's laughable march of the mallards makers, manufacturing remains in the doldrums (some of which is undoubtedly down to the ongoing woes in the Eurozone), while construction activity continues to plunge. The figures also make it more difficult for the incoming governor of the Bank of England Mark Carney to convince the other members of the monetary policy committee that further intervention beyond quantitative easing is needed to boost growth, which was exactly what Osborne was said to be relying on.

Of course, if Osborne were to suddenly decide that continuing with his plans as they stand is more damaging in both the long and short term than bringing the deficit down at a slower pace with the risks that entails, he would still be able to borrow at close to record lows, in spite of the credit downgrades he once scaremongered about and said his policies would prevent. Despite Plan A not really existing any longer though, such has been the success of austerity so far, we simply have to stick to whatever it is we're doing now. We've gone past the point at which this was a mere fetish to it bordering on full blown S&M, where Osborne's the sadist and we, like it or not, are the masochists. It's hurting but it isn't working doesn't even begin to cover it.

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4/25/2013 07:40:00 pm | | | links to this post

Tuesday, April 09, 2013 

Thatcher's victories.

The only appropriate response yesterday seemed to be to mock.  Thatcher had become and will remain a myth, for both right and left.  For her most devoted followers on the right, and for an example of the loopiness she has on even those usually most staid of academics, historians, one only need read the Graun's interviews with Michael Burleigh and Andrew Roberts, she was a giant who will never be equalled.  It doesn't matter to them how many communities her policies ripped the heart out of, how many lost their jobs as an effect of her repudiation of the attempts to maintain full employment of the post-war years and were thereafter bought off with incapacity benefit, or how the ultimate effect of the castration of the unions was the soaring inequality we have today (or if it does, they rationalise it as unavoidable collateral damage).  They really, genuinely, believe that she saved the country as David Cameron said yesterday.

Equally, for some on the left, Thatcher became the ultimate depiction of the nasty, heartless, even evil Tory.  There is no such thing as society, she said, and that quote came to symbolise how they felt she cared nothing for the working man who wanted little more than a secure job and a roof over his head.  If he wanted to buy that house, then that was different, he became "one of us".  All the rest could be disregarded, or if they were actively hostile, they could be characterised as the "enemy within".  The previous solidarity of local communities and workplaces was broken down through such rhetoric, while the police were used, whether against the miners or the strikers at Wapping as her effective line of enforcement.

As you might expect, my own view on Thatcher is closer to that of the latter rather than the former.  It's difficult to draw such a broad conclusion though when she resigned as prime minister 5 days shy of my 6th birthday.  Indeed, one of the many absurdities of yesterday was that so many of my generation and younger were either celebrating or certainly not feeling the slightest bit sad about the death of someone they could either barely remember as being in power or had resigned years before they were even born.  I don't have very solid memories of much before I was about 7, although I can extremely vaguely recall the news of the poll tax riots.  As for her political passing, there's just a blank.  I might be a child of Thatcher, but actually remember her time? I certainly don't.

Britain in 2013 is nonetheless still her country.  It's undoubtedly a more socially liberal and multiracial place than it was in the dying days of 1990, but economically it resembles it more closely than it has in years previous.  Enterprise zones, straight out of the Thatcherite handbook are back, as is the language of there being no alternative. George Osborne even lifted directly from her for his budget slogan, that it was one for those who want to "work hard and get on", as tactless a message as we've come to expect from the sledgehammer chancellor.

It's here where a certain section of the left's demonisation of Thatcher begins to fall apart.  To understand what she achieved, you don't just have to be aware that not a single one of her privatisations, financial reforms or trade union laws was unpicked by Labour between 97 and 2010, but also that support for her was so total from the vast majority of the media that it forced everyone that has come since into trying to ride the press tiger.  All have tried, and all have failed, although John Major refused to play the game to anywhere near the extent that Blair, Brown and Cameron did.  It's been said repeatedly that New Labour was Thatcher's greatest achievement (including by herself), and it's one of those rare cases when such a widely shared view is probably right.  In fact, New Labour didn't just keep to her settlement, it expanded on it: one of Gordon Brown's very first acts as chancellor was to give away the only remaining power that the Treasury had kept, that of raising and lowering interest rates.  The free market was triumphant.  That Labour would have almost certainly won in 97 regardless of Tony Blair's transformation of the party is now just another of those what if scenarios.

Although I disagree with plenty of the Heresiarch's analysis, he's right to note that the most fundamental difference between the New Labour machine and that of Thatcher was language.  New Labour (initially at least) spoke compassionately and continued to denounce the evils of Conservatism while going far further than she had dared in many areas.  Whereas she may not have cared two hoots for the NHS, she didn't introduce privatisation, as New Labour did; nor were the unemployed or others on benefits denounced in anywhere near the terms that became familiar in the final years under Labour (Tebbit's "on yer bike" anecdote about his father aside, although the denunciation of single mothers wasn't many moons away).  The use of the private finance initiative boomed, while the City was allowed to do whatever it liked, and duly did.  Thatcher undoubtedly wanted as many as possible to get rich, but she never said anything amounting to the immortal line uttered by Peter Mandelson.  She also might have loathed anything that wasn't bourgeois while having no interest in wider culture whatsoever, but she didn't expand the prison estate in the way her successor and then Labour did, or impose the restrictions on civil liberties Labour did in the aftermath of 9/11, despite almost being murdered by the IRA.

While then it was at least nice to hear one alternative voice yesterday, and it's difficult to disagree with Ken Livingstone that Thatcher's reforms set the political failures on housing and the City we're living with today into motion, his opponents were also right when they stated back that his party did nothing to change them and in some cases have ended up exacerbating the problems.  Just then as Thatcher lay the foundations for New Labour, so too did New Labour set the foundations for David Cameron's Tories and the coalition.  David Cameron's attempt to rebrand the Tories has undoubtedly been more spin and less substance than the remaking of Labour was, yet it just about worked.  That in power almost all of the fluffiness has fallen away and been replaced by some incredibly harsh rhetoric isn't just a mirror on the 80s, it's also how Blair and Brown operated when they thought they had to.

You can't imagine though that when either Blair or Brown go there will be impromptu street parties to mark the occasion.  Thatcher wasn't just divisive, as has been admitted even by Cameron, she polarised the country.  Apparently capable of great charm and kindness in private as well as rudeness, her public demeanour inspired hatred.  You were either with her or against her, a position only Tony Blair has since invoked.  For all the claims of how she was an inspiration for people in the Soviet bloc and had a passion for freedom, this only went so far.  If you were unlucky enough to be under the yoke of a dictatorship of a British ally, whether in Chile, Indonesia or Saudi Arabia to name but three, then hard luck.  The same went for the ANC in South Africa; she may well have opposed apartheid, but she continued to refer to Nelson Mandela as a terrorist and refused to impose sanctions on the regime.

All the more reason why yesterday we should have heard more widely from those who opposed her at the time.  The closest the mainstream came to acknowledging the depth of feeling of some, not to mention what was happening online were the one or two interviews with miners, with Red Ken and Shirley Williams turning up on Newsnight, alongside the odd reference to George Galloway's tweeting.  The 80s were hardly a sanitised era, and Thatcher herself was ruthless in her attacks on the media when they refused to follow the Conservative line, particularly the BBC, although perhaps most notoriously when Thames broadcast Death on the Rock.  Nor was there much, if any comment on the continuing censorship during her decade in power: the video nasty panic and the influence of Mary Whitehouse on Thatcher went unremarked upon.

