- 1 Links ToDo
- 2 Fiscal Policy
- 3 Monetary Policy
- 4 Northern Powerhouse Initiative
- 5 Money Laundering
- 6 Budget / Privatisation / Democracy
- 7 References
- Helpful website, Thatcher policies + Economics Help
- There's a bunch of stuff in Conservative Party on this.
- Fiscal Policy, https://www.slideshare.net/dakshbapna/fiscal-policy-31444530
- Monetary and Fiscal Policy, https://www.slideshare.net/srgeorgi/monetary-and-fiscal-policy-43290362
- Fiscal Policy and Monetary Policy, https://tamoclass.wordpress.com/category/monetary-policy/
- Economic Policy - Monetary and Fiscal, https://www.slideshare.net/Vaibhav29/isce03-bangaloreeconomic-policy
- New Economic Policy of India, https://www.slideshare.net/VinodReddyKarnati/new-economic-policy-of-india
- Economic Policy, Concept and Implications, https://www.slideshare.net/domsr/economic-policy-7849667
- Economics and Economic Rreasoning, http://slideplayer.com/slide/4822557/
- Auterity: http://www.variant.org.uk/39_40texts/Variant39_40.html
- 2017.02.22: Why is cost of living in UK so expensive? https://www.economicshelp.org/blog/16366/inflation/why-is-cost-of-living-in-uk-so-expensive/
Fiscal Policy. Fiscal policy is the use of govt revenue collection (mainly taxes) and expenditure (spending) to influence the economy. According to Keynesian economics, when the govt changes the levels of taxation and govt spending, it influences aggregate demand and the level of economic activity. Fiscal policy is often used to stabilize the economy over the course of the business cycle.
- Mar.2017 video, https://skwawkbox.org/2017/03/08/short-brilliant-video-tells-all-you-need-to-know-re-tory-economic-competence-budget17/
Austerity is a political-economic term referring to policies that aim to reduce govt budget deficits through spending cuts, tax increases, or a combination of both. Austerity measures are used by govts that find it difficult to pay their debts. The measures are meant to reduce the budget deficit by bringing govt revenues closer to expenditures, which is assumed to make the payment of debt easier. Austerity measures also demonstrate a govt's fiscal discipline to creditors and credit rating agencies.
Professor David McNally on the machinations of capitalism which the elite have, and will continue to carry out, in order to preserve the status quo and gross inequality of our political economy: "But the purpose of a capitalist enterprise is not to make sales; it is to make profits. Once capitalism gets into a systemic crisis such as in 2008, profitability cannot be restored without enormous destruction. There are two key mechanisms by which this happens. (1) Destroying excess or unproductive capital. (2) Driving down working people’s living standards which reduces capital's costs of doing business. (1): In addition to funneling $trillions to bail out the financial sector, companies' borrowing costs are virtually free due to extremely low interest rates. So that leaves (2) - austerity - as the principal strategy. Insecurity makes it harder for workers to fight back. Capital’s ideal worker is the migrant who enters a country bound to a single employer, with no rights to live and stay beyond the length of their employment contract. Enter Cameron's open door immigration policy". more ref.
- Aug.01.2018: Ministers' plan to research effect of policies on food bank use. ministers want to identify policies or practices that may have contributed to rise in demand for food banks. The use of food banks has become a toxic issue over the last five years, with Tory ministers consistently refusing to accept that austerity-driven welfare reforms, including the introduction of universal credit, may be directly responsible for the huge increase in people needing emergency help. Hilary Osborne, Nick Hopkins, The Guardian.
- Mar.11.2018: Spring Statement 2018: Philip Hammond fixes his eye on the horizon while local councils drown. Chancellor Philip Hammond will resist calls from Labour, from Conservative councils and even from some Tory MPs for "an end to austerity". Calls that have become almost deafening since the Office for National Statistics announced this month that the UK has at last hit George Osborne’s target, albeit 2 years late, and is no longing borrowing to spend on a daily basis. Last week the National Audit Office (NAO) reported that local authorities have suffered cuts in funding from central govt of a staggering 49.1% since 2010, totalling about £16bn. They get four-fifths of funding directly from the Treasury. The remainder comes from Council tax, paid locally but with increases capped by central govt. Linkback: John McDonnell, Alistair Darling Adam Boulton, The Times.
