Posts Tagged ‘George Osborne’

Osborne’s new austerity will force local government beyond breaking point

09/12/2014, 08:02:33 PM

by Kieran Quinn

December the 12th is one of my favourite days of the year: I attend the pensioner Christmas party in my ward. It’s an opportunity to mark the contribution that many of our senior citizens have made to Tameside in Greater Manchester. It also gives people the chance to celebrate and socialise with other Tameside pensioners.

With further austerity measures being levelled on local government over the next few years, I fear for the future of events like these, and services that residents have taken for granted.

£142 million will have been taken from our budget by 2017, we are currently consulting on the £38 million of cuts imposed upon our borough over the next two years, and we are now at a tipping point. Put simply, with half of our budget taken away we simply cannot fund the same level of services, and our workforce has halved so far. We are beyond the approach of doing more for less, despite a hardworking, innovative and dedicated workforce.

As the 980 residents that have taken part in our budget consultation will know, nearly two thirds of our budget is spent on safeguarding the very young and the very old. These services are statutory, laid down in law by parliament. With no additional resources put into these services our ability to provide for our most vulnerable citizens will come into question.

While any funding ring-fenced for the NHS is welcome(a one-off figure of £2 billion , not year on year) a more holistic approach to public sector funding is needed. If you cut our budget by £142 million, high spend areas such as Adult Services are not immune from this and the pressure on NHS resources goes up. It is both morally and economically sensible to integrate these budgets, the emphasis must be on early help in the home and community.

Enough really is enough. If the Chancellor genuinely believed “we are all in these challenging financial times together”, he would have responded to the cross party call for a fair approach to local government finances and deliver an even bolder approach to devolution.

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Miliband only has himself to blame for Osborne’s reckless tax cuts

09/12/2014, 10:56:14 AM

by Samuel Dale

I laughed when I first heard yet slowly but surely the true horror of Ed Miliband’s gaffe has began to sink in.

When our leader forgot to mention the deficit during his 80 minute conference speech in Manchester he handed the Tories a free rein on the economy.

Tory minister has tripped over Tory MP to claim, fairly, that Miliband does not care about the UK’s debt mountain and deficit.

Of course, the gaffe could only gain traction because Labour has failed to rebuild its economic credibility in the last four years.

The lack of a credible alternative on reducing the deficit has allowed the Tories to develop a completely ridiculous and undeserved reputation for sound economic management.

Britain might be splintering into a four or five party system but on the economy it is still a two horse race between potential prime ministers and chancellors. It’s a zero sum game; one party is up, the other is down.

Since 2010, George Osborne has drastically missed his deficit target, lost the UK’s AAA credit rating, increased public debt by trillions and made huge gambles on the tax revenues.

He has also overseen a collapse in living standards, years of stagnant growth and a shameful under-investment in infrastructure.

To give some under-reported examples of his recklessness: Raising the income tax allowance threshold to £10,000 combined with slow wage growth has seen income tax receipts plummet by billions.

In addition, the changes to stamp duty last week and pensions next year create huge tax uncertainties as well, recklessly populist tax cuts in the pursuit of votes.

Then, of course, there are £7.2bn of unfunded income tax cuts for lower and middle earners promised after the election.

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Scrapping RDAs has made Osborne’s task harder

06/12/2014, 07:27:27 PM

By Kevin Meagher

As the Tories’ main political strategist, George Osborne knows only too well that winning the next election means convincing people they’re getting better off, or soon will be. In the next six months, his task is to make sure the warm rays of economic prosperity are felt across all parts of the country.

Yet as the dust settles on the Autumn Statement, recovery remains stubbornly uneven and tackling Britain’s asymmetric economy, split between a galloping London and South East and, at best, a cantering North and Midlands, looks as forlorn a prospect as it has for the past three decades.

Yet the bodies set up by Labour in 1998 to narrow these deep economic disparities – the nine English regional development agencies – were in coalition ministers’ crosshairs from day one. To Conservative eyes, RDAs were quintessentially old Labour. The state getting involved in promoting economic growth.

While the concept of “regions” was an unwelcome affectation, dreamt up by John Prescott in all his pomp running the sprawling Department of Environment, Transport and Regions.

