Saturday, 30 July 2011

Lunatics and the asylum

Ladies and gentleman the lunatics are running the asylum.

The lunatics are the CONDEM government for sure.

In a report published today, the Commons Treasury Committee concluded there was a "serious risk" that if communicating with the HMRC became too time-consuming, difficult and expensive, "respect for the tax system, and with it voluntary compliance, may be undermined".

The committee acknowledged HMRC operated "under significant pressures" such as implementing increasingly complex tax legislation, restructuring, plus continuing resource reductions and its impact on staff.

"Given the fiscal position, it would make little sense for the department to be cut back further if resource reductions in addition to those plans already agreed would have the effect of reducing receipts, displacing disproportionate costs on to the wider economy or further eroding public confidence in the tax system."

The select committee are right to point out if you reduce staffing numbers and undermine staff morale, this effects performance. Tax revenues are crucially important to fund public services and if the government undermines it's ability to collect revenues, this is seriously undermining government it's self.

Oliver Letwin has let the governments strategy on public services out of the bag.

He made controversial comments angering teachers, nurses and doctors, he warned that it was only through "some real discipline and some fear" of job losses that excellence would be achieved in the public sector.

Letwin added that some of those running schools and hospitals would not survive the process and that it was an "inevitable and intended" consequence of government policy.

Mark Serwotka, general secretary of the Public and Commercial Services Union(PCSU), "Public sector workers are already working in fear – fear of cuts to their job, pension, living standards and of privatisation. Far from improving productivity, the cuts are creating chaos in vital public services."

Harriet Harman, Labour's deputy leader, said last night that she did not recognise Letwin's portrayal of the public sector. "Death rates in hospitals have been falling, satisfaction levels have been rising," she said. "What hasn't changed is the Tories' antipathy to public services. And the idea that the way to improve public services is to put fear into those who provide them is absolutely grotesque."

In a nutshell, the government strategy is to see schools close, the Academy Schools are now essentially small businesses trading children/students like commodities, those who attract more young people survive and make a surplus and those schools who fail to attract pupils will close. This is "inevitable and intended" so no more community comprehensive schools.

The same agenda is being forced on the NHS, competition a Darwinii solution, the strong will survive and the weak go under.

Public sector reform is being conducted with fiscal contraction. The rationing of public services is back on the political agenda.

The public service like the HMRC are operating "under significant pressures" such as implementing increasingly complex reforms, restructuring, plus continuing resource reductions, as Einstein said "doing the same thing over and over again and expecting different results" is a definition of insanity.

The CONDEM government are trying to prove Einstein wrong, but in truth, the lunatics are running the asylum.

Wednesday, 27 July 2011

They're going to borrow more than Labour

When Labour left office in 2010 growth in the economy was 1.2% for the second quarter, 2011 has seen 0.2% growth in the same period.

By this time in 2010, borrowing was already £1.8 billion below 2009 borrowing; the borrowing numbers reported last week show borrowing only managed to fall by £370 million so far this year.

From the Office of Budget Responsibility’s estimates it could be projected that if growth for fiscal 2011 is below 1.1% then we could be in a situation where the CONDEM coalition is borrowing more than Labour.

With confidence at a low point, this will mean stagnant growth and will keep the deficit too high, with levels of borrowing higher under Labour, this will continue the collapsing confidence in both the business and consumer sectors.

In the last quarter production contracted 1.4% from the previous quarter, with mining and quarrying down 6.6%.

Agriculture declined by 1.3% while construction grew 0.5%, recovering after two weak quarters.

The CBI says "it's members are planning to cut jobs over the next three months and have revised down their investment plans for the year ahead," the business trade body said.

Manufacturers reported they were less optimistic than three months ago after a fall from +9% to -16% in the CBI index, the first fall in sentiment since July 2009.

The biggest drag on growth at the moment is inflation and that's eating into household disposable income and holding back consumer spending.

So the CONDEM governments policy of austerity is creating a cycle of lower growth, higher borrowing, this exasperated by VAT tax increases and National Insurance rises for employees and uncontrolled increases in fuel and food also increasing.

The current government have no strategy for growth, with some regions of the country are in recession, we have a government cutting taxes for large corporations, cutting benefits for the poorest and ignoring tax evasion by the wealthiest, we have a cronic housing problem with a million young people unemployed, we have a government with the wrong priorities, this needs to change.

Sunday, 24 July 2011


Twelve months ago the UK economy was growing at 1.2% in the second quater of the year, this week we will receive the 2011 second quarter growth rates.