- Jan.13.2019: The vandals destroying libraries should have the book thrown at them. A great public service is being run down by a state that prefers cost-cutting to culture. More to the point: the "haves" won't suffer from this, only the "have-nots". The death of reading is habitually attributed to social media. It’s unfair, really, because nobody has worked as doggedly to this end, as unsentimentally, and with a greater commitment to the suppression of literacy, than our own Department for Digital, Culture, Media and Sport. Catherine Bennett, The Guardian.
- Nov.21.2018: The Tories’ obscene joke: shred the safety net, then toss people into it. Austerity is turning into the ultimate raid on local government’s finances – gut its funding and then force it to pay out more to fix the problems caused by other cuts. And it’s only going to get worse. This is about more than strained spreadsheets or internal politics – it’s a sign of a govt that’s causing obscene hardship to its citizens and doing nothing to alleviate it. Frances Ryan, The Guardian.
- Oct.04.2018: Is austerity really over? Theresa May's promise lacks key details. PM’s announcement doesn’t reflect current Treasury policy as departments still face cuts. Is it all just "Word Salad"? May burbled on, mentioning a review next year, but no timescales. Phillip Inman, The Guardian.
- Sept.10.2018: How would you like your cuts served? Basildon Council are inviting residents to participate in an online survey to find out their views on spending priorities: Setting a balanced budget for 2019/2020. However, as Basildon Council admit, this exercise is being conducted in the context of a continuing squeeze on council spending. Without actually admitting it, in an age of seemingly permanent austerity, to all intents and purposes the council are seeking the views of residents on where the axe should fall on spending. bear in mind that the permanent austerity we’re having to endure is a consequence of having to bail out the banks after the financial crisis of 2008. We’re being made to pay for the excesses of an unsustainable debt based, financialised economic system. It’s time to say we’re not going to suffer this crap any more. StirringInTheFanns, The Heckler.
- Oct.01.2018: Tin-eared, blockheaded: Theresa May’s party is laying waste to its own voters. Tory policies have concentrated power and wealth in a few hands. No wonder the party’s supporters now look to Labour. Smack-bang in the middle of a crisis of capitalism, May has positioned the Tories as the stalwarts of capitalism. While the country cries out for more money, she carries on cutting spending. Such astounding blockheadedness is compounded when the prime minister who told a struggling nurse last year that "there is no magic money tree" boasts this week of her plans for a £120m festival of Brexit. the deep-rooted problem that the programme pushed by the Conservatives since the 1980s simply hasn’t worked for the very people who used to vote for them. Margaret Thatcher promised a shareholder democracy – but individual ownership of shares is below where it was when she began her privatisations. She pledged a country of homeowners – but home ownership in England has fallen to its lowest point since 1985. What Tory policies have done is concentrate wealth, power and opportunity in ever-fewer hands – thus cannibalising their voter base. Aditya Chakrabortty, The Guardian.
- Sept.12.2018: 'The world is sleepwalking into a financial crisis' – Gordon Brown. “Austerity was based on an analysis that what had caused the global recession was the high level of public debt rather than the reckless action of the financial sector. Nobody who has looked at it seriously would come to that conclusion, but the Conservatives dined out on it for 5 years.” The problem, Brown added, was not that governments borrowed more to boost growth but that the stimulus had not been big enough. “We have underestimated the power of fiscal policy because of an aversion to deficits and debt. We got back to growth quickly but couldn’t sustain it because of over-rapid fiscal consolidation. “We were out of recession in 2009 but back in it by 2011. Why? The withdrawal of government support cost us jobs and prosperity but also cost us our ability to cut the deficit in the long term.” Larry Elliott, The Guardian.
