I had a conversation a couple of days ago with a person who asked if I would be of service to the current government, if asked. My answer was an unambiguous yes, although caveated with two things, the first being my belief that I might have appropriate skills and the second being that I thought the task sufficiently useful to justify the demand on my time. I did, after all, serve on the General Anti-Abuse Rule committee for the last government.
I make the point for a reason: there are those who think I object to this government per se, and that is not true. When I object to this government it is because they are doing things that are harmful to society. Go back into the history of this blog and you will find I did, once upon a time, do the same to Labour.
Why say that this morning? Simply because having spent some time, as is my habit at this time of the day (I am writing at 7am) reviewing the morning's newspapers I have a feeling we are currently suffering the madness of King George.
James Guthrie has an article in the FT this morning entitled:
A sell-off funded by a raid on housing would be monumentally wrong
The article, entirely reasonably in my view, objects to the plan now being floated for the government to sell its £44 billion of subordinated debt due by Housing Associations. The only reason to do so would be to get it off the government balance sheet for ideological reasons. The debt would have to be sold at a massive discount as it carries no right to interest. The only way a return could be paid would be by Housing Associations having to pay proceeds of housing sales to bondholders rather than invest in new homes for people who need them in this country.
Politely, this is dogmatic driven madness. As Guthrie concludes, Osborne needs to change his mind, saying:
Don't be a pea brain, George. Be a Peabody.
Peabody was, of course, the banker who created the trust named after him to house low paid City workers.
Then there is Martin Wolf. His article in the FT has the headline:
Cuts to tax credits are both a crime and a blunder
His conclusion is:
The best route is to combine a carefully assessed minimum wage with subsidies aimed at supporting families with children and encouraging them into work. That is precisely what the UK had. There is no good reason to throw this away so casually.
I might argue that a basic income would be better still, but the point is that cut away the dogma and someone who is far from a natural left-winger can see no logic to what Osborne is doing.
Let's move on to another FT piece. This time it is Barack Obama, not all of whose article (especially re TPP) I agree with but where this comment makes complete sense:
Fifth, the world agrees on the need for greater public investment, especially where interest rates are low. That is why I am pushing Congress to create jobs today and tomorrow by adopting a long-term infrastructure plan this year.
In contrast this is actual and planned UK government investment spending over 20 years based on HM Treasury budget reports and OBR forecasts:
The message is clear: despite economic slack, and despite low interest rates and massive UK spare economic capacity there's no planned spend to boost the recovery here. It's little more than business as usual. And why? Let's go back to Martin Wolf:
There is no strong reason to run an overall surplus by the end of this parliament: at a time of extraordinarily low interest rates, the case for borrowing is strong.
But the dogma rules the economic logic, so investment will be rationed.
And one more example? This from Giles Fraser in the Guardian talking about the Bank of England jamboree aimed at engendering trust in bankers this week in which George Osborne took part. Giles has his doubts. As he puts it:
The purpose of all this touchy-feely openness? To address the widespread worry that the City has lost its social licence
But that licence is vital to George: the City are the people he wants to provide the private debt that will let him repay his own debt. But as Giles says:
In my parish, just a mile or so from the City, the growth industry is still food banks. And until that changes, you won't find me hugging a banker or praising their social usefulness.
Quite so. But dogma is designed to suggest we should.
And none of this bodes well for the spending review coming up. Are we facing the madness of King George, or just his dogmatic divisiveness? Does it matter if the outcome is the same?
My only comfort is that I am not alone in worrying about the question, and as importantly, the consequences.
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And yet, un-reported, things seem to be [very] quietly moving along……interesting that Mr Osborne seems to do things very quietly….
http://www.constructionenquirer.com/2015/11/12/hiring-spree-sees-atkins-add-nearly-1000-staff/
As with everything it’s the detail which helps to determine the likely impact and outcomes.
What sort of jobs are they? Full time? Part time? Zero hours? Long term? Short term contract? Permanent? Self employed franchise? A mixture (and if so what percentages)?
Where are the actual jobs going to be located? Across the UK? The overheated (in comparison with the rest of the country) South East and London? Boy George’s much lauded Northern Powerhouse? Scunthorpe? Redcar? Lanarkshire? Scotland? Wales? Offshore? A mixture (and if so in what quantities)?
Assuming best case scenario of full time, permanent, within and across the UK, will any, or the bulk, or all of the Labour be imported?
Will the company be meeting all its tax obligations?
Will the company be requiring/does the company receive any subsidies from the rest of us taxpayers?
When the relevant details are to hand a more comprehensive assessment as to the relative merits and impact can be made.
What a load of blather Hansell. No surprise that you can’t simply concede that a company creating 1000 jobs is generally a positive.
