Budget 2014 Takes Doublespeak to New Depths

Casual readers of the budget might wonder whether it had been written by chancellor George Osborne or George Orwell. A garden city built in a quarry and growth built on a reinflated housing bubble are hardly reassuring evidence of the economy based on "more economic security and economic resilience" that Osborne claims to be his objective.

Most shockingly, the freezing of the carbon tax and the reduction in the rate of air passenger duty for long-haul flights makes it plain that the chancellor has no understanding of what resilience means, and how our failure to tackle climate change threatens it.

Resilience has followed hard on the heels of that much-abused concept 'sustainability' in helping to define the key characteristics of a sustainable society. Unlike the financial system, which cracked when it came under pressure, a resilient system would be able to bounce back even in the face of unexpected challenges; unlike the railway line at Dawlish, resilient infrastructure is based on built-in redundancy that means there is always an alternative when a system comes under pressure from an unpredictable event. It is exactly this sort of resilience that has been designed out of our economy and society by years of lean management and just-in-time production systems. From computer systems to food supply chains, the globalised market-place has left us less resilient than we have ever been.

So what would a budget for resilience and security actually look like? Let's start with finance. A resilient model for banking would insist on the breaking up of the consolidated megabanks so that banks were no longer 'too big to fail', and no one bank would be large enough to bring down the whole system. Mr Osborne could pop across to the Department for Business, Innovation & Skills (BIS) and have a word with his colleague Vince Cable who operates RBS on behalf of its owners, us, the citizens of the UK. He might subtly suggest that he break it up into a system of local community banks, which could be required to actually act like banks, building supportive relationships with the local businesses that a resilient economy requires, rather than acting like casinos.

While on the issue of finance, we should also tell George that his desperate attempt to reinflate the housing bubble through extending the life of Help to Buy is storing up exactly the sort of catastrophic financial collapse that put us in this economic mess. It also does nothing for those who are most in need of reasonably priced housing, since it will only support mortgages they cannot afford and encourage house prices to rise even further beyond their reach.

The most fundamental cause of social insecurity in modern Britain is the failure of the housing market to provide affordable, comfortable homes to those who need them. Here the chancellor could act swiftly to bring in rent controls which would simultaneously reduce the massive amount of public money being wasted on housing benefit. He could also raise the borrowing limits on local authorities to enable them to build houses for those on their lengthy and growing waiting lists.

The greatest source of insecurity we all face is the unpredictable consequences of climate change, and it is here that Osborne's words ring most hollow. Here we see clearly the government's back-tracking on this most vital issue, building on the earlier folly of reducing green levies on energy companies, now further decreasing incentives to business to reduce their carbon emissions by freezing the carbon price floor. He has learned nothing about resilience from the winter's devastating storms and floods, but the urgent need for a consistent policy on climate change is now more evident than ever.

Real energy security comes from demand reduction as a result of improved energy installation in homes, combined with local generation from renewable energy sources. This government's mixed messages on renewable tariffs and taxes has undermined several proposed investments in wind generation, destroying jobs in my own home region of the South West. A higher rate of feed-in tariff limited to small-scale and community-owned electricity generation projects would be the best policy in the budget to ensure real energy security.

With a budget that achieves the exact opposite of the objectives the chancellor has set himself we are all wondering what will come out of the Ministry of Truth next. A Localism Act that centralises planning perhaps; or a Big Society that cuts benefits for the poor and vulnerable?

Written by  Molly Scott Cato Professor of Green Economics at Roehampton University and Green candidate in the European Elections

First published at The Huffington Post

Follow Molly Scott Cato on Twitter: www.twitter.com/MollyScottCato

Council of Europe recommends more powers for English local authorities

Councils in England should have more powers devolved to them, according to a new review into the state of local government.

The Council of Europe regularly reports on the state of local and regional democracy in the EU's member states. A delegation visited twice last year in only the second-ever review of the UK, the first taking place in 1998.

Published today, its report ‘Local and regional democracy in the United Kingdom' recommends greater devolution of powers to local government, increased tax-raising powers for councils and a fairer funding settlement for English local authorities.

The report concludes:

·         The ability of councils to provide "essential public services, quality health and social care and effective and adequate community services and facilities, especially to the growing number of older people" is under huge pressure following austerity measures.

·         It recommends devolution of powers to councils as "the ability of local authorities to discharge their responsibilities sometimes appears to be highly restricted by central government".

·         Despite significant funding reductions themselves, councils in Wales and Scotland are "better off financially than their English counterparts". The complex formula for distribution of central government funding produces "considerable uncertainty and effects of unequal treatment".

·         A diversified base of local revenue is an "urgent necessity" with council tax "limited by central or devolved governments, due to the referendum obligation" while "all rates are decided by government and funding is still dominated by central government grants".

Sir Merrick Cockell, LGA Chairman, said:

"This report recognises the huge challenge facing public services with councils having to find £20 billion worth of savings by the end of this current Parliament. The LGA has highlighted the impact this will have on essential services and the Government has listened by not making an additional reduction to local government funding in 2014/15.

"We feel this review is a fair reflection on the current pressures facing local government. The current model for financing and running local government needs to change and adapt to today's circumstances and it is important that local and central government works together to address these issues and takes these recommendations forward.

"Devolution of decision-making and tax-raising powers to local areas is needed to help save money and improve services and English communities need to be given the same significant say over everything from health services to public transport as they do across the border in Scotland, Wales and Northern Ireland.

"Our European counterparts also identified the urgent need for a fair and equitable distribution of public money across the United Kingdom. The 34-year-old Barnett Formula is short-changing English communities by as much as £4.1 billion a year and a needs-based model is needed for a fairer deal.

"When the delegation returns to the UK in five years, I hope these vital reforms will be in full force and local government will be looking ahead to the future with renewed hope."

This is a press release from the Local Government Association, which is a cross party grouping of local authorities, Chaired by a Tory. It shows the depth of feeling in local government about lack of funding under the ConDem government.

Statement on Local Authority Cuts

The Green party of England and Wales fought the 2010 general election in opposition to the savage public service cuts supported by the Conservative, Labour and Liberal Democrat parties. The Green party offered a different approach to reducing the country’s debts, which included making the wealthy (people and corporations) pay their fair share of tax, investing in the economy to produce sustainable growth through the Green New Deal, some cuts for example to Trident and pledging to protect public services particularly for the most vulnerable in our society.

Unfortunately, we did not win the general election and so are unable to put these policies into practice, although Caroline Lucas has almost single handedly taken the opposition to the Coalition government cuts agenda. The ideologically driven shrink the state policies of the Coalition government aim to reduce public spending and turn most of the public services over to private corporations. 

