Category Archives: Austerity
Read the article here.
Alan Simpson opens: “The nation is at war. Peacetime production has slumped, foreign travel collapsed, casualties rise. In every part of the country, people anxiously worry about how to avoid the enemy. This time, however, it is germs, not Germans, that we fear!”
What Britain needed was wartime mobilisation for peacetime survival. Instead handwashing and a mêlée of ‘unofficial’ messages have been offered that simply add to public confusion and anxiety.
He sees Boris Johnson’s preference for encouraging individual behaviour change (rather than more interventionist ‘test-and-trace’ and ‘social distancing’ policies) as likely to deliver a slower drift into a much deeper problem.
Most offensive of all is his claim that ‘herd immunity’ is what will save us is offensive, because “throughout history, herd immunity comes only after widespread infection and substantial death rates. Even the benefits are often short lived; with immunity not comprehensively passed on to succeeding generations of the herd”.
Johnson’s policy of turning his back on more interventionist measures, may result in ‘A Very British Cull’; ironically, one getting shut of large numbers of the voters who put him into power.
Simpson’s article predicts – according to the pattern revealed in Italy – that in less than three weeks – assuming the rate of increase remains constant – the total number of cases in Britain will have exceeded 16,000.
The World Health Organisation now says that China’s most effective strategy was the extensive testing, pro-active detection and immediate isolation of patients. This is what rapidly reduced infection rates. By choosing not to adopt vigorous ‘test-and-trace’ policies, Britain has opted not to know precise numbers. Simpson anticipates that by the end of three weeks, the capacity of the NHS to deal with the Coronavirus epidemic will be close to breaking point.
Due to the scale of NHS cuts since 2010 the UK has only 6.6 ‘critical care’ beds/100,000, whereas Italy has 12.5 ‘critical care’ beds/100,000 people. 14,000 EU nationals left the NHS during Britain’s Brexit debacle and there has been an 87% fall in NHS job applications that followed this.
His generation (the older generation) mustn’t miss the chance to face painful home truths. Coronavirus is to the elderly what climate is to the young. If population growth is a problem, it isn’t the kids. It’s those of us living longer. Coronavirus has grasped this in a way that prejudice doesn’t.
Far too often climate campaigners come across indifferent (older) voices saying “It’s population, not climate, you should worry about. So let’s look at the actual numbers. According to the UN, out of today’s global population of 7.6 billion there are about 2 billion children (under 15). By 2100, when the population may rise to 12 billion, the number of children is projected to be … 2 billion.
An economic implosion in 2020 is unavoidable
No amount of Central Bank interest-rate reductions will avert this. Societies that are afraid to go outside, or share the air they breathe, and have lost faith in the safety nets they once took for granted, are only ever semi-functional. But it is around the silver linings of such a collapse that tomorrow’s New Jerusalem will have to be built.
The silver lining to a dire situation
In the absence of government leadership, whole communities have been quietly stepping up to the plate; providing the leadership the nation lacks. In Wuhan, an impromptu army of young volunteers, transporting food around on empty buses, has delivered the food and medicines that has kept others alive. It is what happens in a war. Dad’s Army, Mum’s Army and (increasingly) Kid’s Armies have stepped in, providing the emergency safety nets their society needs. One way or another, we are all following China’s lead. In the UK, the most visible sign of this came from those volunteering as emergency responders; providing non-medical support services to the NHS.
As self-isolation increases, it appears too in local support networks. We’re part of a neighbourhood ‘internet Group’ that offers shopping and support to anyone self-isolating. Go onto Twitter, WhatsApp or Facebook and you will find these in their thousands, all across the country.
Some reports suggest that up to 3 million UK volunteers are stepping in this space. Increasingly, as older/more vulnerable members self-isolate, it is younger people who underpin these safety nets. Slowly, we are rediscovering what previous generations did in wartime. They called it ‘social solidarity’.
Simpson forecasts that today’s crisis will see carbon emissions tumble, pollution levels plummet, and a generation of younger people emerge as social saviours. Around them a very different Green New Deal must then be written. Tomorrow’s security will require a more circular, cleaner, inclusive economics. It will have to put back to the planet more than it takes out, and turn its back on beliefs that we can just shop our way from one crisis to another. This won’t be before time.
