George Osborne just boasted in Parliament that the economy is fixed and his policies are working. After three years of flatlining, he really shouldn’t have.
Because for most people, this is no recovery at all. As prices continue rising faster than wages, millions of working people and families are finding it harder just to get by.
On average, working people are £1,600 a year worse off under this government. And still the Tories won’t agree to our call to freeze gas and electricity prices.
In other words: the Chancellor is boasting about a recovery that is not being felt by most people in Britain..
I say that many people has a message for this government Britain needs an economy that works for everyone, but the Tories are only looking out for a privileged few. Britain deserves better than that. Labour has a plan: get more homes built, get young people into jobs, expand free childcare to make work pay, and freeze gas and electricity bills. A Labour government would make our economy work for people like you.
Checkout this Youtube and remember to tell the coaition to stop playing their scratch record:
It’s been purported 5 December that George Osbourne autumn statement is a ruthless act class war which is too sure up Conservative Supporters and rubbish the lower and middle incomes living standards. It’s no surprise it alleges marginal increase in output new record levels of employment and dubious forecasts of future economic success to declare that his polices are working.
It’s no wonder that working people face growing hardship with 15% wiped off the value of their wages which suggest that George Osbourne has not add up his sums right.
It’s further alleged that they economic programme was never about the so called collective hardship to resolve a difficult economic situation.
Slashing living standards of the lower and middle incomes whether in work unemployed or retired is not an unfortunate side effect. This is central to their programme by increasing the pension age for public service employees and state pensions.
National Pensioners Convention research indicates that life expectancy may be falling especially as lower living standards and cuts in local services will take their toll.
Hey folks who would concur that that 2+2=4 10+20=30 well I’m sure most would agree however to leading economists has written in a leading national newspaper that George Osbourne sums does not add up. What am I reading right will be the answer from the Conservatives surely there must be a mistake somewhere. Er no you are reading it right depending which rags you read matey. Sound the alarm and let him know ASAP.
Yet Britain’s leading experts on tax and spending have said that living standards would be lower at the end of the current parliament than at the start, as they backed claims by the shadow chancellor, Ed Balls, that family budgets were being squeezed hard under the coalition.
Delivering its judgment on George Osborne’s autumn statement, the Institute for Fiscal Studies took issue with the way Labour had calculated its estimate of a £1,600 loss to the average family in the three years since the coalition came to power in 2010 but said it was “pretty consistent” with survey data showing a big drop in household incomes between 2009-10 and 2011-12.
Paul Johnson, the IFS’s director, said there was a lack of reliable figures for the current year, but added: “We do know from household surveys that income fell sharply in 2010 and 2011. It is almost certainly significantly lower now than it was in 2010.
“And while it should start to grow, it will surely still be below its 2010 level by the time we get to the election in 2015.”
Osborne sought to counter Labour’s claims this week by using a different way of calculating incomes to show total household incomes rose by 3.9% between their pre-recession peak of early 2008 and the second quarter of 2013.
Johnson said the yardstick for household incomes used by the chancellor was not normally used to measure living standards, and an IFS study found that it had failed to detect a squeeze on real spending power in any of the four big recessions Britain has experienced since the early 1970s.
“As a series it [Osborne’s measure] behaves quite differently both since 2008 and over long periods of time to other series measuring living standards,” Johnson said.
“It includes some income which does not accrue to the household sector at all. And its actual construction is opaque. It tells us something about household incomes but it should certainly not be used in isolation to measure how they are changing.”
The IFS said Osborne’s adoption of that National Accounts measure of household disposable income meant “non-profit institutions serving households”, such as universities, were included alongside areas like pension savings, which have declined, freeing up more disposable income.
The Balls measure, it added, did not include changes to tax and benefits and used the retail prices index – no longer considered a reliable gauge of inflation by the Office for National Statistics – to come up with the statement that real wages had fallen by £1,600.
“That said a £1,600 fall is a fall of about 6%. That is pretty consistent with what we know from survey data happened to household incomes between 2009-10 and 2011-12,” said Johnson.
The IFS director said it was not surprising that household incomes were lower than before the recession and had fallen since 2010.
“We have just lived through the deepest recession in generations and measured output is still below its pre-crisis level. And earnings have been hit particularly hard. In part that is the flipside of the strong employment numbers and is directly related to the apparent fall in productivity.”
The IFS was critical of the chancellor’s spending promises, including the freeze on fuel duty, introduction of marriage allowances, national insurance cut and freeze in business rates, costing £2.5bn, without concrete plans to fund them.