- Aug.21.2018: Squalid prisons are just the start. The entire justice system is in meltdown. From the police to legal aid to the courts, savage cuts mean a nightmare is unfolding largely out of public view. Under all previous governments, journalists could regularly visit any prison with due notice – and prison governors would speak out about problems. Now they are frightened into silence. In 2010 the shutters came down and it’s virtually impossible for journalists to visit prisons, except for a rare manicured walk-about with a minister. Why not? Because what the media would see would be too disgusting. Because desperate staff might say too much. Secrecy suggests shame. The prisons minister, Rory Stewart, a semi-amateur politician, earns growls from colleagues for promising to resign if there’s no improvement by next year. He could start by opening the gates of his filthy estate to us of the filthy fourth estate. Prisons returning to Newgate conditions are just the most extreme fallout from the disintegrating justice system, from inadequate policing to a crumbling CPS, malfunctioning magistrate and crown courts and vanished legal aid. The tottering edifice is only kept going by the superhuman goodwill of the dwindling numbers operating it. The Ministry of Justice is suffering the deepest cuts of any department – a huge 40% to be sliced away before 2020. The Treasury knows this is a secret world, hidden from public eyes, as courts are removed ever further from the local community, an integral part no longer. On the last day of term, when the government scuttles out bad news in written statements, the MoJ slid out an announcement that seven more courts are to be shut and sold off. That’s on top of the 258 that have closed and been sold off in England and Wales since 2010. In the great sale of public property – hospitals, schools, police stations, courts and more – the Treasury demands that capital raised be sucked into the running costs of remaining services, regardless of how a growing population will need this valuable land, gone forever. When criminal barristers went on strike recently against 40% pay cuts leaving them often with less than the living wage after travel costs and waiting time, the government said: “Any action to disrupt the courts is unacceptable.” But they are the deliberate disrupters of a legal system that is the basis of democracy. Polly Toynbee, The Guardian.
- Aug.21.2018: Don't blame councils for the harm done by government ideology. Far from ‘smashing up the public sector’, we’re trying to provide services in the face of austerity. Joanne Fry, senior local govt officer, The Guardian.
- Mar.11.2018: The Guardian view on the chancellor’s spring statement: another missed opportunity. Tuesday’s speech promises studied blandness. Instead it should promise an end to the austerity causing such damage to families and public services. Editorial, The Guardian.
- May.27.2016: Austerity policies do more harm than good, IMF study concludes. Economists from the International Monetary Fund give strong critique of neoliberal doctrine ushered in by Ronald Reagan and Margaret Thatcher in the 1980s, and has dominated economics for the past 30 years. They concluded that the increase in inequality threatened to be self-defeating. "The increase in inequality engendered by financial openness and austerity might itself undercut growth, the very thing that the neoliberal agenda is intent on boosting. There is now strong evidence that inequality can significantly lower both the level and the durability of growth." The Guardian.
- Apr.20.2015: IMF head Christine Lagarde praises UK for austerity measures. Speaking alongside Conservative chancellor George Osborne at the IMF and World Bank spring meetings, International Monetary Fund managing director Christine Lagarde has endorsed the outgoing Conservative-Liberal Democrat govt for its handling of the British economy. She said "It’s obvious that what happened in the UK has actually worked". Her praise was echoed by German finance minister Wolfgang Schäuble. In 2010, the Conservative/Liberal Democrat govt set out to eliminate a budget deficit of ~£135 bn by the end of its term; but in 2015, a £90 bn deficit still remained. The Trussel Trust provided a 3-day emergency food package to 25,899 people in 2009, but in 2014 900,000+ people sought help. At the other end of the spectrum, there are now some 104 UK billionaires, 3 x the 2008 number. They own £301+ bn, a 50% increase on the £201 bn possessed by 75 billionaires in 2008. Richard Tyler, News for the Revolution.
The Fiat System and Money Creation
- Apr.12.2018: Why doesn’t tax and spend matter when a politician wants to go to war? The money for war can always be found. After all, money is just a promise to pay. And what the govt does when committing to pay for war is to promise to pay for it. To indicate that fact it issues promissory notes - that is, notes and coin or, rather more likely, credits in bank accounts. And then it taxes at a later date and accepts the cash it has created in payment: the promise is therefore fulfilled. It is then money creation that pays for war. Nothing more, and nothing less. That, and the fact that the govt can tax to fulfil the promise. War has always been fought in this way. No monarch, state or warlord has saved up to go to war: they go to war and promise to pay later. Richard Murphy, Tax Rearch UK.
- Jul.04.2017: The Money Deluge: How the rich get richer – money in the world economy. The fiscal policies of the central banks are causing an uncontrolled global deluge of money. More and more money is moving away from the real economy and into the speculative field. The winners are set from the start: the rich just get richer. Cheap debt has distorted the market: big companies can borrow cheaply to swallow up others. It’s a kind of snowball system. (YouTube) Deutsche Welle.