WordPress malfunction is causing photographs to be removed.
Accountancy professor’s summary: “The government change of policy is welcome, but it is full of contradictions, weak gestures and does little to address poverty, inequalities or increase purchasing power of the masses”.
Baroness Camilla Cavendish, former Director of Policy for Prime Minister David Cameron, enthuses in the FT: snapshot from her article
Similar enthusiasm was expressed by Lauren Davidson, head of personal finance at the Telegraph: “In our Budget “winners and losers” list, we struggled to come up with many that fell into the latter category. The former, however, was bursting:
- anyone who pays National Insurance,
- workers who claim sick pay,
- low earners on the minimum wage, (most) high earners affected by the pensions taper,
- women who use sanitary products,
- families who save into ISAs,
- readers who prefer e-books and digital journalism
- and, of course, drinkers.
Ingram Pinn of the FT reminds us of the warning from the OBR of the economic cost of Brexit. It said that Britain had lost 2% of potential output since the 2016 Leave vote, with a further 3.2% to come, and that higher trade barriers would cause imports and exports to be about 15% lower after 10 years.
IFS director Paul Johnson has been widely quoted. In Civil Service World, he says: “Average annual increases of 2.8% sound substantial; take account of the need to replace EU funding and factor in planned increases for health, schools, defence and overseas aid and there is relatively little here for other departments. If this spending envelope is stuck to, there are plenty of public services which will not be enjoying much in the way of spending increases over the next few years.”
The IFS statement added that the economic forecasts on which the Budget was based predated any significant effect of the coronavirus being taken into account, so were “therefore out of date at the moment of publication.” Overall spending per person for many public services will therefore be ‘well below’ 2010/11 levels by the middle of the next decade”.
A Moseley reader draws attention to an article by Simon Jenkins; his overview: “Local government’s share of the welfare state, social care and social services got nothing extra. There was no mention of old people or family support or youth clubs chief victims of the 30% cut in local council spending since 2010. Downward pressure will continue on libraries, day centres, sports fields, drug rehabilitation and facilities for young people”.
The strongest and most fact-filled critique comes from Professor Prem Sikka, who opens “The government has announced £30bn of spending, but it is far short of the £54bn annual expenditure needed to roll-back the damage inflicted since 2010”. Read more here. This follows a pre-Budget article in which he gives an alarming summary of the damage done by a decade of austerity, which he sees as being borne out of political dogma rather than any economic necessity.
Increasing public debt
“The chancellor did not make any mention of the need to reduce public debt, a favourite mantra of previous Conservative governments even though they borrowed to fund tax cuts for corporations and the rich. In April 2010, public debt was £960bn. The government expects it to hit £1,799bn for 2019/20 and rise to £2,031bn by 2024/25.
Sikka comments that little has been done for those on lowest incomes. Some examples given:
- The increase in the minimum wage to £10.50 an hour by 2024 is too little to make much difference to inequalities, in-work poverty or queues for foodbanks.
- The failure to increase personal allowances and tax thresholds in line with inflation will mean that many low-paid and middle earners will end up paying higher amount of income tax. Small print in the government announcement says that various measures in the budget will increase taxes by £1.4bn in 2020/21, rising to £12.5bn by 2024/2
- The extension of statutory sick pay (SSP) is welcome, but the rate of £94.25 per week is far short of even the minimum wage rate. Many employers won’t pay more and vulnerable employees will suffer.
- SSP would be available from the first day for up to 14 days for all those advised to self-isolate. Employers with fewer than 250 employees will have the full cost refunded. However, the SSP extension won’t help self-employed or people caught-up in the gig economy.
- The government spin is that it has not increased income taxes but that isn’t so because of the removal of existing tax breaks and stealth taxes (more here) built into the prices of products. The government collects these at the point of sale and they do not depend on a taxpayer’s income level.
