One has to give it to Osborne, he’s extremely good at branding whatever he doesn’t like with a clever, pejorative – but false – jingle. ‘The merry-go-round on welfare’, ‘strivers versus shirkers’, ‘Labour left behind this economic mess’ , and ‘austerity’s painful decisions are the only way to cut the deficit’ immediately spring to mind. But they’re all wrong, or at least require teasing out to show they’re more propaganda than reality. But with the unerring aid of a prostrate Tory press and the feeble docility of a pliant Opposition, he manages to command a narrative resonant with the public consciousness which even a cursory scrutiny would show to be a raging falsehood. Continue reading
Posted in Earnings
Wages, profits & investment In Greece
The IMF has placed a road-block in the way of a deal with the Greek government and it remains unclear whether any agreement can be reached. The prior agreement which the IMF rejected was itself already very onerous. But the IMF wants to shift the burden of paying for the crisis away from taxes on business and the better-paid towards more cuts in social protection. This is an insupportable burden as net median household incomes are already below €8,000 a year. Many multi-member households without work subsist solely on state and public sector pensions. Continue reading
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Even the high priests of capitalism have come out against against inequality
The IMF is the last place that one would expect to hear the argument being made that inequality has gone far too far. So the recent detailed research from the citadel of capitalism has to be taken seriously. What they found was that raising the income share of the poorest fifth of the population increases growth by as much as 0.38% over 5 years, whilst increasing the income share of the richest fifth by 1% actually reduces growth by 0.08%. On that basis the argument that enriching the rich yet further benefits everyone collapses. Trickle-down which both Thatcher and Blair devoutly believed in is therefore seen for what it is – merely a rationalisation to justify their hold on power and wealth. Continue reading
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Osborne’s £12bn cuts mainly hit those in work and will backfire badly
Contrary to incessant Tory propaganda about a pervasive culture of welfare dependency, the evidence actually shows jobless benefits claims are now at a 35 year low, but will be put at risk if Osborne pursues his £12bn welfare cuts at the expense mainly of people in work. Of the three out-of-work benefits – unemployment benefit and income support mainly for single parents and disabled persons – the proportion of the working age population receiving one of these benefits (according to the Resolution Foundation) peaked in 1993 at 17%. It now stands at 10%, its lowest level since 1980. The number of children living in workless families has also dropped from 20% in 1996 to 12.5% now. There are now fewer than 100,000 workless couples with children (excluding where adults are disabled). Moreover the UK employment rate for single mothers has risen from under 40% in the early 1990s to 62% now, and has continued to rise through this latest recession. Continue reading
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Cameron’s one-nation programme: pull the other one!
Like Thatcher declaring on the steps of Downing Street in 1979 that, like Francis of Assisi, “where there is discord, I will bring peace”, so Cameron in the Queen’s Speech debate has pledged a one-nation Britain – until one looks at the detail and reads between the lines. To take one example, the most recent government statistics show that the poorest 10% of households pay 47% of their gross income in direct and indirect taxes, while the richest 10% pay just 35% of their income in taxes. How is that to be addressed? Further, the higher tax-free personal allowance will do nothing for the 44% of adults, including pensioners, whose income is already too low to pay any income tax. – which is why raising the personal allowances will do more to benefit the well-off than the poor. Continue reading
