The Wisdom of the ages.....

I don't know how long I have been reading William Keegan in the Observer and the Guardian: all my life, it seems, and he never fails to hit the mark. Keegan is an economist who understands that economics is nothing without social, historical and political context, a thinker who views events from a wide perspective. He also has a phenomenal memory for precedent and example. When you read Keegan you don't just get the dry statistics of GDP and GNP and OECD, or judgement of current situations in isolation. You get a lesson in economic history, political precedent and personal anecdote. All of it highly relevant.

Today he has an article in the Observer which revisits the economics of 1952, revives the ancient ghost of "Butskellism", and makes acute comparisons between the situation then and the current policies of George Osborne. In doing so it highlights the eternal and important differences between Labour and the Tories which too many people dismiss and deflect.

Listing Gaitskells' criticisms of the then Tory Party's economic policy, he notes;

"1. Breach of [electoral] promise. 2. Pandering to vested interests. 3. Reactionary social policy. 4. Gross incompetence and muddle."

As Keegan comments "plus ca change..." The list is the same as Ed Balls has been levelling at the Cameron government and its Lib Dem poodles.

I won't plagerise any more of Keegan's article. It stands for itself and you should read it here...

Cuts "Regressive" - Official!

Here's a couple of quotes "

Nick Clegg Apr 2010 IFS... "concluded that the Lib Dems’ plan is the most credible." 

Nick Clegg Oct 2010 IFS..... "distorted and a complete nonsense"

The Institute for Fiscal Studies (IFS) has been the Lib/Con coalition's think-tank of choice: Nick Clegg thinks (or thought, see above) that it was wonderful when it endorsed his plans. It is certainly one of the most respected organisations commenting on economic matters in the UK.  George Osborne was so impressed that he even poached Andrew Dilnot, the chair of the organisation, to take charge of his own creation, the Office for Budget Responsibility.

So when the IFS says George is lying, you have to sit up and listen. In the IFS presentations on the cuts, the IFS acting director, Carl Emmerson says that the claim by Osborne that the cuts are, at 19% of departmental budgets, less than the 20% Labour was committed to, is untrue. To quote;

"...But the new Government has already implemented cuts to spending in this
year, thereby reducing the base for Mr Osborne’s comparison. So, by 2014–15 departmental spending is forecast to be below the level implied by the plans set out in Labour’s last Budget. And because this is true, any like-for-like comparison of spending in “unprotected areas” would also be higher in 2014– 15 under the last Government’s plans than under the new Government’s plans.."

He also points out that the cuts are regressive

"....The Treasury’s modelling shows that the benefit measures announced yesterday will hit those in the bottom half of the income distribution more as a share of their income than those in the top half...."

and hit the poor hardest particularly poor children

"...benefits will be focussed more on pensioners and less on families with children....".

None of this is a surprise: I have no doubt that the cuts are as much idelogical as economically driven, they are too deep and too quick and the aim is to end the Welfare State as we know it. It appears more than two thirds of the population agree with me.

But there is one aspect I have found particularly hard to bear...and that is the unseemly gusto with which George Osborne announced the cuts and the cheers with which Tory/Lib Dem MPs greeted them. It is one thing to believe (wrongly IMO) that you have to make savage cuts: it’s quite another to do so with unbridled enthusiasm and little apparent thought for the practical result of your actions.

When hundreds of local authority social workers or care assistants are sacked and their clients suffer because of these cuts, and when benefits are denied the poorest and most deserving, we will remember those whoops of delight from the Lib/Tory coalition and understand the kind of people to whom we have given control of our society.

By then, unfortunately,  a lot of damage will have been done, damage that a future Labour Government will have to addresss and fix.....just as they had to salvage civil society after the savagery of Thatcher....... plus ca change...

Let them eat promises...

The coalition promised that their cuts would be "progressive" and that the poorest "would be protected". Various Lib Dems have been trumpeting how the managed to soften the Tory stance and get the cuts to be more humane, less vicious...

A survey from Age UK finds evidence to dispute this rosy scenario......

"In cash terms, the poorest over-75s will lose an average of £2,030 worth of services by 2014-15 – which works out at a third (33.7%) of their household income.

Things don't look much better for the 65-74 age group either - they will miss out on £1,870 worth of services by 2014-15; just under a third (29%) of their net income.

Taken across the whole society, the research for Age UK shows that there will be serious losses for all households, but particularly for younger families with children and for older pensioners. "

Nobody I know ever actually believed that George Osborne's cuts would be so sensitively targetted and that the Conservatives would suddenly find a deep well of compassion for the poor in their traditionally hard souls.
 
These findings (and other figures published recently by the IFS)  show how right we were.
 
The big and unanswered question is, as ever, about the Lib Dems and how can they find it in their supposedly "liberal" conscience to go along with the Osborne cuts and the effect they will undoutedly have on the poorest people in our country?