Johann Hari: A colder, crueller country - for no gain - Johann Hari

These attitudes have real consequences. We're not in this together. Who isn't in it with us? Them, their friends, and their families. They were asked to pay nothing more in this CSR. On the contrary: they are being let off left, right and centre. To pluck a random example, one of the richest corporations in Britain, Vodafone, had an outstanding tax bill of £6bn - but Osborne simply cancelled it this year. If he had made them pay, he could have prevented nearly all the cuts to all the welfare recipients in Britain. You try refusing to pay your taxes next time, and see if George Osborne shows the same generosity to you as he does to the super-rich.

There is one stark symbol of how unjust the response to this economic disaster caused by bankers is. They have just paid themselves £7bn in bonuses - much of it our money - to reward themselves for failure. That's the same sum Osborne took from the benefits of the British poor yesterday, who did nothing to cause this crash. And he has the chutzpah to brag about "fairness."


If true that really is shocking.
While some will argue that Vodaphone, for example, will contribute jobs (and we need plenty of those given Ozzy's Axe), they must pay their bill. That £6million could have saved massive welfare payments. I think it's important to get people into work so I would cut national insurance and get the money from income tax.
As for bankers bonuses, it's beyond obscene.

Thinktank calls for 7p income tax rise to plug hole in state finances

The National Institute of Economic and Social Research is proposing this pretty radical change to fiscal policy (or raising pension age to 70) in order to plug the public finances.
Now, I've gone on and on before about making debt-tackling a priority in that doing it too early will mean trouble. I think 80s style trouble.

They said that "Britain's structural deficit – the underlying level of borrowing, excluding the extra borrowing caused by the recession – was running at 6% of GDP and that this was unsustainable."
While the structural deficit is a problem, we have to tread very carefully when addressing it.
There are issues around what actually brings in the most money: is it tax rises or tax cuts. That's something that needs more work, well beyond my means for sure.

But trying to raise all the money from the bottom of the pile goes against everything I stand for by hitting the poorest the most. If there were ways to raise this from higher up, or spread the load, then that might be something to look at.

As for the pension age rising to 70, i'd like to see it based more on length of service so that the poorest who leave school earliest and die earlier don't loose out

Shortages in social services

There's a story about Birmingham social services being short of cash, lacking staff etc.
The things are
1) cuts will be terrible and make things worse than they are
2) where will the money come from?

misleading media?

Left Foot Forward, who are not impartial, are alleging that the Daily Mail are spouting rubbish. That in itself is a pretty fair suggestion. The specifics cover this article on quangos "The cost of quango Britain hits £170bn - a seven-fold rise since Labour came to power".

The Left Foot Forward article here alleges that the Mail use Taxpayer Alliance figures which are "not a like-for-like comparison". With statistics, precision is everything and the odd thing here or there makes all the difference. In this case, not comparing like-for-like allows the latter figure to be overblown in order to give the effect they are after.
Bloody Daily Mail
Bloody Taxpayers' Alliance, a real nasty lot

Spending cuts

Coz blimey, can't MOVE for politicians are the like going on about spending cuts.
I actually liked what I heard from Gordy (think it was speech to the TUC, might be wrong) where he said there will be cuts to waste, inefficiency, pointless programmes etc.
I thought that was a good focus, but i think he's dug his own hole in that he spent so long denying there would be any cuts that now embracing them seems too late.
Linguistics is a very funny business in politics

Brendan Barber on spending cuts

The general secretary of the TUC has pinpointed "tax relief on pension savings to be scrapped for higher earners and says measures to curb Britain's national debt should target the better off."
I agree with him, though i fear long-winded administrative measures in order to sort out who needs it or doesn't. If this was done through the direct taxation system and sorted by the Treasury, then i'm in favour.

Barber makes very good points about where the axe will fall:
"He said unions would defend universal benefits such as child benefit being paid to the middle classes, but suggested reviewing tax arrangements for the better off, adding: "Issues like the tax relief on higher rate [taxpayers'] pensions – this is preferential treatment, giving a massive boon to better off people at a huge cost to the public purse, a cost that's equivalent to twice the cost of the overall public sector pensions that some of our critics keep saying is unaffordable."

Big spending cuts

According to Thursday's Guardian, the Taxpayers' Alliance and Institute of Directors plans discussed in the previous post involve cutting things such as:

"The Taxpayers' Alliance and the Institute of Directors propose abolishing Surestart and child benefit, and imposing a one-year freeze on the basic state pension and on all public-sector pay except for the army."

Their usual rubbish

Big spending cuts

The Taxplayers' Alliance and the Institute of Directors came out with their usual rubbish about how great slashing public spending is.
Left Foot forward attacks their claims, and I agree with the lefties, no surprises there.

They think they can cut money without it impacting front line services. They're wrong, and they don't much care what I think. But they can fuck off.
I could go into detail, but it just seems such rubbish i get angry. To say that they can reduce staff and pay without impacting front-line services is pants. How can you pay people less and expect the same service?

They attacked Sure Start Centres, which says it all really. They claim they would get rid of them. But replace them? Hmm? Not that the TPA or IoD care about poor people

Labour and Tory plans for spending and the election

Jonathan Freedland argues that the election battles lines are drawn, with 'the many' and 'the few' having their champions decked out in their colours.
Cameron, he argues, has jumped on the band-wagon of MPs expenses to say how much he'll slash everything which helps politicians and ID cards, ID cards, ID cards.