Nor should it have been decided so swiftly that she would receive a ceremonial, if not state funeral, although the difference is frankly semantic.  Regardless of what you think of Churchill as a politician both before and after the war, his leadership during the conflict demanded that he receive full state honours when he died.  He worked to unite the nation and give it the belief to fight on.  Thatcher did the opposite of the former, while indirectly promoting a class conflict that continues to this day.  If the family wanted a public event, then by all means they could have either paid for it themselves (as they are doing in part) or had it privately funded.  Those pushing for a full state funeral should note that if Thatcher deserves one, then when Blair goes he will also surely merit such recognition.  It will also inevitably attract much protest, which raises the question of how it's going to be policed.

The ultimate conclusion to draw is that as always, it's the victors that end up writing the history.  Where the left has arguably succeeded socially (although there is much still to do) the right has most definitely triumphed economically.  What Thatcher and Reagan instituted in the 80s ought to have been exposed by the crash of 07/08 and the depression that has followed.  Instead, after a initial bout of Keynesianism, neoliberalism has re-emerged if anything stronger than ever.  There is, we are told, no alternative.  They're right, as the left has completely failed to set out that alternative.  Thatcher won then, and her successors are doing so now.

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4/09/2013 07:19:00 pm | | | links to this post

Thursday, March 21, 2013 

The depression must continue. And continue.

The usual way budgets pan is out that they begin to fall apart the day after.  Last year, Osborne's wheezes were so shambolic and leaked so thoroughly beforehand that it was clear on the day what a disaster it was.  This year we've had the spectacle of the chancellor himself making clear just how the figures were fixed to meet his objective.

Osborne then admitted this morning as was suggested yesterday that he had specifically asked departments to underspend so he could still meet his aim of reducing borrowing year on year.  As the IFS has since made clear, the underspend in total was £10.9bn (PDF), more than double the average of the last five years.  This includes a £2.2bn underspend on the NHS, further giving the lie to the claim from Cameron that spending on the health service is rising in real terms.

This is the kind of manoeuvring that during Gordon Brown's time as chancellor would have resulted in the Tories and the right-wing press throwing a fit.  The IFS sums up the aim of reducing borrowing year on year as "economically unimportant" which it is, but that spending time and effort to achieve it "could have had real economic costs".  In other words, Osborne would rather be proved right about the politics than the economics, which is just about as brutal a criticism of a chancellor as the IFS is likely to make.

Incredibly, it gets worse.  The IFS also forecasts that to fill the hole created by the various giveaways yesterday, come 2016 we face even more cuts, or more likely, significant tax rises. As spending on the NHS, education and international aid is due to remain protected till at least then, this puts all the more pressure on the other departments, and it's difficult to see how welfare won't be raided again.  Pledging to protect certain departments may have been good politics originally, but it's exceptionally daft now that budgets are falling in real terms anyway.

All this only underlines what a disaster Osborne's tenure has been. The inheritance the next government can look forward to will be even worse than the one the coalition had in 2010, when there were plenty of alternative policies that could have been pursued. The options available are either tax rises, when wages will still not have recovered, or cuts across the board.  As none of the parties are likely to make clear just how unpleasant these choices will be, the next government is bound to be unpopular from the very start as they are forced to row back on election promises.  And all because of Osborne's continuing refusal to change his mind when the facts have.

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3/21/2013 08:07:00 pm | | | links to this post

Wednesday, March 20, 2013 

The depression must continue.

How then has austerity been working out for you?  Are you enjoying the umpteenth year of a cut in pay in real terms?  Does life seem to be getting progressively more miserable and onerous with each passing month?  Aren't you at least somewhat appeased by how all this will be worth it in the long run?

George Osborne must certainly be hoping that you are, as today's budget does next to nothing to ease the pain at any level.  Indeed, if you're a public sector worker, he's just announced another year where your pay won't meet the rate of inflation.  As for everyone else, he's managed to find some money from somewhere through the usual tricks to be able to abolish the beer duty escalator altogether, as well as reducing the price of a pint by one single new penny.  Also cancelled was the planned rise in fuel duty in September, although anyone who imagined it was going to go ahead when it's been apparent for some time now that the lobby against is just too powerful is living in a country only slightly adjacent from the one Osborne occupies.

For this was the budget that spelled out plain and clear that his plan hasn't only failed, it's done so catastrophically.  The economy has effectively not grown since the coalition came to power; growth last year was 0.2%, all of which was down to the Olympics and counting the sale of the tickets in the third quarter.  The Office for Budget Responsibility forecast at the budget last year that the economy would grow in 2013 by 2%; at the time of the autumn statement they downgraded this to 1.2%; now they predict growth of a pathetic 0.6%, and some of that will depend on the economy not slipping into a triple dip in the current quarter, which will be very touch and go.  Osborne claims that the deficit has been cut by a third, yet as Duncan Weldon points out, on a like for like basis excluding the taking on of the Post Office pension book and the receipts from quantitative easing, it has in fact not even fell by the much lauded quarter, rather by 22.5%. Moreover, over the next two years the OBR predicts it will barely move, remaining around the £100bn level, rather than coming down to £37bn as the OBR originally predicted following Osborne's "emergency" budget of 2010.

Similar smoke and mirrors tactics seem to be at work when it comes to Osborne managing to avoid borrowing actually increasing this year compared to last.  He's only succeeded thanks to departmental underspends, as tax revenue fell £5bn short of what was expected.  Whether as Faisal Islam suggests this was down to Osborne ordering departments to hold back we can't know, but it certainly looks suspicious that his figures are only £100m away from there being no change.  Those same departments are now being called upon to make further cuts to finance the £3bn increase in infrastructure spending, which isn't going to kick in until 2015 anyway.  Little wonder that the OBR suggests that broadly this was a budget that will do absolutely nothing to encourage growth, something Jonathan Portes concurs with.

Whether there are any nasty surprises lurking will doubtless be confirmed by the IFS tomorrow, but what's apparent today is that Osborne is once again betting that a gamble will pay off in order to ensure the budget is "fiscally neutral".  The almost £5bn being spent on reducing beer duty and cancelling the fuel price rise is all to be made up through dealing with tax evasion, something which is notoriously difficult.  Last time he counted on the 4G auction to pay for his spending, and only just about managed to get out of the bind when it brought in less than was expected.  This time there may well be no escape.

Otherwise, this was the usual nakedly political budget we've come to expect from Osborne, who despite loathing Gordon Brown seems to have learned everything he knows from the son of the manse.  This was a budget for an "aspiration nation", or to put it more bluntly, the middle classes, as long as you fit the new Tory notion of what the middle classes are.  You must want "to get on in life", work even if you have children, either own your own home or want to, not earn quite enough to fall into the 40% income tax bracket, not claim benefits, not work in the public sector, and you must drive to work and swill beer rather than any other alcoholic beverage.  There were a couple of sops to those outside these arbitrary confines, such as the raising of the personal allowance to £10,000 a year ahead of schedule, but then that also helps the middle more than it does the poorest.

All this pampering of the middle and continued codifying of business with a further cut in corporation tax for those who bother to pay it, does, after all, come at a price.  While there were no extra cuts to welfare announced this time round, it seems likely further reductions will be coming in 2015, with Osborne due to target "annually managed expenditure".  The effects of the current cuts are already there to be seen: the poorest are continuing to take a pounding, while the richest, despite possibly paying more in tax now than they did under Labour, are barely affected, not least thanks to Osborne's abolition of the 50p rate.

