I do seriously wonder what, if anything, George Osborne understands about economics and the real world. As the FT reports this morning:
Britain's hard-pressed construction industry has poured cold water on the government's plans to stimulate the economy with a £5bn boost to infrastructure spending and a £20bn investment from pension funds, warning it will make “no discernible difference” in the short term.
Why? Because as the article also notes:
An extra £5bn of capital investment, funded by spending cuts elsewhere, formed the centrepiece of the national infrastructure plan announced by George Osborne, the chancellor, last month as part of an attempt to prevent the country sliding back into recession. [But d]espite the chancellor's announcement actual capital investment by the government is set to fall by £14bn over the next three years, given the much bigger cuts announced in the Comprehensive Spending review of 2010. Spending on infrastructure is expected to drop 30 per cent from £59bn in 2010-11 to £45.4bn in 2013-14.
So, as the FT notes:
“The £5bn merely lessens the fall,” said Noble Francis, economics director at the Construction Products Association, the trade body for the building industry. “Worse still, most of the effects of this ‘boost' won't been felt for at least 12-18 months so it certainly won't be helping construction, or the economy, anytime soon. It will make no discernible difference in the short term.”
This is entirely predictable. First, this was announcing that other people would spend money without getting their prior consent.
Second, as is rightly pointed out by the industry, this only partially corrects previously announced cuts by Osborne: there is no new money in this.
Third, by cutting benefits which are spent with immediate impact this capital spending does in net turn increase the downturn in demand, fuelling the risk of recession.
Fourth, as argued in The Green new Deal, the need is for small projects that can have immediate impact like insulation, solar energy installation and repairs which all have a high local labour content too and not major works right now.
Fifth, as I argue in Making Pensions Work and in The Courageous State, the need is for compulsion on pension fund contributions to public infrastructure projects that create jobs.
These are viable plans. Why isn't Labour shouting about them?
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Probably the reason they [Labour] are not shouting about them is because labour, as was, is no more.
The present “Labour” party is slightly Left of centre, while the Conservative party is slightly right of centre. Neither much to left or right of anything, and hence there is not much difference between them.
Worse, from the Labour viewpoint, is that they are presently led by someone who seems to have no idea where he is going, no idea where he is coming from, and less idea if there is anywhere he wants to be sometime in the future.
In choosing between Ed and David they chose the wrong one
thats what happens when you elect a leader in the way labour did, with the power of the unions behind him……
Voted by members mind…..
You really don’t like democracy, do you?
For goodness sake, SteveT –
a) it’s frequently been the case that Trades Unions have been ahead of the game, in terms of common-sense proposals, not just now (see the many reports Richard has worked on or co-worked on for the TUC), but throughout their history (very many of the most important social changes in our society were union-inspired, the classic example being our whole Health & Safety legislation, which has led to the UK having one of the very the lowest accident rates in the world – a record NOT to be sniffed at, considering the misery caused by industrial accidents and deaths to those injured or left behind). In other words, the Union wing of the Labour movement has been of great value even to non-unionised workers and employees
b) There’s also plenty of evidence to show that economies work better with strong, real unions (not the neutered variety of the old Eastern Bloc, nor the sort of Unions the American Right Wing are after = polite “Staff Associations”, who will nod through every diminution of lawful rights and protections), simply because i) the shop-floor really does often know better than the board-room, and besides, ii) strong unions anf capable management make a good team.
c) Finally, every decision in a Union is subject to some sort of democratic mandate, the classic being the political levy. You have the right not to pay the levy, and once paid, to have some sort of say over how it’s applied. How very different from “shareholder democracy”, where the shareholders have no real say over which Party receives donations (and certainly no say over whose palm is greased in return for favours)
I used my union vote, as a member of UNITE the Union, to vote for Ed Milliband – the exercise of a democratic right, exercised in a democratic manner, to achieve a democratic outcome, and all subject to scrutiny. How much of the discussions, and pressures, and leverage exercised in the clubs of the West End, and other watering holes of the “old boys network” that makes up the establishment are similarly open to scrutiny, and subject to a democratic mandate? Precisely ZERO!
Only when they are so open, and so subject, will you have the right to criticise the Labour movement – but I suspect you would have apoplexy, were you to find out just how much unethical wheeler-dealing and palm-greasing was being carried out behing the corporate veil of secrecy.
Come off it! Wise up!
Hear, hear
Ed : comment deleted for being gratuitously offensive in my opinion as well as contributing nothing to debate
In choosing between Ed and David they chose from the wrong family, in fact going by those two as examples I’d say they chose from the wrong species. If they’re the best that can be offered as leadership candidates then no wonder there’s no Labour party to speak of. They’re geeks, backroom boys, beancounters, nerds, wholly out of their depth in a limelight to which they’re entirely unsuited. With them as opposition the Coalition has no need of friends.
Probably because Labour don’t have anyone who understands economics either.
I have been reading Peter Oborne’s The Triumph of the Political Class over the Christmas period and whilst I am not a particular fan because in many instances he is extremely right wing, his theory about the nature, scope and influence of this ‘political class’ really does have some merit. There is a consensus amongst the leading politicians of all parties to pursue essentailly the same policies. Politicians are drawn from similar socio-economic groups, are metroplitan in outlook and are drawn to politics for financial reasons. The few exceptions who do not tow the party line are marginalised and languish on the back benches. Oborne contends that the major problem with these politicians is that most of them lack any experience of work and life outside of politics. This has been manifested in their complete incompetence in running the great offices of state. I really do wish that this book had not been given as a Christmas present as it just provides another topic for me to rant about, but there again my husband says I rant about these things anyway.
Best Wishes to everyone for the New Year.
Ranting is good for the soul!
The trouble with democracy is that the good leaders rarely get elected.
But….do we really have a democracy, or do we just have to make the best of a bad lot ?
It is a horrible situation. If nothing else, John Major is likely to go down in history as a Trivial Pursuit Q – “last PM to have done a normal job”.
Back in the day, Labour MPs had been Trade Unionists, Conservative MPs had been Company Dirs. In their different ways, both had experienced real life.
Nowadays, the apparently accepted progression is school:student:activist:party worker (or trainee barrister):party researcher:MP:Minister:PM
They never show their faces outside Westminster. No wonder we’re in such a mess !
I agree
I seriously wonder whether MPs below 35 and even 40 should be barred
“In his message, Mr Miliband said he was not prepared to stand idly by.
“When so many are sceptical about politics the easy route for politicians is to join in and accept the cynicism.
“To say simply that in hard times nothing can be done. But that’s not why I came into politics and it’s not what the Labour Party stands for.
“My party’s mission in 2012 is to show politics can make a difference. To demonstrate that optimism can defeat despair.”
Mr Miliband said the autumn statement had been more generous to bankers than to the lowest earners, and said Labour would bring in a more “responsible capitalism”.
“I believe this country needs profound change, not small change.
“Not to seek simply a continuation of what Labour did in government but to renew and reinvent our party’s mission in response to the urgency of changed times.
“Everything I have seen and done since I got this job has convinced me I am right to believe that.
“Throughout our country’s history, tough times have seen us not lower our sights but raise them.
“We need equal ambition for the future if we are to avoid our country heading further and faster in the wrong direction: a lost generation of young people, Britain struggling to compete in the world, and greater inequality.”
http://www.bbc.co.uk/news/uk-politics-16356763
This is the same business that wants nil taxes on business and personal taxes structured so that only the poorest pay. At the same time, they call on government to spend to bail them out. Where do they think the money to bail them out comes from?