Our elected representatives in local government are on the front line in the assault on public spending, with local authorities having their funding from central government cut by around a third since 2010. Councils of all political stripes are hurting and they worry about whether they will even be able to fund their statutory duties in the future. Local government is under serious threat and everyone involved in it knows this to be true, despite the blithe statements about local authorities making efficiency savings and encouraging local business growth to pay for services, trumpeted by the Coalition central government. All the easy savings and many not so easy have been made now, and a future of even more of the same is daunting.

Haringey Green Party would continue to look for better and more effective ways of doing things in Council budgets especially on energy, transport, supplies, consultancy, and agency fees, whilst avoiding cuts in services, jobs, or wages and whilst recognising the importance of all sub-contractors’ staff (as well as Council employees) being paid a London living wage.  We would oppose any salaries in new appointments being over ten times the lowest full time wage.

Haringey Green party supports Green councillors who refuse to participate in or support an administration that implements any further cuts; and recognises that Green councillors may better represent the interests of their constituents by remaining in opposition at this time.

Haringey Green Party supports popular mobilisation against the cuts through demonstrations and where necessary direct action, in coordination with local, regional and national anti-cuts movements such as the People’s Assembly. HGP would welcome coordinated actions between Green and left councillors in different areas to resist cuts in services. 

HGP would welcome a national campaign for reform of local taxation and/or Council or GLA charges to make them more progressive and to capture more of the profits of developers to support local services, and would encourage and support any Green councillors elected here to pursue these aims as well as to campaign for local eco-taxes like levies on commercial packaging.

Haringey Green Party believes that Green Councillors, whenever faced with a need to make instant decisions about budgets in the Council chamber and whenever consultation with supporters and allies is not possible within the permitted time frame, should do whatever they judge to be in the best interests of the local population and consistent with Green Party policy.

Hungry Christmas: Food Bank Use Soars

This Christmas more people than ever will be relying on food banks in the UK. Despite the government's talk of a recovery, thousands of people across the country are going into the Christmas period with the grinding desperation of poverty and hunger hanging over them.

In my report, Hungry Christmas, I've exposed a huge increase in the number of people relying on food banks in South East England. The region - the second richest in the UK - has seen a 60% increase in the number of people relying on emergency food handouts this year and the total number of those needing emergency food handouts is likely to hit 70,000 for the year April 2013- April 2014.

These statistics are shocking enough, but behind each statistic is the story of someone who is living in the sixth largest economy in the world yet struggling to feed themselves and their family.
This year I've toured my constituency visiting the food banks which are straining to keep up with rising demand. It's at these food banks that I've met people like John.

He was now volunteering after receiving help from the food bank at a time in his life when he had lots of problems. By degrees he'd lost his good job, his accommodation, developed a drug habit and drifted into street drinking, until his life was in a very dark place.
He told me he thought that a lack of food was the least of his worries: he could always scavenge or beg. But he realised that he eventually needed to get back to a 'normal life' and regular meals, or he would die.

I also met Mary*, a single parent who just can't keep up with the expense of clothing and feeding her children, and often goes without food herself so her kids can eat. For her, the food bank was a lifeline at a time of desperation.

The two major reasons people give for going to food banks are benefits problems (delays, sanctions and changes) and low incomes. There's evidence to suggest that the former has been exacerbated by the government's 'crackdown' on benefits claimants and their changes to social security. The latter reason, which explodes the myth of people being able to 'work their way out of poverty', reflects the fact that wages have stagnated in real terms for a decade now.

This Christmas many of us will be giving a bit of our money to the many good causes who help those in need. But, while charity is essential for assisting the vulnerable, it's vital that we don't let ourselves slip into thinking that the poverty so many of us face is inevitable or uncurable. In twenty first century Britain nobody should have to rely on handouts to get by at Christmas time, and no government should be allowed to get away with letting this situation develop.

If we are to tackle the poverty faced by so many in the UK we need to ensure that people have access to jobs which pay enough to build a life on and adequate social security protection when times are tough.

Let's make sure that the good yuletide feelings don't let us forget or forgive this Government for passing on a financial crisis to the poorest in society. And let's ensure that in 2014 we say to this government loud and clear that poverty in this country is a result of their politics, and we won't stand for it anymore.

*names of food bank users have been changed

Keith Taylor is a Green party MEP

Follow Keith Taylor on Twitter: www.twitter.com/GreenKeithMEP      

David Harvey interview: The importance of postcapitalist imagination

From housing to wages, David Harvey says examining capitalism's contradictions can point the way towards an alternative world

You’re working on a new book at the moment, The Seventeen Contradictions of Capitalism. Why focus on its contradictions?

David Harvey: The analysis of capitalism suggests that there are significant and foundational contradictions. Periodically those contradictions get out of hand and they generate a crisis. We’ve just been through a crisis and I think it’s important to ask, what were the contradictions that led us into it? How can we analyse the crisis in terms of contradictions? One of Marx’s great sayings was that a crisis is always the result of the underlying contradictions. Therefore we have to deal with those themselves rather than their results.

One of the contradictions you focus on is that between the use and exchange value of a commodity. Why is this contradiction so fundamental to capitalism, and why do you use housing to illustrate it?

All commodities have to be understood as having a use value and exchange value. If I have a steak the use value is that I can eat it and the exchange value is how much I had to pay for it.

But housing is very interesting in this way because as a use value you can understand it as shelter, privacy, a world of affective relations with people, a big list of things you use a house for. But then there is the question of how you get the house. At one time houses were built by people themselves and there was no exchange value at all. Then from the 18th century onwards you got speculative house building – Georgian terraces which were built and sold later on. Then houses became exchange values for consumers in the form of saving. If I buy a house and I pay down the mortgage on it, I can end up owning the house. So I have an asset. I therefore become very concerned about the nature of the asset. This generates interesting politics – ‘not in my backyard’, ‘I don’t want people moving in next door who don’t look like me’. So you start to get segregation in housing markets because people want to protect the value of their savings.

Then about thirty years ago people began to use housing as a form of speculative gain. You could get a house and ‘flip’ it – you buy a house for £200,000, after a year you get £250,000 for it. You earned £50,000, so why not do it? The exchange value took over. And so you get this speculative boom. In 2000 after the collapse of global stock markets the surplus capital started to flow into housing. It’s an interesting kind of market. If I buy a house then housing prices go up, and you say ‘housing prices are going up, I should buy a house’, and then somebody else comes in. You get a housing bubble. People get pulled in and it explodes. Then all of a sudden a lot of people find they can’t have the use value of the housing anymore because the exchange value system has destroyed it.