If Osborne's ultimate aim was, as the Guardian reports, to "avoid fucking up", then at the moment he seems to have just about managed it.  What he most certainly hasn't done is shift away from Plan A, regardless of how many people or publications urge him to drop his refusal to borrow to invest.  The one move today which may well have some effect is the £2,000 cut in employers' national insurance contributions, which could encourage small businesses to take on more workers.  Otherwise, he's relying on the Bank of England to inflate away the debt, something which is asking for trouble when wages already can't maintain pace.  Osborne's major problem is that as a recent poll showed, his unpopularity poisons his policies regardless of whether the public agree with him or not.  Nothing announced today is going to change that.  Nor will it even begin to get us out of the depression the coalition has helped to plunge us into.

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3/20/2013 07:48:00 pm | | | links to this post

Tuesday, February 26, 2013 

Osborne must go.

Once, it was fashionable to compare and contrast Blair and Brown with Cameron and Osborne.  While there isn't a story behind the latter's relationship to rival that of the deal/non-deal between TB-GB at Granita, Brown did eventually manage to become prime minister. His ambition may have been greater than his ability to do the job, but he got there, thanks in part to a parliamentary grouping incredibly short on other talent.  Once, there was talk of the pattern repeating, the chancellor replacing the prime minister.  No one thinks it's going to happen now.

This isn't just because as chancellor Osborne has been shown up as out of his depth, unwilling to listen to reason or to change tack as the economy continues to stagnate, although it is part of the story.  It's more that Osborne is a one-note politician. His default and only setting is pomposity, mixed with more than a dash of smarm. His voice is the always the one tone, not quite nasal but far too close to it for anyone to regard it as anything other than an annoyance. Nothing is ever his fault or responsibility, or too big to be swept under the carpet: we've heard hundreds of times how the deficit has fell by a quarter since the forming of the coalition, yet Osborne didn't think the double-dip recession was important enough to mention in his conference speech last year. His greatest achievement, the pledge of an inheritance tax cut that frit Gordon Brown into calling off his planned snap election, has now been abandoned to help pay for care for the elderly.  Rather than sharing the proceeds of growth, he continues to share out the blame for his failures without ever taking any for himself.

Regardless of what you think about Cameron, and I remain as bewildered as ever about his status as the Conservative party's main electoral asset (I could at least understand why Blair was so popular for so long, even if that was precisely why I so disliked him), he has a range. He can do righteous anger and unrighteous anger, he can be conciliatory, he can make sincere apologies for things he wasn't responsible for and he can fawn over royalty and autocrats with the very finest of the upper middle classes. He isn't as eloquent or as convincing as Tony Blair at his best, or come anywhere near to competing with the majesty of Bill Clinton and his uncanny ability to home in on an audience's collective erogenous zone, but on his day he's not bad.

Osborne by contrast always speaks in public as though he's delivering the budget, a strange thing to do when he doesn't have Tory backbenchers ready to cheer when required.  You get the feeling that if he were ever to address a room of orphans he'd tell them in the familiar style that their lack of parents was down to the last Labour government and that their only idea to replace them is to increase borrowing.  Just as his failure to engineer growth is blamed on the wider state of the world economy, the continuing recession in the Eurozone and the wrong kind of diamond jubilee, so yesterday saw him put the responsibility for the credit rating downgrade on everything other than the coalition's policies.  It didn't matter that the very first benchmark in the Tory manifesto at the last election by which his government could be judged was the keeping of the triple A rating, or that he had said before then that it would be a "humiliation" if we lost it, now we have it's irrelevant as gilts are at 10-year-lows and interest rates are still at 0.5%.  That interest rates are so low is a sign of the lack of growth is irrelevant.  All this was delivered as though it was a triumph, and nothing whatsoever to be embarrassed about.

It's true, as Chris says, that this is a failure that doesn't really matter.  The obvious point though is that you can't make such a fetish out of a policy as Osborne has and then pretend that it was meaningless all along, or indeed completely misrepresent Moody's main reason for the downgrade, that of the "continuing weakness in the UK's medium-term growth outlook".  All but needless to say, Osborne didn't so much as mention the need to go for growth in his statement to the Commons, but there were plenty of Tories ready to stand up and read the lines given to them by the whips blaming the last government for everything, the very same thing Osborne accused opposition MPs of doing.

(Incidentally it's worth noting that just one Lib Dem bothered to take part in the debate, and he had the gall to accuse Ed Balls of politically motivated antics, obviously forgetting last year's unhappy incident when Osborne accused Balls of allowing the banks to rig Libor, for which he failed to produce any evidence.)

Whatever Osborne's positive qualities once were, and supposedly his analytic mind was once highly valued, his utter lack of humility and inability to be anything other than a one-dimensional chancellor with one debunked idea is slowly but surely ensuring Conservative defeat come 2015.  David Cameron doesn't have either of the problems that Blair had each time he considered moving Brown from the Treasury; he's not succeeding and he doesn't have anything like the following in the party that Brown had and would have set out to sabotage everything from then on.  The only question ought to be who to replace Osborne with, and William Hague doesn't exactly strike as the best option.

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2/26/2013 11:59:00 pm | | | links to this post

Wednesday, February 20, 2013 

A fairy story (or, bludgenoning home a truism).

Once upon a time, there was a farmer called George.  George was a bright man, but he had a problem.  Despite all of his initiatives and plans, his farm was failing.  His main problem was that he kept losing chickens to a wily fox called Ed.  Ed was taking so many that George had to keep buying chickens from the local market to replace them.  Since taking over the farm from a dour Scotsman named Gordon, George had insisted that he would bring down the number of chickens he bought within five years.

3 years on, and George's accountants noticed that rather than reducing the number of chickens he was buying, he was in fact purchasing more than ever.  "Ah", said George, "but these new chickens I've been buying are in fact premium, leaner birds. They will lay more often, leaving enough eggs to replenish the brood at the same time as I sell more in the farm shop."  This seemed such a cunning business plan that it succeeded not only in convincing the accountants, it also flummoxed Ed, who failed to snatch a single chicken from George for over a month.

Sadly for George, his devious scheme did not go as expected.  His new hens did indeed lay more eggs, but not at the rate that the creditors had pencilled in.  Ed also regained his confidence, and once again started snatching birds from under George's nose.  All told, George's chickens laid 2,300 more eggs, 1,200 less than expected, meaning he would indeed have to keep buying more hens to replace the ones Ed was stealing. 

Luckily for Albion Farm, George now has a new plan.  It involves selling off other parts of the estate, starting with the stables.  Findus have already expressed an interest.

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2/20/2013 07:13:00 pm | | | links to this post

Thursday, February 14, 2013 

Time to put flesh on the bones.

2013 so far hasn't exactly been an auspicious one so far for the Conservative party.  All their gambits, and there have been more than a couple in the past six weeks, seem to have come to naught.  The attempt to portray Labour as hopelessly out of touch by jumping on their voting against the 1% uprating in benefits has had no discernible impact on the polls.  By the same token, the promise of an in/out referendum on the EU come 2017 caused a slight ripple, which has since disappeared.  Lastly, the vote on gay marriage showed how deeply split the Tory party remains between what the modernisers believe will help them win the election, and what the err, conservatives believe is likely to hinder them.  Any goodwill which the announcement of the referendum generated was just as quickly snuffed out.

