Tuesday, 27 December 2011

Reality Check

To quote George Orwell, "Who controls the past controls the future. Who controls the present controls the past."

2011 has largely dominated by the failing economy and falling living standards, yet the Labour Party had made only modest gains in the local elections and made only marginal progress in the opinion polls.

Let's be clear though, Labour has been proven right on the consequences of the coalition governments handling of the economy, yet they have not received recognition in the opinion polls when people asked on economic competence.

I am convinced without a coherent message in a language people understand, political parties has very little chance of convincing the public of their agenda, this is Labour's problem and has been for years, the political narrative.

The European fiasco before Christmas amplified Labour's problem.

David Cameron went to the European Summit to defend the interests of the City of London, he vetoed the agreement, so the Europeans decided to go on without Britain, as many financial regulation are dealt with in the single market, much of financial regulation will go on anyway.

David Cameron's message was clear "standing up for Britain", it doesn't matter he effectively did not!

Labour were seen as unclear on it's policy, seen as supporting Europe and Austerity and at home wanting a more Keynesian economic stimulus, Labour should be saying, if the Europeans want to save the Euro then they should devalued the Euro with further fiscal integration and more power to the European Central Bank.

At home Labour's economic policy is to stimulate demand that create revenue and jobs, yet the European Summit wanted to legalise Austerity.

Why would Labour want to agree with centre right political parties in Europe, when
Labour does not believe to have balanced budgets in all parts of the economic cycle, government has to spend in recession to keep the economy going, this is not my view, it is also George Osbourne's as he is going to borrow £158 billion more than he said.

Labour needs to state that we have an over reliance of the City of London and need to a switch in focus to the productive economy, this won't happen by the private sector alone, the organs of government needs to be involved.

When the coalition government cut the Jobs For a Future Scheme and cut Educational Maintenance Allowance this has led to over £1 million (20%) young people out of work, these cuts have made employment opportunities worse now we see
Labour message of the productive economy and jobs with the responsibility of government and the individual to work.

Thursday, 15 December 2011

To few media owners

I watched a piece on Liverpool Football Clubs TV channel about a fundraiser for the Hillsborough Justice Campaign and justice for the 96.

Long before the News of the World hacking scandal, Hillsborough showed the corruption of an over powerful newspaper in tandem with police and politicians who colluded with the media to portray football fans poorly to protect the incompetence of the organs of the state.

This was an early lesson and strongly chimes with my core belief, that injustice is destructive and needs to be tackled, whether by the state or private business.

The powerful have the tools, the power and the wealth to protect themselves, whether private Newspaper companies, incompetent police (as was the case at Hillsborough)and bigoted governments and the judges will side with the establishment as they are deeply conservative in their thinking.

The need to tackle vested interests is essential, too few owners of the media, too much power concentrated, as we see with the current Levenson inquiry, with sections of the media was out of control, with apparent disregard of law, for a healthy democracy, there is a need for a diverse, open and accountable media.

There appears to be little protection for the little person, the Press Complaints system, is a sham, there is no power to investigate or punish poor news pieces in the newspapers.

Even this last week the former editor of the News International title that lied about Liverpool fans in 1989 had to retract a statement he made on the BBC this week, so tabloid sorts don't change.

Thursday, 8 December 2011

Homelessness up 13% this year

The number of households declared homeless so far this year is up by 13 per cent from the same period last year, according to Government figures out today.

35,680 households have been accepted as homeless by local authorities since the start of 2011.

This is also borne out by a recent CAB meeting where it was stated issues raised around home ownership had increased by 36% this year, it was also thought that the worst was still to come as lenders see little point in repossessing as the market is poor. Levels of debt are high, with mortgage arrears and secured loans are up 26%.

And with rising unemployment, with less secure employment and an increases in fuel bills and a continued squeeze on living costs, the picture is unlikely to improve any time soon.

The number of new affordable homes being built for the first half of this year have fallen by 97% on the same time last year, to a mere 454 homes, it can’t be a surprise that unemployment is rising, when one of our most labour-intensive industries is collapsing.