- Jan-Mar.2014: Money creation in the modern economy. This article explains how the majority of money in the modern economy is created by commercial banks making loans. Money creation in practice differs from some popular misconceptions — banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits. The amount of money created in the economy ultimately depends on themonetary policy of the central bank. In normal times, this is carried out by setting interest rates. The central bank can also affect the amount of money directly through purchasing assets or "quantitative easing". Bank of England's Monetary Analysis Directorate, Michael McLeay, Amar Radia, Ryland Thomas
- Apr.2012: The Four Horsemen. People are being denied effective access to an economy that has been hijacked by vested interests. The Four Horsemen is our independent feature documentary which lifts the lid on how the world really works. It is a film that questions the systems we’ve created – and suggests ways to reform them. Renegade Inc., Four Horsemen (film)
Three types of lending
- Into business and industry - gives a good return in GDP and doesn’t lead to inflation
- To consumers – leads to consumer price inflation
- Into real estate and financial speculation – leads to asset price inflation and gives a poor return in GDP and shows up in the graph of debt-to-GDP. It's too much of type 3 lending that has caused neoliberalism its problems. Werner explains in the video: Money creation in the modern economy (Mar.12.2014).
- Sept.22.2013: How The Economic Machine Works. This animated video answers the question, "How does the economy really work?" Based on Dalio's practical template for understanding the economy, which he developed over the course of his career, the video breaks down economic concepts like credit, deficits and interest rates, allowing viewers to learn the basic driving forces behind the economy, how economic policies work and why economic cycles occur. Ole Bjerg, Youtube.
- May.01.2012: 97% owned. When money drives almost all activity on the planet, it's essential that we understand it. Yet simple questions often get overlooked, questions like; where does money come from? Who creates it? Who decides how it gets used? And what does this mean for the millions of ordinary people who suffer when the monetary, and financial system, breaks down? Michael Oswald, YouTube.
- How The Economic Machine Works
- Martin Wolf, Financial Times: Stop banks from creating money
- The Bryan Callen Show, ep. 320: Not So Austere – Mark Blyth
- ]https://www.youtube.com/watch?v=CI5CFQXJxcA Fractional Reserve Banking... not what the textbooks tell you.]
- Short-Term Politics -vs- Long-Term Returns: Lessons from History
- Money in the modern economy: an introduction
- Quantitative Easing - How It Works
- BBC Shopping: the Supermarkets Shop Smart
- Today's Modern Food: It's not what you think (1/2),ref
- The Federal Reserve: Biggest Scam In The History Of Mankind - Hidden Secrets of Money Ep 4
- Secrets The Food Industry Doesn't Want You To Know, Monsanto's crops are self-fertilising so don't need bees; + bees die when they feed on the flowers 'cos Roundup kills them. Farmed shrimp: eye ablation + antibiotics + filthy habitats. Cheese product != cheese. Fibre != natural fibre, == synthetic fibre. Corn-fed cows get E.coli, so meat is treated with ammonia to kill it.
Northern Powerhouse Initiative
- Dec.06.2018: Oligarchs hit as Home Office suspends ‘gold-plated’ visas. Oligarchs and the super-rich wishing to come to Britain are to face new curbs as the govt suspends “gold-plated” investor visas from midnight. The move is part of a crackdown on organised crime and money laundering. The “Tier-1” investor visas give people who are willing to bring £millions to Britain a fast track to settlement in the country. Richard Ford, The Times.
- Feb.2015: Corruption On Your Doorstep. How corrupt capital is used to buy property in the UK. The research found that 75% of properties whose owners are under investigation for corruption made use of offshore corporate secrecy to hide their identities. Findings include the fact that 36,342 London properties - totalling 2.25 sq miles - are held by offshore haven companies. Transparency International UK.
Limited Liability Partnerships
LLPs are popular vehicles because the partners do not bear legal responsibility for the firm’s legal obligations or debts.ref LLPs have historically been attractive to money launderers.[Private Eye, Where there’s muck, there’s brass plates] They do not require real people to be partners, allowing them to be controlled by two companies based in secrecy havens, turning them into anonymous companies with a UK ‘wrapper’.
LLPs are particularly popular with money launderers, representing over 50% of corporate vehicles Transparency International UK has identified in large scale money laundering. TI-UK's analysis found that the majority of LLPs used in high-end money laundering were effectively being used as anonymous offshore vehicles with UK addresses.ref Pretty much the same goes for Scottish Limited Partnerships.
