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How Labour forced Tories to defend the ‘squeezed middle’

by Sunny Hundal    
March 23, 2011 at 4:07 pm

Its one of those unstated rules in politics: if you want to win over your opponent, make sure you’re the one framing the parameters of the debate. The Conservatives played that hand well pre-election by forcing Labour on the defensive over the deficit and national debt levels.

Labour’s subsequent attempt to triangulate (saying they would also push for ‘savage’ cuts) failed and their economic credibility splintered between people angry that nothing was being done about the banks, and those suddenly fearful about national debt levels.

This budget is perhaps the first sign that Labour is regaining the initiative again.
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Even Tories know Osborne’s tax changes won’t help lower paid

by Sunder Katwala    
March 23, 2011 at 10:20 am

Osborne will use the increase tax threshold to claim that he has lowered personal tax bills, and is trying to take the poor out of tax.

That the claim is misleading was obvious as soon as this key budget pledge was pre-spun on 1st March – as the claim relies on ignoring the VAT rise.
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Growth down, borrowing up: Osborne blames “Wrong kind of inflation”

by Duncan Weldon    
March 22, 2011 at 12:00 pm

Big news on the public finances in today’s FT. It would seem that the Chancellor’s Office has had their first look at the OBR forecasts and they don’t like what they see.

In an attempt to get their excuses in first, we have a front page story in the FT. A story which doesn’t seem to entirely stack up.

Ignore the ephemera about a ‘Learjet levy’ on private planes and the entirely expected news that the OBR is going to downgrade growth – the big news is that borrowing forecasts are being revised up.

Apparently this is because of the ‘wrong kind of inflation’. continue reading… »

What are your private sector horror stories?

by Owen Jones    
March 21, 2011 at 9:00 am

Bloated. Inefficient. Wasteful. Pampered. Manned by the lazy and incompetent; administered by shameless fat cats with salaries that make the Prime Minister look like a pauper. All-expenses paid trips to exotic locations. Non-jobs like ‘Executive Officer to Protect Endangered Snakes’.

This is Britain’s public sector, if the relentless campaign of bile directed against it by the Conservative Party and their allies in the right-wing media is to be believed. In a political campaign with few parallels in modern times for either genius or audacity, this axis has transformed one of the greatest private sector disasters in human history into a crisis of public spending. continue reading… »

What should progressive councils be doing now?

by Guest    
March 17, 2011 at 3:00 pm

Contribution by Cllr Michael Desmond

There has been little room for philosophy during the recent mayhem of council cuts, budget reductions and staff lay-offs. The nearest thing has been Barnet Council’s unedifying dalliance with budget airline theory, the controversial “easyCouncil”, where only bare essentials are done and costs restrained, which saw planners on strike yesterday.

Some Tory flagship authorities have combined back-room roles to limit administrative costs, and Labour councils have juggled meagre settlements to limit and in some cases avoid, cuts to front-line services. Of course, this is by no means the first time local authorities have had to face the music; but we haven’t seen anything like the savage climate induced by Eric Pickles’ hatchet since the 1970s.
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Tory claims on pension and benefits spending don’t add up

by Don Paskini    
March 16, 2011 at 9:05 am

Earlier this week Tory HQ, under the direction of George Osborne, put together a briefing about “Ballsonomics”, which claimed to set out £12 billion of unfunded spending pledges which Labour had made.

I had a quick look, and the first, and largest, claim was that Labour were planning to spend an extra £5.8 billion on pensions and benefits in 2014/15.
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Nick Clegg admits cuts were a political choice

by Duncan Weldon    
March 15, 2011 at 9:02 am

A little noted, but I think important, Nick Clegg u-turn in his speech to Lib Dem Spring Conference.

Speaking about the Government’s actions to close the deficit he said:
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Greens should resist the temptation to celebrate rising petrol prices

by Adam Ramsay    
March 12, 2011 at 5:15 pm

Petrol prices are going up. This hits people in the pocket – hard. At a time when most people haven’t had a pay rise in years, this is particularly tough. But, traditionally, greenies have argued in favour of more expensive fuel – right?

We need to put fuel prices up in order to wean our society of oil? Right? Well, I’m not convinced. Greens are often percieved as a party who are not on the side of ordinary people. Green taxes became emblematic of that.
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Polls show public back decent public sector pensions

by Nigel Stanley    
March 11, 2011 at 9:02 am

Here’s a fascinating poll commissioned by Prospect on public sector pensions that has not received the attention it deserves.

By more than five to one, the British public says the average public sector pension should be increased to at least £10,000, a YouGov poll for the Prospect professionals’ union has revealed. Only 11% of people say public servants should get less than £10,000.
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Why is nothing being done about banks still ‘too big to fail’?

by Guest    
March 10, 2011 at 11:10 am

contribution by Lydia Prieg

Ever since the first taxpayer-funded bank bailout, the question on everyone’s lips is: “How can we ensure this never happens again?”

In response, politicians have enthusiastically espoused “resolution mechanisms”, which detail how large, failing banks could theoretically be slowly wound down over time in such a way that all losses would be borne by investors rather than taxpayers. However, this approach is severely misguided.
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Rich Ricci: the class politics of £44m bonuses

by Dave Osler    
March 9, 2011 at 1:15 pm

Among the value propositions for the Grand National next month is Willie Mullins-trained The Midnight Club, who has demonstrated impressive stamina in a couple of outings in Ireland earlier this season. At 14-1 last time I looked, it could be worth having a few bob on him.

Yet even though the winner of Britain’s most prestigious steepchase will pick up £521.053 this year, success or failure will have little impact on the bank balance of owner Rich Ricci. And yes, that surname really is pronounced ‘richie’.