Which raises the question, is it a good idea to allow use value in housing, which is crucial to people, be delivered by a crazy exchange value system? This is not only a problem with housing but with things like education and healthcare. In many of these we’ve released the exchange value dynamics in the theory that it’s going to provide the use value but frequently what it does is it screws up the use values and people don’t end up getting good healthcare, education or housing. This is why I think it’s very important to look at that distinction between use and exchange value.

Another contradiction you describe involves a process of switching over time between supply-side emphases on production and demand-side emphases on consumption in capitalism. Could you talk about how that manifested itself in the twentieth century and why it’s so important?

One of the big issues is keeping an adequate market demand, so that you can absorb whatever it is that capital is producing. The other is creating the conditions under which capital can produce profitably.

Those conditions of profitable production usually mean suppressing labour. To the degree that you engage in wage repression – paying lower and lower wages – the profit rate goes up. So, from the production side, you want to squeeze labour down as much as you possibly can. That gives you high profits. But then the question arises, who is going to buy the product? If labour is being squeezed, where is your market? If you squeeze labour too much you end up with a crisis because there’s not enough demand in the market to absorb the product.

It was broadly interpreted after a while that the problem in the crisis of the 1930s was lack of demand. There was therefore a shift to state-led investments in building new roads, the WPA [public works under the New Deal] and all that. They said ‘we will revitalise the economy by debt-financed demand’ and, in doing so, turned to Keynesian theory. So you came out of the 1930s with a very strong capacity for managing demand with a lot of state involvement in the economy. As a result of that you get very high growth rates, but the high growth rates are accompanied by an empowerment of the working-class with rising wages and stronger unions.

Strong unions and high wages mean the profit rate starts to come down. Capital is in crisis because it’s not repressing labour enough, and so you get the switch. In the 1970s they turned to Milton Friedman and the Chicago School. That became dominant in economic theory and people began paying attention to the supply-side – particularly wages. You get wage repression, which begins in the 1970s. Ronald Reagan attacks the air traffic controllers, Margaret Thatcher goes after the miners, Pinochet kills people on the left. You get an attack on labour – which raises the profit rate. By the time you get to the 1980s the profit rate has jumped up because wages are being repressed and capital is doing well. But then there comes the problem of where are you going to sell the stuff.

In the 1990s that is really covered by the debt economy. You started to encourage people to borrow a lot – you started to create a credit card economy and a high mortgage-financed economy in housing. That covered the fact that there wasn’t real demand out there. But eventually that blows up in 2007-8.

Capital has this question, ‘do you work on the supply side or the demand side?’ My view of an anticapitalist world is that you should unify that. We should return to use value. What use values do people need and how to we organise production in such a way that it matches these?

It would seem that we are in a supply-side crisis, and yet austerity is an attempt to find a supply-side resolution. How do we square that?

You have to differentiate between the interests of capitalism as a whole and what is specifically in the interests of the capitalist class, or a section of it. During this crisis, by-and-large, the capitalist class have done very well. Some of them got burned but for the most part they have done extremely well. According to recent studies of the OECD countries social inequality has increased quite significantly since the onset of the crisis, which means that the benefits of the crisis have been flowing to the upper classes. In other words, they don’t want to get out of the crisis because they are doing very well out of it.

The population as a whole is suffering, capitalism as a whole is not healthy but the capitalist class – particularly an oligarchy within it – has been doing extremely well. There are many situations where individual capitalists operating in their own class interests can actually do things which are very damaging to the capitalist system as a whole. I think we are in that kind of situation right now.

You have said often recently that one of the things we should be doing on the left is engaging our postcapitalist imagination, starting to ask the question of what a postcapitalist world would look like. Why is that so important? And, in your view, what would a postcapitalist world look like?

It is important because it has been drummed into our heads for a considerable period of time that there is no alternative. One of the first things we have to do is to think about the alternative in order to move towards its creation.

The left has become so complicitous with neoliberalism that you can’t really tell its political parties from right-wing ones except on national or social issues. In political economy there is not much difference. We’ve got to find an alternative political economy to how capitalism works, and there are some principles. That’s why contradictions are interesting. You look at each one of them like, for instance, the use and exchange value contradiction and say – ‘the alternative world would be one where we deliver use values’. So we concentrate on use values and try to diminish the role of exchange values.

Or on the monetary question – we need money to circulate commodities, no question about it. But the problem with money is that it can be appropriated by private persons. It becomes a form of personal power and then a fetish desire. People mobilise their lives around searching for this money even when nobody knows that it is. So we’ve got to change the monetary system - either tax away any surpluses people are beginning to get or come up with a monetary system which dissolves and cannot be stored, like air miles.

But in order to do that you’ve also got to overcome the private property-state dichotomy and come to a common property regime. And, at a certain point, you need to generate a basic income for people because if you have a form of money that is anti-saving then you need to guarantee people. You need to say, ‘you don’t need to save for a rainy day because you’ll always be getting this basic income no matter what’. You’ve got to give people security that way rather than private, personal savings.

By changing each one of these contradictory things you end up with a different kind of society, which is much more rational than the one we’ve got. What happens right now is that we produce things and then we try to persuade consumers to consume whatever we’ve produced, whether they really want it or need it. Whereas we should be finding out what people’s basic wants and desires are and then mobilising the production system to produce that. By eliminating the exchange value dynamic you can reorganise the whole system in a different kind of way. We can imagine the direction that a socialist alternative would move in as it breaks from this dominant form of capital accumulation, which runs everything today.

First published at Red Pepper

The Green Party takes on the banks

This is a guest post by Daniel Key who is an ex member of Haringey and of Tower Hamlets Green Party. He is a member of the Policy Committee of the Green Party of England and Wales. He tweets at @danieloliverkey.

Last weekend, the Green Party of England and Wales made history by joining the United States Green Party in calling for an end to the private creation of money by banks. After a debate on the motion at the Autumn Conference in Brighton, the Green Party has collectively decided to instead place this power with a democratically accountable National Monetary Authority at the Bank of England. This represents a huge change in Green Party policy, as we are now calling for full reserve banking, alongside other radical policies such as a citizen's income, land value tax and of course the decarbonisation of the entire economy as we move to a post carbon and equitable world.

