Wednesday, June 15, 2016 

The empty threats of an irresponsible chancellor.

When it comes to issuing threats, there are a couple of set rules.  First, the threat itself must be realistic. For instance, every time Israel has struck within Syria, whether to hit Hezbollah or some other related target, the Syrian government has responded by warning of devastating consequences.  This has been going on for decades.

Second, the threat must be seen to have a chance of being carried out.  Despite all the talk of Project Fear and the criticism of scaremongering, the threat or rather promise of refusing a currency union with an independent Scotland was a realistic prospect, as were most of the other warnings.   While not a threat per se, the warnings of how an independent Scotland would be affected by a drop in the price of oil in fact underplayed how serious the drop in revenue would have been had Yes won.

George Osborne and Alistair Darling's threat of an emergency budget should the country vote to Leave next week therefore fails on all counts.  First and most pertinently, George Osborne's not going to be in a position to present a budget in the first place.  Even if David Cameron doesn't resign immediately as I imagined yesterday, he's likely to announce a fairly imminent departure.  Osborne is almost certain to stand in the Tory leadership contest, so win or not, he most certainly won't be chancellor.

Next, as most commentators quickly pointed out, the tax rises and spending cuts Osborne and Darling set out (PDF) would almost certainly result in a recession whether or not the reaction to leaving is as dramatic as they predict.  Darling's claim that he's more worried now than he was in 2008 is ahistorical nonsense.  Darling and Brown have both previously commented that if they had not acted in the way they had as market turmoil and panic spread following the bankruptcy of Lehmann Brothers, the whole banking system was in danger of collapse.  However serious the market reaction to a Leave vote would be, it would not result in the banks having to close and ATMs being left empty.  The only responsible thing to do would be to wait and see what happens, and then if the economic fallout is damaging as claimed, the response would be to cut taxes and increase spending, as Darling of course did in 2008.

If then by some marvel of the universe Osborne was both still chancellor and decided to pursue his punishment budget, it would be voted down.  The now 65 Tory MPs who have said they oppose it would win the day on their own, without the need of Labour, with Jeremy Corbyn and John McDonnell both saying they would oppose such a ramping up of austerity in any case.  Corbyn even managed to get a laugh out of Cameron at PMQs by congratulating the Tory MPs supporting Leave on their sudden conversion to anti-austerity.

In the end though, it all comes back to the irresponsibility of Cameron and Osborne.  Their refusal to confront their backbenchers in the way that say Blair did, instead giving in to their demands, has inexorably led to the very real risk the country will vote to make itself permanently poorer and more insular next week.  Osborne's threat to make things even worse with an emergency budget isn't him cutting off his nose to spite his face; it's the equivalent of the dictator in the bunker ordering a non-existent army to commence blowing up bridges and destroying crops.  Remain or leave, Cameron and Osborne must go.  And soon.

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6/15/2016 09:19:00 pm | | | links to this post

Monday, April 11, 2016 

There's a word for what our democracy has become: oligarchy.

It's not often I disagree with Chris over at Stumbling and Mumbling.  You can chortle all you like at Charles Moore declaring David Cameron to have been caught in the wealth trap, but it's a useful phrase, he writes.  And of course to a degree he's right, you can be trapped by any number of circumstances of your birth, although it's a hell of a lot easier to dispose of the wealth you inherit than it is to escape being born into poverty.

While Moore may be pleading for understanding of Cameron's position, his not as bright colleagues elsewhere in the media and within the Tories are instead asking for sympathy.  Both the Mail and the Telegraph today ran leaders denouncing the iniquities of inheritance tax, the tax which as Moore himself points out was paid by only 17,917 people who died in 2012-13, out of the 500,000+ whom passed on.  Their real beef was that Cameron had received further criticism for having been given a £200,000 gift from his mother, another of those perfectly legal tax planning moves, described as an "equalisation" by Downing Street.  Joylon Maugham might have declared this to be tax avoidance, but practically no one else in the industry dedicated to just such planning does.  Funny that.

Here, finally, is what a week of coverage of the Panana Papers has been leading up to.  Most of the Tory press was happy to see Dave taking a beating at first as they believe it will damage him vis-a-vis the EU referendum campaign, where Dave effectively is the remain campaign.  Once it gets into the realm of all politicians having to publish their tax returns, which in turn leads to demands that those sneering from the sidelines also get their self assessments out for the lads, it's clear this cannot be allowed to continue.  When the questions move on to lump sums gifted in the expectation of income tax not needing to be paid, then the squealing really starts to begin.  Then we hear the cries about the politics of envy, about the enemies of wealth creation, that this is really about how "they hate anyone who has got a hint of wealth in them", and that if we're not careful, we'll have a parliament full of "low achievers".