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How exactly will IDS pay for his flat pension scheme?

by Nigel Stanley    
March 9, 2011 at 9:20 am

There are powerful arguments in favour of a simpler flat-rate pension of the kind outlined by Iain Duncan Smith yesterday.

The question is who is going to pay for it. Who will win? Who will lose? We do not know the answers to these questions yet. Simplification is always a good thing in principle, but in practice is almost always much controversial.
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Duke of York: time to get a job, mate

by Dave Osler    
March 8, 2011 at 1:37 pm

Highly attractive woman though Angelina Jolie indisputably is, I do sometimes wonder what it is about thespianism that makes her especially suitable for her role as goodwill ambassador for the United Nations High Commissioner for Refugees.

Nor am I clear why Geri Halliwell was chosen to undertake a similar job for the UN Population Fund, although she may possess greater legitimacy than Tony Blair boasts as quartet special envoy to the Middle East. At least the Spice Girls never actually invaded any of the countries in which Ginger is expected to spread peace, love and understanding.
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Why Cameron can’t rely on the market to provide public services

by Guest    
March 6, 2011 at 3:19 pm

contribution by Saadaab Janab

Last week David Cameron outlined his plans to forge himself a legacy so he can go down in history as a somebody. He’s under the impression that a freer market creates choice which means freer people, freer society.

This is absolutely TRUE. In the world where conditions for perfect competition hold, trees talk, pigs fly and West Ham win the league. It’s for this abstract neo-classical world that these policies are dreamt up, but it’s in the real world where they’re inflicted.
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Osborne claims international opinion is with him; this chart disagrees

by Duncan Weldon    
March 4, 2011 at 9:10 am

On Monday, at the launch event for the IPPR’s collection of essays on growth, Wendy Carlin gave an excellent talk on growth, policy and rebalancing.

One graph from that talk, which I hadn’t seen before, really speaks for itself – an international comparison of fiscal stimulus/tightening in 2011.
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Barclays paid a billion quid in tax – but not to us

by John B    
March 1, 2011 at 3:04 pm

It’s become a well-reported trope over the course of a weekend that Barclays only paid GBP113m in UK corporation tax in 2009.

Various people of various ideologies have reacted to this disclosure, some by blockading Barclays branches, some by making fairly irrelevant points about tax losses.

But the truth, found in Barclay’s 2009 annual report – is a bit more complicated.
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George Osborne’s four claims in the Guardian rebutted

by Sunny Hundal    
March 1, 2011 at 8:45 am

George Osborne is in the Guardian today – trying to turn the tables on Ed Balls and deflect attention from their own lack of a growth plan.

I guess the aim here is to give BBC journalists something to read from when they interview Ed Balls, but most of the points are easily rebutted as they’re fairly dishonest.
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Snow joke: GDP shrinks more than expected

by Left Outside    
February 25, 2011 at 9:46 am

Fresh from the Office of National Statistics:

UK gross domestic product (GDP) in volume terms decreased by 0.6 per cent in the fourth quarter of 2010, revised down from a decrease of 0.5 per cent published in January.

This was not due exclusively to snow either, although it clearly had an impact:

The disruption caused by the bad weather is likely to have contributed approximately 0.5 percentage points of the 0.6% decline, that is, if there had been no disruption, GDP would be showing a slight fall.

In the face of depressed demand, and a still weakened economy the Tories desperately need a Plan B.

Sunny adds: This is significant also because Tories expected the -0.5% figure to be quite conservative. But its worse than expected now.

Update: Ed Balls has sent out a statement saying:

These are disappointing figures which confirm that the recovery stalled and the economy contracted at the end of last year, even once the effects of the snow have been taken into account.

Of course we should always treat one quarter’s figures with caution, but it is not cautious for the Treasury to plough on regardless. George Osborne was complacent in declaring before Christmas that he had saved the economy and secured the recovery. And he is being complacent now in refusing to accept that his choice to cut too deep and too fast is holding back our economy and putting jobs at risk.

2011 should be the year when the British economy grows strongly and the recovery is secured. Yet the early signs are that the Tory-led Government’s reckless decision to abandon Labour’s plan to halve the deficit over four years has seen the economy take a turn for the worse. We now face the worst of all worlds – unemployment and inflation both rising, growth stalled and consumer confidence collapsed. And this is before the Government’s extreme fiscal tightening really starts to bite.

The Chancellor appears to be in denial. It is simply not credible for George Osborne to casually dismiss these figures once again and blame the wrong kind of snow rather than the wrong kind of economic policy. If the economy does not grow strongly this year – and make up the ground we lost at the end of 2010 – the Chancellor will have failed his first major test. He should change course before it’s too late.

How Cameron’s Big Society 3.0 (corporate welfare edition) could be checked

by Don Paskini    
February 25, 2011 at 9:00 am

The Big Society started off with the idea that people would run services for themselves. When it became clear that this wasn’t going to work, Big Society 2.0 was about promoting charities and social action.

When it became clear many of these “Big Society” charities were being wiped out by the cuts, and were very ungratefully complaining about government cuts, Big Society 3.0 was born.

But this is the worst idea of them all.
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Osborne gives banks another handout and scuppers any chance of reform

by Duncan Weldon    
February 17, 2011 at 3:34 pm

According to a front page FT story this morning George Osborne is looking to relax the rules on UK banks’ liquidity, in effect allowing them to hold less gilts and cash.

This is big news, George Osborne is relaxing rules on the UK banking sector, rules designed to prevent a future crisis by forcing the banks to hold more liquid assets – assets that can be easily sold in a crisis to raise cash.
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