Trusts are another vehicle used by corrupt individuals to hide illicit funds. Like companies registered in secrecy jurisdictions, the lack of transparency around who controls and benefits from trusts is abused to mask the identity of those who have criminal wealth to hide.ref Both the OECD30 and the Financial Action Task Force identify trusts as a money laundering risk.ref
Under the Money Laundering Regulations 2017, express trusts with tax consequences in the UK are required to maintain registers of beneficiaries with HM Revenue and Customs - but this will not be made public. As more legislation is introduced to bring transparency to the beneficial owners of companies and partnerships, the use of trusts to own property could become more popular among those seeking anonymity.
- Nov.01.2018: Money-laundering crackdown on public schools and law firms. Security minister Ben Wallace pledges to focus on where illegal cash is spent. Wallace has in his sights the lawyers and accountants, public schools and car washes that facilitate or benefit from this wrongdoing – and are, he claimed, as bad as the criminals themselves. Pippa Crerar, The Guardian.
- Sept.30.2018: Forget the pledges to act – London is still a haven for dirty Russian money/ After Salisbury, the Tories said we would get tough on rich Russians. But billionaires are still coming and sanctions are nowhere to be seen. Oliver Bullough, The Guardian.
- May.21.2018: Russian 'dirty money' is damaging UK security, MPs say. Government must stop money laundering by ‘kleptocrats and rights abusers’, which is helping Putin subvert international rules. The Foreign Affairs Select Committee has warned that the govt is putting national security at risk by allowing “kleptocrats and human rights abusers to use the City of London to launder their ill-gotten funds to circumvent sanctions”. Conservative MP Tom Tugendhat, the committee chair, said: “We can no longer allow ‘business as usual’. The scale of damage that this ‘dirty money’ can do to UK foreign policy interests dwarfs the benefit of Russian transactions in the City. On Mar.16 – two days after the govt announced the expulsion of 23 Russian diplomats from the UK following the Skripal poisoning – Russia raised $4bn (£2.97bn) in eurobond issuances, nearly half of which were bought by investors from the UK,” the report said. A day earlier Russian energy company Gazprom raised €750m (£656m) in a bond sale. The ease with which the Russian govt was able to raise funds in London despite the strong measures that the govt took in the wake of the Salisbury attack raises serious questions about the govt’s commitment. The committee also said the flotation of En+, a Russian energy company controlled by oligarch Oleg Deripaska on the London Stock Exchange last year, was also an example of “the contradictions inherent in UK government policy towards Russia”. Rupert Neate, Patrick Wintour, The Guardian.
- Mar.22.2018: Labour urges crackdown on Russian money laundering through Scotland. Party says almost 17,000 shell companies based in Scotland are flouting the law. More than half of all Scottish limited partnerships (SLPs) - structures popular among private equity firms and investors in the former eastern bloc - have not disclosed the identity of their beneficial owners, despite new rules introduced last year. More than 100 SLPs were used to launder $20bn to $80bn between 2010 and 2014 in the Global Laundromat. Richard Partington, The Guardian.
- Mar.21.2018: The UK Doesn't Prosecute Money Laundering - It is High Time It Should. Despite the UK’s rhetoric about wanting a “world leading reputation for integrity” as a financial center, it has never prosecuted a single company or bank for money laundering. Given the scale of money laundered through the UK, this is pretty extraordinary. London has long had a reputation as the Laundromat of choice for corrupt actors globally. Despite official acknowledgement of the problem, the UK’s financial sector regulator, the Financial Conduct Authority, which has primary responsibility for prosecuting money laundering, only opened 24 investigations into companies for breaches of the UK’s Money Laundering Regulations since 2007, and has brought zero prosecutions. HMRC, which supervises some of the very high risk sectors for money laundering and has the ability to prosecute, has likewise launched zero prosecutions against any company either under the 2007 or 2017 Money Laundering Regulations. The HMRC has a total lack of transparency about who it has fined and the very low fines it imposes. Kleptocrats and high risk political exposed persons are “potentially profitable customers” for UK banks and businesses. The FATF reviewers should be probing what is behind the lack of prosecutions for money laundering. The UK govt is refusing to take steps to introduce new laws for money laundering and other economic crimes. Transparency International UK found that 73% of the UK’s 27 supervisory bodies for AML (in 2015) had institutional conflicts of interest, acting as both lobbyists for their industries and supervisors. The Treasury Committee has long questioned whether it is appropriate for the FCA to act as both a supervisor and an enforcer; the fact that the Chancellor can fire an FCA chief in circumstances where financial institutions are complaining that the regulator is being too tough, points out that the FCA is not as independent as it needs to be. Sue Hawley, Corruption Watch.