Poor little rich people.  All they want is to look after their families.  What could be more natural than that?  Why should both they and their children be punished when bequeathing vast sums, property and all the rest when they go to meet their maker?  Isn't this income being taxed twice over?  Isn't opposing this in fact opposing aspiration?  Don't we all want to make good by our kids?  Why in short, does the left and Labour hate our freedoms?

Once the right was just as indignant about unearned wealth as the left.  Alan Clark might have judged another Tory sneering at Michael Heseltine as the type who had to buy his own furniture as cutting but snobby, yet there was also concern about what the passing on of vast sums and houses encouraged.  Not more hard work, but indolence, idleness.  Now David Cameron declares that there is nothing more natural than wanting to pass on your home to your children.  This only applies obviously to those who own their home, while everyone renting or even more shockingly, in what remains of social housing, should expect at any minute to be turfed out.  Earning more than you once did?  You're going to have to pay to stay.  Have a spare bedroom?  We'll deduct that from your benefits if you don't downsize, even if there isn't anywhere to downsize to.  Want to live near to where your family and friends are?  Tough luck if that'll breach the benefits cap; you'll have to move somewhere cheaper.  Unable to so much as put down a deposit thanks to the paradox of astronomical rents?  I feel your pain, says the prime minister renting out the Kensington home bought with the help of dad and a previous inheritance from an aunt for over 90 grand a year.

Over £90,000 a year just in rent.  Alan Duncan ought to be careful about who he describes as "low achievers", as Dave by many yardsticks would fall into the category.  About only one proper job, and that as PR for Carlton.  Remember that by the standards of Dave's set, he and Osborne are relative paups, George made to describe himself as a "despicable cunt" for having gone to St Paul's rather than Eton.  To most people this a world beyond imagination, where some will be lucky to earn in a decade what Dave pulled in from rent in a year.  This is the world that the Mail, Torygraph and Dave want to defend at all costs, where "aspiration", something the middle classes do, is pulled out to defend the ultra rich forever living in the style to which they have become accustomed.  The inheritance tax threshold might be rising to a million, to the point where practically no one will pay it, yet still at the smallest hint that gifts might come under suspicion the cry goes up.

Without using the word, what Adyita Chakraborty so accurately described in his Graun piece this morning is oligarchy.  Sure, we hear fine words every so often about social mobility, and of course a few of the best and brightest rise to the top while some squander their inheritance, falling down the pecking order, but otherwise when it comes to wealth the Tory party could not be more dedicated to conservatism in its truest sense.  Almost every move on the tax and welfare fronts since the Tories came to power in 2010 has been to screw the poorest, throw the odd bone or two to the middle to give the impression they're on their side, and ensure the top stay at the top.  

In this if nothing else the right-wing media is completely on side.  They too claim to be standing up for the middle while working, literally, for the top.  It was instructive whom the prime minister chose to mention in his statement today in a dig at the media.  It wasn't the weirdo Barclay twins hidden away at their flat pack castle on Brecqhou he dropped, or Jonathan Harmsworth, aka Viscount Rothermere, the non-dom head honco at the Mail.  No, it was the BBC, the Graun and Islington council who were brought up for investing in offshore funds.

The impression this is meant to send is clear.  Everyone's at it.  Nothing to see here.  Except we're not all at it.  Most of us do though dream of having enough spare cash lying around to be able to squirrel it away hidden from HMRC, so for plenty that will be enough.  The belief is those still not sated can be dismissed as simply jealous, envious, as so twisted in their politics that they would rather do right by the state than by their family.  Perhaps it will hold for a while.
 
Yet a crunch is coming.  A point is going to be reached when it becomes clear just how loaded the system currently is.  It might take another crash, but it's going to come, such are the frustrations that are without question building and every so often find expression in outbreaks of anger like the one seen over the past week.  And when it does, no amount of pleading, appeals to authority or media attempts to push back against it are going to quell the demands for fundamental economic recalibration.  A smarter political class would see what's on the horizon, and act now.  This for the most part is not a smart political class.

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4/11/2016 10:14:00 pm | | | links to this post

Wednesday, April 06, 2016 

Questions still remaining, and answers not necessary.

According to Dan Hannan, in full Monty Python colonel mode, this is getting silly.  Likewise, Boris Johnson "cannot see what they are blathering about".

Presumably, neither could Downing Street.  On Monday, David Cameron's father's tax arrangements via his offshore investment fund Blairmore Holdings were deemed "a private matter".  Yesterday it became apparent this wasn't going to hold, and so in the present tense, Dave confirmed he was not benefiting from any offshore holdings or shares, nor did he have any.  Further to that, he then made clear neither did Samantha, apart from a few shares in her father's own onshore property holdings.  Come this morning, and still a further clarification was deemed necessary: now Dave is saying that he also won't benefit from Blairmore in the "future".