           
To recap: currently private banks create money as debt when they make loans. This electronic bank money now represents 97% of the UK money supply, with only 3% being created debt-free by the government in the form of notes and coins (a good place to start to understand the UK money system is the one hour documentary 97% Owned. This money is allocated by the lending decisions of the high street banks, and so we see money pumped into the housing market (putting house prices way beyond the means of young people) instead of small businesses, as banks receive collateral if mortgage holders default on their loans. This is massively undemocratic, as control of the banks' power to create money is in the hands of its board members, who are only accountable to the bank's shareholders.

 Money creation is pro-cyclical – too much is created in an economic boom, whereas we are currently living through a period where lending is restricted and money is therefore destroyed when debt is paid down. This is why the Bank of England has introduced quantitative easing to indirectly get money into the economy, and the government has introduced the Help to Buy scheme to encourage the public to take on more debt, creating a housing bubble in the process.

 From an environmental perspective, the biggest problem with the current money system is that the level of debt is constantly growing. This in turn means the economy is compelled to grow, even when this leads to environmental destruction. This is the engine behind such environmentally damaging innovations such as planned obsolescence (designing products with a limited useful life to perpetuate consumption), as Michael Rowbotham recognised in his book The Grip of Death over a decade ago. The current debt-based system of creating money is incompatible with the goal of a sustainable, steady-state economy, as pointed out in the recent green economics book Enough is Enough.

To achieve a steady state economy we must eliminate the growth imperative that is built into the existing banking system.

Full reserve banking is recognised as the missing link in the move to a sustainable economy by a number of leading green economists and thinkers. These include:

Herman Daly (grandfather of green economics and the author of Steady State Economics)

As Caroline Lucas points out in this video, the best way to use the debt-free money created as a result of these reforms (estimated at £1 trillion over 20 years) would be to spend it on the Green New Deal in an effort to build the green economy. This way we can get unemployed people into labour-intensive jobs, with more taxes paid by a larger workforce, creating a virtuous circle for government revenues and society as a whole.

The potential transition scenario to a full reserve banking system, as well as the finer details of the reforms, are laid out in the book Modernising Money. We have adapted these proposals to suit Green Party principles.

With the Icelandic parliament looking into the potential of introducing full reserve banking[3], we may have a working example of these reforms in the years to come. As the proposer of the motion, Andrew Waldie, puts it, “This motion strikes a blow at the heart of financial capitalism by removing from banks their power to create money”. We may have improved our policies, but the real battle will be taking this power back from the banks when our movement reaches a critical mass.

Read the Green Party Banking Reform Motion here - http://2joz611prdme3eogq61h5p3gr08.wpengine.netdna-cdn.com/wp-content/uploads/2013/09/Green-Party-C%CE%A903-Banking-and-Monetary-Reform-Composite.pdf

Read the Background Paper to the motion here - http://2joz611prdme3eogq61h5p3gr08.wpengine.netdna-cdn.com/wp-content/uploads/2013/09/Banking-reform-motion-GP-Conf-Autumn-2013-Background-Paper-submitted.pdf

Check out some Frequently Asked Questions about full reserve banking here -
http://www.positivemoney.org/faqs/

UK is urged to invest £50bn in a greener economic recovery

Campaigners have warned that Britain is hurtling towards a new economic crisis, and call for a £50bn "Green New Deal" to create more sustainable growth and better-paid jobs and equip the country for a low-carbon future.

After two quarters of better-than-expected GDP growth and a batch of positive economic indicators – including rising house prices and upbeat business surveys – the coalition is hoping the summer economic bounce will turn into a longer-term recovery. But five years on from their first demands for a radical reworking of Britain's business model, the Green New Deal group, which includes Green party MP Caroline Lucas, economist Ann Pettifor and tax expert Richard Murphy, says the need for an alternative approach is greater than ever. In a report published on today, it argues that recent growth has been based on unsustainable rises in consumer spending and house prices and could end in "the mother of all credit busts".

"Recovery is an interesting word to apply to an economy that is marked by rapidly rising personal debt, highly insecure and often low-paid work, and rising underlying carbon emissions. What we're calling a recovery is poor, divided, indebted and polluting," said Andrew Simms, chief analyst at thinktank Global Witness and an author of the report.

Central banks have poured cheap money into financial markets to drive down interest rates and prevent deflation and depression. But Green New Deal says this is a dangerous gamble: "Given the choice, they prefer to have the problem of asset prices going through the roof than the problem of deflation. If they are wrong and the bubble bursts before the recovery arrives, it will be the mother of all credit busts," it says.

Under an alternative plan in the Green New Deal report, the government would invest £50bn into expanding green technologies over five years, building low-cost housing, and employing a "carbon army" to insulate hundreds of thousands of homes and reduce energy use.

The authors say these measures would create more, and better-paid, jobs than the current debt-fuelled bounce, which Pettifor described as an "Alice in Wongaland" recovery. Lucas, who is the MP for Brighton Pavilion, said a grassroots workforce could be trained to lag Britain's chilly lofts "within weeks". "Ministers want to cut a nice big ribbon on a new nuclear power station – but this would be far more effective in getting our emissions down quickly," she said.

Real incomes have continued to fall over the past year, as above-target inflation has outpaced pay growth, in what the TUC has described as the greatest wage squeeze since the 1870s. Green New Deal argues that if more workers were paid a living wage it would help to create more sustainable consumer demand. Frances O'Grady, the general secretary of the TUC, which begins its annual congress in Bournemouth on Sunday, supported the Green New Deal initiative, saying: "The green economy already employs nearly a million people, in areas from electric-car manufacturing to wind-turbine installation. Implementing some of the ideas in this report could help these industries create more of the skilled and well-paid jobs we need if we are to build a sustainable recovery."

The authors suggest their pro-growth policies could be paid for by scrapping the controversial HS2 rail project; cracking down on tax evasion; and launching a fresh round of quantitative easing.

Instead of using electronically created money to buy government bonds from City investors, as the Bank of England has done with almost all of the £375bn-worth of QE it has undertaken since 2009, the proceeds this time would be used to invest in green projects, and pay off private finance initiative debts, freeing up public money to be spent elsewhere. The report argues that investing in affordable housing, in particular, would benefit those on lower incomes more than the better off. "It can mean that people have more disposable income after housing costs, which in turn boosts spending in the local and national economy," the report says.

The authors argue that a rapid boost in the supply of housing would also help to "dampen the housing bubble beginning to appear in response to government measures such as Help to Buy, which facilitates prospective homebuyers to find a deposit". The controversial Help to Buy scheme was the centrepiece of George Osborne's March budget, and has been questioned by a number of critics, from the former governor of the Bank of England, Lord King, to the International Monetary Fund, amid fears that it could create a new property boom.