Of the plan to expand university student numbers by selling the student loan book, Johnson said: “This may work in the near-term fiscal numbers, but economically it makes little sense. Selling the loan book will be broadly fiscally neutral in the long run, bringing in more money now at the expense of less money later on. Lifting the cap on numbers will cost money every year.”
More broadly, he said, this tactic was a theme of the autumn statement. “Continuing to announce tax cuts and to make new spending commitments, unfunded beyond 2015-16, can only increase the difficulty of reaching the fiscal balance he is targeting.”
The IFS said the chancellor’s plan to balance the budget by 2018-19 involved an acceleration in the pace of spending cuts from 2.3% a year in the five years from March 2011 to March 2016 to 3.7% a year in the three years after that.
The thinktank agreed with the independent Office for Budget Responsibility that this would involve shrinking the state to a level not seen since at least 1948. The IFS said this would hold true even if debt interest payments and infrastructure spending were added to the running costs of Whitehall departments.
To avoid a stepping up of the pace of spending cuts in the next parliament would require welfare cuts or tax increases worth £12bn, the IFS said.
TUC general secretary, Frances O’Grady, said: “Today’s IFS analysis confirms that spending cuts will go on and on as George Osborne makes austerity permanent.
“This has nothing to do with economics, but is all about a rightwing political project.
“The chancellor is using the fallout from the global recession to permanently cut services and shrink the state back to where it was in 1948.
“This is not what voters want. They may have accepted the need for harsh medicine in the wake of the crash, but they want a cure that delivers rising living standards, decent services and a fair economy.”
Chris Leslie, shadow chief secretary to the Treasury, said: “It’s an embarrassing blow to the chancellor that his favoured measure of living standards turns out to include the incomes of charities and universities. The IFS is also right to question whether George Osborne’s sums for future years really do stack up.”
What Geogre Osbourne has neglect to mention is that millions of people finding it harder each month to make ends meet, the Chancellor had nothing to say in yesterday’s Autumn Statement.
Since David Cameron and George Osborne came to office working people are now on average over £1,600 a year worse off. Yet they gave people earning over £150,000 a huge tax cut this year.
Prices are still rising faster than wages. Official forecasts show the cost-of-living crisis will continue with working people worse off in 2015 than in 2010.
Labour will freeze gas and electricity bills until 2017. And we will make long-term changes to the energy market to stop customers being ripped off.
Under this Government bills will rise this winter and energy companies are being let off the hook. With this Chancellor, the only freeze this winter is for pensioners who can’t afford their hearing bills.
What we need is Labour’s long-term plan to tackle the cost-of-living crisis and earn our way to higher living standards for all. Let’s build more homes and boost apprenticeships to get a strong recovery.
Let’s make work pay by expanding free childcare for working parents and strengthening the minimum wage. And let’s get our young back to work with a compulsory jobs guarantee for under-25s and the long-term unemployed. That’s the way to get a recovery for the many and not just a few.
After the Chancellor’s statement, it’s clear working people are worse off under the Tories.
To the long list of Tory crimes must now be added grand larceny – of Labour’s policies.
Hugh Turn (say it out loud), who also trades under the name of David Cameron, shamelessly reversed his stand on fuel charges and payday loans.
He sneered at Ed Miliband’s gas and electricity price freeze, and then brought in a pale imitation that still leaves bills rising.
He rejected limits on sky-high interest rates charged by payday loan merchants, but now he favours curbs.
No wonder Ed Miliband kept his policies under wraps for so long in the face of Tory taunts that he hasn’t got any.
As soon as he goes public with a bright idea, Coalition crooks burgle it. Ed led on Syria, and phone hacking, and Cameron followed.
Labour backs the Living Wage, and Boris Johnson, friend of the super-rich, followed in London.
When the Tories start filching the Opposition’s policies, you know they’re rattled. Their Grand Autocratic Theft is a good thing, because it shows Ed Miliband is getting it right. And not-so-good because it raids his store of policies in the run-up to polling day.
Cameron’s latest theft of Labour’s clothes is barefaced cheek. Unfortunately, the clothes don’t fit, and he looks stupid in them.
Hugh Turn is revealed as the circus clown, with his pockets full of pilfered policies.
Labour has hit on a rich vein of voter support by hoisting the cost of living to the top of the political agenda. It shows they care.
The Tories claim to be ahead on the issue of the economy, but that doesn’t cut quite so much ice with people these days.
For many, “the economy” is a remote concept, something that politicians do far away in Westminster when they’ve done fiddling their expenses.
But the cost of living is in every home. It affects every family and every pensioner.