It’s called the scientific method Jim, considering all the relevant information rather than ignorantly discarding anything that does not fit a simplistic and simple minded faith based view of the world.
You might just as well deny the force of gravity.
I agree – there seems to be an element of saying one thing and doing another – rather similar to when govt expenditure increased in 2013/14. You might put that down to a pre general election spurt but the reason for continuing not to practice what you preach (if that is what is happening) is a mystery to me.
“And yet, un-reported, things seem to be [very] quietly moving along……interesting that Mr Osborne seems to do things very quietly….
http://www.constructionenquirer.com/2015/11/12/hiring-spree-sees-atkins-add-nearly-1000-staff/“
Well..I suppose those 1000 jobs will make a slight dent in the 10,000-12,000 plus jobs lost due to recent steel plant closures.
Probably. However, the point was that infrastructure funding seems to be quietly being released.
The steel plant closures were always going to happen, the unions knew that from day one.
The steel produced (while of high quality) was vastly overpriced, compared to state-subsidised steel from China and India. The cost of producing steel in the UK is much higher than steel available from other countries due to higher energy costs and higher wages. Plus, government investment in keeping the plant open is not forthcoming. When the furnaces are shut down, the plant will never re-open. In my time working in Engineering, I noted the very low quality of imported steel. Much of it was only useful as feedstock for blast furnaces!
Hopefully the teams producing steel for high-rise building (loads going up in London) will notice the imperfections before fabrication….
“The steel produced (while of high quality) was vastly overpriced, compared to state-subsidised steel from China and India.”
Well..much like clothes and textiles made in this country (are there any left?) are “over-priced”.
If they are made by developing countries being paid literally pennies an hour, then our clothes would be vastly over-priced in comparison.
The thing is, China subsidises it’s steel – don’t. The government could have invoked protection measures keeping underpriced imports out – it didn’t.
Like industries before them, they were allowed to die.
It isn’t economic reality letting steel die. It’s economic illiteracy.
It is quite unbelievable that Thatcher wasted the fantastic windfall from North Sea Oil on ideologically making people unemployed and crushing the unions, and now Osbourne instead of using the opportunity of low interest rates is further and probably fatally destroying the UK economy. And people vote Conservative because of their handling of the economy!
There will certainly be no Great left in Britain by the time this to have finished, our economy and our environment will have been trashed.
As always, I point out that George is neither mad nor stupid.
If you disagree with someone and you do not understand their motives, it is easy to call them crazy, and deride them for failing to achieve the things you think their objectives ought to be.
The Osborne agenda is to maximise the concentration of wealth.
Review his successes – and you are describing another one here – and criticise him for his aims, not for ‘failures’ he celebrates in private, nor for deviating from the agenda you believe he ought to have.
Above all, attack the agenda, not the smokescreen: why should he bother deflecting ineffective criticism that was aimed to miss?
The Osborne agenda is to maximise the concentration of wealth.
I can accept that this is true but are present policies the best way to achieve this outcome? They aren’t much different to the economic policies of the 30s. Did they ‘work’ then in this respect? I’d put a slightly different slant on it.
The Sunday Times rich list largely consists of individuals who were born outside of the UK, have made their money oustide the UK, but have immigrated to the UK, presumably, for tax reasons. So we have to ask is if they are using their wealth to ensure the economy is being run too much in their interests?
I have to admit I am missing your logic
I’ve suspected for some time that the Grim Reaper is on his way the scythe down social housing and now it looks like the pretext is there.
As someone living in a Housing Association house (in a more expensive part of the country)I’m expecting this over the next few years, perhaps my rentier-par-excellence M.P will become my new landlord (he’s already got a portfilio of properties in London as well as the inherited stuff).
It’s the next logical step for the Tories as they have successfully turned HA tenants into social pariahs already by alienating them from the ‘rungless ladder’ climbers patted on the back as ‘hard working’ or ‘doing the right thing.’
Nile “The Osborne agenda is to maximise the concentration of wealth.”
But with what end in view?
What’s going to happen when he’s done it? Do the rich just count their sheckles and stand by with their fingers on the new trident button whilst the rest of us dive about in the mud looking for pennies?
What I’m trying to fathom is that, never mind us, it doesn’t actually seem much of a life for them!
The aim is simply more wealth
This is the fulfilment of the theory of conspicuous consumption first created by Veblen
Well isn’t this why some tend to think he’s a twit then? Fulfilment of the theory of conspicuous consumption is no fulfilment at all.