You don't have to go into a Jess Phillips routine to find this all a bit rum.  Yes, plenty of us to an extent benefit from investments exempt from tax through putting savings in an ISA.  Yes, plenty of us also want to limit our tax liability as much as we can.  No one likes paying tax, but tax in the aphorism is what we pay for a civilised society.  Clearly however there's a difference between begrudgingly paying what we owe, and going out of our way to avoid paying it, as was the aim with Blairmore.

The obvious question for Cameron now is, was his father right to establish an offshore trust for this purpose?  It's not that he needs to answer whether he benefited from Blairmore in the past, as it's apparent he did.  Cameron has after all been highly critical of individuals who have taken part in artificial tax avoidance schemes.  His not being forthcoming will hardly inspire confidence that he means what he says about cracking down on tax havens and those avoiding/evading tax currently, not least when the OBR's projections on reaching a surplus by 2020 are reliant on more tax coming in through the closing of such loopholes.  This is without even beginning to get into how reliant the Tories are now and have been in the past on funding from businessmen who have either been non-domiciled, or have taken part in similar avoidance schemes.

Nor is there really a parallel here between the anger when the Daily Mail attacked Ed Miliband's father for "hating Britain", and the questions now being raised about Ian Cameron's financial dealings.  No one is suggesting that what Cameron's old man did was illegal, and while you can get on your real high horse ala Phillips about it, there's little point.  Cameron has never denied his privilege, and Blairmore if anything looks to be on the mild end of the lengths some went to avoid paying their fair share.  The point now is whether Cameron will act in concert with other world leaders to prevent the rich and global corporations from paying what they owe.  If that means imposing direct rule on places like the British Virgin Islands, instead of pussyfooting around, then so be it.  It should mean that where a light has begun to be shone into the depths of the offshore world, such as with the Private Eye database of properties owned by overseas companies, this should not then be brought to an abrupt end by the privatisation of the Land Registry.  These are hardly radical steps, especially for a prime minister whom according to the spin has been leading the way already.

Something on the other hand that is very much not a scandal is the hubbub around culture secretary John Whittingdale.  According to Nick Mutch on Byline, in a piece unhappily published on April the 1st, Whittingdale was for at least a year in a relationship with a dominatrix by the name of Olivia King.  No documentary evidence is provided by Mutch to prove that the woman photographed with Whittingdale is an escort, let alone a dominatrix, but let's take that on trust.  If the fact Whittingdale might have been paying for sex isn't enough to make it a story, then Mutch has secondary and third angles.

First, King was apparently at the same time as being paid for her services by the culture secretary also making appearances with a "a member of the London underworld, who has a previous firearms conviction", potentially putting him at risk of blackmail.  Second, the press very much knew about all of this, and yet despite in the past running similarly weak exposes, has decided in this case that Whittingdale's apparent lack of luck with women isn't of interest to the public.  Could this possibly be because of Whittingdale's spoken aversion to the BBC, or his refusal to implement the double costs element of the 2013 Crime and Courts Act?

Or is it that the story is just a bit crap?  Are we really in 2016 pursuing the whole blackmail justification, especially on the remarkably spurious grounds that King was also going out with a "member of the London underworld"?  In the Profumo scandal there was at least a Soviet attache involved.  The idea that the press won't expose him because it's not in their interests doesn't really wash either.  The Tories as a whole weren't keen on the double costs recommended by Leveson, nor are they the BBC.  The Independent and Mail on Sunday might conceivably have factored Whittingdale's usefulness to them into their thinking, but at the expense of bringing a minister down, always regarded as a journalistic coup?  Pull the other one.  Not everything is a conspiracy, nor is every unmarried or single politician being seen out with someone a story.  It really isn't any more complicated than that.

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4/06/2016 07:15:00 pm | | | links to this post

Tuesday, April 05, 2016 

How many journalists does it take to get a story wrong?

The Panama Papers, then.  The biggest leak ever, went up the cry.  A massive team of journalists from around the world, working together on 2.6 terabytes of data, detailing the work of our new friends Mossack Fonseca, based in Panama.  The data goes back decades, with the law firm specialising in the setting up of shell companies for the rich, famous and elite, often based not in Panama itself but in crown dependencies like the British Virgin Islands.  Who then would be the first to be exposed?

Putin.  Of course.  His name doesn't appear itself, as Vlad isn't that daft, but his cellist pal and two childhood friends do.  Not really telling us anything we didn't already know though, is it?  Nor does it take into account that however much it is Putin has salted away, it will pale in comparison to the hundreds of billions stolen from the Russian taxpayer in the giveaway privatisations of the 90s.  You know, those same oligarchs that have since made London their home, buying up property left and right and fighting battles through the courts.  One name not given as big headlines was Petro Poroshenko, billionaire president of Ukraine, who was setting up an offshore company as the east of the country burned.