Bill Clinton’s winning slogan “It’s the economy, stupid” needs updating. It should read “It’s the cost of living, wise guy.”
Another test of Tory nerves is the level of vituperation. Unable to counter Ed’s attack on incompetent Coalition handling of the cost of living crisis, Cameron resorts to personal abuse.
At Prime Minister’s Questions, his face gets redder, his arrogance gets louder, his contempt more obvious and his insults nastier. We see the Bullingdon Boy bully behind the baby face.
It’s not a pretty sight. I don’t think it wins him any votes from uncommitted viewers of this weekly theatre of the absurd. The way he behaves tells us more about him than a thousand U-turns.
So, I’m sure that many people don’t mind him paying Labour the back-handed compliment of stealing Ed’s policies. If they can be implemented before Labour gets back into power, that’s a plus.
Why is George Osborne relying on the Bank of England and Britain’s resurgent housing market to deliver strong growth in the runup to the 2015 general election after he spurned the chance to use a surprise pick-up in the economy this year to ease the government’s austerity programme.
In an upbeat autumn statement that left his Labour shadow, Ed Balls, struggling, the chancellor produced plans to shrink the size of day-to-day state spending to its lowest level for at least 70 years and sought to neuter Ed Miliband’s cost-of-living campaign by using the proceeds of the squeeze to trim domestic fuel bills by £50 a year, freeze fuel duty for motorists and limit increases in rail fares.
On Friday morning Osborne, in a round of interviews with broadcasters, rejected Labour’s claims that workers would be £1,600 a year worse off by the end of this parliament. “People remember that the economy collapsed under the last Labour government,” he said.
Asked about the prospect of interest rates rising, he also insisted it was the government’s actions controlling public spending that were keeping interest rates low.
He spoke as Ipsos Mori released polling figures suggesting that 40% of people accept Ed Balls’s claim that Osborne is in denial about the cost-of-living crisis. By contrast, only 24% said they agreed with Osborne that his plan for economic recovery was working and 27% said they agreed with neither propostion.
On Thursday, Osborne said the state of the public finances left no room for tax cuts, although the City believes a fresh surge in the housing market expected next year will leave scope for pre-election giveaways. Interest rates are expected to remain at 0.5% until after the general election.
“This statement shows the plan is working. It’s a serious plan for a grown-up country,” the chancellor said as he warned voters that Labour would put any economic recovery at risk.
“We have held our nerve while those who predicted there would be no growth until we turned the spending taps back on have been proved comprehensively wrong. Thanks to the sacrifice and endeavour of the British people, I can today report the hard evidence that shows our economic plan is working.”
He announced forecasts from the Office for Budget Responsibility (OBR) showing that the economy would grow by 1.4% this year and 2.4% next year – up from the 0.6% and 1.8% predicted in the March budget. “But the job is not done,” Osborne added. “By doing the right thing, we’re heading in the right direction.”
The OBR said that the acceleration in growth during 2013 had been the result of consumers running down savings to fund higher spending, and said productitivity would need to improve in order to “sustain the recovery and raise living standards”. But it said hopes for an increase in business investment this year had not been met and the UK’s trade performance had been worse than expected.
Osborne said that the consumer-driven pick-up in the economy was still not strong enough and left the budget deficit too high for the government to ease up on austerity. He said he would support companies by limiting the increase in business rates to 2% and spent £500m abolishing national insurance contributions for workers under the age of 21.
But he said measures to tackle what Labour has called Britain’s cost of living crisis had to be paid for by a cap on all welfare spending, apart from pensions and unemployment benefits, and a fresh squeeze on Whitehall departments. The independent OBR said that by 2019 the share of national income spent on the day-to-day running of the state would be the lowest since at least 1948 when modern records began.
Osborne said he wanted a “responsible recovery” and while warning of “more difficult decisions” to come he accepted the effects of Britain’s deepest postwar slump were still being felt on family budgets.
Stronger growth meant that the government needed to borrow £73bn less over the next five years than originally envisaged in the spring and that the national debt would peak in 2016-17, a year earlier than previously predicted, the chancellor said.
But Robert Chote, the OBR’s director said the upgrade was the result of a cyclical pick up in consumer spending and the housing market rather than a structural improvement. “Borrowing is lower but the hole that the government will eventually have to fill in doesn’t appear to be any smaller than it was in March,” Chote said.
The OBR is expecting house price inflation of above 5% in 2014 and 7% in 2015, with the Exchequer seeing a near doubling of property stamp duty from £9bn to £17bn between 2103-14 and 2018-19.