In fact, David Cameron used his first major speech as prime minister to herald a different approach to driving local growth. It mattered little that the boards of the RDAs were private sector-led. Or that there was strong business support for retaining the northern agencies in particular. Or, indeed, that they were actually succeeding in their task of boosting growth. (In 2009, PriceWaterhouse Coopers calculated that the economic value they generated was equivalent to £4.50 for every £1 of public money invested).

But the RDAs fate was sealed because the Lib Dems didn’t think much of them either. Business secretary Vince Cable suggested scrapping them himself in a paper for the Reform think tank before the 2010 election. So when the “bonfire of the quangos” was lit, the English RDAs were the Guy Fawkes effigy placed right at the top of the pyre.

Since then, ministers have created a total of 39 local enterprise partnerships – effectively mini-RDAs but without the budgets – or the experienced staff – to drive local growth. This disjointed, stop-start approach, just as the economy was going through the bumpy 2010-12 period, was one of the more politically indulgent things the government has done.

And, potentially, one of the more politically costly.

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George Osborne hasn’t set a trap for Labour. He’s launched a boomerang

01/12/2014, 09:38:06 AM

by Jonathan Todd

George Osborne thinks he is being clever, setting a trap for Labour. But Labour should vote against his proposal, expected to be contained in Wednesday’s Autumn Statement, for a new law requiring that Britain’s structural deficit be eliminated by 2017-18. As it is not a trap, it is a boomerang.

“The duties imposed by the Bill are not accompanied by any corresponding sanctions,” he told MPs, when asked to vote by the then Labour government to put into law the halving of the deficit in two years. As declamatory legislation – an Act of Parliament which no one has any intention of enforcing – Osborne was right to dismiss it as “vacuous and irrelevant”.

Yet Osborne now advances his own declamatory legislation. What will follow as a result of his law from the deficit not being closed by 2017-18? Will the deficit be further extended by the government fining itself? Or will the government be required to learn their lesson in its prisons? It’s all funny money and silly politics.

Such tawdry legislation diminishes us. And if Osborne is going to pass laws making a deficit after 2017-18 illegal, doesn’t he anticipate people enquiring how he’ll make his government legal? Labour will make hay with speculation on what heartless plans he conceals. But his stated intentions are sufficient to damage him.

Under published Conservative plans, the Resolution Foundation “estimate that several government departments would face real-terms budget reductions of one-half or more between 2010-11 and 2018-19”. Budgets for DfID, the NHS and schools are nominally ring fenced, so other departments face a halving of their budgets.

How will the Home Office keep us safe on a shrunken budget? Are we to win ‘the global race’ with an FCO so puny? Will local government be recognisable after ‘the jaws of doom’ close?

Osborne is asking MPs to vote to make the continuation of government as we have known it illegal. While by 2010 there was fat to trim in the public sector, there is now less, so his plans entail a more dramatic state curtailment.

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Yes, it’s a reshuffle cliché, but George Osborne’s fingerprints are all over the new Tory line-up

18/07/2014, 11:40:36 AM

by Renie Anjeh

The reshuffle is over.  William Hague dramatically resigned as foreign secretary and has announced that he will retire from politics in 2015 after 26 years as an MP. Ken Clarke’s ministerial career – which began under Ted Heath in 1972 – has come to a close.  Teachers and pupils (and probably Theresa May) rejoiced when Michael Gove was demoted to the humble role of chief whip.  The reshuffle was not just the equivalent of football transfer day for political anoraks, it was the most important reshuffle in David Cameron’s premiership.

The reaction to the reshuffle has been varied. Dan Hodges (the prime minister’s favourite columnist) called it a ‘strange’ reshuffle whilst Charles Moore labelled it as ‘the worst reshuffle in 25 years’.  The official line from the Labour party was that the reshuffle was the ‘massacre of the moderates’ and almost every single tweeting Labour MP repeated that message religiously as the reshuffle unfolded (probably with encouragement from the whips). However, the party’s claim was demonstrably untrue and actually highlighted a failure on our side to truly understand our political enemies.

The departure of one nation Tories such as Clarke, Young and Damian Green is down to the political longevity rather than their politics.  Dominic Grieve may be a supporter the Human Rights Act but he is also an opponent of HS2 which may have also counted against him.  Although, David Willetts and Alan Duncan are the godfathers of Tory modernisation (‘Tory Taliban’ was coined by Duncan), it is wrong to suggest that they are One Nation Tories.