Mark Carney, the Bank's new governor, has said he is "very alert personally" to the risk that a housing boom is emerging – and said he was ready to burst any bubble, by targeting mortgage lending.

Reforming the bailed-out banking system is another central proposal of the report, suggesting that Royal Bank of Scotland, which is majority-owned by the taxpayer, could be broken up into a series of regional lenders that would build relationships with local industries. "All the mechanisms which have been brought into play to encourage lending to the productive part of the economy don't seem to be working," says Simms.

Labour has promised to introduce a British Investment Bank, to boost lending to businesses; but it has eschewed much of the Green New Deal agenda over the past five years, focusing on an emergency VAT cut as the centrepiece of its policies to create a recovery.

Other members of Green New Deal include Charles Secrett, former director of Friends of the Earth; Jeremy Leggett, chairman of green energy firm Solarcentury; and Larry Elliott, economics editor of the Guardian.

First published at The Observer newspaper

You can read the full report here

Using the Financial Crisis To Force Down Lower and Middle Wages

We have featured on this blog the way the Coalition government is blaming the recession on welfare benefits recipients, and using the current economic crisis to make cuts in welfare payments, but they have also taken the opportunity to cut wages, for the lower and middle section also. A recent report by the TUC highlights this policy.

The report finds that almost 80% of the jobs created in the UK since June 2010 have been in low paid industries, i.e. paying less than £7.95 per hour. It goes onto say:

Retail has made the biggest contribution to rising employment levels, with the number of employee jobs in this sector increasing by 234,000. The average wage in retail is just £7.35 an hour. Residential care, where the average wage is £7.78 per hour, makes the second biggest contribution of 155,000 jobs.

Just over one in five (23 per cent) net new employee jobs created since June 2010 has been in the highly paid computer programming, consultancy and related services industry, where the average hourly wage is £18.40. The workforce in this sector has grown by 131,000.

In middle-paid industries, which account for nearly three-quarters of the UK workforce and where the average wage is between £7.95 and £17.40 per hour, there has been no net job creation since June 2010. While some industries, such as legal and accounting have created jobs (135,000), others such as public administration (-160,000) and social work (-68,000) have shed them.

High-paid industries were hardly affected by the recession, with the number of jobs falling by just 0.9 per cent. There are now a record 900,000 employee jobs in high-paid sectors.

On top of this, public sector workers, who are by and large low to middle earners, have had pay freezes and pension contribution increases over the last five years, with the increasing use of short term contract and agency staff at even lower wages. Private sector workers have also had pay freezes and reduced hours, as their employers piled huge amounts of cash reserves (over £300 billion at the last count, not including the banks).

Then as The Guardian reports we have one million workers employed on zero hours contracts across the country, meaning that they are paid when required like the casual hiring of dock workers in New York in the 1950’s, immortalised by Marlon Brando in the film On the Waterfront. No sick pay, no holidays, no pay when not required.

It should come as no surprise that most low paid workers are women, and are disproportionately affected by the forcing down of these wage rates, as this Coalition government is deeply misogynistic and so it is at best ambivalent to this outcome.

Wage rates have been falling though since 2003, under the previous Labour government, though not so sharply, but the gap then was taken up by increasing property prices, where people borrowed against their rising house value to fuel the economy in buying consumer goods. It appears that the current government is attempting to revive this approach with ‘help to buy’ guarantees on home loans, seemingly learning nothing from the debt ridden causes of the 2008 and continuing recession.

All of this while boardroom pay and bonuses rocket.

The future employment prospects for most UK workers will be of low pay, few benefits and generally insecure.  Further legal curbs on the trade unions, and a ‘loosening’ of employment law, with higher fees for employment tribunals thrown in.

A low waged economy where what can be outsourced to China or India cheaper will be and what by some necessity needs to be based in the UK, will be low paid and insecure for most workers, if they can find work at all.

A future where in the first generation since World War 2, the children will be poorer than their parents, rolling back all the social progress in living standards that was achieved in the last century.

Let’s not go down meekly; we can at least put up a fight.       

Industrial Dispute in Brighton and Hove and the Green Party

With industrial action starting last Friday, Green Party members across the country face an immense dilemma – the choice between supporting our own minority Green council or hundreds of workers going on strike for a week against proposed pay reductions.

Some of the workers could lose up to £4000 a year. That’s a choice most Greens would a few years ago have never thought they’d face. In the midst of massive local authority cuts, the Greens are in office but seemingly not in power.

Many local parties and individuals – including the local Brighton & Hove Green Party, Caroline Lucas (who has pledged to join the picket lines), and university branches such as my own – have spoken out against the bin worker pay cuts.

It has thus-far been a shambolic dispute where a noble attempt to equalise pay between male and female staff has turned into idiotic comparisons to the winter of discontent, accusations of potential strike breaking, and outsourcing the pay proposal decision altogether in order for Greens to claim ‘it wasn’t our decision’. Yet the council leader, Jason Kitcat, seems determined not to budge.

Serious internal discussion about this sorry state of affairs has sadly been minimal at best, stifled at worst. The party is coming under attack over this from all other sections of the left, and Labour will exploit this to its fullest unless the Green group in Brighton change tack and handle the situation properly. If Greens don’t tackle the issue head on, other parties will do so.

Neither is it good enough to say, as some have, that since the Greens are a federal party ‘it’s up to Brighton’. Brighton Greens – both the local branch and our only MP – have spoken clearly on this issue. It’s now up to the rest of the party nationally to back them up in this. Brighton is, bar a sizeable number of honourable exceptions in the likes of Alex Phillips and others, a rogue council, refusing to cede to the wishes of its local party, its constituents, and (from what I gather) the rest of the party nationally.

Disappointingly, the Green Party Executive (GPEX) and leader Natalie Bennett have appeared quiet on the issue.

Worthy though bringing in a Living Wage, leading the ‘no evictions’ fight over the bedroom tax, and attempting to equalise pay between male and female workers is, a Green council should never cut the pay of some of the least well off. That should be a given, particularly after enshrining social justice into the party’s Core Values last conference. As a party which has the strongest record on workers’ rights in terms of policy, strike busting should never have even been rumoured, let alone a potential possibility.

There are some hopeful signs however. Leading figures in Brighton & Hove Greens have at last made public statements about the strike action, though still seemingly refusing to back down over the pay proposals. The GMB has agreed to re-enter negotiations. And the candidate for the Hanover & Elm Grove by-election, David Gibson, is a solid trade unionist who opposes the measures to equalise pay down instead of up.