But the government is still showering gifts on those with high incomes
The entrepreneur’s relief costing about £2.6bn a year has been abused and a former head of HMRC called for it to be scrapped. Nearly three-quarters of it went to just 5,000 individuals. It enabled them to pay capital gains tax at the rate of 10%, compared to standard rate of 20%, on gains of up to £10m from the sale of their business.
The government has committed to spending £27bn on English strategic roads between 2020 and 2025. It will also freeze fuel duty and there is no reference to the new green deal or government led investment in new high-tech industries
Sikka points out that this omission sits uneasily with the government’s claims of reducing carbon emissions. A broader national infrastructure strategy with focus on integrated affordable public transport is needed but was not put forward by the chancellor.
Is Loach’s latest film about working in the ‘gig economy’ hitting home once too often? Either state media has just not been mentioning it or the Google search engine has been tampered with.
For the first time yesterday I saw a brief review of Sorry we missed you, the latest Ken Loach film and today, in an email message from Pat Conaty (co-author of a report on the ‘precariat’) came the words:
“The Ken Loach film, Sorry we missed you has been so marginalised”.
An online search then revealed that there had been extensive coverage in social media and regional newspapers but just one excellent article/review in the i-news on the first page with the subtitle:
We need to wake up to the reality that, in this instance, “flexibility” is just another word for exploitation”
On the second page of the search engine George Osborne’s Standard offers a briefly mocking review: “a man makes a pact with the devil and a corporation turns humans into robots. Not literally” – but has the grace to present a video in which Loach (right) and the scriptwriter Paul Laverty (left) discuss the film.
The third page‘s only MSM review was the Financial Times’ sympathetic and straightforward article, opening with a summary:
“An unhappy Newcastle family is being trampled in the vineyards of the gig economy. Ricky (Kris Hitchen) is a parcel delivery driver coping, or trying to cope, with brutal schedules and inhuman work-protocols. Wife Abbie (Debbie Honeywood) is an overburdened NHS carer. Son Seb is a cellphone junkie hanging out with a graffiti gang and dipping his toe in petty crime. Daughter Lisa, 11, hardly knows what’s going on, yet seems at times the wisest head in the house”.
Pat Conaty, who is working with others on a Union Co-op manifesto to be released this spring, ends: “(Ken Loach’s latest film is) just as powerful as Kathy Come Home, but unlike the latter in that everyone saw it on the BBC over 50 years ago and talked about it. Hardly anybody has seen Ken’s latest film. So getting this counter movement underway is going to be a harder task. But we hope the manifesto will kickstart more aligned action and some coming together of solidarity economy action”.
The revolving door between government & big business
Yesterday’s headlines review of ONS report: 2008-2019, richest 10% enjoy biggest gains in household wealth
The Labour Party’s inspiring manifesto is described by FT Journalist Robert Shrimsley (right) as “a self-indulgent and ideologically obsessed clique, holding open the door of Number 10 for Mr Johnson . . . economically ruinous; a manifesto that effectively tells outside investors the UK is closed for business . . . the cumulative effect is an all-out attack on wealth creators which will deter foreign investment.
Brief comment on foreign policy. “Electing Mr Corbyn would be handing control of Britain’s defences to people who think the wrong side won the cold war”.
He continues: “For all those yearning for more investment in public services, a fairer economy, a saner Brexit and those just desperate to be rid of a government which has deepened the divides in the nation, Labour’s approach is a shameful betrayal“ after conceding:
“It may yet be that his potpourri of policies can win enough support among the young, the environmentally concerned and those who have suffered under austerity to stop Mr Johnson. There is no doubt Mr Corbyn has mobilised an activist base as no other recent leader has managed . . . but time is running out”
Eleven FT readers criticised yesterday’s FT editorial: “Labour’s manifesto adds up to a recipe for decline”, subtitled Jeremy Corbyn’s hard-left programme will wreck the UK economy
- However much you disagree with the Labour manifesto – and I personally disagree with much of it, especially on nationalisation – it is an honest, decent and transparent set of proposals, fully costed. It is actually easy to disagree with it in its detail and clarity.
