Inequality ought to figure much more sharply in this election than it has done so far. The reasons are obvious:
- the grotesque injustice in the widening gap between the top 1% (and more particularly the top 0.1% and most of all the top 0.01%) and the rest of us;
- the way that austerity has been manipulated to hit the poorest far harder than the rich;
- the brazen myth that markets generate a trickle-down that enriches all when in fact they have driven a flooding-up of wealth to the top;
- the scandal of massive tax avoidance by the super-rich as one of them once declared that “only little people pay taxes”, and
- the unfairness of remuneration systems guaranteeing huge bonuses and lucrative long-term incentive plans to many of the miscreants who caused the crash and numerous financial scandals in the first place.
But there’s another reason why inequality should now be centre-stage in this election: it causes slower, not faster, growth. Continue reading →
It is bizarre that Osborne continues to preen himself that the economy is such a strong card for the Tories at the election when in fact every aspect of the UK’s economic performance is looking bad and getting worse. Yesterday it was reported that the growth rate in the final quarter of 2014 was down to 0.5%, and unmistakeable evidence that Osborne’s ‘recovery’ is fading out. In the quarter before then growth was expected to be 0.9%, but turned out to be 0.7%; in this latest quarter it was expected to be 0.7%, but in the event fell back to 0.5%. Continue reading →
Labour has had a successful party conference, Ed Miliband made a powerful speech with a strong commanding narrative of Labour’s objectives for government, but the only let-down was in the crucial area of economic policy.
Ed Balls’ embrace of the the right-wing Tory orthodoxy of prolonged austerity until at least 2020 is as unbelievable as it is indefensible. He clearly must believe that the voters don’t trust Labour because it’s profligate so we must at all costs prove to the electorate that we’re fiscally sound and hence be at least as tough as Osborne in pursuing austerity to cut the deficit. But the record shows that Labour has not been reckless with public expenditure.
The last Labour Government’s biggest deficit in the pre-crash years was 3% of GDP, yet the Thatcher-Major governments ran deficits bigger than this in 10 or their 18 years. So who was the more profligate? But anyway from my personal experience what disgruntled voters complain about isn’t that Labour is profligate, but rather: why should I vote for Labour when it’s no different from the Tories in pursuing endless spending cuts? – exactly what Ed Balls is committing to. Continue reading →
There was nothing subtle about economic policy under New Labour. ‘We are getting into bed with business‘. Fingers to the hoi polloi. ‘You’ve got nowhere else to go‘. People in their millions voted blindly for it in 1997. A significant proportion got wise by 2001 and placed their ‘X’ elsewhere or decided ‘None of the above‘. The message ‘politicians – they are all the same‘ went viral. Labour’s vote dropped from 12 million to 8 million. Another million walked away in 2010.
By then it was clear the New Labour policy was bust. Greed and criminality at the heart of the world’s banking system plunged the global economy into recession. But five years on that New Labour lust to remain close to business lingers, contaminating the Labour offer under party leader Ed Miliband. Continue reading →
Osborne’s boast that he would shrink the welfare state to its small scale in 1948 has been definitively scuppered by a report from the Office of National Statistics (ONS). These official figures reveal that there are at least 6 major areas of public expenditure which are currently escalating rapidly and make it impossible to reconcile with his proposed 35% cuts in all non-protected departments and a further £25bn cuts in benefits in the next parliament.
This is reinforced by the latest news that the deficit (public sector net borrowing), the reduction of which is the ostensibly central objective of Osborne’s economic strategic, actually increased last year by £13bn despite a year of economic growth, whilst in the first quarter alone of the new fiscal year ONS figures now reveal a big increase in Tory government borrowing to £36bn, a worrying 7.3% increase over the same quarter in 2013. This major reversal, if it continues as it shows every sign of doing so, leaves Osborne’s counter-productive deficit-reduction plan in tatters. Continue reading →