There needs to be a serious discussion about the possibility of setting ‘needs budgets’, and if not, discussing whether we should be in office at all if we are forced to act as a mere smoke-screen for Tory-Lib Dem cuts.

At what point does the party start to consider that to stay in office and continue to implement cuts would be to breach fundamental principles? As the Green Party conference in Brighton approaches, it’s time to get backtracking on the proposed pay cuts, and time to start talking.

Josiah Mortimer is a Green Party activist and student based in York.

And here nine of the Brighton and Hove Green Party councillors plus Green Party activists argue in an open letter against Green group's leadership on the issue:

Labour’s embrace of welfare reform is a victory for the right

The Labour Party leadership’s embrace of welfare reform – set out in Ed Miliband’s keynote speech on welfare to a select audience in Newham, East London – marks a victory for the right and describes another benchmark in the political degeneration of the party that created the welfare state.

From the moment the current global economic crisis hit these shores with the collapse of Northern Rock in September 2007, the singular objective of the right has been to turn what was and is a crisis of private greed into a crisis of public spending. It was a campaign given political credence with the election of the Tory-led coalition government in 2010, unleashing a political and economic assault on the poorest and most vulnerable section of society under the rubric of austerity.

In economic terms austerity is doomed to failure. The empirical and historical evidence leaves no doubt that in periods of economic downturn a government must spend more not less in order to re-inject the demand sucked out by the refusal of the private sector to invest as profits tumble

Investment strike

A story that appeared in the Express in April revealed that the government’s own Office for National Statistics had calculated that UK corporations, other than banks, were sitting on a combined surplus of £318 billion in the final quarter of last year – up from £304 billion in the previous quarter.

This is an investment strike by any other name, which the government has responded to with tax cuts for the wealthy and other inducements to invest in the shape of subsidies, grants, tax breaks, and so on. Picking up the tab for all this has been the poor and those reliant on the welfare state and public services in the form of swingeing cuts to public spending.

If we factor in the £375 billion pounds the government has thus far fed to the banks in the form of Quantitative Easing since 2009, what we have seen over the past five years of the economic crisis is the transfer of wealth from the poor to the rich on a grand scale.

The fact that the government has been able to get away with this without meeting significant or effective resistance is a consequence of two processes that are interlinked. The first is the traction and persuasiveness of the simplistic analogy that the Tories and their bag carriers in the right wing press have drawn between a national economy and a household budget.

Contraction of demand

Yet as the US economist and Nobel laureate Paul Krugman reminds us – unlike a household budget, when it comes to a national economy one person’s spending is another person’s income. Under the aegis of austerity, if no-one is spending then no one has any income, resulting in the contraction of demand leading to the stagnation we are currently witnessing.

The second of these two interlinked processes is a government initiated campaign of demonisation against the unemployed and those claiming benefits, resulting in the creeping criminalisation of poverty. Shifting the responsibility for poverty onto its victims – away from the vicissitudes of a free market economic system that could not function without creating poverty – has been one of the most vicious and callous policies of any British government in modern history. Sadly, as stated, it has met with inordinate success, reflected most recently in Ed Miliband’s speech on welfare reform, which amounted to the Labour Party leadership’s abandonment of the principle of social solidarity that underpins the welfare state.

The specific contents of Ed Miliband’s speech set out a pledge to in building homes in order to bring down a housing benefit bill that currently sits at £95 billion annually. Set against the paltry £4.5 billion the government devoted to building affordable housing last year, it is inarguable that the current expenditure in housing benefit is unsustainable. However its size indicates an out of control private rental market on the back of a three decades long housing crisis.

Bedroom tax

While any pledge to address this housing crisis is welcome, the lack of any policy on rent control to deal with exorbitant rents charged by private landlords – the real beneficiaries of housing benefit – is instructive. Also instructive, not to mention disappointing, is the lack of a firm pledge by Labour to repeal the present government’s iniquitous Bedroom Tax if and when elected, with its disproportionate impact on the disabled.
Listening to Ed Miliband’s capitulation to the right on welfare reform, the words of US billionaire investor Warren Buffet immediately sprang to mind:

“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

Written by John Wright and published at Socialist Unity Blog

UKIP and the Anti-Establishment Vote

The big story of the local elections in (rural) England was the rise in the vote for UKIP, gaining 139 council seats and gaining almost a quarter of the vote, and finishing second in the South Shields by-election. Certainly, that is how the mainstream media have portrayed it, and of course it was huge stride forward for UKIP.

To place this into context though, the Green Party made on the surface of it, only a modest net gain of 5 seats, but this was in going from 17 to 22 seats, an increase of nearly a third to our representatives, which is good result for us. And even though now UKIP are now slightly ahead of the Green party in numbers of local councillors, who in the mainstream media ever made a story of us being well ahead of them before?

The media do tend to give a disproportionate amount of attention to UKIP and they have done so with the BNP in the past, although we have many more elected representatives than they have ever had. So, I think the media have played a part in the success of UKIP, almost a self-fulfilling prophesy, but I don’t think that this explains everything.

Nationalist parties are gaining ground all over Europe in this time of imposed austerity, and in some ways UKIP are more benign than other right wing nationalist parties scattered across the continent.  With the failure of the economic system in Europe (and the US) people’s living standards have been slashed and in circumstances similar to the 1930’s, simplistic, scapegoating solutions have again bubbled to the surface. 

For UKIP in Britain, there is almost the perfect storm. The UK government blames our economic woes on Europe and immigrants, the Coalition parties have failed to improve the situation and Labour is still held responsible by many for getting us into the mess, and so a desire to protest and look for politicians untainted by the present problems, becomes an attractive option. At least at local or by-elections, whether this will all carry to a general election, I have my doubts.

But we should not be complacent about the rise of UKIP, but more we should question why people vote for basically another shade of grey, rather than a truly radical party of the anti-establishment, the Green Party?

As mentioned the media and simplistic solutions play a part, and UKIP have a lot more money than we do, so the challenge for the Green party is to effectively communicate the message that the system has failed, and needs to be radically overhauled. No tinkering with immigration rules or human rights laws is going to change the fact that we have an economic system that is failing to deliver for the vast majority of people in the UK and across Europe. And all of this, with little money and not much in the way of favourable media coverage.

And this is hard message to sell anyway, even in the dire straits we find ourselves in today. To pretty much tear down the system and start again with a sustainable, socially just political agenda is a scary concept for many people, so we have our work cut out to be sure. But if we prove by our actions and deeds, where we do have democratic influence, and by campaigning hard around issues that illustrate the failures of the status quo, maybe we can ride the anti-establishment zeitgest too, which is so obviously a real feature of electoral politics today in this country.       