Indeed, the coverage as a whole has been stilted and highly fragmented.  To learn of practically any names other than those of the usual 2 minutes hate figures, you need to go to the International Consortium of Investigative Journalism's own site.  There you can learn that apart from bag handlers for Assad and figures linked to FIFA, directly named in the files are the Saudi king, the president of the United Arab Emirates, and the former emir and prime minister of Qatar.  The Graun has now got round to featuring the daughters of Azerbaijan's ruler and their property dealings in London, as well as highlighting other potentially shady transactions, but already it feels as if the moment of maximum publicity has passed, possibly wasted.

We've been here before, after all.  The HSBC files from Switzerland were met with calls for inquiries, prosecutions.  The end result? 1 case ended up being pursued.  1.  Nor is the story about David Cameron's father new, even if some of the details are.  Back in 2012 the Graun revealed that Ian Cameron ran a "network" of investment funds based offshore, including Blairmore Holdings, based in Panama and we now learn administered from the Bahamas.  Blairmore was also explicit about the aim being to avoid paying tax  The fund's prospectus from 2006 said: "The Directors intend that the affairs on the Fund should be managed and conducted so that it does not become resident in the United Kingdom for UK taxation purposes".

You can't hold the son responsible for the sins of the father, of course.  Nor can you when the son is extremely careful in how he responds.  When asked by Faisal Islam if he had benefited from the fund in the past, Cameron said only that he didn't currently.  Nor did he expand on the point in a further statement, which did alert us to how Glam Sam Cam does hold shares connected to her father's land.  The subtext is fairly obvious: of course he benefited from the fund in the past.  That was the point.  That said, there is no suggestion anything illegal has taken place.  Mossack Fonseca may well have helped bust sanctions, hide the ill-gotten gains of dictators and had a hand in laundering the money from the Brinks Mat robbery, but plenty of their business is all about ensuring the rich pay as little tax as they can get away with.  Some of these masters of the universe then fund political parties, who in turn are then strangely resistant to doing much about cracking down on tax avoidance.

Oh sure, the government has been talking a good game for a long time, and there were further changes in the budget aimed at implementing the recommendations of the OECD action plan.  None of this is likely to have much effect though when HMRC remains deliberately understaffed, when the British overseas territories at the centre of so much tax avoidance activity are dragging their feet on disclosing the identities of the beneficiary owners of companies registered there, and when the City of London itself has become the equivalent of an offshore tax haven.  At the same time as he claims to be cracking down on tax avoidance, the chancellor continues to reduce corporation tax, due to drop to 17% by the end of the decade.  Osborne is playing a double game: knowing that companies will go on trying to pay as little as they can, his aim is to make Britain the new Ireland, and to hell with the other nations trying to get businesses based there in all but name to pay their fair share.

Will then the Panama Papers make the slightest difference to anything?  Pull the other one.

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4/05/2016 11:18:00 pm | | | links to this post

Monday, March 21, 2016 

A sight for sore eyes (and minds).

Is there a finer sight for sore eyes than the Conservative party in full on civil war mode?  Forget Jodorowosky's Holy Mountain, witnessing the Tories scratching away at retinas, tearing out throats, calling each other idiots and screaming about sanctimony, especially after months of Labour's massively inferior equivalent has been like waking up from a coma, wiping away the built up sleep and seeing the world anew.  It's not just that seeing the party of government fall apart within the space of a couple of days, and over the resignation of Iain Duncan Smith of all people has been so wickedly delicious, it's that it's also demolished media constructs regarded as unassailable fact until they suddenly crumbled into dust.  Like how George Osborne is a tactical genius when it's been apparent for a very long time that he's all politics and no awareness.  And how the Tories will rule in perpetuity, despite their being just as divided as Labour, with only power holding them together.

You can to an extent understand just how discombobulated the likes of Matthew d'Anconservative have been by IDS flouncing out at this stage in proceedings.  If we are to accept IDS's sudden, almost Damascene realisation that he's in a government which is doing over the poorest and most vulnerable in order to keep the upper middle and above in the style to which they have become accustomed, then you have to first presume that IDS was possessed between 2010 and last year.  Who was this man who otherwise looked liked IDS, who as the Graun has it, was one of the most gross incompetents to ever hold the position of work and pensions secretary?  If it was him, he certainly kept his feelings about how the very policies he was instituting were affecting those who would never vote Tory but need protecting regardless.  Did he not read his own party's manifesto, which was explicit on how if returned to government they would raise the 40p tax threshold, increase the inheritance tax threshold to £1 million and carry on with corporation tax cuts while slashing £12bn from the welfare budget?  Sure, perhaps he like the rest of us didn't think his party would win a majority and so introduce those policies, but then again, was he still under possession when he cheered Osborne's living wage as those cuts were announced in last year's budget?  In his Marr interview IDS insisted he had considered going last year over very similar concerns then, only to back down.