- Dec.19.2017: Trusts and the UK: half a step forward, three steps backwards. We called for the registration of trusts in 2013, but the govt opposed it. Now in 2017, the UK has approved registration of the beneficial owners of trusts that meet certain conditions - but information will not be publicly accessible. Nevertheless, if BO registration of some trusts is possible, there is no reason why the law cannot be widened to cover all trusts. Not public; has loopholes, ie only "relevant" trusts); the requirement to be "competitive" - which is just part of the global race to the bottom. TJN’s Nick Shaxson: "The word ‘competitiveness’ sounds moderate, but in reality it is a code word for corporate tax-cutting and financial deregulation, routinely used by every tax haven in the world to defend questionable policies. It deliberately raises the spectre that the rich, banks and multinationals will flee – so as to justify handing them ever more goodies ..." Andrew Knobel, Tax Justice Network.
- Dec.11.2017: Amber Rudd announces new national economic crime centre for UK. Home Secretary Amber Rudd warned that £billions have been laundered through the City of London as she announced a new anti-corruption strategy. Rudd issued the warning as she announced plans for a new national economic crime centre, with the power to task the Serious Fraud Office to investigate the worst cases of fraud, money laundering and corruption. The national economic crime centre will be based within the National Crime Agency and will oversee the national police response to financial crime, backed by greater intelligence and analytical capabilities. Alan Travis, The Guardian.
- Feb.13.2017: Trusts: Weapons of Mass Injustice? This paper seeks to start a debate on the harms that trusts can inflict on societies, and what can be done about it, focusing on trusts’ impact on wider society - the abuses and risks that they create and facilitate. Andrew Knobel, Tax Justice Network.
- Apr.05.2016: What are the Panama Papers? A guide to history's biggest data leak. The documents show the myriad ways in which the rich can exploit secretive offshore tax regimes. Luke Harding, The Guardian.
- Jul.28.2015: Is it game over for money laundering in London’s property market? David Cameron said: “The UK must not become a safe haven for corrupt money from around the world”. He has committed to starting a central register of land owned by overseas companies this autumn, and will be consulting on whether to introduce a register of beneficial ownership of land in the future - but a consultation is all that is promised. Put simply, London property is the currency of corruption. According to London’s police force, most grand corruption cases they investigate involve the purchase of UK property. There are a number of reasons for this... A few years ago the UK did introduce a special tax on homes owned by offshore companies. But this was low enough so that many people just chose to pay the tax rather than to bring ownership back onshore. Dirty money from around the world has been flowing into the London property market for years, so why do something now? Firstly the flow of offshore cash into the London property market is now so vast that it is creating serious economic distortions. Secondly, there is an increasing awareness that a large proportion of this money is the result of money laundering and corruption. George Turner, Finance Uncovered.
Budget / Privatisation / Democracy
- Mar.11.2018: £10bn windfall for chancellor Philip Hammond — but austerity far from over. Philip Hammond is set to bank a £10bn windfall this week as he announces Britain’s smallest budget deficit since 2002. ...the Treasury is expected to undershoot the previous borrowing projection for the 2017-18 financial year by several billion pounds. Tommy Stubbington, The Times.
- Mar.08.2018: For the Tories, eliminating the deficit was just a pretext to slash the state. David Cameron and George Osborne are celebrating this week. But their austerity programme has left lives in ruins. There is an almost delusional refusal among austerity's architects to acknowledge the reality of the last decade – a gaping chasm between the moral superiority Cameron and colleagues attach to the implementation of cuts and the human misery they have caused. It’s easy to find sacrifice noble when it’s other people who are doing the sacrificing. Gutting of services was always the intention. Rather than sound economic prudence, the austerity measures that Osborne and Cameron launched were ideological: an excuse to shrink the state, as cuts to govt spending focused in on social security and public services. Ann Pettifor, director of Prime: Policy Research in Macroeconomics, points out, this was not even economically sound. Many economists stress Osborne’s post-crisis austerity programme actually deepened and lengthened Britain’s post-crisis recession, causing public and private investment to fall further and real wages to decline. Frances Ryan, The Guardian.
