George Osborne delivers his autumn statement on Tuesday against a backdrop of low growth, high unemployment and impending strikes, reports Shamik Das.
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• George Osborne delivers his autumn statement on Tuesday against a backdrop of low growth, high unemployment and impending strikes.
Far from changing course to a Plan B, however, the chancellor will stubbornly stick to his failing Plan A – with devastating consequences for us all.
As IPPR’s Adam Lent and Tony Dolphin wrote on Left Foot Forward on Wednesday:
“Despite the certainty the Office for Budget Responsibility (OBR) will significantly downgrade its growth forecasts for 2011 and 2012, George Osborne has far too much political capital invested in his Plan A to shift position now.
“In a paper (pdf) for IPPR, we argued it was precisely this political constraint that rendered the chancellor’s programme too inflexible…
“Unfortunately, the chancellor was so keen to keep bond investors happy he unveiled a deliberately tight budget for a full five years. Now, due to high inflation and the eurozone crisis, the UK economy faces much lower growth than expected.
“One result (pdf) is the chancellor will find it far harder to meet his deficit reduction target. So this is precisely the time when the Treasury should have enough flexibility in its plans to stop austerity contributing to the slowing of the economy and, ironically, to weaker public finances. Instead, the Treasury is struggling with a plan so rigid any flexibility risks the chancellor’s credibility…
“George Osborne won’t change course next Tuesday, but he should. Even the IMF now believes governments should relax fiscal tightening in the short-term, while maintaining a credible medium-term strategy for eliminating deficits.
“This is precisely what our approach – 10 ideas to promote growth (pdf) – delivers.”
On Thursday, it was Ed Miliband’s turn to turn the screw on the failing chancellor, attacking Osborne’s “dangerous gamble” and “catastrophic mistakes” on the economy.
Speaking to IPPR, the Labour leader said:
“Why the government no longer deserves the benefit of the doubt, is that even on this measure [deficit reduction] – the central test they set themselves – the plan isn’t working.
“It isn’t working because their failure to get businesses growing, to see more jobs created, has locked them, and the country, into a vicious cycle on the deficit, with low growth, more people out of work claiming benefits, and less paying tax, and higher borrowing as a result…
“David Cameron needs to change course next week. It is time for Mr Cameron and Mr Osborne to stop blaming the snow, the Royal Wedding, and the eurozone crisis for Britain’s economic emergency. It is time for our out of touch government to look at the mounting economic evidence.
“Next Tuesday must be the moment they take responsibility, and think again. Nothing less will do from Mr Osborne and Mr Cameron. That is the responsibility on this government. It is a responsibility which we will do everything we can to make them face up to.”
We will have analysis and reaction to the autumn statement on Left Foot Forward on Tuesday.
• The public sector pensions strike takes place this Wednesday, November 30th.
Millions of workers will go on strike in defence of their pensions, with the government – and David Cameron in particular – taking to the airwaves instead to talking, ramping up the rhetoric and seeming unwilling to compromise, using super-simplistic language and talking to the public like they’re idiots.
“Ministers should stop spinning and start negotiating if they want to avert the largest day of co-ordinated action in a generation. So far this week they have blamed everything but the weather on the wicked trade unions. If it starts raining though, expect to see [TUC general secretary] Brendan Barber put in the frame for that too.
“The real problem is that the current government simply does not understand trade unions and how they work.
“One day they offered us a 15 minute strike “for free”, completely misjudging the anger there is among staff about the pension proposals.
“The next, the prime minister – himself with a rather shaky electoral mandate – is lecturing us about whether 80 per cent-plus strike votes are sufficient to call for strike action.
“Yesterday, we were accused of destroying the economy – a job the government seems to be doing quite nicely on its own, thank you very much.
“The problems our country face are too serious for this silly spin. Trade unions did not create the crisis. Nor did they invent the current, unjustified attacks on their pension schemes.”
More than 70 per cent of those polled said would take some form of action if their pension contributions were to increase while promising lower returns, while a staggering 99% said they did not fully trust ministers on the affordability of pensions. Little wonder given our repeated debunking of Lord Hutton’s lies on pensions.
“In conclusion, trade unionists and campaigners should take some heart from the fact they are much more trusted than the media and politicians dare admit. In the coming days the more frontline workers who are able to take on the government’s myths with objective facts the better.
“There is a hardening mood across the country that the ‘little guy’ is already picking up too much of the bill for a crisis caused by others. There are worries the future people plan for and expect now looks increasingly bleak.
“If the unions can successfully tap into this mood and highlight the unfairness of proposals and present alternatives, then they have an opportunity to win wider public support.”
