Tag Archives: Coalition

Social Cleansing: Yet again government policy not living up to their rhetoric

Today we have a new scandal on the front pages, “social cleansing” and the movement of masses of people to other areas of the country.

This type of action is only something previously heard of in war torn countries or extreme right wing (even fascist) regimes.  Yet today, Grant Shapps, Conservative Housing minister is trying to explain why the actions of Newham Council are happening when he specifically told the country that this would NOT be the result of government policy.

Newham Council, in London, the Olympic capital for 2012, is in discussions with Stoke on Trent, one of the most deprived areas of the country, to take up to 500 residents from their area because they can no longer afford to provide social housing for people due to the caps on Housing benefit.

We were assured by ministers that the idea of “social cleansing” and the fear of wholesale movement of poorer people out of the well off areas of London was simply hysterical, is now looking a little hollow.

We were assured by Grant Shapps in interviews:

Housing minister rebuts opposition critics: “We are not being unfair”
and
Concerns over Housing Benefit reforms “complete nonsense” says Grant Shapps.

See http://www.guardian.co.uk/society/2010/oct/28/housing-benefit-cuts-defended

Now the very concern dismissed by the government is now becoming fact.  Whether by design or simply government incompetence (it is difficult to tell the difference at the moment) their policy is having the exact result that they stated would not happen.

The BBC reports:

Newham Council says it can no longer afford to house tenants on its waiting list in private accommodation.

The gap between market rents and the housing allowance is too big, it says.

It has written to the Brighter Futures Housing Association in Stoke, offering it the “opportunity” to lease homes to it.

The letter says the local private rental sector is beginning to “overheat” because of the “onset of the Olympic Games and the buoyant young professionals market”.

It says the council can no longer afford to house tenants on its waiting list in private accommodation as the gap between market rents and the local housing allowance has become too great.

The council has been “forced to look further afield for alternative supply”, it adds.

And unbelievably this is a “Labour” council.

But along with so much this government says like “no top down re-organisation of the NHS” ; “We are all in this together”; “No Banker will have a bonus of more than £2,000; and that they had no plans to raise VAT, all become hollow in the face of reality.

As with the NHS reforms that will have changed the service for ever, we will not know the full effects of the reforms until several years later, when the damage will have been done and most probably irreversible.

In respect of moving 500 people to Stoke On Trent, I understand that the “people” concerned have neither been consulted or their concerns heard.

This is policy could have some of the most vial consequences our country has ever seen, but we will sleep walk on regardless.

DAVID CAMERON’S EURO SCEPTIC NIGHTMARE

We have so many Deja vu moments with the current government, however, last night was perhaps one that David Cameron would have preferred had not have happened.

Cameron has nothing to hide over Europe?

The spectre that is Europe on the shoulders of any Tory leader is a heavy burden.  Sadly for the British people, it has again weighed heavily on the shoulders of yet another Tory leader.  David Cameron, known for his clever political manoeuvres in the corridors of the Tory party and Westminster decided to politically take on a fight which has left him embarrassed, undermined and left his own power within in his party dented.

Instead of allowing a free vote and playing down the significance of the outcome of any vote, he decided to take on the euro sceptics and in the process has lost two ministerial aids; suffered the biggest backbench rebellion in 30 years and opened up old festering wounds that the Tories have been trying to heal for 13 years.

It reminded everyone of the catastrophic Major years –  81 voting against the government (half of the back benchers) not counting those that abstained and has prompted the euro sceptics to ask – Is Cameron one of them?

The longer the Euro sceptics look at David Cameron and his rhetoric the more they feel that actually he will dither and give bluster, but in the end is unlikely to repatriate much power back to the UK Parliament and certainly not in this parliament.

What could force his hand however, is a) that the back benchers will now put far more pressure on him and to placate them he will have to act to stop the inevitable split and back biting that will occur and b) Any systemic Euro zone restructuring to solve the ever growing crisis WILL inevitably require changes to the European treaties.

What is curious is why Cameron bothered to risk the stoking up of the hornets nest in the guise of Tory Euro sceptics?  He showed is political manoeuvres with the Liam Fox issue, delaying taking action so he was seen to be giving him every chance so as not to anger the right wing.  He could have done the same this time but decided not to.

The art of being a leader in politics is knowing the fights to take on and when to do it.  The judgement on this occasion was most certainly wrong.

David Cameron’s position is now clear, his problems of keeping his coalition together has just taken a turn for the worse.  He has been concentrating on keeping his coalition with the Lib Dems on track, but in doing so has angered the right of his party AND the Euro sceptic wing.