- Mar.04.2018: A triumph for George Osborne's austerity plan? Not when our social fabric is in tatters. George Osborne, cheered on by the Institute for Fiscal Studies, basked in self-admiration last week. But there has been another long-term and deeply damaging impact: the decline of Britain's local democracy and accountability. There is growing consensus among economists that Osborne’s post-crisis austerity programme deepened and lengthened Britain's post-crisis recession, causing public and private investment to fall further and real wages to decline. Ann Pettifor, The Guardian.
- Mar.02.2018: Britain is finally back in the black after the current budget ends with a £3.8billion surplus. Current budget ended last year with a £3.8billion surplus, its first since 2001. It is a major milestone on the road to rebalancing the books after costs soared. Figures likely to pressure Chancellor Philip Hammondto loosen purse strings in Spring 2019 statement. But Treasury official insist there will be no change of tack. But when capital spending on infrastructure and other big-ticket items is included, the country borrowed £17.6 bn last year, and the National Debt stands at more than £2 trn. Linkback: George Osborne, Conservatives, BlackRock James Burton, The Mail Online.
Bad Economic Policy
- Apr.24.2018: Lower government borrowing doesn’t prove austerity has been a success. After nearly 10 years of austerity, the Conservatives are loudly proclaiming its triumph. For the first time in 16 years, the UK has achieved a current budget surplus. Total borrowing (£42.6bn) is at its lowest level for 11 years. This is still far short of the overall surplus the Tories originally promised, but Philip Hammond has proudly boasted of building “an economy that works for everyone”. However, in a phenomenon the political scientist Colin Crouch has described as "privatised Keynesianism", households are borrowing more as the state borrows less. The meagre GDP growth forecast over the next 5 years is still dependent on household debt rising from 139% of disposable income to 146%. A recent Resolution Foundation study charted that 45% of the poorest 20% of working age households now endure some form of “debt distress”. As the New Statesman's Crumbling Britain series is documenting, after years of unending cuts, Britain’s public realm is in unmistakable decay. Homelessness, which fell by 75% under the last Labour govt, has risen by 169% since 2010. NHS, Schools, Child poverty, (more) George Eaton, The New Statesman.
- Dec.30.2017: For many, it's difficult to accept that the govt can never run out of £s, because it means that all the pain + suffering of recent times has been gratuitous. It has. There is absolutely no reason why we should tolerate poverty. @PatriciaNPino, Twitter.
- May.01.2015: Mark Blyth McKenzie Lecture 2015 - Austerity and the Politics of Money. Mark Blyth provides a critical assessment of austerity policies across Europe and their effectiveness and impact. Mark Blyth, University of Glasgow, YouTube.
- Mar.10.2018: Millions of families on brink face deepest benefit cuts in years. New study by the Resolution Foundation and the Joseph Rowntree Foundation confirms that the poorest are being hit hardest by continuing austerity. The Guardian, Michael Savage
- Nov.15.2017: Landmark study published in BMJ Open links Tory austerity to 120,000 deaths. Government is accused of 'economic murder'. The Independent, Alex Matthews-King
Public Sector Pay
- Public Sector Pay Cap
- Apr.08.2018: Town hall rich list: 500 council bosses earn more than prime minister. The annual town hall rich list reveals local authority chiefs earning more than ever before, while services continue to face cuts. At least 2,500 council chiefs were paid more than £100,000 each last year — with about 500 of them grossing in excess of £150,000, more than the prime minister earns. The report, from the Taxpayers' Alliance pressure group, reveals that at least 16 local govt bosses received more than £300,000 and four grossed in excess of £500,000 in 2016-17. Birmingham City Council, Edinburgh City Council, Northamptonshire County Council. Caroline Wheeler, Tim Shipman, The Times.
- Mar.06.2018: Philip Hammond is 'hoodwinking' public sector over pay rise. Chancellor would have to cut jobs or cut public services, analysis by thinktank concludes. A report by the Centre for Labour and Social Studies (Class) thinktank, on behalf of the PCS union, said current projections of departmental spending would prevent even minimal increases in wages. It said the figures cast doubt on the govt's claim to have lifted the public sector pay cap, arguing that in practice it would remain in place unless ministers overhauled spending policy. "Our analysis shows what Philip Hammond knows: lifting the public sector pay cap either means further job losses or cutting public services, an impossible and unfair choice". Anushka Asthana, The Guardian.
