Tag: GMB

George Osborne ignored civil servants’ warnings of increased child poverty due to 1% public sector cap

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Back in July 2015, George Osborne, then chancellor, announced that the 1% public sector pay cap would be extended for four years – a policy that had not been included in the Conservative manifesto. The cap remained in force until the 2018/19 pay round.

Documents released under the Freedom of Information Act show that Osborne had received advice from civil servants warning him that the policy would “make it more difficult for low-income families with children to access essential goods, and will therefore make it harder for the government to hit the Child Poverty Act targets.”

Authoritarian Osborne ignored civil servants’ warnings that extending the public sector pay cap would force children into poverty, the newly released documents reveal. Civil servants also warned that extending the cap “could increase financial pressure on families of public sector workers which may have a negative impact on family relationships”.

The previously undisclosed warnings are contained in a ministerial decision record obtained by GMB union. The papers reveal that ministers had also considered freezing public sector pay for two years. 

The Treasury released the paper to GMB after a prolonged delay and following being instructed to respond to the GMB by the information commissioner. Rehana Azam, GMB’s national secretary, said the pay freeze had a devastating impact on the union’s members for many years.

Osborne’s policy has directly affected over a million families with children. There are an estimated 2.4 million dependent children in households in which there is at least one public sector worker in the UK.

Azam went on to say : “This document is a mark of shame on ministers who imposed years of real-terms pay cuts in the full knowledge that it would condemn families and children to poverty.

“If Theresa May is serious about ending ‘burning injustices’, she must use this budget to reverse the fall in living standards that this government has imposed on ordinary working people.”

It emerged earlier this month that the cap on benefits, also imposed by Osborne in 2015, will mean that low-income families will miss out on an extra £210 a year from April. Analysis by the Resolution Foundation highlighted that more than 10m households will face a real-terms loss of income from the government’s austerity measures, introduced when Osborne was chancellor. It was also reported this week that Philip Hammond, Osborne’s successor, is considering imposing regional public sector pay rates. However, similar proposals were defeated in the 2010 to 2015 parliament.

A Whitehall source confirmed that the Treasury is considering overhauling the system to allow greater regional variation in pay rises. The chief secretary to the Treasury, Liz Truss, reportedly told the cabinet that pay rises should be ‘determined by retention, performance and productivity.’

The reasoning means that those working in London and the south-east could receive greater increases because pay in other regions is already more “competitive” with private sector levels, the source confirmed.

Meanwhile, Hammond is under increasing pressure to loosen curbs on spending after May used her conference speech in Birmingham to tell voters that next year’s spending review would mark the end of almost a decade of austerity.

George Osborne was contacted for comment and has not responsed at the time of writing.

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Government refuse to publish Brexit impact assessment. We need to ask why

“Despite calls from over 150 MP’s and threats of legal action, the Department for Exiting The European Union are still refusing to publish Brexit impact assessments.” David Lammy.

Whitehall’s internal risk assessments of the impact of leaving the EU on various sectors of the UK economy have remained the private property of the government. The government’s reluctance to publish them has been one of the most controversial, and widely discussed, features of its approach to Brexit. Ministers say that publication would undermine their hand in the Brexit talks and could influence the debate on Brexit if they were revealed. Circulation of the assessment is said to be highly restricted inside government because of its political sensitivity.

However the government’s authoritarian refusal to publish these documents is undemocratic, and it means the public will be intentionally kept in the  dark about Whitehall’s internal analysis over the economic impact of Brexit. Not a government that’s fond of public scrutiny, transparency and democratic accountability, then.

If you think my use of the term “authoritarian” is a bit strong, it’s worth remembering that in 2012, the government was ordered more than once by the Information Commisioner and by a Tribunal to release the risk register document relating to the impact of the controversial Health and Social Care Bill. Ministers vetoed the disclosure, and said that revealing such information would “interfere with policymaking”, and as such, was “not in the public interest.”  However, the Information Tribunal had ruled that the public interest in publishing the risk register was “very high, if not exceptional”.