- This editorial is based on conjecture rather than any facts. The Labour manifesto only looks so radical given the extent of the move to the right the Tories have dragged the country to over the last decade.
- It’s been a decade of ideologically driven austerity which has decimated local services with the the only winners a few of the super elite and big companies. If this experience of the last decade doesn’t call for a “radical” change in our politics, whenever will this need arise?
- Look outside your gated communities and your shiny office buildings – Britain is hurting because of your hubris. We need real change. If that radical change hurts some of you who have caused this decline, good.
- Those who claim Labour’s manifesto will wreck the economy must consider who, ultimately, this economy is for. When the fifth-richest country in the world cannot feed its children, house its working poor or treat its sick, its economy is already wrecked.”
- You have foolishly believed the right’s false propaganda that the democratic state is incompetent to radically transform society for the benefit of all (well, most). “Those who claim Labour’s manifesto will wreck the economy must consider who, ultimately, this economy is for. When the fifth-richest country in the world cannot feed its children, house its working poor or treat its sick, its economy is already wrecked.”
- This article is mistaken in suggesting this manifesto is a throwback to the seventies. Things have changed, not everywhere for the better and this is a radical programme for the future. Time to get the neo-liberal blinkers off.
- I can’t help noticing there is no mention of the financial transaction tax in the article. Too close to the bone? Or perhaps simply, much too sensible and reasonable for your diatribe?
- On railway, most countries with successful railway services retain majority public ownership of the system (Switzerland, Germany, France, Spain … just to name a few). One should be agnostic on the model and look at the empirical evidence. Also, the entire contractual arrangements in public monopolies don’t necessarily mean public jobs — again there are different models!
- Why does this editorial spout rhetoric without evidence? Without reference to your own data analyses? The last ten years of deregulation has hugely increased poverty, homelessness, use of food banks, and cut all social welfare and education funding in real terms. AND it has doubled the national debt. Corbyn’s policies will restore the balance between wealth and income as Thomas Piketty and many progressive economists (Wren-Lewis, Stiglitz, Mazzucato, Krugman, Blanchflower) suggest. I expect more from the FT than neoliberal platitudes devoid of data.
- Socialism my foot – this is social democracy, it used to be quite fashionable, remember? Corbyn’s spending plans will make the UK a typical European country, next to Germany, in terms of government expenditure. (See FT Nov 21).The more recently fashionable neoliberal model has got us into a right old mess. Maybe this country can provide an example of the necessary corrective which others will follow – wouldn’t that be a turn-up for the books given our recent embarrassing hopelessness?
Will Corbyn/Labour’s industrial strategy guarantee fair production costs for perishable food – or rely on the global market?
“It is simply not right that any worker should have to sell their product for less than it costs them to produce them, and this is acutely felt by dairy farmers.”
Countryfile, reviewing Jeremy Corbyn’s “Rural Renewal” report, continued to quote: “A combination of a small number of very large milk processers operating as suppliers to retailers, supermarkets operating a ‘price war’ forcing down the cost of milk, and milk co-ops losing their power has resulted in thousands of dairy farmers finding it harder and harder to make ends meet, let alone make a profit.”
Corbyn said “we will work with all parties to ensure that customers are offered a price they can afford for their milk, but not at the expense of farmers whose very livelihoods depend on it. This will include investigating regulating supermarkets to prevent below cost selling.”
Factories don’t sell their products at a loss, but those producing perishable food are often required to do so. It’s so easy to put pressure on those producing perishable food: fresh milk, fruit and vegetables, who have to sell quickly – in effect holding them to ransom.
Seven years ago Telegraph View pointed out that some supermarkets pay less for milk than it costs to produce. Nothing has changed! Prices sometimes drop to the 1990s level but all other costs have risen steeply.
Confidence in successive governments continues to fall as the country has become increasingly dependent on imported food – which now even includes tomatoes from Morocco and eggs and poultry from Israeli settlements in the occupied Palestinian territories.