IDS claimed to be motivated only by social justice, ensuring everyone gets a fair start in life.  You can quibble about whether IDS's chosen motives would in practice achieve this, but let's take him at his word.  The fact is that universal credit has been and is a disaster, made worse without doubt by how Osborne has repeatedly raided it, and yet it's IDS's baby, his policy.  You can't achieve the goals you want to if the system itself is a failure, as UC is.  Rather than take seriously the many criticisms made, IDS has acted with spite throughout, as he has when challenged on workfare, the bedroom tax, and all the rest.  To judge by the defence given by other ministers in the DWP, with the exception of the laughable Ros Altmann, independent pensions "expert" turned gatekeeper, he ran a tight team.  It only reinforces the belief that IDS had managed to convince both himself and his underlings that he was achieving great things while doing the exact opposite.

Who then was the one dragging his work down, who was undermining everything he thought he was working towards?  George Osborne, aided by Cameron at every step.  Last week's budget, with Cameron letting Osborne make the academies announcement, the sexing up of the OBR's remarks on the EU, the giveaways to the middle classes and above meant to keep them sweet, all was designed to speed Osborne on to the leadership.  IDS it's true doesn't have any leadership ambitions himself, but few assassins are after the top job themselves.  When you then have David Davis repeating the lines established by IDS, that this isn't a government dedicated to fairness, a claim echoed by right-wingers and overwhelmingly pro-Brexit MPs who two weeks ago delighted in supporting the changes to ESA, then you'd have to be a fool to see there isn't something else going on.

And yet many journalists spent yesterday telling the world just how convinced they were by IDS claiming this was purely about his no longer being able to put up with balancing the books on the backs of the poorest.  The Graun, after nailing IDS in a likely hastily written Friday night leader today pompously intones that "impugning motives is no way of dealing with arguments".  While it has obviously been novel to a hear a resigned cabinet minister contradict the Tory spin on how they are one nation party devoted to providing security to all regardless of background, you get the impression that hacks themselves had fallen into believing the lie.  Or if they hadn't personally, they imagine the public have.  That those who did vote for the Tories might have done so not because they were promising to provide security for all at the same time as walloping scroungers, but because they were promising to wallop scroungers doesn't seem to have registered.

Little wonder Cameron apparently called IDS a "shit" in their tete-a-tete on Friday.  He and Osborne came up with this winning formula, soaking those most likely to vote while doing little to nothing to help those who don't, and here's this incompetent attacking them for doing what they said they would!  When you have right-wingers attacking social liberals for being too economically right-wing, something is up.  That IDS and others lining up behind him are right on this occasion, pointing out Osborne has become a liability who shouldn't be getting the help he is doesn't make them right on anything else.  Their aim is to damage Osborne fatally, while also undermining Cameron on the EU vote by making clear his authority is waning.  Staying in doesn't look as secure an option when the man making the argument is no longer looking as solid himself.

Osborne certainly has come out of this looking once again the knave.  From the moment it was briefed in advance that cuts to PIP would be made in order to fund giveaways to the well-off it was apparent how this would turn out.  Not even Labour in its current state could fail to score presented with such an open goal.  What possibly made the Treasury think, having u-turned previously on tax credits, that the same wouldn't end up being the case when they were specifically targeting the disabled?  This wasn't a budget where it took a day or two to unravel; it was already an obvious dog as he sat down having delivered it.  Nor having spent the first part of his speech blaming foreigners and Labour for what he was having to announce can he do so without being laughed at.  The mess he's in is down to the fiscal charter, meant to trap Labour but now traps him, and the welfare cap, for which ditto.  He can't cut tax credits, so going after the disabled was the only other option that would have brought in the needed money to get his surplus.

He did nonetheless make the right choice in deciding not to go to the Commons to answer the urgent question on the unravelling of the budget.  He looks a coward, but considering he only has one apparent mode of communication, which is smarm, smirk and wind up, sending David Gauke was the likely better option.  Cameron then came along and did his best to calm everyone down, which has likely temporarily put a lid on things.  Make no mistake though: the past couple of days are only the first rumblings of what we can expect to transpire as the referendum approaches, and once Cameron announces the date for his stepping down.  There is no obvious successor, let alone an idea of what a post-austerity Conservative party will be for.  Nothing is written, nothing is set in stone, all is still to play for.  Plus, how glorious it is to be reminded of the enjoyment there is to be had when a party other than your own spontaneously combusts.

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3/21/2016 09:10:00 pm | | | links to this post

Saturday, March 19, 2016 

Never underestimate the cowardice of a quiet man.