The latest setback for the Tories, the 12% percent lead for Labour in this month's Graun/ICM poll, does look slightly ominous.  Yes, there's sampling errors and the fact that all the other polls suggest Labour's lead remains about the 10 point margin, but ICM usually shows lower leads due to their reallocation of some don't know answers to the party they last voted for.  With the Lib Dems having voted against the boundary changes that would have given the Tories an advantage in around 30 or so constituencies, the chances of Cameron improving on his party's showing in 2010 become ever more slim.

Not that any of these problems for the natural party of government have been due to Labour being anything other than a generally efficient opposition.  Ed Miliband continues to put in solid performances at PMQs, often besting Cameron, yet you can hardly say that he's been the most visible of leaders since the new year.  Presumably some of that time was well spent preparing for today's speech, which is almost certainly his best since he became leader, his last two conference speeches being the only others of real note.

This isn't though down to the announcement of the twinned policies of reintroducing the 10p top rate of tax and paying for it through a mansion tax.  Whether the sums add up certainly isn't clear, as the band at which the 10p rate would be set depends on the amount raised through the tax.  It would arguably make more sense to do a wholesale revaluation of the council tax bands, as indeed the Institute for Fiscal Studies has since suggested, although such a policy would doubtless be vigorously opposed by those who have spent the last 20 years caring more about how much their house is worth than actually enjoying living in it.  As the IFS has also pointed out, reintroducing the 10p rate would just further complicate matters, especially when the government has been raising the personal allowance, which regardless of the downsides of the policy is a move everyone understands.  Their suggestion as to what could be done instead from the proceeds of the tax is either increasing tax credits, a policy Labour seem to be moving away from, or increasing the threshold at which employee national insurance contributions are paid, which would be the obvious step to take in line with the rise in the personal threshold.

No, the real reason why it's notable is that for the first time in years a party is making the case for running the economy differently. As Miliband said, it may well be true that we're in a race with the likes of India and China, but that doesn't mean our response should be to dump hard won rights, as the Tories want as part of their EU treaty renegotiation and Osborne has already introduced through his ludicrous shares for rights scheme. Emphasising how the 1% have taken 24 pence in every pound over the last 30 years and connecting it with how the Tories believe they still deserve a tax cut is exactly the sort of message Labour needs to keep making.

It doesn't therefore matter that New Labour did obeisance at the feet of the bankers, what matters now is that Miliband brings foward policies that make concrete his pledge to break with the era of the trickle down theory. It's fine saying Labour would break the stranglehold of the big six energy companies and stop the train companies ripping customers off on the most used routes, it's how they're going to go about doing so.  Welcome as proposals such as the introduction of a technical baccalaureate are, they're just small parts of what needs to be a far wider vision of what a "one nation" Britain would look like.

The polls suggest that for now at least this lack of detail doesn't matter, as silly as it seems to be saying that while the 10p rate and mansion tax are policies Labour would implement now if in government, they won't necessarily be in the manifesto come the election.  Much as this makes sense when for all we know the depression could yet extend to 2015 with all that would entail for government spending or rather the lack of it, the time is fast approaching when we need to know exactly what policies Labour will pledge to implement should they win.  Miliband has made a good start, and his repudiation of the worst of New Labour is now all but complete; it's what comes next that will decide whether or not David Cameron will helm a one term government.

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Thursday, February 07, 2013 

"Oh no, not if I have anything to do with it, and I do have something to do with it! Lol."

Reading the IM transcripts between the bankers who conspired to fix the Libor inter-bank rate at RBS, it's difficult to know whether to feel sorry for these children trapped in the bodies of men, or be rather scared that these are the people who can either make or break the economy. You can read far too much into the way people type, it's true, but there's something not quite right about these supposed Masters of the Universe begging each other to commit fraud in text speak.  The messages are of such a piece that when one of the traders writes in something approaching 20th century English it comes as a shock. Was he not feeling quite right that day, or did he consider himself normally somewhat above the juvenile styling of his peers?

Chief executive Stephen Hester for his part blamed precisely this "mateyness" and bar culture among the "junior" traders for the entire episode, rather than say, greed or the fact that there was no supervision whatsoever over the setting of Libor until mid way through 2011. Not that this necessarily would have ensured it either wouldn't have happened or been spotted sooner: as the logs also show, wash trades were used to reward brokers and they sometimes went wrong, yet still the bank failed to notice.  It reminds somewhat of Nick Leeson at Barings, able to keep getting away with taking ever greater risks and making ever larger losses, until he finally brought down the entire bank.

In keeping with the day's other main story, those at the top of RBS won't be losing their jobs.  Indeed, the only person other than the traders themselves to leave will be John Hourican, the now former head of investment at the bank.  According to RBS he had "no involvement in or knowledge of the misconduct", something that could also be said of many at the bank who will be remaining in their posts.  Still, we shouldn't feel too sorry for him: he might not be getting the up to £4m he was entitled to, but he will still receive 12 months' salary, a mere £700,000.  As for the fines levied on the bank, "most" of the £390m imposed by both the FSA and the Americans will be clawed back from bonuses previously paid out, so rather than the taxpayer fining the taxpayer, it's slightly more complicated, although obviously it's still a mostly circular process.

As noted on the Graun live blog, it was rather odd though that the only person named was Hourican, who did the decent thing.  The men who actually rigged the rate remain anonymous, presumably on the grounds that there may be criminal charges brought against them.  Considering that so far no one has been prosecuted for their role in the crash at all, this seems a rather forlorn hope, although you never know.  All we have to identify those responsible is that they like sushi, steak, a free lunch, and one remarked he was up and down like a "whores drawers" (sic).  Well, at least it narrows it down slightly.  How many bankers can there be who have a taste for those things?

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2/07/2013 12:19:00 am | | | links to this post

Thursday, January 31, 2013 

Ever fallen in love..

Interesting to read Iain Dale's post on how he's falling out of love with politics, along with a couple of equally thought-provoking responses.  My own take on why apathy seems to have become the default response to politics is similar to Paul's, in that it leads back not to Thatcher, but rather to the surrender to the markets of the late 70s, exemplified by Denis Healey's going to the IMF and James Callaghan's statement that Keynesianism was no longer an option.  With that surrender has come the failure of politicians to offer anything approaching a vision of a better society: all they promise now is either shallow aspiration, a belief in the fallacy of meritocracy, or more simply, that they'll do a better job of managing the country than the other lot.

Let's face it: the main political battle since the sub-prime crisis has been over who will cut what and when.  The choice on offer has been either cuts now, or slightly less deep cuts over a longer term period.  In fact, such has been the coalition's success that their programme for deficit reduction is now practically indistinguishable from that of Labour's, albeit Miliband 'n' Balls would do things slightly differently, whether through their jobs guarantee or cut in VAT etc.  The only real resistance to this inexorable narrative has been from the Occupy movement, who in this country at least seemed determined to ensure their own irrelevance from the outset.  No leaders, no real suggestion as to what the alternative should be, just that corporations aren't people, bankers aren't very nice and that everyone should pay their fair share of tax.  Inspiring it wasn't.