Also this week, there was further evidence the government’s savage attacks on pensions will hit women hardest, as Nigel Stanley revealed on Left Foot Forward:
“New TUC research shows more than 750,000 workers – 90 per cent of them women – will face higher contributions from next April.
“This is because the government will measures workers’ income not by looking at their gross pay, but their full time equivalent earnings. In other words someone working half-time with a £14,000 salary is treated as earning £28,000.
“Official figures show 806,000 public sector part-time workers earn less than £15,000 but have full-time equivalent earnings greater than this threshold. Of these 732,000 or nine in ten (90.8 per cent) are women.
“For many, this will mean as much as a 50 per cent increase in the amount they pay for their pension.”
Also this week on Left Foot Forward, we’ve reported the latest attempt by the government – this time business secretary Vince Cable – to destroy workers’ rights; the Scottish union chief’s description of the government as behaving like “a Victorian mill owner”; the strike latest from Scotland, Wales and Northern Ireland; and today, the day of action song, “Let’s Work Together”, which you can download here.
Throughout next week, we’ll have more on the fight for fair pensions – including on Monday the real facts about public and private sector pensions.
• To ram home the point of how unfair the present system is, on Tuesday, the High Pay Commission released its final report – providing for some horrific reading.
The report, “Cheques With Balances: why tackling high pay is in the national interest” (pdf), highlights the growing divide between not just the top 1% and the rest but the top 0.1% and the 99.9%. On current trends, the top one thousandth of the population will, by 2035, take home 14% of the national income – levels last seen in Victorian England.
“The public is rapidly running out of patience with a system that allows those at the top to enrich themselves while everyone else struggles to make ends meet. This has been thrown into stark relief by the economic crisis, but has been building for the past 30 years.
“In 1980 top bosses were well rewarded, but they had not pulled so far away from the rest of society. Since then some of them have enjoyed an increase of over 4,000% to what are now multi-million pound packages.
“Those in respectable middle class jobs such as secondary school teachers and policemen have seen their income rise by a much more modest amount with average wages increasing from £6,474 to just £25,900 over the same period. There have been huge changes in all of these jobs, yet so much wealth has been channelled to those at the very top.
“This is a trend that has led to such a huge rise in inequality over the period that Britain now has a gap between rich and poor that rivals that in some developing nations.”
Mary Riddell, responding to the findings in the Telegraph, said democracy itself is at stake “unless the huge and growing pay gulf between the very rich and ordinary workers can be narrowed”:
“Politicians, terrified of conceding that they risk losing control, are unlikely to admit that, in one respect, Karl Marx was right.
“Capitalism has been shown to contain the seeds of its destruction. As the Croesus class cash in and the markets dine off democracy, no one dares point out that, from Tottenham to Tennessee, the world may be staring at the end of politics.
“In Greek legend, King Croesus was placed on a pyre to be burnt alive. His pleas for salvation were answered by divine forces who ordained a storm so fierce that the fire was extinguished, sparing him to become a wise, if much less rich, adviser.
“This time round, with the flames licking at democracy’s roots, there may be no such happy ending.”
Not everyone, though, is as enlightened. Cue Dr Heather McGregor, director of headhunting firm Taylor Bennett, who appeared on Radio Four’s Today programme on Wednesday to defend high executive pay in the most jaw-dropping way possible.
She compared workers to “children” and said anyone concerned with obscene pay “can move to Cuba”. You have to hear it to believe it – and hear it you can, here.
Progressive of the week:
Deputy prime minister Nick Clegg, who yesterday highlighted the scandalous lack of black managers in English football, and attacked the banks for discriminating against black customers.
Delivering the annual Scarman lecture, he said:
“In football, fans adore their heroes for their talent and character, whether they are black or white, and when Sepp Blatter dares trivialise racism on the pitch, his comments are rightly met with public outcry.
“But how many black managers are there in the Premier League? Zero. And in the top four divisions? There are just two, despite the fact a quarter of all players are black…
“If you are a white player you have a one in 50 chance of moving into management. If you are a black player? One in 500.”
Fine words, and welcome – but, as ever, he will be judged not on sentiment but on actions, as I wrote yesterday:
“It is now imperative, having highlighted the problem, for Mr Clegg, along with sports minister Hugh Robertson, to lobby the Football Association, Premier League, Football League, League Managers Association, Professional Football Association and all the other bodies and organisations charged with running the beautiful game to adopt the ‘Rooney Rule’.
“Save for the recent Terry/Ferdinand and Suarez/Evra controversies, we’ve largely driven racism off the pitch – it’s time to drive it out of the boardroom as well.”