They are Thatcherites who in spite of their Eurosceptism and economic liberalism, hold very socially liberal views.  If the reshuffle was a cull of the moderates, as Labour yesterday, then since when did Owen Paterson and David Jones become moderates?

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Class-based jibes are not an effective attack on Osborne’s feel-good budget pitch

24/03/2014, 03:52:00 PM

by Jonathan Todd

“Tories neck and neck with Labour,” reported The Sunday Times. Revisiting the questions that Uncut posed for George Osborne prior to the Autumn Statement allows us to assess how the landscape is evolving.

1.) Has the relationship between economic and Tory recovery broken?

Last October Uncut ran a regression to analyse the relationship between economic sentiment and Labour’s poll lead. This indicated that for every 1% increase in the proportion of the electorate reporting the economy as doing well, the Tories would close on Labour by 0.6% – ‘the Todd thesis’, as Lewis Baston christened it. The table below, which uses figures from YouGov, shows how these variables have evolved since then.

Picture5

The upward trend in economic sentiment is clear. Labour’s lead over the Tories, though, remains much the same now (5.6%) as last October (5.7%). This is the stuff of the ‘voteless recovery‘ that Tories fear.

Digging deeper into these numbers, however, raises some challenges for Labour. The table shows that Labour’s lead was largest during November and December. This might be explained by the popularity of Labour’s price freeze commitment made at party conference. As this commitment has featured less prominently in political debate, Labour’s lead has withered.

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Budget 2014 preview: Labour must change the language it uses to talk about business and economics

19/03/2014, 07:00:50 AM

by Rob Marchant

Today Britain’s political focus turns, as it always does sooner or later, to the economy. It is the last Budget which will come in time to make much of a difference for the election, an election for which all parties now start to gradually gather together their support from various quarters and interest groups.

Osborne will set out his pre-election stall and Miliband will respond. We have yet to see just how he will respond, but it seems pretty likely that it will be along the lines of his op-ed in yesterday’s Guardian.

Reading it, thankfully, Miliband seems to have learned his lesson from the awful “predators and producers” speech of the party’s 2012 conference and is now more careful with his wording. But if you want to really understand what a politician is thinking on a particular subject, you should look to their advisers on that subject; those who may unguardedly say what their bosses cannot. More of that later.

Now, one notable absence – or, more unkindly, gaping hole – in the 2010 election campaign was any noticeable support from the business community. A stony silence replaced the modest set of endorsers for the party’s business policies who had previously spoken in support of the party. And that was in the days of Prime Minister Brown, whose administration certainly had a more business-friendly character than the party’s current leadership.

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Miliband’s reckoning must also reassure

20/01/2014, 02:24:17 PM

by Jonathan Todd

“The next election”, according to an answer that Ed Miliband gave on Friday, “will be a choice between a big reckoning and steady as she goes.” There wasn’t much that Mliband understated in setting out how Britain would change with him in charge. But this was one thing. There is no steady as she goes option.

George Osborne can only make his sums add up with a much reduced role for government outside of ringfenced areas and/or further cuts for the disabled, children and the working poor. That’s not so much steady as she goes as once more into the breach, as the ship heads towards the rapids. Osborne gave the impression in 2011 that the electorate had sacrificed all that he’d ask of them. Now he asks them to keep sacrificing till 2018/19.

His ‘baseline theory’ of politics encourages this strategy. This forces Labour to choose: Match my baseline and all the tough choices that entails or don’t and accept that the full force of HM Treasury will be thrown at undermining Labour’s credibility.

Miliband’s speech was his response to Osborne’s gaunlet. Which he picked up, tossed aside and dismissed as redundant. Deficit reduction alone can’t fix our economy, he told us. Nor alone can it make hard work pay or be a vision for the country, he continued.

Osborne tried to force Miliband to talk about the size of government but he insisted on telling business what to do. His refusal to play Osborne’s game may have had something of Jarvis Cocker’s snapping of a pencil about it (See two minutes in to this). There is, however, nothing scrawny about Miliband’s attitude to business. He is as muscular in articulating what he will require of them as Osborne is unrelenting in shrinking the state. It’s not a nudge – once a buzzword in David Cameron’s circle – that Miliband wants to give business but an unavoidable prod.

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Osborne’s tank tries to churn up Ed’s lawn

17/01/2014, 08:24:49 AM

by Kevin Meagher

He would bristle at the comparison, but George Osborne’s raid on Labour’s turf – promising to support an above inflation rise in the minimum wage – is straight out of the Gordon Brown book of political tradecraft.