It would be unsurprising to see stalled economic growth in this last quarter, the current government has cut hundreds of thousands of public sector jobs, expecting like Lazarus the private sector jobs to replace them. We have seen the cost of living rocket; food, fuel and increased taxes on VAT and National Insurance have shrunk the average families spending power.

The other side of demand in the economy is confidence, everyone I to talk to is frightened about the coming year, the governments dangerous largely unfounded talk of a sovereign debt crisis, comparing the UK to Greece, Portugal, Ireland, this is wrong when Labour left power only Canada had a smaller % GDP sovereign debt in the G7. Yet this dangerous talk has frightened people, reducing the confidence of consumers.

We are in a classic monetary squeeze.

The Labour Party has been calling for the VAT increase to be temporarily lifted to give a boost to spending, under the previous Labour government Alistair Darling did so and reduced the tax to 15 per cent during the financial crisis, consumers spent £9bn more than they otherwise would have done. A VAT cut today would be a similarly effective fiscal stimulus.

The Labour Party are calling for further taxation on Bankers with this money invested in Affordable housing giving a stimulus to the construction industry, increasing employment and taxes and spending.

We are seeing the Americans playing a desperate game with setting their deficit budget and the Europeans failing to get a grip in the euro zone crisis, the markets will remain jittery.

We need substantial political leaders to stand up, yet Merkel, Sarkozy, Cameron and Osbourne are utterly failing in the economic diplomacy needed to restore confidence in the Euro zone.

The right wing republicans in the US clearly desperate to damage Obama and to hell with the world economy simply need to get a grip, history shows us Ronald Regan raised the deficit eighteen times in his presidency, so this is nothing new and is sensible handling of the economy.

There are challenges a plenty, yet the politicans are coming up short.

Sunday, 17 July 2011

Ed finally gets it

The Last week has finally convinced me that Ed Miliband has finally got the message about the need to develop Labour's agenda around tackling the vested interests of those extremely powerful corporations that abuse their concentrated power.

Ed Miliband led on the News International telephone hacking this week, he was clear that there needed to be a judge led public inquiry on the phone hacking at News International with full legal powers and there needed to be an inquiry into the Police handling of this scandal.

He also wanted to know at a political level of the decision of Prime Minister to appoint the former editor at the News of the World as his Communication Director in Downing Street.

Ed Miliband is now questioning how much anyone/corporation should control of the news/media communication in the country, basically questioning the dominance of media barons to control the news environment when decisions are made by public bodies.

The point I would make is it would be better if there were more owners of the news/media this should provide a diverse and healthier environment.

The Banks are another example of corporations abusing their size and power, a situation where banks are too big to fail, this leads to undue risk and corporate irresponsibility.

The financial model of the modern banks has seen mutuals reduced to a minimum and corporate greed rampant, shareholders of PLCs simply do not regulate these companies, how can the Barclay's Bank pay, Bob Diamond, president of Barclay's Capital millions in bonuses when their share price is just over half of there value of 4 years ago.

Are bankers embarrassed, NO, Bankers are warning that if the UK imposes a tax on bonuses when other major financial centres, such as New York, do not then the biggest stars might relocate from the City.

Banks continue to fail to invest in local communities to develop small businesses, failing to meet commitments made to government.

Greater diversity and models of financial services needs to be developed, with the PLC and investment banks being less powerful.

Politicians need to tackle tax evasion, in recent months we've seen the poor and those on benefits under attack, the mantra that it's the poor own fault if your poor, reminiscent of the poor laws, but tax evaders are rewarded to help government, the Lib Dem's talk about this issue but the Conservative government merely does zero.

The work place needs meaningful worker participation, the view of employers that employees are only working units, misses the point, workers invest there lives in the companies they work for, this investment should be rewarded by workers participation in the company board room.

So, Ed, continue tackling the powerful and those who abuse their position, proposals need to increase the power of ordinary people against powerful unaccountable bodies.

Saturday, 9 July 2011

Fit and Proper?

The Independent on Sunday are saying that Rupert Murdoch personally guaranteed that Andy Coulson was safe to take on as his Downing Street press chief, the newspaper learnt yesterday, as the fallout from the News of the World phone-hacking scandal threatened to escalate into all-out war between the UK's two most powerful men.

Mr Cameron promised he would defend Mr Coulson's position. The IoS revealed that the cosy relationship between the Prime Minister, Mr Murdoch Snr, News International's chief executive Rebekah Brooks and Mr Coulson has been severely damaged by the hacking crisis, which caused the closure of the 168-year-old tabloid newspaper this weekend.