There is now a real challenge with housing for government, this government policies of increasing the cost of new tenancies, with reduced tenure will hurt low paid workers the most, this coupled with few new social lets will force people into expensive private landlords.

Shelter says "we know only too well that being made homeless, or living each day under the constant threat of homelessness, is a horrific experience that can tear families apart. That’s why we will be doing all we can to help those who are struggling this Christmas"

Sadly our millionaire cabinet are turning a blind eye.

Monday, 5 December 2011

Real People

Sometimes when writing about the economy it's easy not to remember the human misery that lay behind data and statistics.

I attended the CAB meeting tonight and for example the CAB has seen mortgage arrears and secured loans has risen by 26% this year, the CAB is helping Mendip residents with £15million of debt. With average debt per client of £20/30,000

The resolution foundation this week reported on the Autumn statement by the government, it reports that scrapping the planned increases in Child Tax Credit and freezing more elements of the Working Tax Credit takes money from those who can least afford it, with more than three-quarters of the £1.2bn savings planned for 2012coming from the bottom half of the income distribution.

Cuts to the Child Tax Credit will mean families lose the extra £110 per child they had been expecting in 2012, and the freezing of the Working Tax Credit will reduce the incomes of working families by a further £100. Around 5.5 million families will lose as a result of the changes to Child Tax Credits with 2 million facing a double hit because of the Working Tax Credit changes.

The new announcements come on top of major cuts to tax credits previously announced in the October 2010 Spending Review and June 2010 Budget, including:
- a three year freeze in the basic and 30 hour elements of the Working Tax Credit from April 2011
- a reduction in the proportion of childcare costs parents can claim back through Working Tax Credits, from 80% to 70% from April 2011
- an increase in the rate at which tax credits are withdrawn, from 39 percent to 41 percent from April 2011
- the removal of the £575 families element from more middle income families from April 2012
Total cuts to tax credits announced by the coalition now amount to approximately £2.9 billion in 2012-13, around 10 percent of the total tax credit budget.

These families still have to pay their bills, with increases to food, fuel and energy bills with inflation running well above earnings.

The government have made a decision to switch taxes from companies onto individuals; a) The amount of taxes raised from the consumers & workers in the form of income tax, NICs & VAT is set to grow by 3.1% this parliament.
b) The amount of taxes raised from business through Corporation Tax, Business Rates & Oil and Gas is set to fall by a hefty 9.4% this parliament.

With the government reducing help for middle income families and raising their taxes it's no wonder consumer confidence is low and debt is on the increase.

Saturday, 3 December 2011


On Wednesday I attended the Bristol March in support of the public sector workers who were striking to defend their pension provision.

Today I was in Wells High Street, gauging public opinion on the strike doing a questionnaire.

There is no doubt the government chooses to divide public opinion on public sector pensions, this is easy to do, as many in the private sector do not have access or the ability to afford a private pension.

Public sector workers, Ambulance workers, Nurses and Teachers for example are valued people within our society and deserve to be rewarded in terms of their salaries and conditions.

The Office of Budget Responsibility has in July 2011 has stated that current public sector pension will decrease as a portion of nation income by a third.

Yet the proposed government changes would see a 42 year old nurse pay an extra £283 a year and have to work seven years longer and a 31 year old teaching assistant will pay £388 extra a year and work three extra years.

The government are looking to effectively save £2billion from public sector workers.

There is a huge problem with pensions in the private sector, between those who do not have employers schemes or cannot afford them and with top directors in the private sector (FTSE 100 directors) have pensions worth nearly £4 million on average.

For the Unions and public sector workers to win this argument the solution to extending decent pension provision to the private sector will have to be sought, this will mean the Unions have to change their approach and campaign in a more effective way with private sector workers and increase penetration in the workplace.

Politically, the case has to be made for a secure future for all, this will mean a revaluation of tax and benefit system, with tough choices made.

The bottom line is the country needs to be more productive, the government needs to help restructure the economy, developing an industrial strategy around innovation of new technologies that produce goods for the country and away from casino banking.