When politicians won't even provide the merest outline of how they want to make things better, or won't in terms that aren't technocratic, you can't be surprised that so many switch off.  Which brings me to another explanation that is far more prosaic: there's never been so much to distract yourself with as there is today.  When in 1976 there were only 3 television channels, extremely primitive video games and VHS systems still a couple of years away, politics was something to involve yourself in even if you weren't particularly vehement in your views.  Today if you so wish you can avoid hearing almost anything of the news let alone politics, and you can't really blame those who choose to do so.

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1/31/2013 10:38:00 pm | | | links to this post

Friday, January 25, 2013 

You ain't seen a double negative yet.

No growth whatsoever last year, the snow over the last week bound to lead to a decline in the first quarter of this year, and still the government wants to persist in removing some of the automatic stabilisers through the 1% cap on benefits. It's almost as though the coalition wants to completely crash the economy.

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1/25/2013 02:23:00 pm | | | links to this post

Wednesday, December 05, 2012 

The equivalent of a kick to the balls.

According to Michael White, George Osborne was wearing a purple tie as he delivered his autumn statement.  On my admittedly ageing TV it looked black, a colour far more reflective of the words spooling out of Osborne's mouth.  If during the budget the question being asked by the chancellor was just how hard and fast those earning under £150,000 a year wanted to be shafted, there were no such rhetorical flourishes this time round.  Today's statement was nothing less than the equivalent of a kick to the gonads of all those earning under £42,000 a year, already sprawled on the floor from previous budgetary onslaughts.

Never before have the battle lines been drawn quite so distinctly between those who claim any benefit from the state and those who don't.  Osborne focused, as the Tories repeatedly have, on the mythical striver going out to work early in the morning and coming back late at night, only to notice that some of the other families on his street aren't doing the same, their lights not on when he goes out and their lights still on when he goes to bed.  How can it be fair that he works hard while others fail to take any responsibility whatsoever?  It doesn't matter whether these other individuals are feckless scroungers (extremely unlikely) or they can't get a job as there aren't any, whether they're too disabled or sick to work, or even if they do go out to work and claim tax credits, under Osborne's new uprating regime all are equal.  First he tried changed the method of uprating benefits from the retail prices index to the consumer prices index to save money, only for inflation to be so high that the impact was minimal, so now he's simply fixed the increase at 1% for the next three years.

Remember the outcry when Gordon Brown raised the state pension by 75p a week?  Well, Osborne's gone one better.  Those over 25 on Jobseeker's Allowance, or on the lowest rung of Employment and Support Allowance can look forward to an increase of 71p a week come next April, or in total an extra £36.92 over a whole year.  As we saw last week, thousands of those on JSA are being failed by the work programme, the government having abandoned a scheme that both worked and paid at least the minimum wage.  They will doubly suffer due to the incompetence of the coalition.  As for those who've managed against all the odds to be recognised as unable to work by ATOS, well, you've had rises in previous years so stop complaining.  And frankly, as for those of you on tax credits, they were invented by Labour and we'd really like to abolish them altogether but can't quite yet, so count yourselves lucky.

As it was with Gordon Brown, everything with George Osborne is about screwing the other side as much as it is about the economy.  His change to the benefits uprating will require legislation, therefore challenging Labour to either side with the government against the most vulnerable and poorest in society or to stand up for those the Tories have characterised and will continue to smear as the undeserving.  It is base, disreputable and vile politics, but it works.  Polls show we still want a welfare state, we just don't want welfare claimants, and the Tories are determined to milk that sentiment down to the very last drop.

Something else half-inched from Brown was Osborne's almost magical finding of extra money, which allowed him to claim that he wouldn't despite speculation be borrowing more this year than he had previously announced.  Similarly to how PFI debts were kept off balance sheet by Brown, allowing him to claim up until the crash that he was keeping debt to 40% of GDP, Osborne today counted money that hasn't even been raised yet.  By including the £3.5bn expected to be raised from the auction of the 4G spectrum, as well as £5bn meant to be coming from the deal with the Swiss over tax avoidance, along with the £11.5bn of interest created through the Bank of England's quantitative easing programme, Osborne somehow managed not to give Ed Balls an open goal.

Not that Balls would have scored anyway, as he had an off day.  Quite how he managed to be so awful is unclear, such was the incongruity of much of Osborne's statement: only a politician with his level of smugness could describe the economy as "healing" when the OBR predicted growth this year of -0.1%.  Osborne also claimed that the OBR had absolved the government's austerity programme of responsibility for the double-dip, all the blame being heaped again on outside factors, something not wholly backed up by the facts, as Chris points out.  The big winner was, once again, large businesses, with those unable to manage their affairs so they don't pay any corporation tax able to console themselves with a further cut of 1%.  This puts the onus further on the individual, and so more of those on higher middle income can look forward to falling into the 40% tax band.  I think we've dealt with the continuing rises in the personal allowance more than adequately before, and how they fail to help the poorest, almost to the point where it can be disregarded.

While the Institute for Fiscal Studies will no doubt confirm it tomorrow, this table from the Resolution Foundation sums up Osborne's approach.  Stripping out the measures inherited from Labour which are still having an impact, today's changes are remarkable in how regressive they are, with the supposed squeezed middle and hard-working families we hear so much about taking a battering.  The richest meanwhile, while affected, will barely notice their losses.

Just as remarkable is how little dissent there's been at the extension of austerity right up until 2018.  The coalition was formed with the main aim of eliminating the structural deficit by 2015.  Half-way through the the parliament, the economy has stagnated, the public sector has been severely cut, welfare has been slashed close to the bone and still more is being demanded.  Politicians have probably never been as unpopular, yet apathy rather than anger or resistance is the mood.  This more than anything is why Osborne can get away with claiming that the real disaster would be to alter his plan, even as the OBR itself recognises the problem isn't with the supply-side, it's with the lack of demand.  Even the spectre of an unprecedented triple-dip recession seems unlikely to make the coalition budge.  We don't just face a lost decade, as that doesn't anywhere near adequately describe the situation; what we're going through isn't just unnecessary, it's counter-productive, ideological and downright nasty.  If we can't get these bastards out come 2015, then frankly we've deserved all of this.

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12/05/2012 11:15:00 pm | | | links to this post

Tuesday, December 04, 2012 

Still two and a half years to go.

Here's one to delight those glass half full/glass half empty types: tomorrow is the official half-way point for the coalition, as noted by dearest Pollyanna.  Either we've only got another two and a half years to go, or we've still got another two and a half years to go.  As a glass half empty person, it's also worth noting that these 30 months will see the brunt of the cuts: next April sees the introduction of the benefit cap and further alterations to housing benefit, while October will bring the new, guaranteed to work perfectly universal credit.  The timetable was based around the assumption that the economy would be back to stable growth by this point, making the cuts less painful.  So much for that.

At least the coalition's spinning of tomorrow's autumn statement on the budget has been perfectly transparent.  After the disagreements that led to almost all of the budget being leaked, contributing to the shambles that followed, this time round they've decided to announce the main points in advance themselves and so avoid the potential for another disaster.  Sunday saw George Osborne ensconced on the cosy Andrew Marr studio sofa, all but accepting he would miss the target set in his first emergency budget to bring debt down as a proportion of GDP by 2015, having already postponed eliminating the structural deficit until 2017.  Today Dave 'n' Nick went off to a school, presumably one of those not run by the barmy lefties who so vex Michael Gove, where the pair announced that Plan A was also being modified, albeit slightly.  Rather than go to the markets where they can borrow at record low levels, all government departments other than those protected are to be raided once again to fund a £5bn increase in capital spending projects.