Mr Cameron faces serious questions over his judgement in appointing Mr Coulson, who was arrested on Friday by police investigating hacking and illegal payments to police officers. The Prime Minister said that he had sought assurances over the appointment in July 2007. Mr Murdoch Snr later gave Mr Coulson a clean bill of health, himself believing he was giving an accurate portrayal of his former editor.

Lord Ashdown, a key player as the Liberal Democrats agonised over whether to join in a coalition with the Tories, told the Observer newspaper that, based on what he had been told, it was obvious Coulson's appointment as Cameron's director of communications would be a disaster.

"I warned No 10 within days of the election that they would suffer terrible damage if they did not get rid of Coulson, when these things came out, as it was inevitable they would," he said.

The bigger picture here is the BSkyB takeover that would give the Murdoch family 40% of the media, this in terms of competition would be wrong, but until the police investigations into News International are over, in terms of the fit and proper test cannot be fulfilled.

Ed Miliband the Labour leader said today "I say this to the prime minister candidly. Over the next 72 hours I hope he changes his position on this, because I don't want to force this to a vote in the house of Commons, but I think he's got to understand that when the public have seen the disgusting revelations that we've seen this week, the idea that this organisation – which engaged in these terrible practices – should be allowed to get that 100% stake without the criminal investigation being completed and on the basis of assurances from that self-same organisation, I'm afraid that won't wash with the public."

So the ball is in the Prime ministers court and the Lib Dems who will have to choose who's side they are on?

Thursday, 7 July 2011

NoW it's time

News International corp has closed the News of the World.

They claim this is the right thing to do.

The News of the World had used people who allegedly hacked celebrities, politicians, murder victims and bomb victims and fallen soldiers.

Years, months and weekly coverage of this scandal has drained the confidence in the News of the World, advertisers must also of lost confidence and they must have been telling News International so. So, whilst News International wish to bury this hacking scandal closing the News of the World seems a clever maneuver, especially as merging the News of the World and the Sun looks like the solution News International has been looking at.

We know the News of the World paid large sums of money to private investigators to hack phones and paid money to police officers.

News International want us to believe their editor did not know of this hacking and those financial transactions.

News International want to do the "right thing" by closing the paper and lay off 200 people, yet unbelievably "the right thing" is the then editor now the CEO of News International, continues in her job. Yet the sanctimonious media who claim government ministers must take responsibility for civil servants failings, by resigning, do not practice what they preach.

Are the Police capable of investigating this malpractice? I question whether the police are. They've tried to ignore then bury this malpractice.

Three things have to happens now;

A proper police investigation

A full public inquiry, investigating the practices of the News of the World and the failures of the Police.

A full review of the media and how newspapers operate and no deal between News International and BSkyB can go ahead until after these inquiries has taken place.

Tuesday, 5 July 2011

Who's in Charge

If politics matter, then our elected representatives have to respond.

After the financial crash in 2008, it was politicians that saved banks and saved peoples savings.

Yet after saving banks, by using tax payers money and printing £200 billion to reflate the economy, you would of thought our politicians would exact some pay back for the damage to ordinary peoples lives.

However, with banks to big to fail and now, the financial dictatorship who say any threat to bankers will be a threat to the city of London, if Politicians exact a Transaction Tax or higher taxes on bankers bonuses then they will leave the country. So politicians will not take action on bankers, despite the revulsion of the general public.

Then we have the untouchables in the Media, the News of the World hacking scandal has been running for months, with the police dragging(to be polite) their feet, at times the police refused to investigate claims by Labour MPs.

The hacking scandal now needs a public inquiry, to investigate News International and the police investigation, this inquiry requires legal powers to compel witnesses to attend and answer questions.

Finally this week we have a government minister talking about British jobs for British workers, then the following day we have British jobs for German contractors, double speak.

We need for our politicians to tackle the vested interests, in the economy and media, this government seems happy to cut benefits to the poorest that will cost more than it's saves, whilst taxing bank bonuses less than under the previous government, cut legal aid for the vulnerable, whilst turning a blind eye to alleged hacking.

Were all in this together, get real, attack the poorest and protect the wealthy and powerful, what happens when the public rumble the politicians, the wolf whistles of British Jobs for British workers sounds dangerously familiar, without democratic control over powerful vested interests, people will turn to less main stream political groups.

Monday, 4 July 2011

Silence of the establishment

Over the last couple of days stories in the national newspapers concerning the meddling of the heir to the throne in government matters.