Nonetheless, it has never been published for the public to see. Over the last 7 years, I have given many other examples of policies and narrative that indicate the Conservative’s strong authoritarian tendency.

The highly controversial Welfare “Reform” Act ( key measures of which were the introduction of Universal Credit, the “bedroom tax”, changes and steep cuts to disability benefits, the introduction of  a harsh and punitive sanctioning regime and the benefit cap) was defeated several times in parliament. The government implemented it nonetheless, by enforcing the “financial privilege” of the Commons in order to ignore the serious concerns raised and the refuse to entertain the mitigating amendments from the House of Lords.

Parliamentary debate regarding Brexit legislation is at a crucial stage, but opposition parties are given very little information before they are expected to make key decisions and vote on them. This is not an isolated or incidental set of circumstances. It’s emerged as a key Conservative strategy over the last few years, to ensure that parliamentary and public scrutiny and debate of controversial legislation is minimal. It’s a government that likes to get its own way, regardless of what the majority of the population may think. 

Tim Roache, GMB General Secretary, has said: “Brexit isn’t a game – people’s livelihoods and futures are at stake.

The Prime Minister seems to be intentionally keeping people in the dark in her quest to leave the single market and customs union.

The Government must publish their secret impact assessments as soon as possible so people know what’s in store and what the government is putting at risk.

Public services, unions and government need to plan for the future, we can’t do that when the government is hiding so much information from everyone.”

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There has always been a substantial gap between the Conservatives’ ideological position and economic prudence. Despite assurances earlier this year from the government, the Daily Mail  and the Express that our economy is “thriving”, they have somehow managed to misplace £490bn of our cash. That’s half a trillion pounds. It’s equivalent to 25 per cent of GDP.

This quote from the Daily Mail hasn’t held up very well in the fullness of time:

“In a damning assessment of the scaremongering by the Remain camp, the Office for National Statistics declared that there had been no post-referendum economic shock.”

I think it’s a bit of an economic shock to discover that the UK’s wealth has suddenly diminished from a surplus of £469bn to a net deficit of £22bn, and that investment in the UK by overseas companies and individuals fell from a £120bn surplus in the first half of 2016 to a £25bn deficit, over the same period, in 2017. 

Meanwhile, the government’s decision to leave the EU has itself “raised uncertainty and dented business investment” in the UK, a new report from the Organisation for Economic Cooperation and Development (OECD) has warned. 

The report says that real wages are being stripped back amid soaring inflation, despite low unemployment. Of course this has been a longstanding problem under successive Conservative governments as they have pared back labor market regulation and undermined the very notion of workers rights and collective bargaining. The balance of power was deliberately tipped against unprotected employees, in favour of exploitative and bad employers.

David Cameron introduced enormous fees of £1,200 for anyone seeking redress from an employment tribunal for unfair dismissal or discrimination. The crippling cost had its intended effect – in one year there was a 67% drop in the number who could afford to use tribunals. Only the highly paid or those backed by a union can now seek help. Women have been the hardest hit as sex discrimination cases fell by over 80% in the first year of fees.

Then there came the Trade Union Act which was deliberately designed to set too high a bar for strikes – a conditional ballot requiring a 50% turnout, and 40% of the electorate to vote yes.

General Secretary of the Trades Union Congress, Frances O’Grady, says: 

“Pay packets are taking a hammering. This is the sixth month in a row that prices have risen faster than wages.

Britain desperately needs a pay rise. Working people are earning less today (in real-terms) than a decade ago.

The Chancellor must help struggling families when he gives his Budget next month. This means ditching the artificial pay restrictions on nurses, midwives and other public sector workers. And investing in jobs that people can live on.” 