Let's give Iain Duncan Smith the benefit of the doubt.  Perhaps he really did regard the demands of the Treasury to cut PIP to be a compromise too far.  Perhaps he really was angered by how a policy he signed up to only reluctantly was "junked" within a couple of days after a number of influential backbenchers spoke against it.  Perhaps he had been wrestling with his conscience over how the "fiscal self imposed restraints that I believe are more and more perceived as distinctly political" would affect the disabled.  And it is true that he and George Osborne have long disliked each other, the DWP and Treasury clashing repeatedly over Osborne demanding cuts to welfare, universal credit especially.

Yeah, we could do that.  Or we could drop the idea this has practically anything to do with PIP and instead focus on how this has everything to do with the EU referendum and internal Tory party politics, couldn't we?  God, how instantly a ministerial resignation, no matter how absurd excites the political class.  How even the most milquetoast of criticisms of what everyone knows is about politics and nothing whatsoever to do with economics is toasted as somehow being a rapier like stab into the heart of the government.

Here's IDS's heavily caveated, unutterably weak, and yet still "blistering" attack on the government's continued raison d'etre in full:

I am unable to watch passively while certain policies are enacted in order to meet the fiscal self imposed restraints that I believe are more and more perceived as distinctly political rather than in the national economic interest.

Even at his most potentially damaging moment, Quiet Man is a coward. Certain policies?  That I believe are more and more perceived?  Distinctly?  Tell us what you think Iain!  Don't hold back!

Of course, IDS flouncing out with a slap at Osborne is damaging to the government, without doubt.  Despite IDS's refusal to call a spade a spade, his criticism of Osborne acting out of political rather than economic motives gives opponents a line and will further make ministers squirm when questioned.  More than anything though, this is a pre-emptive strike from the Tory right at Osborne for believing he can waltz into the top job.  If IDS had really wanted to damage Cameron, rather than just the chancellor, he could have walked out either before the budget or in the immediate aftermath, not once the government had already made clear it was going to think again.  The backtracking is what gave him the opportunity to resign, rather than the policy itself being the last straw.

Wrong as it is to view the potential Osborne rise to the Tory leadership as analogous to Brown's taking over from Blair, the comparison is still valid to an extent.  Except for Osborne's followers, the chancellor is not universally liked, let alone loved: sure, they'll cheer him when he does something they do applaud, as IDS did when Osborne announced the "living wage"; when he pulls out a dud, as happened this week, those same faces are suddenly nowhere to be found.  No one is really looking forward to Cameron going, for the reason that all of the candidates are divisive in one way or the other.  Osborne is too socially liberal, not to forget punchable; Boris is Boris; May is colder than liquid nitrogen, etc.

Then we have the EU vote, and how it's apparent there will be a reckoning against those in the cabinet who've decided to support leave.  It's handy for Cameron that the majority of them are either dunces or just plain useless at their jobs: Chris Grayling is a complete liability, Michael Gove is a traitor harbouring leadership ambitions, Priti Patel is a joke, John Whittingdale is little more than a Thatcherite totem, and then we have IDS.  As the Graun's acerbic and accurate leader has it, IDS has managed to be both hopeless and destructive as work and pensions secretary.  More than anything, the only reason he wasn't moved is thanks to how IDS has been a good shield for everything that's both gone "right" and wrong in his department, allowing Cameron to somewhat be above the fray of workfare, food banks, the bedroom tax and all the rest.  He was unsackable because of how crap he was.

Resigning now allows IDS to portray himself as still having a heart, gives him the opportunity to dedicate himself to the leave campaign, and means he avoids getting the inevitable sack that was coming either after the referendum or Osborne becoming leader.  The damage is also far slighter to the government than it initially looks.  Yes, it looks bad that a senior cabinet minister has accused the chancellor of balancing the books on the backs of the disabled for political reasons, but the majority paying attention will conclude this wasn't primarily about that for the reason that it wasn't.  Cameron has also struck the right tone in his response: IDS's resignation is "puzzling", and raises more questions than it answers.

What it does highlight is the only real thing holding the Tories together, so fractured has the party become by Europe and between its left and right, is power.  We saw this irregularly during the coalition years: the EU vote itself is a product of it.  The first sign of trouble and the backbenchers become restless.  Getting the majority and seeing Labour in such dire straits brought a wave of euphoria that is only now descending into a comedown, thanks to the referendum and the spectre of Cameron's departure.  If, and this a huge if, Labour can at least keep its own infighting to a minimum, then the cracks in the Tories are again becoming visible.  It won't take much for them to turn into chasms.

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3/19/2016 11:07:00 am | | | links to this post

Thursday, March 17, 2016 

Your idols speak so much of the abyss...

Usually it's a mistake to bring morality into politics.  We're all as The Thick of It had it, in the same plague pit.  None of us have clean hands.  We all also have different notions of morality; take the weirdo that runs The Entertainer chain of toy shops.  He refuses to stock anything related to Harry Potter due to his Christianity, despite how the entire series is about the battle between good and evil.  Each to their own.  So long as politicians don't try to impose their own warped version of morality on everyone else, something that continues to be a problem in Northern Ireland if not so much for us in the rUK, then we can just about live and let live.