Green Party - Austerity Isn't Working

No local elections in London this year, but there are elections in other areas. A timely message from Caroline Lucas, Green Party MP for Brighton Pavillion, the ConDem austerity policies are not working, instead, they making the economic situation much worse. Even the IMF, well known lefties they are not, have told George Osborne the Chancellor of the Exchequer, he should change course.  

We Need a Labour Government

Well, obviously we need a Green government, but sadly that will not come about at the next general election, which is planned to be held in 2015. It could be that we win a few more parliamentary seats, and if the result is close, possibly get some influence on a minority government. For me though, this could not be with the Conservatives, because they are just too right wing, and I think most Greens would agree with me on that.

So, that means that it would need to be a Labour led government, given the likely arithmetic, they are the only other party capable winning enough seats to be in with a chance of forming a government. It could well be that Labour wins an overall majority and doesn’t need to strike any deals with other parties, but even this is preferable to the present ConDem government, for two main reasons, one partisan the other not so.

Firstly, in general, it would be good for the country to have a Labour government, or at least not as bad as it is under the disastrous rule of the current incumbents, the coalition of Conservatives and Liberal Democrats, who have driven us into a double dip recession with their ideological obsession of cutting back the state. I say at least not as bad, because they too would be cutting almost as much and as fast as the government is, should they have won the last general election. 

The best thing that you can say about a Labour government, and it is pretty much what they say about it themselves, is that they would be slightly better than the Tories, and I suppose that is about right. I think a lot of other people are thinking this too, as they struggle with the consequences of present economic policies, and so Labour has become a more attractive proposition.

Take the recent London Assembly elections for example. Labour did very well as a ‘brand’ and only lost the mayorality to the Conservatives because Ken Livingstone was portrayed as shifty and hypocritical over his tax affairs. Which he was! Everywhere else they did well, mostly at the expense of the Lib Dems. The Green vote did increase slightly, but it looks as though Labour have swallowed up much of the disaffected Lib Dem vote, in London anyway.

So, let’s get rid of this ConDem government, and replace it with a Labour one.

Secondly, and in more partisan terms, I think the Green party does better under a Labour government. Hopes are always soon dashed by an incoming Labour administration, and the left type voters start looking for a credible alternative party to support, which was mainly the Lib Dems in recent years, but is less likely to be in the future.

Yes, it does take time to build into a party that can be taken seriously as an alternative government, a commodity we don’t have much of given the small window of time left to seriously tackle climate change, and the need to achieve real improvements to social justice for the people.

But if you keep making the arguments, particularly in a world where the status quo has clearly failed, and will continue to fail, you can bring people around. Admittedly, the UK is not in as bad a shape as Greece at the moment, but the spectacular rise of the Syriza left coalition which includes greens, from 4% to 27% of the vote in just three years, making them now the main opposition party in Greece, is an inspiration to us all.    

SYRIZA Offers Hope to Greek and European Peoples – No to Austerity

The graph above illustrates the spread of seats in the Greek Parliament following the recent general election in the country. Leaders of the three largest parties, New Democracy, SYRIZA and PASOK have all in turn been asked by the Greek President, Karolos Papoulias to try to form a coalition government, but to no avail. In a last ditch attempt by the President to form a government, he has now approached the leader of the Democratic Left party for his support. It looks unlikely that the Democratic Left will join any coalition that does not include Syriza, and fresh elections in June now look to be inevitable.

New Democracy with PASOK failed only narrowly to reach the 151 seats needed for a majority in the Greek Parliament, but this was largely down to the idiosyncrasies of the Greek electoral system, whereby the largest party after the election are rewarded with a 50 seat ‘bonus’. In reality New Democracy and PASOK, the two coalition partners who are responsible for accepting European Union (EU) austerity policies, only garnered about 30% of the vote, with the rest going to anti-austerity parties.

The electoral impasse is caused by SYRIZA not agreeing to be part of a government that is committed to the ‘Memorandum’ deal on austerity policies for Greece with the EU. This is a perfectly reasonable stance from a party that stood in the election as against the austerity measures and opinion polls suggest that their popularity is increasing, with three polls showing they are likely to be the largest party after a new election, with support perhaps as high as 27%.

SYRIZA is a coalition of left wing radicals and greens, covering some fifteen different political parties and groupings and has clearly been the main beneficiary of anti-austerity sentiment in Greece. An ecosocialist source inside SYRIZA, Tasos Pantazidis, predicts that after new elections SYRIZA will be able to form a government with other left forces, including the KKE (Stalinist Communist Party) who have resisted all talk of coalition so far. Other smaller parties that did not gain the required 3% of the vote to qualify for seats in Parliament, such as the Greens, ANTARSYA and the PASOK breakaway Social Agreement party may also be brought into the SYRIZA coalition. The opinion polls indicate that their voters are voting with their feet anyway and throwing their lot in with SYRIZA.

SYRIZA say that they want to remain in the Euro (opinion polls show something like 70% of Greeks want to remain inside the Euro), which is the popular view, and to renegotiate the bail-out deal with the EU and IMF. This is a game of high brinkmanship, where SYRIZA are gambling that the EU will be more worried about the effect on the Euro itself caused by a Greek default, than offering Greece a better deal. SYRIZA would be wise to have a plan B, because it looks as though Greece will need to leave the single currency, to begin to sort out their problems in the medium term.

Of course all of this electoral uncertainty has led to a fall in the value of the Euro, and the political earthquake it has unleashed in Greece has sent shock waves all through Europe, coinciding with the election of Socialist party candidate Francois Hollande to the French presidency on a largely anti-austerity platform, if it is somewhat vague about actual detail.

But what seems to be clear is that for the first time in 30 odd years the neo liberal political/economic consensus is being challenged in Europe which is likely to have an effect on attitudes in the UK, where austerity policies have been promoted with some relish by the right wing coalition government of Conservative and Liberal Democrat parties. The Labour party, as is its want these days, has suggested only an ‘austerity light’ approach to the UK’s debt problems, with only the Greens and far left parties opposed to austerity full stop. Labour may now feel they have more cover for a more radical stance, with events in Greece and France (and to a lesser extent Spain and Italy) moving the debate from a dogmatic no alternative to austerity policies to a more expansive strategy for economic growth.

The shock waves have even reached Germany, where the ruling Christian Democratic Union (CDU) have suffered big losses in regional elections in the country’s largest region, North Rhine Westphalia. The CDU vote fell by 9% with the Social Democratic Party (SPD) and the Green party expected to form a new coalition government in the region.