Despite their eyewateringly disingenuous rhetoric, the Tories have never been “the party of the workers”. Real wages are still shrinking , the cost of living is spiralling upwards, inflation was 2.6% in July (the mid-point of the quarter), and jumped to 3% in September.

Today, in response to the ONS employment report that was published, the Resolution Foundation analyst, Stephen Clarke, says:

“Today’s figures confirm the big picture trend that the UK labour market is great at creating jobs, but terrible at raising people’s pay.

“The scale of the pay squeeze over the last decade is so vast that people today are earning no more than they did back in February 2006, despite the economy being 4.4 per cent bigger per person since then.”

Britons would need a £15 per week pay rise to get back to the levels before the financial crisis.

Brexit, the economy and more shenanigans

The 140-page annual report from the OECD outlines the state of Britain’s economy 16 months after last year’s EU Leave vote.

It also says the deadlock in talks has put Britain on course for a “disorderly Brexit”, suggesting: “In case Brexit gets reversed by political decision (change of majority, new referendum, etc), the positive impact on growth would be significant.” 

The deputy leader of the Liberal Democrats said it was clear from the OECD report that a second vote was needed to prevent the harm caused by Brexit.

Jo Swinson said: “Brexit has already caused the UK to slip from top to bottom of the international growth league for major economies.

“This will only get worse if the government succeeds in dragging us out of the single market and customs union, or we end up crashing out of Europe without a deal.”

At least 20 members of May’s cabinet backed remaining in the EU in the run-up to last year’s referendum. 

The Treasury and Conservative ministers have rejected the OECD’s suggestion of second Brexit referendum, despite the warning from the thinktank that Britain must stay close to the EU or face long-term decline, and that reversing the decision to leave would significantly benefit the economy. 

I wonder if Philip Hammond’s Autumn budget on 22 November will continue to push the “balancing the budget” theme – a Conservative euphemism for more austerity, and the poorest citizens having to live within the governments’ dwindling and increasingly miserly “means,” now that he’s somehow misplaced a massive amount from the public purse. It’s going to be very difficult to woo the electorate with such a backdrop of even more looming poverty for the demographic that Conservatives usually direct their traditional prejudices at. For many of us, the “no gain without [your] pain” mantra doesn’t endear the Conservatives or switch on our confidence in their “long-term economic plan”.

There is a veritable chasm between policy and democracy, rhetoric and empirical evidence, not forgetting the galaxy-sized space between facts and techniques of persuasion. Maybe the Conservatives are still trying to convince themselves, in the their typical blustering, unreachable, non-dialogic “because we say so” way that always indicates denial and authoritarianism, that they can persuade a cut-weary public that austerity will suddenly work if we persist for yet another decade.

The “paying down the debt” deadline set by the chancellor has become an elusive goalpost, forever retreating into the future, and now we are expected to believe that by 2025, our economy will be fine and we’ll have a comfortable surplus instead of an ever greedy black hole of trillions.

Back in 2010, we were reassured by George Osborne that the government’s aim was for the deficit to be eliminated by 2015, and in his first budget he said that aim would be achieved, based on the government forecasts of the time. That didn’t happen. By November in 2011, the first surplus was forecast for 2016/17. By December 2013, it had been pushed back again to 2017/18. Now it’s been pushed back to 2025.

That’s providing that the public continue to believe the Conservatives have a shred of economic credibility for the forseeable, of course. Personally, I think that people are starting to grasp that the continuing radical cuts to public spending the economy will continue to shrink rather than expand the economy, because it’s not rocket science, and besides, we have now witnessed 7 years worth of empirical evidence that austerity does not work the way the Conservatives say it will. There’s only so many times that the Conservatives can get away with saying “but the economic damage was greater than we feared”.

The Tories have succeeded in being economical with the truth. But the fullness of time itself – the last 7 long years – has been a very good test of verisimilitude. The Conservatives failed. The public have noticed.