Normally then, John McDonnell describing the cuts to personal independence payments as "morally reprehensible" wouldn't be a good idea, especially when McDonnell has said things in that past that plenty of others would regard as similarly reprehensible.  As Robert Peston for one noted however, the £1.2bn set to be cut from PIP makes up for the loss in revenue from reducing capital gains tax and raising the 40p income tax threshold.  George Osborne has decided that the disabled, those recognised as needing help with going to the toilet and getting dressed should loss some of their benefits so the most well off get a tax cut.  Nor is it just the disabled.  While the spare room subsidy was brought in some time ago, the claimed rationale was to incentivise those affected to downsize.  A few years on, and now those in the private sector lucky enough to have a spare room to let out on sites like Airbnb are to get a tax break.  The word obscene comes to mind.

When Seema Malhotra was asked on Newsnight if she would go along with McDonnell's description, she demurred.  A bit too much of a low blow, especially when governments at the best of times involve themselves in morally dubious acts.  Malhotra would like to imagine she still might one day be at the Treasury herself, faced with making difficult decisions that will affect the poor and disabled.  Sajid Javid for his part denied furiously that he would involve himself in something as despicable as taking money from the disabled, as the money being spent overall is going up.  Which as the IFS today stated is true, with spending having increased four-fold over the past 20 years.  That doesn't make much odds to those set to lose on average £3,500 a year, nor will it those in the Work group part of ESA, down by up to £30 a week thanks to the recent vote.

Our views on who is and who isn't deserving are equally idiosyncratic.  The chancellor who complained of hard-working folk getting up early in the morning, seeing their neighbours' curtains drawn, returning home late in the evening to the same scene has no problem with handing out £1,000 in cash to those able to save £4,000 a year.  It doesn't matter whether the money put in is down to graft or given by a wealthy parent, it will get the same reward.  The IFS says this could prove extraordinarily costly, and once these sweeteners are in place the shrieks if you abolish them can prove deafening.  The obvious point is if the government has grands to splash about and growth is forecast to be tepid at best, why not give the money instead to those who will spend it rather than save it, those set to lose rather than gain from the budget?  We have an aversion to handouts, except when they go to us and those like us.  We fret about moral hazard, encouraging unethical or irresponsible behaviour when we have institutions that are too big to fail, and yet the absurdities of rewarding some to motivate them and penalising others to do the same goes on.

Not that the mixed response to the budget or such criticisms will bother George Osborne in the slightest.  The Mail applauded the giveaways to "Middle England", Middle England in the Mail's world meaning the top 7% of earners.  That's all that will matter when Osborne's sights are set purely on the prize of the top job.  Tom Clark in the Graun reckons Osborne's otherwise laughable plan for turning a £21bn deficit one year into a £10bn surplus the next is down to how he intends to call an early election once ensconced as Tory leader, with only the fixed terms parliament act standing in his way.  If so, Osborne's slow transformation into Gordon Brown is all but complete.  We can but hope he meets the same fate.

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3/17/2016 07:46:00 pm | | | links to this post

Wednesday, March 16, 2016 

Everything's coming up, George's.

What the Office for Budget Responsibility giveth, the Office for Budget Responsibility taketh away.  Last November the OBR's forecasts gave George Osborne a £27bn windfall, more than enough for him to backtrack (somewhat) on the highly unpopular cuts he had previously announced to tax credits.  Fast forward 4 months, and the OBR has done an dramatic reverse ferret: they've now taken £52bn away from the chancellor, as well as lowering their forecasts across the board, with growth and productivity hit the hardest.

And yet, somehow, despite this significant deterioration in the public finances, one that will see an increase in borrowing between now and 2020/21 of £38bn, Osborne still claims he'll hit his fiscal mandate of reaching a budget surplus by the time of the next election.  This is even more eyebrow raising when the OBR forecasts there will still be a budget deficit of £21bn in 2018/19.  Somehow, in the space of only 12 months, this will turn into a surplus of £10bn.  This is meant to be achieved by further cuts that year, a raid on public sector pensions, bringing forward infrastructure spending that was pencilled in for then to now, and deferring changes to corporation tax.  It won't be.  I can say with near certainty that the cretinous plan for a surplus will be abandoned almost as soon as Osborne moves on, whether to Number 10 or to the backbenches.