Considering the fetish made by Osborne of not deviating from his spectacularly successful economic plan by as much as an inch, any u-turn on investing is welcome.  The change is though massively tempered, firstly by how £1bn of the £5bn will be allocated to a school building programme, when there was a perfectly adequate one already in operation when the coalition came to power which Michael Gove almost immediately cut to the bone, and secondly by how the money has to come from yet more cuts. 

Then again, how could the Tories possibly do anything other than rob Peter to pay Paul?  Cameron's main line of attack on Ed Miliband and Labour has been that all they want to do is borrow more.  It doesn't matter that tomorrow Osborne will admit the government is having to borrow more due to the lack of growth, or how numerous experts have called for a loosening of austerity, should they do exactly what Labour urged the Tories fear they would lose all credibility.  They're probably right, but that's their own damn fault.  If the coalition truly is governing in the national interest as they continue to say, Osborne would admit the current economic situation isn't the fault of everything other than his policies, and row back and introduce something along the lines of Jonathan Portes's plan for growth. 

Instead, we're likely to be served up something which ends up bringing down debt as a proportion of GDP at around the same point as Alistair Darling proposed, the plan Osborne and friends continue to maintain would have resulted in our borrowing costs rising to the levels Greece and Spain are having to pay.  The wonder isn't that the polls show Labour opening up a lengthening lead over the Tories (the Lib Dems meanwhile are now neck-and-neck or behind UKIP in most polls), it's that the Tories are still ahead on who would best run the economy.  Perhaps it's simply down to mishearing or a typo: all run needs is an I in it and the public are dead right.

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12/04/2012 11:59:00 pm | | | links to this post

Thursday, October 25, 2012 

Just an ambulance at the bottom of a cliff.

We are, apparently, out of recession.  It has to be apparently as, depending on where you live, your job or lack of one and your other personal circumstances, it's never been clearer that the official statistics tell only the slightest of stories.  For a hell of a lot of people, there hasn't been any uplift since the crash of 2008 whatsoever: only on Tuesday the ONS released statistics on net national income per head, showing there had been a decline of 13.2% since then, almost double the drop in GDP.  In parts of London and the south east by contrast, you'd be hard pushed to see any evidence that there's been a recession at all: yes, consumers have cut back on their spending to a certain extent, but for the most part unemployment has stayed low and businesses have carried on much as they did before.

Naturally, George Osborne and David Cameron have both taken credit for this first sign of recovery and while not being too triumphalist, have cited it as evidence of their policies beginning to work.  This is in stark contrast to how they, equally naturally, took no responsibility whatsoever for the previous three quarters of negative growth.  Everything other than their interventions were blamed: banks for not lending, the Eurozone crisis, Labour, the jubilee, the weather and Labour some more.  A couple of weeks ago, the word recession did not so much as pass their lips.  Yesterday Cameron informed the Commons while being pasted by Ed Miliband as is now the pattern at PMQ's that the "good news would keep on coming". 

And fair enough, growth of 1% between July and September is to be welcomed.  Once you've stripped out the 0.5% apparently accounted for by the making up of time lost for the extra jubilee bank holiday, and the 0.2% added purely by the sale of Olympic tickets, 0.3% isn't quite as impressive, but it is growth nonetheless.  Indeed, if we're being especially charitable and add that 0.5% back onto the last quarter we actually came out of recession then, albeit with a barely noticeable growth rate of 0.1%.  The figures are though prone to revision, as evidenced by the last quarter where the first announced statistics suggested a decline of 0.7%, rather than the 0.4% it turned out to be after they were twice updated.  No one's suggesting they're likely to be revised up in this instance, so it may well yet turn out that shorn of the Olympic factor, the economy remains as flat as my personality.

There's also little indication that this pattern of negative growth followed by slight recovery is going to change.  The last three months of the previous two years both saw negative growth, and betting against that happening again when prices are almost certainly going to rise would be foolish.  Even if we don't suffer an unprecedented triple dip, and that's a very real possibility if the Americans implement their planned cuts in January, our own cuts are due to accelerate over the next two years.  This is still planned in spite of the recognition from the IMF that they underestimated the effect fiscal consolidation would have on growth, and in spite of all the evidence suggesting that if the pace of consolidation was slowed in order to borrow to invest, there wouldn't be a rise in the cost of doing so.  George Osborne previously claimed, entirely wrongly, that the economy was "out of the danger zone".  Both he and Cameron could yet have to eat their words again.

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10/25/2012 10:42:00 pm | | | links to this post

Wednesday, October 10, 2012 

No responsibility.

Well, that was a perfectly workable speech by the leader of the opposition.

What do you mean, David Cameron's the prime minister and has been for the last two and a half years?  How can he possibly be?  How can you have been in power for that period of time and still be blaming every single problem you face on either the previous government or on other outside forces apparently conspiring against you?  How can someone who praises the virtues of taking responsibility be so completely unwilling to accept it himself?  How can someone with such intellect be so wilfully obtuse?  Or is it that intellect, that apparent belief that all you need to do is aspire and work hard and you'll achieve greatness, in the face of all the evidence that it is still overwhelmingly privilege or lack of it that defines where you'll end up in life, that makes Cameron such a dull boy?

To get away from answering my own questions for a second, we should give Cameron some credit.  Most party leaders lay off the blatant untruths until they're at least a tenth of the way through their conference speech.  Not Cameron: 60 words in and he claims that he came into office with the challenge of making an insolvent country solvent again.  Now, you can play around with what the true definition of insolvent is, but by most reasonable measures we are not and were not insolvent: even if we class insolvent as needing a bail-out, we have not needed one, and would not have needed one regardless of which party won the election.  As pointed out yesterday, George Osborne is now thanks to his superb management of the economy going to eliminate the deficit later than Alistair Darling planned to.  Despite this, the markets have not decided we can't pay our way in the same way they have Spain or Greece.  Half-way through the current parliament, it really is about time that the coalition dropped the act that it's thanks to them we've avoid bankruptcy.

Not that this is even close to crucial when neither George Osborne or David Cameron can bring themselves to admit that there has been no economic growth for the past nine months.  The word recession has not so much has crossed their lips.  Instead Cameron can't "tell us that all is well"; all he can say is that "the damage was worse than we thought, and it's taking longer than we hoped".  All our woes were placed squarely on the Eurozone crisis, down to how Ireland, Spain and Italy aren't buying as much from us as before.  As for who got us in this mess, it was Labour.  Yes, it was Gordon Brown who personally and purposefully crashed the economy.  It wasn't anything to do with the popping of a bubble that politicians of all parties and stripes encouraged, or the sub-prime crisis in America, or the neoliberalism of the past 30 years finally collapsing under its own contradictions, it was Labour.  Labour, Labour, Labour.

And now what do Labour propose, even though they shouldn't be so much as allowed to continue to exist as a party considering what they did to us all?  They want us to borrow more.  It's their solution to everything.  It doesn't of course matter that the coalition is borrowing far more than it planned because of the unmentionable recession to pay for out of work benefits, in spite of which we still have the phenomenally low interest rates the Tories never stop raving about, if we were to so much as deviate from austerity even slightly it could mean our doom.  It also doesn't matter that the high priests of austerity, the IMF, on Monday admitted they'd completely underestimated the effect of cutting government spending and that it was now really time to consider a Plan B, Cameron and Osborne know better.  As for the IMF's prediction that there will be negative growth of 0.4% this year, should that be proved correct it will obviously Labour's fault as well.