The two most political bean-counters British politics has ever produced are both fans of ‘weaponising’ policy to suit their ends; laying clever traps for their enemies to fall into and using the Treasury’s tanks to churn up the opposition’s lawn.

“I want to make sure we are all in it together” said Osborne yesterday, to a chorus of generally disbelieving gasps. The minimum wage should increase “because the British economy can now afford that.”

The Tories used to be “on the wrong side of the argument” about the merits of the minimum wage, but that was all a misunderstanding. Now it’s a shiny, happy, modern party “in touch with the country,” he added.

ITV’s Chris Ship said the Lib Dems were “spitting tacks” as Osborne had veered over the coalition’s central reservation, cutting them out of the equation on a major good news story.

“He’s effectively endorsing the advice I gave to the Low Pay Commission” said Vince Cable on Newsnight last night, trying to sound nonchalant at the very effrontery of it all. Labour people too were miffed at Osborne’s naked opportunism. How dare a Tory Chancellor say anything positive about the minimum wage!

In a funny sort of way, Ed Miliband should take all this as a compliment. Imitation is the sincerest form of flattery. That Osborne felt compelled to try and spike today’s big speech on the economy and banking reform shows the Tories are irked about headlines proclaiming “I can save the middle class”.

So in the best traditions of “you send one of my guys to the hospital, I’ll send one of yours to the morgue” Osborne’s instinct is to wield his home-made shiv. It’s not pretty, but it is effective.

Gordon would approve.

Kevin Meagher is associate editor of Labour Uncut

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Osborne’s made his move. Now it’s Labour’s turn

14/01/2014, 09:37:04 AM

by Jonathan Todd

We are a nation seeking to rebuild from the economic calamity of the past half decade. You might think this task merits a chancellor focused upon it. But George Osborne doesn’t look to Keynes, Friedman or other economists. He prefers his own ‘baseline theory’ of politics.

As we grasp for an economic rubber ring, we’re thrown the thin gruel of his politics. To the extent that his actions are informed by any economic strategy, it envisages a state so shrunken as to be beyond the ken of post 1945 Britain. Yet his political logic is robust enough that this troubling scenario may come to pass after May 2015.

Osborne’s theory is informed by an impeccable reading of recent general elections. It holds that oppositions never form governments unless they match the fiscal plan of incumbents. Governing parties hold the privilege of being able to set the fiscal baseline. Any departures from this baseline by oppositions will be subject to intense scrutiny. In 1992, this resulted in the Labour opposition seeming to threaten a ‘tax bombshell’, while in 2001 and 2005, it resulted in the Conservatives appearing a menace to public services.

Over the next 18 months or so, the TUC’s Duncan Weldon suspects, the implausibility of Osborne’s baseline will stretch this theory – perhaps to destruction. In this baseline, £25bn of additional spending cuts – much of them from the welfare budget – come after the next election. But, as Weldon notes, the necessity of running a surplus by 2018/19, which motivates these cuts, is not set in stone. It is a political choice. The UK will only come apart if Scotland votes for it, not if a surplus isn’t run by 2018/19.

In fact, there appears more likelihood of grim things happening if Osborne’s baseline is kept to than if it isn’t. It’s delivery – assuming no further tax rises, protection for pensioner benefits and continued ringfences for the NHS, schools and DfID – requires a much reduced role for government outside of ringfenced areas and/or further cuts for the disabled, children and the working poor.

This delivery isn’t impossible but it is likely to be brutal. Perhaps so much so as to effectively be impossible. The social strain and political pain might just be too much. Maybe Osborne knows this and has no genuine intention of seeing this through in the event of being in office after May 2015. But, in indicating that he will, he’s presented Labour with a set of unattractive options.

One such option is for Labour to accept Osborne’s baseline. In its toughest form, this would mean not only accepting £25bn of extra cuts but accepting that half of them will come from welfare payments to working age adults. This would put Labour in a position that Nick Clegg has already castigated as unfair.

It seems unlikely, therefore, that this will come to be Labour’s position. Instead, Labour might match the Liberal Democrat position: acceptance of the £25bn but rejection of the depth of cuts to working age welfare. This rejection, however, only deepens questions as to how the £25bn will be made up.

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