Regressives of the week:
In contrast to the progressive, liberal, forward-looking Mr Clegg, the rotten, racist, backward-looking scum of the St Andrews University Conservative Club, who burnt an effigy of Barack Obama – having previously done the same to Nelson Mandela.
More from Political Scrapbook:
“The Conservative Association which caused outrage by burning an effigy of Barack Obama have previously torched a likeness of Nelson Mandela on numerous occasions and toasted Apartheid at their annual dinners.
“The group at St Andrews University have been excoriated for the racial insensitivities of the stunt.”
As we reported on Wednesday, this is just the latest in a string of sickening incidents by young Conservatives up and down the land:
“The cup of young Tories with terrible views is overflowing.
“What’s really scary, however, is the thought that none of this is new. It may well be that what has changed isn’t that Conservative Future has got more racist and offensive over the years, but merely that whereas they used to do all of this in private, it now often spills out into public.
“Although Cameron has managed to crack down on stories of his Bullingdon days, it will be harder for the leaders of the future to do the same.”
Evidence of the week:
Today’s report from the Tax Justice Network, “The Cost of Tax Abuse: A briefing paper on the cost of tax evasion worldwide” (pdf), which revealed the global cost of tax evasion is $3.1 trillion a year, with the cost to the UK $69.9 billion, the ninth highest in the world. This equates to 56 per cent of the nation’s healthcare spend.
As we reported today:
“The report shows Europe as a whole loses 87% of its total healthcare budget to tax evasion, with Africa losing nearly all its budget (98%) and South America a staggering 139%. One hundred and nineteen of the 145 countries surveyed lose more than half their healthcare budget to tax evasion…
“The findings come as the Tax Justice Network launches Tackle Tax Havens, a new campaign highlighting the critical role these secretive states play in corrupting the global economy.
“The research demonstrates the importance of tackling tax evasion, tax avoidance and the tax havens that help the immoral super-rich from contributing to the services that directly benefit them – from the health and education systems their workers rely on, to the roads that transport their goods, to the courts that enforce their contracts, to the police who protect their property.”
You can watch the campaign video here.
The World Outside Westminster by The Grapevine’s Chris Tarquini:
Most of the news internationally has been focused on North Africa including fresh protests in Egypt over the slow pace of reforms and the tortuous handover of power from military rule.
Much of the trouble has occurred in the place now famous for overthrowing former President Hosni Mubarak in downtown Cairo, Tahrir Square. Much of the military leadership were appointments of Mubarak and are being accused of trying to control the democratic handover to suit their own needs.
Accusations of a desire to mask the military budget and installing veto power over elected representatives have stoked fears that have contributed to the rising volatility in the country.
In slightly more optimistic news the interim prime minister of Libya has announced a new transitional cabinet, en route to the formation of a democratically-elected government.
Following the capture of Colonel Gadaffi’s son Saif Al-Islam the appointments are widely being seen as an attempt to soothe rival factions in the war weary nation. And speaking of Saif, it was reported today his gangrenous fingers will have to be amputated.
For the latest from Syria, Bahrain, and Morocco, meanwhile, check out Alex Hern’s post on Left Foot Forward today.
The West African regional body have stated the political environment is not conducive to free and fair elections due to intense intimidation and media control by President Yahya Jammeh – a claim described as “false” by the chair of Gambia’s ‘Independent’ Electoral Commission.
Left Foot Forward can report that in the past few years there has been great fear amongst citizens in the country about being able to talk openly about the President and it seems these claims support that.
In the latest hilarious turn in the Republican party nomination comedy, former Speaker of the House of Representatives and established hypocrite Newt Gingrich has flown to the top of the polls after former favourite Herman Cain’s sexual harassment allegations and lack of knowledge over world affairs.
Gingrich constantly attacked then President Clinton during the scandal over the Monica Lewinsky affairs, despite being in the process of having an affair himself! A former climate change science believer, he now denies it whilst also weathering a storm over accusations surrounding his past lobbying activity.
Oh, and he also left an ill wife for his mistress – twice. Reeeeeeeal classy.
Despite taking a more moderate approach on immigration in recent debates and appearing to be a strong debater against President Obama, will the GOP nominate the man with more baggage than a Heathrow terminal?
The latest Gallup Daily Tracker Poll has the President on a 41-51% approval/disapproval rating leaving him hoping he can win over undecided voters and appear as the lesser of two evils against a weak GOP nominee.