Only months ago, before the election, the government were boasting about the economic “recovery”. Yet when it comes to actual policies, we see more miserly austerity cuts, juxtaposed with generous tax cuts for very wealthy people, and the justification narratives always sound as if those carrying the brunt of austerity cuts – our poorest citizens: disabled people, young people, those on the lowest wages, public sector workers and so on – are somehow culpable personally for the state of the economy, inequality and poverty.

Some disabled people have been forced by the state to “tighten their belts” on behalf of the nation to the point that it has actually killed them. I can’t help but wonder how long the public are willing to sacrifice politically marginalised groups in the name of “the national interest” and “the deficit” just for the sake of fulfilling economic dogma, traditional Conservative prejudice and nasty, antisocial ideology.

The revised figures from the Office for National Statistics figures have weakened the governments’ position in Brexit talks. On Monday, the prime minister is meeting with European Union leaders, Jean-Claude Juncker and the EU’s chief negotiator Michel Barnier, a matter of only days after the exit negotiations were deadlocked.

The OECD said Britain must secure “the closest possible economic relationship” with the EU after Brexit to prevent the economy suffering a long-term decline.

Angel Gurría, the OECD’s secretary general, said Brexit would be as harmful as the second world war blitz and the British would need to act on the propaganda maxim to “keep calm and carry on.” That doesn’t exactly bode well. 

The revision of UK national accounts, the ONS “Blue Book”, shows that the country no longer has a net reserve of foreign assets, and therefore no safety margin while talks with the European Union reach a critical point, as time runs out to reach an agreement.

Is no prime minister better than a bad prime minister?

The half a trillion pounds that has gone missing is equivalent to 25 per cent of GDP.  

The Institute for Fiscal Studies says that if we leave without a deal, trade with the EU would fall by as much as 29%, costing the UK economy between £48.6 billion and £58 billion – the equivalent to between £741 and £884 per person.

The Treasury, rather worryingly,  is equally pessimistic saying it could cost 800,000 jobs, cut GDP by 6% and see the pound fall by 15%.

The Conservatives have succeeded in raising employment figures, but all that means in reality is that more people earning smaller wages.

And the pay squeeze is set to continue.

Maike Currie, investment director for Personal Investing at Fidelity International, says the rise of the ‘gig’ economy, and the government’s public sector pay cap, are partly to blame for the wage squeeze:

Another month, another fall in real household incomes. Today’s wage growth figures show our total earnings including bonuses grew at just 2.2% in the three months to August . With yesterday’s CPI figures showing inflation spiking to an eye watering 3%, the gap between our pay packets and the cost of goods and services continues to remain vast – our wages are not keeping up with the rising cost of living.

“The absence of wage growth remains the missing piece of the puzzle in the UK’s slow road to recovery – high employment should be the worker’s best friend because that’s what pushes up wages. With UK unemployment at a 45-year low, one would think that workers’ bargaining power at the wage negotiation table would improve, yet earnings growth remains elusive and the UK’s workforce is getting poorer. There are many potential reasons for this ranging from poor productivity to the squeeze on public sector pay and the rise of self-employment in the so-called ‘gig economy’.

Treasury documents showed Britain could lose up to £66bn a year if it pursues the hard Brexit option – leaving the single market and EU customs union.

Yet May’s Conservative conference speech signalled that the UK will prioritise immigration over single market access in Brexit talks, which also sent confidence in pound sterling plummeting.

While the longer-term economic impacts of Brexit are yet to unfold, and surprise everyone except the government, today’s report from the Resolution Foundation think-tank strongly suggests that the lowest paid could once again be hardest hit. It’s like everything this government touches upon immediately loses its value.

A draft Cabinet committee paper, which is based on a controversial study published by George Osborne in April during the referendum campaign, says:

“The net impact on public sector receipts – assuming no contributions to the EU and current receipts from the EU are replicated in full –would be a loss of between £38 billion and £66 billion per year after 15 years, driven by the smaller size of the economy.”