He has clearly damaged himself and will find going tougher in the months ahead and the coalition has suddenly been made harder to keep together.

UNEMPLOYMENT HITS NEW HIGH OF 2.57 MILLION

Conservative ministers are out in force explaining why their economic policy is working so well, and that is why unemployment has hit a 17 year high today at 2.57million or 8% of the workforce.

What a day for the right and the left of British politics.  The same old arguments start being trotted out at these times, along with a few that we thought were dead and buried.  Not to mention some rather interesting excuses and analyses of statistics.

This morning began with the government claiming that the rising unemployment was all to do with the Euro zone problems and nothing to do with government policy.  Prior to this, all previous bad economic news was the legacy of the nasty Labour Party.

Later in the day, the government were stating that the slow down of the UK economy had only occurred in the last 3 months ignoring the fact that the UK economy has virtually not grown at all for 9 months.  Flat lining of the economy did not happen in the last 3 months.

Of course George Osborne has also blamed, the cold weather, the wrong snow, the hot weather, the royal wedding and bank holidays for economic woes over the past 9 months.  At some point you would think they would run out of excuses.

Don’t you love politicians who when they are out of power blame everything that happens on the incumbent government, and then when they get into power it is always someone elses fault.

The one thing about this recession that has been different than previous downturns over the past 30 years has been how employment has seemed to be a little more resilient.  Now though there has been a large nudge upwards in the unemployment rate and we will probably see it continue on its path to 3 million.

It is funny that this “nudge” has happened at a time when the cuts begin to “kick in”.  But maybe this is just a “coincidence”.

The pattern of unemployment is similar for youth unemployment as it is in the rest of the Euro zone now, with it reaching around 19% of those under 25 out of work.  At least we do not have the 45% youth unemployment of the likes of Spain, but as usual, it is the young (and old) who are sacrificed by an economic downturn.

David Cameron today defended the government’s strategy by saying that their economic policy is working because they have brought down interest rates to 0.5% giving the economy an advantage and being competitive.  Perhaps it was an oversight, but the interest rate in the UK has been at this level since 2009, prior to the present government coming to power.

In the Spectator, a rather skewed look at youth unemployment figures has revived the call from some to abolish the minimum wage for the sake of the under 25’s. The graph below tells the story.

The analysis of this graph by Fraser Nelson is that the reason that youth unemployment has risen in the UK to Euro zone levels is the minimum wage or the evil solialist regulation imposed by the last Labour government.

However, the minimum wage came into being in April 1999 and the rapid increase in unemployment came toward the end of 2007, at the time the Banking crisis hit, and the credit crunch began.  Matching almost to the day that the queues began outside the doors of the Northern Rock.  Another coincidence?

Like the idea that when we have a threat to national security we should put aside our objections to torture because it is inconvenient; we now have the argument that we should not pay people a low but half decent wage because the economy is flat lining.

It is unlikely to be the minimum wage causing youth unemployment to rise, but the wider problems of a debt crisis across half the industrialised world.

Like the arguments that we have a deficit problem because we spent too much, they ignore the real problem which is the collapse of tax revenue which is the real problem.

We now have to watch this space, as the IMF again reassess the UK economic plan.  They have already made noises to the effect that the UK government may have to draw back on its deficit reduction plan as the elephant in the room “GROWTH” suffers.

As unemployment creeps up, and the economy flat lines with no growth, the deficit will continue to grow and not fall despite the cuts in public expenditure.

Like a ship navigating iceberg ridden seas, the coalition has chosen to decide on the speed and course of the ship, without taking into account the changing conditions of the journey.  Simply a recipe for disaster.

I fear there are more stormy seas ahead, oh and a few more excuses.  Maybe Father Christmas will be next on George Osborne’s hit list!

Other post
Great Recession
World Economic Crises – Austerity
Recession what Recession

 

Cat Flap, Red Ed and the Political Party really running the country

Well the Party Conference season is over and, for those that nodded off, it is time to wake up and see the new politics term take its course.

As usual the conference season was a largely pointless and boring few weeks where leaders make speeches thinking the world is watching, when actually, other than an awful lot of BBC and SKY journalists, nobody is taking a blind bit of notice.

The first conference by the Liberal Democrats even had their own supporters staying away, with seats empty throughout the conference, even in the leaders speech.  It was a drab affair with those bothering to turn up being in complete denial at their predicament.