Agreed
No. Welfare states are extremely expensive places to hire labour. Non-welfare states aren’t. Look at a lot of 3rd world countries & yo’ll see that while imports &, typically, oil & fuel are cripplingly dear you can hire cleaners/garderners/guards for virtually nothing. They will be happy to make a few coins &, basically, come in out the sun.
Guards are, obviously, a necessary corollary to living in an extremely unequal society.
With my marketing hat on, I wonder whether ‘GFI’ would be a good acronym to replace ‘PFI’ – with the G for Government of course. It sort of commercialises it?!
And perhaps gives the shorthand that is so needed to sell to the public?
“I had a conversation a couple of days ago with a person who asked if I would be of service to the current government, if asked. My answer was an unambiguous yes,”
I do t understand why you would say this as a voice of independant reason. You will be come an establishment voice and be swollowed up. Remember that keeping you enemies close at hand give you an advantage over them and i fear that you independant voice will dissapear within the conservative murdoch consortium.
I did the General Anti-Abuse Rule as I felt with worthwhile and do not think I lost my voice as a result
I would do it again
BUT I would have to feel it worthwhile
The General Anti-Abuse Rule as reported by you was I believe in July 2013?
since then there has be Mr Corbin September 2015 and you seem to be in favour of corbynomics so I still feel that it is dangerous for you to side with a particular party as I fear for your reputation
I am not having a go at you, but as I follow you and agree with your independent voice
I Worry for your independence as the Liberals found out to their cost .
Rod
I am somewhat confused by what you are saying
The general anti-avoidance rule was based on an idea I discussed with the Lib Dems
Jeremy Corbyn borrowed a pile of my ideas
So have the Greens
But I am not a member of any party
So what do you want me to do?
Just be tread carefully
Dear Friends
I say yet again that the Osbourne’s purpose it to destroy – not build. The fact is that post modern capitalism has almost destroyed itself and Osbourne’s policies are the last gasp of a dying mantra – a ‘grab what you can before it all goes’ mentality.
I concede that there are some really stupid ideas such as bringing in Chinese investment potential to avoid the Government forking out for home grown infrastructure projects. But even this is so the Tories can bribe the electorate with tax cuts.
I’d ask you all to stop thinking that he is stupid. He is not. His is a twisted sort of method – but a method it is nonetheless.
Accepted!
But he he is clever in pursuit of a mad objective
‘Clever in the pursuit of a mad objective’.
Yes – exactly. You’ve nailed it Richard.
I don’t think George would see it as either mad or unobtainable.
If you go back to 1890, say, a tiny handful of people owned the country & all its property & the lives of the great majority of people were predicated on their working for that tiny minority, directly or through Government.
You’re saying we can’t go back to that world, to, say, the world that ‘Brideshead Revisited’ remembers so fondly. I think George would say, “why not if the peasants are so stupid as to vote for their own enserfment?”
I have not disputed Osborne is clever in pursuing his aims: he is
And you may well have his vision right
But it is still mad
Going back to the days of Brides head Revisited is not the objective. Certainly the majority worked for a minority who held the bulk of the wealth. However, that background context, which had existed for centuries, had changed in many subtle ways following the waves of mercantile and industrial capitalism which (at least for a time) have superseded the feudalism on which that relationship was based.
The majority had, over time, wrested some serious concessions. Granted, a lot of those concessions had been paid for by transferring the costs onto people’s and populations in the colonies. What those concessions did produce was the incentive for the owners of capital to invest in new waves of technology to offset the concessions that had been obtained.
That is no longer operating and has not been operating for at least four decades. The concessions of previous waves and generations are being taken back and the economy is largely a rentier one without the old “burden” of noblese oblige. Much of what once required armies of peasant labour can now be done by machine and that trend is set to continue to its logical conclusion.
The majority are viewed by these people as discardable. Having to “waste” any part of “their” wealth paying for anything, including servants, is not on the agenda. As is been increadingly observed we are beyond Brideshead Revisited, or even Oliver Twist, and heading towards neo feudalism but without the two way obligations.
“The best route is to combine a carefully assessed minimum wage with subsidies aimed at supporting families with children and encouraging them into work. That is precisely what the UK had. There is no good reason to throw this away so casually.”
That’s actually very interesting Richard. I support a JG, but will support JG, basic income, tax credits any system better than at the moment.
The job of looking after children in society is created the instant that a child is born. We apparently have no trouble with the state paying people to look after other people’s children, but we have huge problems with paying people to look after their own. Yet the job is essentially the same in both cases.
That dilemma becomes even more stark when you have a state run Job Guarantee. Is it really rational to pay a third party to look after the children so that you can pay the parent to work in a created job? It is clearly cheaper to pay people to look after their own children if that is what they want.
Basic income works for me
I don’t get the jobs guarantee idea, partly for the reasons you note