This evening the All Party Parliamentary Group on a Better Brexit for Young People released a report on the concerns and priorities for Britain’s youth during the Brexit negotiations. The report, compiled in association with LSE, gathered data from forty focus groups of 18 to 24-year-olds from varying economic, geographical and social backgrounds over an eleven-month period from November 2016 to September 2017.

The report, which is divided into three sections, explores youth views on the current state of Brexit, their concerns about Brexit and their priorities for Brexit negotiations.

In the introduction, it says: 

“[Respondents] spoke of their concern about the economic pressures they face with regard to housing, jobs, and education, and the political, social and economic direction of travel that Brexit represents”.

This opinion, says The LSE say that this is an opinion that was shared by over 90 per cent of those surveyed, demonstrating an overwhelmingly negative view of Brexit and its consequences. It’s clear that the referendum stirred feelings among many young people  of sadness, anger and frustration at the outcome of the referendum, and some of that was directed at people who voted to leave – the majority being older generations.  The government chose not to give the right to vote to 16- and 17-year-olds in the referendum. It is fair to ask whether allowing them to vote could have changed the result of the referendum or not.

Neoliberalism: more business as usual

You’d be forgiven for thinking that the near meltdown of the global financial system would prompt a comprehensive rethink of the principles underlying neoliberalism. Instead, the crisis was exploited to de-fund social welfare provision on a grand scale, to dismantle the social gains from our post-war settlement ) legal aid, the NHS and other public service provision, social housing and civil rights, and to hand out our public funds to a small and very wealthy cabal. Austerity socialised losses for the poorest, and privatised hand outs in the form of tax cuts. Labor market deregulation and increasing trade union regulation also benefitted the wealthiest, resulting in the growth of exploitative wages, job insecurity and poor employment practices for ordinary people, and big profits for the wealthiest. 

Immediately following the referendum result, the Centre for Policy Studies (CPS), a free market thinktank, revealed what many of us suspected – Brexit has presented the Conservatives with a cornucopia of opportunities to extend the principles of an already overarching, totalisin ideology to its absolute limits. The CPS said:

“The weakness of the Labour party and the resolution of the EU question have created a unique political opportunity to drive through a wide-ranging … revolution on a scale similar to that of the 1980s … This must include removing unnecessary regulatory burdens on businesses, such as those related to climate directives and investment fund[s].”

Shortly after, George Osborne proposed to cut corporation tax from 20% to below 15%, to staunch the haemorrhage of investment. During the coming months and years, the unfolding Brexit fueled economic crisis will provide countless pretexts for similar “emergency measures” that solely benefit big business profits and of course “roll back the state”. 

This is inevitable if the current government remain in office. There will be no Brexit risk assessment available to the public. There will be no vote in parliament, no second referendum, no fresh elections: just the most massive, scheming and authoritarian legislative programme in history within the current parliament, in which the Tories command an absolute majority based on 37% of the votes cast in the last general election.

So much for “taking back democratic control”. 

Tom Coberg, writing for the Canary, says:

“[…] it was not long after the 2016 EU referendum that one commentator observed how the Conservatives appeared to be adopting tactics akin to “disaster capitalism“. And that with Brexit:

[…] the prize is the opportunity to rework an almost infinite range of detailed arrangements both inside and outside the UK, to redraw at breakneck speed the legal framework that will govern all aspects of our lives.

May has begun to prepare the public for this. And according to Joe Owen of the Institute for Government, the civil service drew up plans for a ‘no deal’ “months ago”. Though, given the close links between the Tories and Legatum, such a scenario may have been the plan all along.

Or to put it another way: extreme Tory Brexit looks as if it could mean exploitation of the many, for the benefit of the few.”

 We are taking our country back. 

We’re heading for the feudal era, singing Hayek’s deadly anthem all the way. 

When the “free market” came to Chile

 


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