Are we about to see a new epoch emerge in European politics, where the crazy casino capitalism of recent times is thrown into the rubbish bin of history? I do hope so, but let’s not get carried away just yet, there is long way to go, but at least now there is chink of light at the end of this long dark tunnel.       

Graph illustration above from the BBC.

Greece Can’t Repay Its Debts With Austerity Medicine

As the so called ‘troika’ (European Union [EU], International Monetary Fund [IMF], and European Central Bank [ECB]) deliberates over whether to release funds to Greece in their latest ‘bail out’ attempt to keep it in the Euro, the simple fact is that Greece cannot repay its debts by making further cuts to jobs, wages and public services.

The ‘bail out’ let us remember is not intended to be a helping hand for the Greek people, but to save the international and national banks that lent money to the Greek government so recklessly and are now threatened with going bust, should Greece default on these loans. At best, any ‘bail out’ will only delay the inevitable for a while, because all the flesh has already been cut from the bone, and Greece is, after nearly five years of recession, falling further into debt, with a 7% drop in growth in the last year alone. The latest plan can only prolong Greece’s recession and will probably make it even worse.

Ironically, in the land where democracy was born, democracy has been suspended during this crisis, with an unelected Prime Minister and commissioners from the EU now running the country’s financial policies. There has even been a suggestion from the German government that the Greek general election, due in in April this year, be postponed so that the latest EU financial offer is not rejected by the people. At best, a gun will be held to the heads of Greek voters, effectively demanding that they endorse the austerity measures in a ballot.

Understandably, the Greek people have taken to the streets with widespread rioting across the country, in opposition to the policies being inflicted on them by remote political and economic elites. Political parties of the left are close to gaining a parliamentary majority in the latest opinion polls, and these parties have said that they will reject the austerity measures as they stand. Whether this would lead to expulsion from the Euro, and even the EU, is not clear, but if more favourable terms are not offered to Greece, it looks as though they will default on their debts, which is likely to lead to an exit from the Euro at least.

There is a precedent of sorts for this situation. In 2001 Argentina defaulted on its debts, and rejected the IMF imposed austerity programme. There was a run on the Argentine Peso, factories closed, and inflation ran riot, amid much pain for the people. But at least they had hit rock bottom economically, from where the only way was up. A new government in 2003 introduced heterodox (left wing) economic policies, setting aside large amounts of money for social welfare spending. With a cheap Peso, exports began to increase and Argentina got back on its feet again.

Argentina has more in the way of natural resources than Greece, and the world economic outlook was much better than that of today, where we are in the worst recession since the 1930’s, if not worse. For Greece though, the alternative is a decade of recession and austerity, with probably a higher national debt than it has now. Some choice.

If Greece does default on its debts; it will have a serious and negative effect on the world and particularly the European economy, including Britain. But we can’t stand by and watch the Greek people being punished like they are, just to prop up the banks, and should show support and solidarity with them. There is lesson for the UK here too, where austerity policies have led to misery for the people and an increase of £158bn in our national debt.

For the first time in Greece a documentary produced by the audience. See the excellent film "Debtocracy" here.

The photo above from The Guardian

Welfare Claimants are Scapegoats for Financial Crisis

The ConDem government is attempting to cut £18 billion from welfare benefits in the latest wave of austerity measures, that they insist is necessary to cut the UK budget deficit and borrowing requirements. This policy seems to have attracted a fair amount of populist support in the country, with the government’s friends in the right wing press producing screaming headlines about ‘benefit scroungers’ and the like.

The proposal to cap benefits at a maximum of £26,000 per year, per family, has been held up by the House of Lords, but will be returned to the House of Commons, and no doubt eventually pushed through into law. This does seem like an extraordinary amount of money to be claiming in welfare benefits, when the average UK gross wage is exactly the same figure, but this tells only part of the story. The vast majority of people receiving this sum live in the south east of England, mainly in London, and most of the money claimed is in the form of Housing Benefit, from tenants of private sector landlords. So the claimants never really see this money, but if they lose it, then they will more than likely lose their homes along with it.

Disability Living Allowance (DLA) is also to be cut for those lucky enough to still be in receipt of it, whilst the rest are forced onto Jobseekers Allowance (JSA), whether they are really fit for work or not, by ATOS, the government’s private health company assessors. (The Guardian reports here that a man who has been registered blind since 2000 due to a hereditary degenerative sight condition was surprised to read his report's conclusion that "the client's level of disability would be expected to improve with time and appropriate treatment"). And of course everyone on JSA gets harassed and threatened with the loss of their benefit, regardless of the lack of job opportunities; with unemployment soaring as the economy stagnates and public sector jobs are cut to the bone. The only growth area I have heard of in the public sector is in benefit fraud investigators.

Contrast this with cuts in the government’s tax inspectorate, where far more money is lost to the public purse than in fraudulent benefit claims, and you can see a pattern emerging in ConDem strategy. The whole aim of this government is to pin the blame on people on welfare benefits for the poor state of the country’s finances, (and by implication the last Labour government), when it seems to have been conveniently forgotten that the current financial crisis was caused by the reckless behaviour of the banks, where the directors of these banks are richer now than they were before they plunged the nation, and indeed most western nations, into recession.

There’s not much sympathy for the bankers though amongst the general public, so the benefit cuts have to be sold as being not fair to the ‘working poor’. Classic divide and rule, as Diane Abbott might say. There are far too many workers on low wages, but the government’s rhetoric doesn’t match its actions. Most claimants of Housing Benefit are actually in work, but this isn’t stopping the government reducing payments and ‘localising’ the system to that end. The government is also cutting Working Tax Credits, which go to the lowest paid workers, and the likely increase to £10,000 of the income tax personal allowance (tax free earnings), will not fully compensate those on the lowest wages. Oh, and it will be made easier for employers to sack workers too.

The only problem for the government with this strategy is that it is not reducing the budget deficit, quite the reverse. The government admits that the deficit will be £158bn higher by 2015, but they have managed to drown this fact out, by shouting noisily about ‘fairness’ and ‘scroungers’. What a pity people fall for this irrelevant diversion, but I hope eventually the proverbial penny will drop, and people will see all of this for what it truly is.

And there is another way. We need to catch the tax cheats and we need to tax the very wealthy properly, and there are a variety of ways that this can done, see here and here on this blog for some examples. To address the Housing Benefit situation, we need to build more social housing and reintroduce rent controls in the privately rented sector.

We need to stop blaming the victims for this mess that we are in, and lay the responsibility at the door of the perpetrators. Now, that really is fairness.