When a political party is in trouble, it can do one of three things.  It can change its leader, it can do a thorough analysis of where it's going wrong and why it isn't appealing to voters in the same way as it used to and act on it, or, as the Tories under Cameron are doing, they can just reprise their old tunes and hope it works.  Yesterday it was murder a burglar; today from Cameron it was aspiration, aspiration, aspiration,  the supposed magic ingredient that propelled Thatcher and Blair to successive terms of office once again being turned to.  The problem is, most people only dream and aspire to more when they're comfortably off, when the support's there to help them realise their aims.  The vast majority at the moment are struggling to make ends meet, they're not saving, they're paying off their debts.  And how is the government itself trying to inspire workers?  By telling them to give up their rights in exchange for shares.  Truly empowering stuff.

At its heart, this was a truly with us or against us speech.  Cameron portrayed everyone who disagreed with his policies as either wreckers, snobs, sneerers, scroungers, or comfortable with under achievement.  The section on welfare especially was a disgrace, not just a tissue but a fabric of lies, claiming that some actively made a choice not to get on in life from their very earliest days, not bothering to try at school as they could live on the dole instead, get a free house or flat and laugh at all the strivers doing the right thing, looking in on them as the hard workers look "out of the window dreaming of a place of their own".  He mentioned families claiming 40, 50 or £60,000 a year in housing benefit, when even the slightest attempt at checking found that 99% of claims are under 15k a year, with 0.0025% over 50k.  And yet again there was no recognition that the overwhelming majority of new housing benefit claims are from those in work.  As for the work programme and Cameron's hyping of it, it simply isn't working.  But then how can it when there are simply not enough jobs out there, and when Cameron himself uses such dodgy statistics to claim that under the coalition there have already been more private sector jobs created than under 10 years of Labour?

It wasn't all bad, however.  While it was nothing like the old days under Blair when almost every year saw him all but launching an attack on his own party, Cameron did all but accept it was often his own natural supporters that block new housing developments with nimby or banana attitudes, urging them to accept we need to build more.  

That was though more or less it, and there were so many egregious sections that anything even slightly conciliatory was completely overwhelmed.  Like giving all the credit to Theresa May for the deportation of Abu Hamza, as though it wasn't a legal process that started under the last government simply reaching  its conclusion.  Or hilariously claiming that the Queen is the best head of state in the world. Or telling blatant lies about the coalition's stewardship of the NHS, while not so much as mentioning the reform bill.  Or not so much as mentioning the police after Plebgate, although considering the walloping every other section of the public sector received just for existing, perhaps that was a merciful decision.  It wasn't then so much a flat speech as the final confirmation that Cameron hasn't adjusted to being a leader of the country rather than just a leader of a party, and we're the ones paying for it.

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10/10/2012 06:25:00 pm | | | links to this post

Tuesday, October 09, 2012 

Osborne delivers in the race to the bottom.

One of the best positions to start from in politics is that if almost everyone agrees on something, either they or the principle itself is wrong.  Obviously, this isn't universal; all the mainstream political parties are opposed to capital punishment, or making abortion illegal, even if there's disagreement on the limitations on the latter, which is a Very Good Thing.  All the mainstream parties are though at least ostensibly in favour of continuing both the war on drugs and the war in Afghanistan, and these are Very Bad Things indeed.

Which brings us in a very round about way to saying that Ed Miliband last week was rather good, despite everyone agreeing that he was.  I do find the whole making a speech without notes and wandering about the stage thing rather tiresome, the equivalent of riding a bike without using your hands, something that is easy to do with plenty of practice, but it was a very decent speech by a man who has been the victim as much of an ever more impatient media and also party than someone clearly not up to the job.  He started off slowly, it's true, but he's been improving ever since.  Derided by the right-wing press last year for his "predator capitalism" speech, which was shaky in both content and delivery yet soon being ripped off by the coalition, there was even less actual content this year and and yet it was lapped up universally.

Once he'd finally finished labouring on about his comprehensive (yes, Ed, most of us went to them as well and were equally scarred by the process) and finally got to the One Nation bit it was perfectly fine.  It was though just a little underwhelming; yes, the Tories have moved so far to the right that they've vacated their old one nation territory and therefore there's plenty of space for Labour to move into, but it isn't much of a rallying cry.  The fact is that most of those old one nation people have shifted to the right with the Tories, and therefore they aren't going to move back. Where then does that leave those of us on the left who want a redistributing but non-nanny state, an adequate safety net without the likes of ATOS deciding who's deserving or not, a publicly owned and controlled NHS and a foreign policy that doesn't involve us either directly funding armed gangs or intervening on their side?  Inside the tent certainly, but with only slightly more say than we had under Blair.

All this though is for another day, as indeed are any definite policies.  Which is fine, as it's utterly pointless for Labour to say what they'd do if they won in 2015 when the coalition doesn't know what it's doing tomorrow.  The contrast between last week's conference and this week's Tory soiree in Birmingham is stark: one was a party finding its feet again as a direct consequence of the coalition's disastrous policies, while the other is, err, a party uncertain of what's to come as a direct consequence of their disastrous policies.  

The old classic of conference time is, if in doubt, bring out the batter a burglar policy.  New Labour did it countless times, briefing to the ever gullible right-wing press that this time they really would be changing the "reasonable force" law to one which would allow you to carry out the most vile torture imaginable on an intruder without PC Plod (or should that be Pleb?) laying a finger on you.  Every time the answer came back that the "reasonable force" rule was working perfectly fine as it already allows you to do anything other than lie in wait for and then shoot burglars in the back as they run away (or alternatively, calling up your friends and family and then battering your assailants to within an inch of their lives once they've reached the road outside your house) and nothing changed.  Regardless of the ever more ridiculous headlines ("new right to attack burglars", says Torygraph), I'm willing to wager that once again nothing will come of Chris Grayling's wheeze.

If only the same could be said for the ordure presented for the conference's delectation by George Osborne.  Osborne is a fairly unique politician in that he actually seems to enjoy being hated: some thought they saw in the Paralympics booing clip his anger and bewilderment at being even less popular than John Terry and Ashley Cole combined.  My view was that his cackle and then laugh was the sign of him loving it.  Osborne wants to be loathed, as in his mind that means his medicine is working; short-term pain will turn into long-term gain.  Not for him the namby-pamby nonsense from of all people, Tim Montgomerie of ConservativeHome, who recommends an end to the attacks on the poorest as they're the real reason why the party is disliked.  

No, here comes another £16bn of welfare cuts, apparently agreed by Iain Duncan Smith, and directed straight at the children of the unemployed, as though those out of work don't think exactly the same way about having another child as those in work do and whether they can afford it, as though the extra child benefit payment they receive somehow make all the difference.  The same applies to restricting housing benefit to the over 25s, as though everyone under that age claiming it is out of work when the latest figures suggest that 50% are not.  Osborne asked how anyone could justify the incomes of those out of work rising faster than those in work; simple, George.  When those out of work are struggling by on their £70 a week through no fault of their own, a rise in line with inflation is more than justifiable when the average full-time working wage last year was £26,200.  5% of not a lot is still not a lot, while 1.6% of considerably more is, err, considerably more.