A Fairtrade Policy Director noted that ‘The unpleasant and aggressive tough love lobby’ which has cut social and healthcare, education and public transport doesn’t spare family farmers
Corbyn on a Cumbrian farm, pledging to do “everything necessary” to stop no-deal Brexit carnage for famrers
No thoughts of love – or natural justice – appeared in the Oxford Farming Conference address of Liz Truss, Secretary of State for Environment, Food and Rural Affairs, who blamed the ‘difficult world market’ for low milk prices and focussed on farming’s ‘huge export potential’, rejoicing that ‘we now grow chillies which we export to Pakistan and Mexico’.
Barbara Crowther (right), by far the best Fairtrade Foundation Director of Policy & Public Affairs (2009-2017), said “There is a very unpleasant and aggressive tough love lobby out there who simply do not understand the importance of locally sourced food and the underlying food security issues which are only going to get worse as the global population grows”. She asked “Could we make our Mark work on milk?”. This link to that (now unwelcome?) reference has been removed.
It’s a fair question and is something that has been looked at, and discussed many times – not least as part of a ‘Local and Fair’ conference a few years ago, bringing Fairtrade and Cumbrian farmers groups together to discuss the issues they hold in common, co-ordinated by Joe Human (see Barbara in video at that conference).
MP Anne McIntosh (below, who chaired the parliamentary Environment, Food and Rural Affairs (EFRA) Committee, for several years, urged the Government to intervene, after it was reported that 60 dairy farmers went out of business in one month alone. EFRA wanted the Groceries Code which covers suppliers to the big supermarkets and retailers, to be extended to include dairy farmers – but soon afterwards, the estimable Ms McIntosh was deselected. Now in the Lords she is campaigning for the farming interests threatened by Brexit
The Royal Association of British Dairy Farmers insists that all supermarkets could pay dairy farmers a price for milk that would meet the cost of production without increasing the price charged to the consumer: they would just need to accept a slightly lower profit on the milk they sell.
Placing the issue third after Angora goats and use of level crossings, the BBC, in a video link no longer working, gave priority to the destructive comments of the establishment economist, Sean Rickard.
Apparently unaware of economic interdependence – the knock-on effect to other industries and the rural economy – Sean Rickard tells farmers that if they can’t manage under these conditions, ‘they should give up making milk and live off the subsidy’.
In fact, as Clitheroe dairy farmer Kathleen Calvert often points out, the whole rural economy is affected as farmers lose income. Each working dairy farm returns a huge amount of money back into the wider economy, supporting many other regional businesses, and therefore helping to provide jobs for many. Each dairy farm that ceases to trade has a knock-on effect on the surrounding community and the economy, due to a loss of income to many other businesses. From press release, link no longer works. Instead see a briefer reference in Lancashire Life.
The key message “We are losing hold of a vital skills base at an alarming rate as dedicated dairy farming families are no longer financially able or prepared to work at a continual loss. We believe that many milk buyers gamble with the continuity and security of the UK milk supply by keeping much of the profit further up the market chain. Despite varying business structures and the importance of food production, most farm gate prices are now lower than production costs. This has a knock on effect on a wide range of other businesses and livelihoods of countless people involved, ultimately leading to pressure on incomes”.
Dairy farmers are compelled to pay a levy to DairyCo/AHDB, a body set up by government, which, consultant Ian Potter (above right) notes, has received – and spent – more than £1 million extra as a result of the increase in production. He asks: “But on what? Cynics say it spends the money on encouraging more production because that generates more levy money for it…and so on!” He continues: “In my opinion we now need a campaign to promote the buying of British dairy products using British milk . . . I have heard one Tesco farmer would prefer to give his levy to Tesco if he could to help it promote British milk. That makes sense to me if DairyCo won’t!”
Meanwhile food imports rise and government ministers advise hardworking farmers to place their ‘commodities’ on the global market so that unproductive internet bound speculators can ‘make a killing’ – nowadays more often crouched over their computer screens.
NHS: Boris Johnson proposes to let Africa and India educate our medics, engineers, scientists and technicians – then poach them
Early this morning Radio 5 reported that Boris Johnson has promised to lure more medics educated in poorer countries by halving the cost of the ‘NHS visa’ and speeding up the application process. This followed an announcement of measures to attract specialists in science, engineering and technology.