Osborne told MPs: “This country is working through its long term plan. Bringing down the deficit and dealing with the debt.
“Spending less on welfare and making the big decisions on infrastructure. Living within our means and cutting tax on business. Making work pay and letting people keep more of what they earn.”
But Balls said Osborne was borrowing £198bn more than he planned in 2010. “More borrowing to pay for three years of economic failure. More borrowing in just three years under this chancellor than under the last government in 13 years.
“He used to say he would balance the books in 2015. Now he expects us to congratulate him for saying he’ll do it by 2019.”
Balls brushed aside suggestions that his shouty performance in the Commons had damaged him saying “there were 350 Tory MPs shouting at the top of their voice because they don’t want to hear the truth about the cost of living crisis in our country”.
He said Osborne “was in denial about the way in which living standards were still falling”.
He insisted that the chancellor’s plans for faster spending cuts, a welfare cap and a proposal to ask MPs to vote next autumn for faster than expected fiscal consolidation in the three years after the election would not cause him problems. But he faces a difficult judgment whether to accept the Tory timetable for fiscal reduction, or back a slower pace.
He also said he may call for tax rises as well as spending cuts to scale back the deficit.
The business secretary, Vince Cable, also emphasised that, like Balls, the Lib Dems would not be forced to accept the plan for Conservative deficit reduction, which envisages for more than 80% to come from spending cuts, even if they might accept the timetable.
Cable said: “The Liberal Democrats are an independent party … Liberal Democrats have a different approach to tax and spend, in particular with an emphasis on fairness in the way the tax system operates, and our achievements in lifting low earners out of tax.
“Ultimately the electorate has got to decide what the outcome of the next election is but we will go into it as a distinct party with a distinct agenda.”
Cable also sounded a warning note, saying the housing market was “very buoyant”. He said: “There’s clearly still a danger of house prices getting out of control.”
Now here is a chance to read the report in full to make up your own mind up see:
Leading investors in HSBC reacted angrily on Thursday to a decision by George Osborne to increase his levy on banks, warning that it would restrain the dividend-paying capacity of Europe’s biggest lender.
A number of the bank’s institutional investors are furious at the Chancellor’s move to hike both the rate and the overall sum raised by the levy, which was introduced in 2011.
A major HSBC shareholder, who refused to be named, said the Treasury was “pushing the bank to a point at which it will again have to consider the issue of redomiciling” its headquarters away from the UK.
Under plans announced as part of his Autumn Statement, Mr Osborne said the targeted yield from the levy on banks’ balance sheets would increase from £2.5bn this year to £2.7bn next year and £2.9bn from 2015.
The latest increase – the fifth since the levy’s introduction – was designed to offset the benefit to banks of ongoing reductions to the rate of corporation tax, Treasury insiders said.
However, the move is likely to force HSBC’s contribution to the levy to more than $1bn (£612m) for the first time next year, and take its overall bill since Mr Osborne unveiled it three years ago to more than £1.5bn, far more than any other bank.
HSBC, which did not require direct taxpayer support during the banking crisis, said earlier this year that it anticipated paying between $800m (£490m) and $900m (£551m) in 2013.
The investor questioned the logic of Mr Osborne’s move, saying that because it was a levy on pre-tax profits, it inhibited HSBC’s dividend-paying capacity.
“It makes no sense. HSBC’s board could quite understandably take the view that the cost of being a UK-based bank has now reached a tipping point,” they added.
HSBC periodically reviews the location of its headquarters but has not done so formally since before the Independent Commission on Banking made recommendations about ring-fencing structures aimed at safeguarding taxpayers from future bank rescues.
The Chancellor’s levy has consistently failed to generate the targeted £2.5bn yield as banks have accelerated the deleveraging of their balance sheets.
Treasury officials said on Thursday that the structure of the bank levy would also be altered from January 1 2015, with changes limiting the protected deposit exclusion to insured amounts, and treating all derivative contracts as short-term.
The effect of this would be likely to mean higher charges for Wall Street banks with UK operations, according to one source.
Why is it that Central government has decided not to allow more houses to be built one can only assume that the coalition are burying themselves in the sand and that The government must allow councils in England and Wales to borrow more money to spend on building so they can tackle housing shortages, a report says.
The Local Government Association (LGA) said nine councils, with 40,000 people on accommodation waiting lists, were unable to take on any loans at all.
It said lifting a cap on borrowing would allow up to 60,000 new homes to be built in the next five years.
But the government said there was “no magic money tree”.
It added there was still a need to cut public borrowing to improve the performance of the economy.