"Proof of that came when reporters asked Cameron to offer more substantial cuts to the national budget than demanding honourable members pay full price for their custard creams. "ID cards", came the answer. Good for him. The identity card scheme is indeed a waste of money and should be scrapped. What else? "ID cards." And? "ID cards." Three times he offered up the same lamb for sacrifice. Which suggests that, for all the macho promises of frankness, he can't think of any other cuts – or none he's willing to admit in public."

Freedland argues that focusing on the size of the debt is a red herring, which i agree with. The size of the current debt is not something that needs a 'slash and burn' approach to sort, it should be gently wound down over time.

investment in young people and keeping people in jobs is worth while and will reep rewards in the future.

perhaps the most telling is the comparison between Labour's desire to keep inheritance tax and tax credits at the current level, while the Tories would reduce these:

"Labour will wield the axe with an eye on protecting the neediest. But look at the Tories. For all his talk of belt-tightening, Cameron has not promised to revoke his proposed change to inheritance tax – raising the threshold to £1m, thereby helping 3,000 of the richest estates each year. Yet tax credits, which boost the incomes of the lowest paid, are firmly in the Tories' sights. There are grounds here for Labour to replay one of its oldest tunes: that they are for the many, while the Tories are for the few."

Lib Dems Tax and spend

Lib Dems:
raise a tax, spend it on education and training.
Cool, let's have some of that.
i agree with them that unemployment, especially youth unemployment, needs to be the main priority.

Tory spending plans and councils

George Osbourne's thing about learning from councils is not, in and of itself, a bad move.
Working in partnership with councils is a good move, integrating the top-end policy direction with the low-level delivery of these services makes sense.
However, what they're really getting at is more and more ways to slash public spending. They can promise more services for less money all they want, but's it's largely a lie.
They are trying to soften people up for an agenda far to the right of where there were until recently. They have moved from their 'compassionate' and 'progressive' stances to their stock in trade of slash and burn.
They are not being called to account on it because Labour are so unpopular and people want a change. However, i'm not sure whether people want a change of direction, or just a new hand on the wheel

Public spending

Apparently, there is talk of Labour committing itself to spending cuts after the summer recess.
One of the things to be at least delayed will be Trident, that's cool.

"Ministers will trumpet the fruits of Labour's "investment" as more new schools open at the start of the new term that at any time since Victorian era. They will argue that spending money on education and skills is crucial to boosting long-term economic growth and therefore the speed at which public debt can be repaid."

That's certainly the most important way to re-balance the books. As always, investment is key when there is no money.
I wonder why only spending cuts are being talked about. I assume it's because they either believe that tax rises will not bring in any more money, or they are scared of being seen as Old Labour

PFI

I've never had a problem with the idea of PFI. If the private sector can get the tax-payer a better deal, then i'm all in favour.

The main reason behind PFI is to get borrowing 'off balance sheet', which is a shame. According to File On 4 on radio 4, many contracts are not open to public scrutiny and I don't like that.

While media should not take the place of the Parliament in holding Government to account, something like this should be addressed by a minister. I don't know whether this topic and detail has been covered in Parliament, but I certainly hope so. The BBC programme should have looked into this, but I suppose that doesn't make such a good story.

The thing is state, private sector and media all come out of this (programme) looking both good and bad. I think a pragmatic, evidence-based and more open and transparent process is what's needed

Britain's Finances

Larry Elliot does his usual good work here, stating that Britian's finances are not as great as Gordy says.
Which we all know.
I personally thought Darling had come up with a plan to get some of the debt back, banks paying back their loans I believe is about half the debt. I may be wrong.
I think there are some things i think can be cut from the public service budget, such as funding for new NHS drugs. I would like to see some tax rises for the middle and richest.

Maybe now would be a good time to legalise cannabis and tax that?

Pay, Banker's, public sector and the rich in general

Peston makes an very interesting point:
how much should people be paid?
As a lefty, i'm pretty much against big pay packets or bonuses for anyone. Hester may be an exception. His contract states that failure will not be rewarded (finally!), and his big cheque is dependent on his meeting certain targets which include getting a big profit on tax-payer investment and therefore significantly improving the public finances.
Surely all these things are the right things to do, and should have been done ages ago. It's been obvious to me that there has been a problem in bankers' pay for a long time, so others should have been able to see it if i could.
On top of that, a bloke taking home millions while millions are unemployed is an issue that hasn't been to the front in the current crisis, but that's no surprise

Public spending

So, public spending then eh?
Martin Wolf has never been my favourite academic, but this piece is interesting.
I've always quite liked Ed Balls. But his going on about keeping high spending on education strikes me as a bit misguided at best. I know he's not (yet) chancellor, but he does know a thing or two about money and that.
I know the public finances are tight and there may be some very tough decisions to make after the election/recovery, and i'm no economist. So why is Balls going on like he's just struck oil? Well, it's politics i suppose. It would certainly be nice to raise spending left, right and centre. But the problem is that there is not enough to go round. Ever. That's the nature of politics, economics, life etc. etc. So unless he can pay for it, he shouldn't spend it.

The whole thing at the moment is very interesting regarding the finances because the debt draws the question of how to pay it off. The usual arguements about tax and spend tend towards the moral, whether the rich should pay more etc. Now we have the situation where the priority is to shrink the debt so i'm a lot more willing to listen to (note not agree with) those who would argue about lower taxes funding growth. I certainly think the rich should pay higher taxes and leave quietly if they wish to. I would like to see big, high, HUGE taxes for the rich. If they leave then we have a more equal society if not world (hopefully world too). But because of the (possible) need for their money, it may be more important to rake the money in than to string up the rich