Ed Jacobs’s Week Outside Westminster:
Westminster and Holyrood again clashed over the consequences of the Scottish government’s refusal to name the day it intends to hold a referendum on independence.
Speaking to Radio Scotland’s “Good Morning Scotland” programme, Lib Dem chief secretary to the Treasury, Danny Alexander, warned that Scotland faced being “dragged down” as a result of the uncertainty it was causing for businesses and the wider economy.
“The United Kingdom government is now becoming ever more hysterical in how it responds to this particular issue.”
Meanwhile, having declared next week’s day of strike action will see 99 per cent of Scottish schools closing their doors, Ann Ballinger, General Secretary of the Scottish Secondary Teachers’ Association, said of the UK government’s position on pension reform:
“The latest government threat that the current ‘offer’ will be withdrawn if strikes go ahead exhibits the level of thinking prevalent in the current Westminster government.
“We see an approach to public service which would be on a par with that expected from a Victorian mill owner for whom every penny spent on the workforce is seen as a disaster.”
Tonight, Welsh Labour agreed a deal with the Welsh Liberal Democrats on a budget for the coming financial year.
In a statement late this evening, the Welsh government said:
“The Welsh Liberal Democrats have agreed to support next year’s budget on the basis of securing an extra £20 million for a new Pupil Deprivation Grant, which will stand at £32.04 million in total for 2012/13, to reduce the impact of poverty on educational attainment.
“The additional £20 million will be reflected in the Final Budget to be tabled on Tuesday 29th November, and represents a 16.5% increase to the total additional allocation made in the Draft Budget.
“In addition, we have been able to agree an Economic Stimulus Package of £38.9 million to be spent on a range of measures to stimulate the economy and protect jobs. These include extra resources for the Young Recruits and Skills Growth Wales programmes, capital investment for our schools and social housing and more investment in the Arbed energy efficiency programme.
“The money will be spent over the next two years with the majority spent in this financial year. The finance minister will be issuing a Written Statement with the detail of the Economic Stimulus Package on Monday morning.”
Earlier in the week, opposition AMs had accused first minister Carwyn Jones of playing a game of brinkmanship following the gridlock that had existed over the passing of the government’s budget for 2012/13.
With Labour having been locked in negotiations with Plaid Cymru and the Liberal Democrats, Tuesday saw the first minister having a laugh at the expense of Welsh Conservative leader Andrew R T Davies, using First Minister’s Questions to argue:
“I have listened to the comments made by the leader of the opposition – off the record and off-camera, as it were – and the best one, I think, was that he said that unfair dismissals create jobs. How on earth he has worked that one out, I do not know.
“He seems to think that sacking one person and employing another creates jobs. He keeps on putting his foot in his mouth, and that is why he is rapidly becoming the Homer Simpson of Welsh politics.”
Elsewhere, following the announcement last month of the cuts to come to the BBC in Wales, the Assembly’s presiding officer expressed her concerns about the measures being considered.
Writing to BBC Trust chairman Lord Patten, Rosemary Butler concluded:
“Like many of my colleagues here at the National Assembly for Wales, I have very real fears that these changes will inevitably damage Welsh democracy.
“I am, therefore, seeking assurances that political programming on BBC Wales will be safeguarded for the medium- and long-term future, despite the tough financial settlement faced by the BBC at the current time.”
Regional development minister, Danny Kennedy, provoked anger as he agreed to a £20,000 a year increase in the salary of Northern Ireland Water’s chief executive Trevor Haslett.
Outlining the agreement, a spokesman for Mr Kennedy’s department explained:
“Northern Ireland Water needs leadership and stability. Trevor Haslett has demonstrated that he is the best person to lead NI Water through the winter that is almost upon us and beyond.
“The package proposed by the board of NI Water has been approved but will not be paid until after the winter period. A significant element is subject to a satisfactory performance over the winter.”
The explanation, however, was not enough for SDLP regional development spokesman Joe Byrne who responded:
“This exorbitant pay rise is a slap in the face to the thousands of low-paid public sector workers who are having their wages frozen and their pensions cut.
“At this time of financial austerity it seems unjustifiable to grant such a large pay increase to someone who is already receiving a handsome salary.”
“Our MLAs will be standing shoulder-to-shoulder with those who are protesting against stinging cuts to our services.
“We offer our wholehearted support to those taking a stand for high-quality public services and will be showing that support to our colleagues in NIPSA in particular by respecting their picket-line.”
This week’s most read:
2. New survey shows public more willing to take action over pensions – Neil Foster, Progressive Polling
5. The £150 million hole in Osborne’s Virgin/Northern Rock deal – Cormac Hollingsworth
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