In 2012 the Treasury capped the amount councils could borrow against ring-fenced housing budgets, set at different levels for each area.
However, the LGA urged Chancellor George Osborne to use Thursday’s Autumn Statement to lift the provision.
He should instead allow councils “to invest in housing under normal responsible borrowing guidelines”, it said, adding that “the investment would be very low-risk and paid many times over by future rents on new homes”.
Mike Jones, chairman of the LGA’s environment and housing board, said: “There are millions of people on social housing waiting lists and councils want to get on with the job of building the new homes that people in their areas desperately need.
“Local authorities have excellent credit ratings and we want to use our assets to help kick-start the housing recovery, but our hands are being tied.”
The LGA said the following authorities had been given no borrowing “headroom”:
- Darlington Borough Council
- Dudley Borough Council
- Exeter City Council
- Gosport Borough Council
- Harrow Council
- Royal Borough Greenwich Council
- South Cambridgeshire District Council
- Waverley Borough Council
- Woking Borough Council
Mr Jones said: “The chancellor has an unrivalled opportunity to use this Autumn Statement to create jobs, provide tens of thousands of homes and help the economy without having to find a single extra penny.
“New homes are badly needed and councils want to get on with building them. The common sense answer is for the Treasury to remove its house building block and let us get on with it.”
Housing minister Kris Hopkins said: “As a lobbying organisation, the LGA need to realise that there is no magic money tree, and this government needs to cut public borrowing to keep interest rates down and ensure long-term economic growth.
“But under this government, the housing market has turned the corner, with house building now at its highest level since 2007, backed by up £19.5bn of public and private investment in affordable housing over the current spending review. The government will outline its broader approach in the Autumn Statement.”
Intriguingly Charities have accused the Prime Minister of giving “inaccurate” statements and raising “false hopes” by suggesting that disabled people who need an extra room are exempt from the so-called “bedroom tax”.
Eighteen chief executives of leading disabled charities have written to David Cameron criticising comments he made during Prime Minister’s Questions last Wednesday.
Mr Cameron was asked about calls to exempt disabled people from the spare room subsidy and responded: “Obviously, what we have done is to exempt disabled people who need an extra room.”
The charities, which include Carers UK, the RNIB and and Sense, say he has made similar remarks twice this year.
The letter states: “None of these situations reflect the reality of the Government’s policy. We are now even more concerned that the effects the policy is having on disabled people and their families are not understood in Government.”
It continues: “When senior Government figures state that these families are exempt when they are not, our organisations have to respond to the false hope this generates. We receive the relieved calls and messages from families who are struggling to pay their rent shortfall, and it falls to us to tell those families that they are, in fact, subject to these cuts and are not exempt.”
Although there are some exemptions for disabled children, many disabled people do not qualify.
They may be eligible for money from a discretionary fund but charities say the fund is not available to all and as a consequence the policy is having a “devastating” impact on many people who need an extra room for carers or equipment.
In the letter to the Prime Minister they list the types of people affected, which include “families of disabled children who need overnight care workers to stay to give them a break” and “people whose extra room is needed for home adaptations or equipment, including dialysis machines, oxygen tanks, hoists and wheelchairs”.
A consortium of 50 charities had written to the Department for Work and Pensions (DWP) calling for disabled people to be exempt from the spare room subsidy.
The DWP responded: “We are determined to support those who might need extra help through these necessary reforms. That is why we set aside £190m this year to do precisely this, with £25m specifically for disabled people living in specially adapted properties.
“The courts have ruled we are meeting our equality duties to disabled people who are affected by the policy.
“The removal of the spare room subsidy means we still pay the majority of most claimants’ rent, but the taxpayer can no longer afford to pay the £500m cost of claimants’ extra bedrooms.”
Here is another example of Iain Duncan Smith cock up again we have learnt the full extent of how to waste money. Mr Duncan Smith told a committee of MPs in July and the Commons in September that the 2017 plan remained in place.
But he has now said some people receiving Employment Support Allowance may not be transferred in time.
The government estimates about 700,000 people in this group could be moved to Universal Credit after 2017.
In an interview Mr Duncan Smith said the Department for Work and Pensions (DWP) “may take a little longer” as it was dealing with a vulnerable group and the official in charge of the project, Howard Shiplee, may want to take more time.
Mr Duncan Smith insists despite the possible late transfer of claimants the new benefit system will “essentially” be complete by 2017.
Ministers will argue that these claimants are among those least able to work so least likely to lose out by not being part of Universal Credit.
So the next time the coalition continue to play their scratch record on blaming Labour let us all remind the coalition of their failed record that is happening on their watch
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