- Sept.12.2017: Theresa May faces pay backlash after lifting 1% public pay cap. Jeremy Corbyn says Tories are trying to divide and rule workers as prison officers and police dismiss pay rises as insufficient. Theresa May's govt faces months of strife over public sector pay after a decision to lift the 1% annual cap on increases was met with derision from Labour and renewed threats of strikes by trade unions. Following months of pressure over the issue, Downing Street simultaneously announced above 1% pay rises for police and prison officers in the last of the 2017-18 deals, and a wider commitment to “flexibility” for all public sector workers from next year. Peter Walker, Rajeev Syal, The Guardian.
- Aug.30.2016: Cameron 'gave pay rise of 24% to some special advisers' before resignation. David Cameron gave some of his special advisers bumper pay rises just months before they were given generous severance packages. The former prime minister upped the salary of some of his advisers by as much as £18,000 – or up to 24%, according to an analysis by Civil Service World. Linkback: FDA union, John Manzoni, Adam Atashzai, Ameet Gill, Liz Sugg, Kate Marley, Daniel Korski, Nick Seddon, Max Chambers, Laura Trott, Richard Parr, Martha Varney, Kate Shouesmith, Frances Trivett, Public and Commercial Services union, Special Advisers. Press Association, The Guardian.
- Apr.01.2018: Government's Easter pay rise is not all it's cracked up to be. The Tories finally deliver on Osborne's living wage promise, but this is a masterclass in political deceit. When George Osborne promised Britain a pay rise in Summer 2015, he pledged a "national living wage". Three years later, his promise means more than 2m workers received an inflation-beating pay rise of 4.4% on Easter Sunday as the living wage rose for the 2nd time, from £7.50 per hour to £7.83 for those over the age of 25. The increase amounts to more than £600 per year for full-time workers on basic pay. Combined with steps to raise the personal tax threshold, taking more low-income families out of paying tax altogether, it makes for a powerful political message: the Conservatives are the party of the workers, not Labour. "Trust us, we’re putting more money in your pocket." But the policy was a masterclass in political deceit. Even though the promise has been kept, and is in some small way a sign of progress, the average pay of workers remains 6% below its pre-financial crisis peak. Britain hasn't had a real pay rise in almost a decade. The Living Wage Foundation warned last week that a worker on the new govt minimum will receive almost £1,800 less per year than they really need for basics such as housing, transport, childcare and food. The ONS also warned the new govt minimum falls short of average family spending. It reckons mums and dads working full-time would earn £212 per week less than the average amount spent by all households with two adults and two children last year. Put simply, the living wage rise is not what it says on the tin. While the chancellor happily mentioned the living wage rise at the spring statement last month, he glossed over some other significant changes that also take effect from the start of this week. A massive £2.5bn of working-age benefit cuts will take effect from the start of this week, as part of the £10bn of cuts earmarked by Osborne in 2015. A further £2.7bn savings must be found in the year from Apr.2019, just as the UK leaves the European Union. There are already clear signs about the dangers for the economy when households have too little money in their pocket to spend. Several retailers – including Maplin, Toys R Us and Bargain Booze owners Conviviality have gone bust, while others are teetering on the brink. Resolution Foundation, Institute for Fiscal Studies Richard Partington, The Guardian.
- May.29.2018: Austerity in Britain: the view from the US. “After eight years of budget cutting, Britain is looking less like the rest of Europe and more like the United States,” the New York Times declares, “with a shrinking welfare state and spreading poverty.” Arwa Mahdawi, The Guardian.
- Feb.02.2016: Iceland Forgives Entire Population's Debt – Mainstream US Media Silent. Iceland chose a very different way of stopping the crisis of 2008 from the rest of the European countries. The Iceland govt made a conscious decision to hear the requests of the population, and to put politicians and bankers on the bench of the accused three years after their financial excesses sank one of the most prosperous economies in 2008. The result was the govt of Iceland forgave the mortgage debts for much of its population. Before It's News.
- Hiding in Plain Sight: How UK Companies are used to launder corrupt wealth. identified 52 global corruption and money laundering cases involving 766 UK companies. It found that the UK is home to a thriving company formation industry which gives money launderers access to UK firms. The UK’s system to defend against this is failing to prevent the abuse of UK companies. Ben Cowdock, Steve Goodrich, et al', Tranparency International UK, Nov.2017.