Boris Johnson proposes to intensify the harmful practice of importing doctors, nurses, workers in agriculture, service industries and IT experts from poorer countries. Rather than bearing the costs of educating our own, he advocates depriving developing countries of the able young enterprising citizens they desperately need.
In March, the Telegraph quoted figures from the General Medical Council showing that last year Britain imported more doctors than it trains. New figures show a steep rise in the numbers recruited from overseas. 53% of those joining the medical register came from overseas to do so – a rise from 39% in 2015.
This is the first time since 2006 that overseas doctors have outnumbered UK medics joining the register
NHS Providers, representing hospital, mental health, ambulance and community services, has written to Boris Johnson to demand action (FT 5.11.19). It made ominous references to ‘a complicated pension problem’ and advises recycling some unused employer pension contributions as salary.
Rule changes introduced in 2016 meant that rising numbers of consultants and other senior staff were facing unexpected tax bills linked to the value of their pensions. The FT article alleges that some high earners are left some facing effective marginal tax rates of more than 100% and in June the Guardian reported that some staff have had to remortgage their homes to cover their tax bills, while others were faced with the choice of cutting their hours.
Raise job satisfaction: as austerity continues, news of distressing delays and anecdotal accounts of neglect in NHS hospitals abound. A Labour government could:
- heed Simon Stevens, head of the NHS: “We need to train more health professionals in this country and that includes doctors. We’ve got five new medical schools coming online as we speak which will be a 25% increase in undergraduate medical places – arguably, that needs to be more”;
- reduce ratio of managers to medical staff;
- train nurses on the wards for the first three years before they undertake part-time university or technical education and
- as pledged by the Department of Health in 2007, bring back matrons who would once more be responsible for all the nursing and domestic staff, overseeing all patient care, and the efficient running of the hospital.
“We’re emptying Romania of doctors” a moral issue
Simon Stevens, speaking at the Spectator Health Summit in London, said the health service must stop “denuding low income countries of health professionals they need” amid warnings of a growing moral crisis. We need to do so in a way that is ethical so we are not, certainly, denuding low income countries of health professionals they clearly need,”
See https://thenewleam.com/2018/01/crisis-public-health-system-india/ There were many excellent photographs of long queues to see doctors in rural India but Alamy demanded a high price for them.
In March. the Telegraph reported that cancer surgeon Professor J Meirion Thomas told the conference: “We’re emptying Romania of doctors … they’re coming from eastern Europe, they’re coming from Pakistan, India, Egypt and they’re coming from Nigeria . . .
“I think there is a moral issue here. We are poaching doctors from abroad and have done for decades. They are coming from countries where they have been trained at public expense and where they are sorely needed.”
“Mr Corbyn comes to life on the stump”
Above: Corbyn in Trafford, May 2019
Mr Shrimsley estimates that a vote share above 30% may be enough to prevent a Tory majority adding that, given likely losses in Remain strongholds, Mr Johnson needs 40-50 gains.
Other points made include those summarised below.
Having alienated the Democratic Unionists, the Conservatives have no natural coalition partners and face the ‘potentially wrecking impact’ of Nigel Farage’s Brexit Party.
Several other parties might support Labour or at least tolerate an anti-Johnson administration. The early evidence is that Remainers may be reconciling themselves to voting Labour where necessary.
Labour has a coherent narrative. The last three years have been no advert for Tory efficiency and the last nine have not left most people feeling better off
It has a raft of policies with appeal to core groups. It has baubles for young and old, tenants and workers. It will not be outbid on public services.
Voters’ current experiences are of austerity and cuts. Labour can, for example, note that Mr Johnson’s promised 20,000 extra police will only restore numbers to their 2010 level.
Plans to nationalise water and rail companies will play well, as will promises to give workers more say and more pay.
Labour also has a radical agenda on the environment, perhaps the most salient issue for younger voters.
And the wild card? As Camilla Cavendish (former No10 adviser) points out: “Mr Corbyn comes to life on the stump; Mr Johnson doesn’t always seem to do his homework”