You would never think that they were a party of government from the low key atmosphere and empty seats, but in government they are.  The funniest moment without doubt was the suggestion by one person in the “ask Nick” sessions that actually it was the Liberal Democrats running the government.  This got a good laugh in the hall and a round of applause – it certainly got a laugh outside the hall!

Then came Labour’s conference.  Oh how journalists must hanker for the good old days when a good punch up would ensue, with walk outs, open hostility and the certainty of a little drawing of  blood.

We have none of that these days, they are all too civilised you know.  Again the conference was largely unremarkable except for the Ed Miliband speech.  His delivery is not great, but at times he did look as though he meant what he was saying.

Unfortunately for Ed, he rekindled the “Red Ed” tag that had all but disappeared.

I actually thought the rhetoric of his speech was quite good with the point being we should encourage good business practice and not bad ones.  However, somehow the Tory press picked this up as being “anti business”.

This is somewhat worrying because this surely assumes that most British companies are actually asset strippers and have no social responsibility.  I would have thought that if companies work hard and create wealth that they would be in the “good” category rather than the vilified one.  Maybe I missed the point?

Anyway, whichever way you take the speech, the rhetoric is all very well but the reality is as yet the Labour Party has no policies to implement such high stated moral values on business or the economy, and frankly is unlikely to have. But at least he seemed to be questioning the general ethos and over riding ideology of the past 30 years, and he is the first of the main parties to do this.

Then we had the Conservative party.  This ended up being by far the most entertaining of the conferences.  Feeling very pleased with themselves for  .  .  err .  .  .  .  not winning the last election, they proceeded to bash the Europhiles, ditch their green credentials, spend £250 million on bin collections, and have an argument between themselves about a cat!  All most amusing.

Cat gate was truly ridiculous.  I have no idea what planet Theresa May lives on these days, but it is not within this universe.  There are obviously important arguments regarding the human rights act, but by choosing such a ridiculous story, that has little, or no basis of truth in it whatsoever, just made her look desperate and pretty silly.  Kenneth Clarke, being the plain spoken person he is, pretty much said so straight away much to the annoyance of his boss David.

It also doesn’t help that it is now being reported that she “lifted” cat gate from a UKIP speech!

Oh how amusing.  Even as I write this, arguments still ensue over the said cat as the immigrant in question plans to join his gay partner in a civil partnership next summer.  Surely this will please the Conservative Party and David Cameron in particular. After all they believe in Gay Marriage, not despite being Conservatives, but because they are Conservatives.   It all fits surely with their belief in family values!

Well, now the party is over, and cat gate rumbles on, I smell a bit of sleaze on the horizon  .   .   .   .   or is that a fox?

ECONOMIC CRISIS AS GROWTH IS CUT BY 50%

Economic woes – “it never rains but it pours” – can be the only description of the world economy right now.  The UK specifically is fully into its 3rd quarter of stagnation.

Yesterday the National Office of Statistics revised its growth for the 3 months to June down to 0.1%.  Down 50% from its previous statistics.  Confirming what everyone pretty much already knows (except George Osborne) that the UK economy is flat lining.

In addition IMF growth forecasts for 2011 have been downgraded to 1.1% from 2% 9 months ago, and for 2012 down to 1.6% from 2.3% and even this looks highly optimistic.  The IMF is clearly opening the door for a squirming back track by the UK government to reduce its deficit reduction plan. 

No growth = very little chance of cutting the deficit by the amount the chancellor would like.  No growth means continual falling standards of living in the UK.

Today the Bank of England kept interest rates at 0.5%.  Not unexpected, but even those on the right are now resisting calls to hike interest rates in the way they were calling for it a year ago.  The opportunity has been missed they say.

In addition they have announced a further round of Quantitative Easing.  The electronic version of printing money.  This was not altogether surprising, as it has been signposted by Goerge Osborne over the past few days.  However, the amount is far more than originally forecast, signalling that the financial crisis is still getting worse and not better.

The penny is beginning to drop for the coalition.  Growth is becoming far harder to come by, and the cuts are only just beginning to bite.  The chances of a double dip recession are massively increased with the continuing problems in the Euro Zone that does not look like ending any time soon. Yet, still no growth strategy except, cut and hope for the best.

I predict that sooner or later the UK government will HAVE to slow its deficit reduction plan, and a new banking crisis to ensue in the Euro zone leading to frozen liquidity in the world banking system.  Watch this space!