Much of it was all too predictable.   Osborne didn't so much as deign to mention growth, or recognise that there had been a double-dip recession, or even that there was such a thing as the unemployed as opposed to scroungers, all while at the same time criticising Ed Miliband for not mentioning the deficit.  That Alistair Darling's plan for reducing the deficit would have eliminated it before Osborne will now manage also went by the by.  Instead we got not reheated old Thatcherism, but the equivalent of pie in the sky: workers of the world hand over your rights and don't unite!  £2,000 in worthless shares in exchange for complete job insecurity; who could possibly object to such a scheme, except, oh, perhaps anyone with half a brain or the European Union?  The only way in which Osborne's brainwave could possibly be attractive is if there isn't any other option, and with the prospect of low to non-existent growth and the introduction of the universal credit, which it seems will demand that part-time workers find full-time jobs or else, desperation might well win out.  

It really isn't over the top to suggest this is like something out of Atlas Shrugged: according to Osborne and the Adrian Beecrofts of the world, it's the John Galts, the strivers and the creators, not the humble workers without whom the business wouldn't be able to function that are deserving of reward and rights.  Britain can deliver, but only it seems in the race to the bottom.

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10/09/2012 07:03:00 pm | | | links to this post

Friday, September 14, 2012 

Cut the Cable.

On Tuesday Vince Cable said that "pure laissez-faire economics" do not work. Today, despite recognising that in the past two years there's been over a million new private sector jobs created, more than suggesting that there isn't any great hesitancy on the part of business to take on staff, apparently the job market needs to be even further liberalised. He might not have gone along with Adrian Beecroft's recommendation for "no fault dismissals", but the capping of compensation for those found to have been unfairly dismissed and a voluntary settlement scheme whereby those wanted rid of agree not to go to a tribunal in return for a pay out is along with the introduction of fees for going to tribunal another loosening of workers' rights. The idea that this will somehow, through making it easier to get rid will in turn encourage those same bosses to hire and thereby drive growth is utterly bogus. It will though delight the headbangers both on the Tory right and at the Institute of Directors, which was the whole point of commissioning Beecroft in the first place.

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9/14/2012 12:30:00 pm | | | links to this post

Thursday, September 06, 2012 

Going nowhere with bells on.

If the idea behind this morning's announcement of a temporary relaxation of some of the planning rules was to ensure it stayed at the top of the news agenda all the day, then it singularly failed. Admittedly, this is somewhat down to the tragic news from France, but it's also down to it failing to set the world alight. A policy always ought to be seen as in trouble when it's announced from the sofa of Daybreak rather than the Today programme, or, heaven forfend, even the Commons, but then we really shouldn't be surprised when about the only politically inclined presenter both Cameron and Osborne are willing to let "interview" them is Andrew Marr, who has picked up the laid-back Sunday morning show baton so ably from David Frost.

As for whether it'll have much of a major impact, it seems dubious in the extreme. Apart from the likes of Lord Wolfson and other major business execs with a monomania for plonking massive warehouses, retail or otherwise on the outskirts of towns and cities, no one seriously claims that it's been the planning rules holding the economy back. As the Local Government Association pointed out, there's currently planning permission for 400,000 new homes; the problem is the lack of demand, the difficulty in getting a mortgage and the banks failing to lend. The same applies to extensions: the rough figures suggest that out of around 200,000 applications for extensions a year, only around 26,000, or 13% are rejected. Even if all of those now go ahead, with perhaps a few set on the idea by today's announcement, then it still seems unlikely to result in the number of jobs as claimed by David Cameron.

The fundamental problem is as, Kirsty Wark is currently trying to get into Nick Boles' thick skull on Newsnight, that many are now in negative equity and are using the disposable income they do have to pay off their debts, so they simply don't have the money for extensions or to move to a new house. And even if they wanted to borrow to invest, then the banks are still not lending. Even if the real reason behind the lack of house building when the margins are so tight is the stipulation that new developments include a certain percentage of social housing, which seems highly dubious when council houses are in such desperately short supply, then this is the kind of splurge which simply isn't sustainable.

None of this is to say that house building isn't part of the solution. It clearly is. It's that this should of been part of a package of measures, such as that suggested by Jonathan Portes for Policy Network. We should be using the low bond yields to borrow to invest in major infrastructure projects, cut national insurance contributions temporarily, reduce VAT and perhaps even consider helicopter money. The coalition has made a rod for its own back: they surely must know that their Plan A has failed, and yet they refuse to accept that it's time to try something different. This isn't about ideology, although it's certainly playing a role, it's fundamentally about loss of face. When you're getting booed by 80,000 people though, surely you can't sink much lower.

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9/06/2012 08:08:00 pm | | | links to this post

Wednesday, September 05, 2012 

On the road to nowhere.

I can't say that Hopi Sen is someone I always find myself in agreement with, but his analysis of the state of the Tories after the reshuffle is pretty much spot on. It has to be kept in mind that to a ridiculous extent David Cameron and George Osborne based their rebranding of the Conservatives on that process Labour went through after the death of John Smith, with the difference being that they never followed all the way through. Cameron may have hugged huskies etc, but there was no Clause 4 moment. More to the point, despite many believing that once in office New Labour would return to the left, the opposite was the case; Tony Blair repeatedly picked fights with his own party, effectively appointed the Sun newspaper as home secretary and after 9/11 was in cahoots with the most right-wing US administration in history.

With the Tories, Cameron's claim to be a liberal Conservative hasn't been borne out. True, with Ken Clarke as justice secretary the party hasn't been anywhere near as draconian on law and order as their manifesto suggested they would be, but this is about the only area in which this has been the case. Policies which featured in neither the Conservative or Liberal Democrat manifestos, such as the NHS reforms and "free" schools were implemented almost immediately. Cameron spoke often of the need to mend our "broken society", and yet with the exception of in the aftermath of the riots, barely a squeak has been heard about it since. Indeed, the measures taken by the coalition have if anything widened the gaps: the cuts to welfare and the failure to get the economy moving have helped towards Save the Children today launching its first campaign on child poverty in this country. Rather than waiting for proper evidence on the 50p top rate of tax, George Osborne abolished it at almost the first opportunity.

As hopeless as Sayeeda Warsi was, bless her, when she argued her case for why she should stay as party co-chairman she put her finger on exactly who the Conservatives need to appeal to if they're ever going to win a majority, let alone win one in 2015:

If you look at the demographics, at where we need to be at the next election, we need more people in the North voting for us, more of what they call here 'blue collar’ workers and I call the white working class. We need more people from urban areas voting for us, more people who are not white and more women.

That she went on to describe herself as working class we'll gloss over, as her main point is backed up by Lord Ashcroft's studies for the party. Everything that the Conservatives have done so far is almost the exact opposite of what they need to be doing to appeal to those voters. Some will probably find the prospect of Chris Grayling at justice more appealing than the liberal Ken Clarke, but other than that the reshuffle will have said absolutely nothing to them whatsoever. At prime minister's questions today David Cameron was once again bested by Ed Miliband, who was left relying on a piece of Daily Mail fluff about Miliband supposedly having to always buy the coffee for the other Ed. "Not very assertive and butch of the leader of the opposition, is it?", to loud laughter from Miliband. Quite apart from the irony of Cameron suggesting someone else is a bit submissive and effeminate, it was but a distraction from his fundamental failure to explain where growth is going to come from. His biggest failure is to be unable to decide what he and his party are fundamentally for other than cutting the deficit, something that without growth they can't do. And without such leadership, there's even less chance those needed voters will come into the fold in 2015.

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9/05/2012 09:02:00 pm | | | links to this post

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