The man who's position has been attained by the accident of birth and through no merit on his own, is now it appears using the exemptions afforded to him by the previous government in the Freedom of Information Act not answer the questions why he is speaking to government ministers and what issues he is lobbying on.

But the new rules mean there is an absolute ban on disclosing communications between the Government and the Queen, Prince Charles and Prince William.

Campaigners called for an urgent review of changes to the Freedom of Information Act ushered in during the final days of the last Labour government which granted the heir to the throne – who is obliged to be politically neutral – an absolute exemption from the release of details about his contacts with ministers and senior civil servants.

The right to freedom of information is critical in an open democratic society, no better example than this was the MP's expenses scandal, we cannot be shocked by what the 'heir' to the Windsor throne is talking to ministers about, government by the people for the people, Charlie needs to know he has always been privilaged, but he should be exposed to public scrutiny.

Sunday, 3 July 2011

The Perfect Storm

The Perfect storm is continuing to build, the government austerity plan, reducing the public sector, cutting benefits (now appears to cost more than they save) and increasing tax to individuals and the private austerity confirmed in an ICM poll with two-thirds of Britons think the economy is getting worse and most are cutting back drastically on their spending to make ends meet in the face of rising food, fuel and energy prices.

The findings follow a string of retail failures in recent months as shoppers cut back on non-essentials while Britain’s economic recovery remains sluggish

Official data showed that Britain’s economy grew by just 0.5 percent in the first three months of 2010, a muted bounce from Q4’s dismal 0.5 percent contraction.

Figures also showed the biggest fall in households’ disposable income in more than 30years the Office for National Statistics said that in the year to the end of March, real incomes - adjusted for inflation - fell 2.7%, a fall not seen since 1977 with higher taxes, domestic bills and inflation are all eating away at consumers' spending power.

Let us be clear, the CONDEM government has made and continue to make false claims about the British economy, the previous government NEVER left the country bankrupt, only Canada had a lower sovereign debt % of GDP, but this dangerous talk has frightened consumers, this led to a collapse in consumer confidence predates and predicts the collapse in consumer spending that is now devastating the high street: the value of goods sold in the high street fell by 1.4 per cent in May, which isn't surprising, given that real disposable income fell 0.8 per cent in Q1 2011, after a fall of 0.9 per cent in the previous quarter.

Now the CONDEM government has done little to tackle the financial sector, the sovereign date crisis in southern Europe could well be the tipping point that will be the shock to send our economy into recession, if Greece or Portugal defaults on their loans and with the banks inter connected through Europe and beyond, the final ingredient in the perfect storm, reminiscent of the Great Depression.

Saturday, 2 July 2011

So They knew it would cost more than it saved, but still did it

This taken from the Observer

"David Cameron has been warned by one of his most trusted cabinet ministers that his welfare policies risk making 40,000 families homeless.

The extraordinary claim, in a letter to the prime minister from the office of Eric Pickles, the communities secretary, exposes deep splits at the heart of government over plans to cap benefit at £500 a week per family.

The letter, leaked to the Observer, reveals Pickles's belief that the cap – announced with great fanfare at last year's Tory conference – will increase the burden on taxpayers, because thousands of families will be unable to pay their rent and will have to seek local government help. It blows apart the government's public insistence that a limit on benefit payments will have little impact on homelessness and child poverty.

Written by Nico Heslop, Pickles's private secretary, at the clear instigation of the minister, the letter lays bare fears of mass homelessness "disproportionately impacting on families". It says:

■ 40,000 families will be made homeless by the welfare reforms, putting further strain on services already "seeing increased pressures".

■ An estimated £270m saving from the benefits cap will be wiped out by the need to divert resources to help the newly homeless and is likely to "generate a net cost".

■ Half of the 56,000 affordable homes the government expects to be constructed by 2015 will not be built because developers will realise they will not be able to recoup even 80% of market rates from tenants."

This must show just how vicious the Conservative lib Dem government has become.

Shelter says "With 21% of people struggling to meet housing costs, it's naive to think you can cut support without putting some people at risk of losing their home. The coalition government should stop bulldozing through badly thought-through policies while ignoring independent evidence, its own expert panel and the views of those who will deal with the very real impact on people."

Enver Solomon, policy director at the Children's Society, said: "The social costs of the cap are huge and would have disastrous consequences for many children."

So the benefit cap will cost more, transferring the budget from government to local government and undermining the affordable house buildings.

This is yet another attack on lower income families, this without any savings with a high likely hood of costing more, so vicious and incompetent.

Conservatives and Lib Dems true to type.