For this was a budget that made clear George is now only in it for the short-term.  The usual idea with budgets is you make the unpopular decisions as soon after winning an election as you can, then time the giveaways as the next round of voting approaches.  Osborne instead has produced a giveaway budget only a year into a five year parliament.  Everyone apart from the disabled and poorest are getting soaked.  Another rise in the personal allowance?  Why not?  A significant increase in the 40p income tax threshold, to £45,000?  Sure, go on.  Free money if you're under 40 and you're lucky enough to have a parent that can give you £4,000 a year to save?  The man from HMRC he say yes!  Yet another cut in corporation tax?  Cheers, say all those multinationals who do their utmost not to pay it anyway.  Small business rate threshold to rise by £9,000 just as the power to spend the revenue it brings in is devolved to local authorities?  Fuck knows how councils are going to pay for services, but that's to worry about another day.  A massive cut in the capital gains tax rate to 20% from 28%, excluding properties?  What better way for a chancellor to thank the hedge fund managers and masters of the universe who funded the Tories to a majority?

Except of course there are a couple of votes on the horizon.  First there's the EU referendum, and so any small chance there was of a rise in fuel duty was spiked lest it vex further any Tory backbenchers yet to make up their minds on remaining or leaving.  Far more important to George though is the Tory leadership contest, likely to happen fairly swiftly once the referendum is over, whatever the result.  Today's budget was effectively his swansong: sucking up to every core constituency he believes he needs to, and doing so before it's too late.  Should he still be chancellor for the autumn statement or next year's budget, he'll tinker around the edges a bit, knowing his work proper has been done already.  Hence why Cameron handed over to him the announcement that schools still under local authority control will be forced to become academies, backed up by the rabbit of the sugar tax on soft drinks, helping to fund an additional hour of the school day and more sports.

Ah yes, the sugar tax.  Not a tax on sugary food all told, just sugary drinks.  Those people you know who stick four sugars in their tea, they'll be fine, but anyone who prefers cold drinks or just the occasional burst of sugar is about to get their wallet felt.  It's impossible not to see this as a judgement tax, however many doctors claim that it'll massively reduce obesity; who are always pouring energy drinks and cans of Coke down their throats?  Those people, and they're costing us a bomb.  The estimate that it will raise £520m, a more than considerable sum, gives the lie to the idea drinks companies will change their formulations or that people will switch to sugar free brands as a result.  How else would it directly fund that extra school hour?  Anti-nanny state Tories be damned, Osborne couldn't let childhood obesity be on his conscience.  Child poverty, taking money from disabled people who need help to go to the toilet or dress themselves, they don't trouble him anywhere near as much.

All this was designed to mask how once again Osborne has failed by the standards he's set himself, as Jeremy Corbyn in his fairly strong response to the budget outlined.  That supposed welfare trap he set for Labour?  Osborne is set to wander into it every year.  Debt coming down as a proportion of GDP?  Nope, that's not happening either.  Keeping to the fiscal mandate?  In theory yes; in practice, knowing full well as he does that all these freebies are not going to be made up by further cracking down on tax avoidance and other stealthy tax grabs, there isn't a cat in hell's chance of a surplus come 2019/20.  All this, while at the same time still going on with the cuts to frontline spending, not to forget borrowing more, the jibe thrown at Labour every time they say they would borrow to invest as bond yields are historically low.  Osborne is the epitome of a chancer, making it up as he goes along.  He and Boris are remarkably alike in the regard, only Boris at least can tell a joke.

Osborne's hope seems to be this: he's perfectly aware that his surplus will turn out to be fictional, and yet he also knows that Labour is hardly going to make a song and dance about it.  His real difficulty is going to be in paying for all the lucre he's thrown around today, only that will be the responsibility of the poor sod who takes over from him.  Unlike with Gordon Brown, his belief is that none of it will stick to him, and why would it?  He's breached every target he's put down, and no one's called him on it.  Sure, it's going to look really bad if his successor has to raise taxes just before an election, but who else are you going to vote for?  Labour, under the stewardship of Corbo 'n' McDonnell?  The right-wing press might tear him a new one for it, but again, where else are they going to go?  To quote Joylon Maugham, Osborne is "giving the most to those who need it least and the least to those who need it most", which is exactly what he came into politics to do.  Everything's coming up, George's.

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3/16/2016 08:35:00 pm | | | links to this post

Wednesday, November 25, 2015 

The lucky chancellor, and the hopeless opposition.

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

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

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

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

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

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

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

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

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

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

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

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11/25/2015 11:59:00 pm | | | links to this post

Thursday, November 12, 2015 

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

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

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

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

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

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

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11/12/2015 11:16:00 pm | | | links to this post

Monday, October 26, 2015 

Hubris, but not yet nemesis.

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

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

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

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

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

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

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

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

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

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

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10/26/2015 11:48:00 pm | | | links to this post

Wednesday, October 21, 2015 

Aenema.

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

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

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

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

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

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

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

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10/21/2015 11:35:00 pm | | | links to this post

Tuesday, July 21, 2015 

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

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

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

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

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

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

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

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

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

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

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

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7/21/2015 10:04:00 pm | | | links to this post

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