This budget could lead to 1.6 million job losses
I am intrigued by the debate on public sector employees. I took part in a phone in on BBC Radio Scotland yesterday morning and you’d think these people are the devil incarnate based on some comments.
I decided to have a quick look (no more) at what they do. I used UK government statistics created by public employees to find the answers, and then wondered whether I’ll be able to do so in the future when all the cuts have taken place?
So, first things first, at end 2009 how many public sector employees are there?
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Tabloids play their anti-German puns
Well, you certainly could not accuse the tabloids of moving on from the past.
via @JonathanHaynes
Are they ever going to grow up? The Sun isn’t that bad, but the Star…?
New government housing policy: make people homeless
In yesterday’s Budget, the Tory/Lib Dem government set out their key housing policies over the next four years:
1. Increase homelessness.
2. Reduce the number of homes available for rent by people who are unemployed or in low paid work.
3. Ensure that people on low incomes are evicted from more affluent areas and herded into ghettos.
4. Increase overcrowding, and therefore increase ill health and reduce educational attainment.
5. Increase personal debt amongst people in housing need.
6. Take £15 per week away from people who have managed to find low cost housing.
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Here are three ways to respond to Tory cuts
Since the banking crash it’s been fashionable for lefty commentators to quote Obama’s chief of staff Rahm Emanuel: “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.”
But the unpalatable truth is that while we’ve been talking about not letting a crisis go to waste, the right have been getting on and doing it.
Or, in the foggier language of Mark Littlewood, director of the free-market Institute of Economic Affairs: “We are trying to ensure that necessity is the mother of invention, in that the deficit spurs the coalition to take a broader view of what the public sector should be doing.”
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Dan Hannan claims VAT is not regressive
Here is the leading light of the Conservative Party:
On the contrary, VAT correlates closely to disposable wealth: rich people pay more, because they tend to spend more. Almost every other type of levy is paid disproportionately by one group or another. Property taxes fall especially heavily on pensioners; income tax isn’t paid at all by around a third of the population; the poll tax hit the working poor. All of us, by contrast, are affected by a sales tax, because we all buy things.
…
I just don’t understand the Labour Party’s contention that indirect taxes of this kind penalise the worst off.
Erm…? Where do we start? Does Daniel Hannan need a simple lesson in economics?
Maybe he could watch this video:
It wasn’t produced by the Labour Party but actually the socialists at the TaxPayers Alliance. Even they think a VAT is regressive.
There’s only word for Hannan: bonkers.
Banks celebrate being let off lightly
George Osborne could see the symbolic political value in putting a tax on the banks, but has squared the circle of pleasing City opinion by producing a smaller levy than many had anticipated.
The Wall Street Journal reports that the UK banking sector “can count itself lucky”.
Robert Peston of the BBC says the Tories won the argument with the Liberal Democrats over the size of a bank levy, with their coalition partner proposing a £5 billion a year tax.
That £2.5bn is a fraction of what the Tories’ coalition partners, the Liberal Democrats, wanted to extract from the banks.
And the tax rate – 0.04 per cent next year, rising to 0.07 in 2012/13 – is well short of the 0.15 per cent rate proposed by President Obama (although his tax would die after a bit more than $100bn has been raised).
Which probably explains why banks’ share prices didn’t move much today (Lloyds up, RBS up less, Barclays down a bit).
The head of equities at City Index said that UK retail banks also rallied after the headline grabbing bank levy came in lighter than perhaps anticipated.”
Another analyst, off the record, said that, any levy set at less than £5 billion might be regarded by some as a “rounding error”.
City voices are taking care not to publicly sound too relieved.
The British Bankers Association offered a measured response, understanding the reasons for the tax while going through the motions of warning about competitiveness.
However, Peston suggests that Lloyds, Royal Bank of Scotland and Barclays may face a significant bill, while most other banks and building societies may well escape paying much, or anything, towards the levy at all.
Labourites: Screaming betrayal at Libdems won’t work yet
Sometimes I’m taken aback by how tone-deaf Labourites can be. There’s tribalism and then there’s just downright silliness.
I suspect a lot of Libdems do actually feel aghast at the budget yesterday, and with good reason too. If the Libdems are ignored on most economic advice other than a few tidbits here and there, sooner or later the party activists will start deserting.
But are they going to listen to Labourite accusations of betrayal right now? I highly doubt it.
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Remember when Tories campaigned against VAT?
Yesterday George Osborne claimed that the VAT rise was “unavoidable”.
But last year the Conservatives were attacking the Labour party for the possibility that Labour might raise VAT to 20%.
This is the poster they unveiled.
via @jamesgraham
And then there’s this interview with Cameron around the same time:
Reporter: Are you able to make the voters any sort of promise on VAT? Ar eyou able to rule VAT rises out?
Cameron: Well what we can say is that we’ve set out our plans. Our plans involve cutting wasteful spending and stopping the National Insurance rise. Our plans don’t involve an increase in VAT. We’re saying it should be wasteful government spending that’s cut rather than putting up taxes as the government suggests. And the only party that has had plans to put up VAT has been the Labour party…
Watch (2min 5secs in):
So much for Conservative honesty with the public.
Afghan realities
I was not planning to write an opinion piece on Afghanistan for a few days, because I think that the more detailed arguments about where we go from here are actually more interesting than the usual general banalities.
But I would like to respond to a few of the points that David Osler makes in his cross-posted piece. Apologies that this will take the form of some para by para responses, which I realise can make articles seem a bit more aggressive than the author intends.
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Afghanistan: 300 not out
Marine Richard Hollington has today been named as the 300th member of the British armed forces to die in Afghanistan since the invasion of 2001. Meanwhile, the Ministry of Defence has confirmed another victim of the fighting, taking the tally to 301.
We are not involved in a numbers game here, of course. For the families and friends of the dead, the losses will be felt just as keenly, regardless of where their loved one happened to fall in this particularly grim ordinal roll call.
Like most people on the left, I was opposed to the war on principle nine years ago, and I write on the assumption that the majority of the readers of this blog shared that stance; there may be some who thought then, or perhaps even think now, that the move was justified.
But rerunning arguments from the past is of merely secondary pertinence. Let us instead stick exclusively to the consideration the circumstances immediately before us.
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