 

UK ECONOMY FLAT LINES

George Osborne has declared that the economic figures released today regarding the UK economy’s growth are a good sign and shows the economy is “stable”.

The Office for National Statistics show that the UK economy grew by 0.2%.  The Office of Budgetary Responsibility (OBR) will have to downgrade it’s estimate for growth yet again.  From an expected growth of 2.7% down to 1.7% so far and is likely to fall to 1.2%.

The Osborne line continues, and as ever we are supposed to believe that these figures are “good news”.  We have to now start asking ourselves what exactly the difference is between “stable” and “stagnant”.

The UK economy now has virtually not grown at all for 9 months – this is certainly “stable”!  But in an economic model that means we HAVE to ensure growth in the economy to maintain and increase wealth, and of course to reduce the deficit, the news that the economy has not grown for 9 months is fairly devastating.

We have also been treated to the economic myths associated with such bad news.  In a country where we can have the “wrong” snow or leaves on the line – we are also the only economy in Europe that suffers from bad weather in winter; bank holidays; warm weather, wet weather; Easter – oh and Royal Weddings.  Apparently all these “one off events” have at some time in the past 9 months explained the dearth of an economic recovery.

The Truth however is far more dyer than anyone can admit.  It is not that these figures are bad for the economy, but what the trend tells us.  We had a small surge in growth taking back 1.8% of the 4.6% loss in GDP, and now the economy is not growing at all, and has not done so for 9 months.  This is no longer a “blip” but a trend.

What is worse is that the parts of the economic figures that were looking good are now looking as though they are following the trend.  Manufacturing is now shrinking again.  This is very bad news at a time when we are supposed to be “re-balancing” the economy, and having an export led recovery.  The truth however, is that manufacturing got an initial boost from a weaker pound, but this advantage only lasts for a relatively short time and then the advantage is lost.

Couple this with hard pressed economies in Europe, Ireland and the US and you have our main export markets in turmoil, recession or austerity – ie) consumers not overly willing to spend.

More bad news is that our main growth appears to yet again be coming from the financial sector.  This is obviously not bad  per say, but is bad if we are to believe we need a re-balancing in our economy and if we are to reform the financial sector to ensure the exchequer does not become too reliant on financial services and to prevent another credit crunch.

As we have heard, Mr Osborne is not for turning, well yet anyway.  George Osborne and David Cameron’s credibility are increasingly reliant on the economy and with all the U-Turns the government has taken, politically they will feel they cannot be seen to take another one, regardless of the evidence.

They are boxing themselves into a corner.

The effects are obvious – we have a higher deficit than under Gordon Brown, no growth, and higher taxation with rising inflation.  Yet the “cuts” have not bitten yet, and this will further dampen demand and employment opportunities.

Every time statistics come out a trend of stagnation and of great recessionary trends are shown.  Whether we are technically in recession or not is irrelevant – to all intents and purposes we have been in recession for the past 9 months as costs rise and peoples standards of living decreases.

I fear that in 7 years time we will look back at the previous decade as the decade of stagnation.

David Cameron, Welfare Reform and another U-Turn on the political horizon

As David Cameron continues to twist and turn in the face of poor policy making, the storm clouds gather again for another possible U-Turn.

Iain Duncan Smith has been at pains to insist there is no turning back with Welfare reform, and many people in this country agree that welfare reform is a necessity to ensure fairness in the future and the prevention of the poverty trap that has been present in welfare for the past 40 years.

However, leaked letters to the Guardian today show fears of the effects of the welfare cap for families that could cause unintended consequences which include homelessness for 40,000 people and could cost more than the cap saves.

It is a dilemma for IDS and his reforms as it is difficult to be certain how the market in housing and welfare recipients will react to the changes, and there are fears the changes may cost the government more than it saves.

There is no doubt that there will be teething problems and anomalies in the new welfare system IDS is trying to bring in.  The system is so complicated that to simplify it will inevitably mean unintended consequences, but this does not mean it should not be attempted.

However, with the concerns so starkly highlighted by the letter from Eric pickle’s Communities office, could another U-Turn be on the ever more stormy horizon.

This morning the press officers of the Conservative party are doing their best to quash any talk of a U-Turn or a rift in the government.  They say it is an old letter and any concerns have been addressed.

Time as ever will tell, but it would not be surprising that there were changes to the welfare bill over time, and ordinarily with such a complex reform this would pass without much comment.  However, with the reputation of the government akin to the U-Turn Prime Minister, every change of direction will be scrutinised.

ccc