Tuesday, March 25, 2014 

This blog is fully in favour of fundamentally disrupting power relations and reframing the debate to make a good society both feasible and desirable.*

Within hours of the budget last week, the Labour Uncut blog had a post up quoting a anonymous backbencher as saying such was Ed Miliband's response to George Osborne's pensions gambit, the way things were going the party would need a Devon Loch scenario to win a majority come the election.  For those under the age of 70 or who aren't much interested in the annual flogging a live horse round a deadly obstacle course soiree at Aintree, Devon Loch did a Bambi while just yards from the finishing post in the Grand National.  This rather strained metaphor ignores that for some time it's been Labour out in the front, not the Tories, but still.

Such is the way some of those on the right of the party have long responded to even the slightest of setbacks, or in this case less than that. Absolutely no one remembers the responses to budgets, and as it seems the coalition declined to provide Labour with the traditional redacted version of Osborne's speech in advance, Miliband would only have been able to respond to the specifics off the cuff.  Instead he went for a general critique, and while it wasn't great, it was nowhere near as poor as has been made out.

Nor is the rise in support for the Tories since the budget anything approaching a surprise. Osborne succeeded in presenting it as a giveaway, albeit "fiscally neutral", and reined in the austerity masochism as far as he could. There were no further painful cuts outlined, although whether they might well be needed when Osborne is spending money he hasn't properly allocated as the IFS pointed out remains to be seen.   Precision geared towards those already more likely to vote Tory, in effect bribing them with their own money, exactly the claim they used to throw at Gordon Brown, add on the changes to pensions and the bounce ought to have been expected.  The real question is whether the uptick remains over time, as it did for Labour long after the omnishambles of 2012.  As yet there's nothing so much as approaching an indication this will turn out to be the case.

For Dan Hodges and his ilk though this is the final proof Miliband is a loser, or rather, "isn't working".  Hodges has been pushing his the only way to win is to out-Tory the Tories shtick for so long now it's stopped being entertaining in the same way as watching a film that's so bad it's good is, and has just become incredibly boring.  Nonetheless, Hodges' line into the soul of the party is John Mann, who urges Ed to speak the language not of a Hampstead academic but of the average resident of Bassetlaw.  These would presumably be the same people telling Mann that what the country desperately needs is a vote on our membership of the European Union, a cause he insisted was top of their agendas just a couple of weeks back.

Thankfully for all concerned who should enter the fray at this precise moment other than a horde of think-tankers with their own views on how Labour should fight the 2015 election.  Or, as they describe themselves, "members of the progressive community".  Think my writing is turgid, highfalutin, unnecessarily verbose and arch?  You should try this unholy alliance, who take Birtspeak to extremes.  They want Labour to make all powerful institutions accountable to their "stakeholders", action on the causes of "our social, environmental, physical and mental health problems", something that requires a "holistic" approach, and obviously, the "empowerment of everybody".  Not aiming too high there, are you lads?  Apparently the time of politicians doing things to people are over (or at least prospective Lib Dem candidates must hope this to be the case), while the era of "building the capacity and platforms for people to do things for themselves, together is now upon us".  Translated, this essentially means they are in favour of devolution and localism, and while it all sounds suspiciously like the Big Society all over again, only rebooted for the crowdsourcing Twitter and Wikis can solve like, everything, man age, it isn't meant as a cover for cuts.  Only there's no money to pay for anything, so sisters people doing it for themselves does help matters immensely.

If like me you can recall the times when Luke Akehurst seemed to embody everything that was wrong with the Blairite tendency within Labour, it comes as a deep shock when his is the voice of reason.  He notes how the letter seems to leave room open for another coalition, suggesting everyone should just forget how the Lib Dems have rejoiced in ripping the state to shreds over the past 5 years, and more pertinently, that as much as localism excites a certain section of politicos, it's mostly deeply unpopular or treated with deserved suspicion by the voters.  Unlike the Hodges/Labour Uncut sect, he even suggests 5 policies which aren't the same old triangulation, nor are they obvious pipe dreams fluffed by arcane language.

All this is to rather ignore just how the Tories seem likely to fight the election.  When they tire of the country is saved thanks to us routine, they fall back on policies that are deeply divisive.  See Cameron returning to the theme of cutting inheritance tax, the coalition having wisely not touched it during this parliament.  The Conservatives have become a party that is openly in favour of oligarchy, the passing down of unearned wealth from generation to generation.  The Mail naturally thinks this is a huge vote winner, while anyone with half a brain can see that you simply can't go on saying you're the party of aspiration while doing everything in your power to screw over those who don't have comfortably off parents.  If Cameron couldn't win outright in 2010 on a centre-right ticket against Liability Brown, what makes him think they can do so on a right-wing ticket in 2015?  The obvious answer is that they can't.  Miliband and his ministers do need to flesh out many of their their policies, but to panic at this point or take advice from either extremely dubious faction would be a misstep.  The budget bounce will dissipate.  Everything is still to play for.

*Yes, that really is how the thinktank alliance conclude their letter to the Graun.

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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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