Guest Blogpost: Richard Lynch – No medal-winning performance from the coalition

During the past month, Britain’s sporting heroes in Team GB have taken on the world at the Olympic Games and, with performances which exceeded expectations, have delivered our biggest haul of medals for over 100 years. What a contrast with the other Team GB, the Conservative/LibDem coalition, which also promised success but has delivered a shrinking economy, increased unemployment and debt, poorer social provision and the biggest squeeze on the living standards of ordinary people in living memory!

When the coalition took office two years ago, it inherited an economy which had been hit hard by the worst global recession since the 1930s but was recovering and had been growing for five quarters. Instead of consolidating and encouraging that growth, however, it embarked on an unnecessary and unnecessarily savage austerity programme which choked off recovery, led to growth contracting over five of the following seven quarters and resulted in a return to recession.

Yet, when announcing his first budget after taking office, George Osborne said that if he didn’t introduce a harsh programme of tax increases and spending cuts, Britain would face:

‘Higher interest rates, more business failures, sharper rises in unemployment, and potentially even a catastrophic loss of confidence and the end of the recovery. We cannot let that happen. This budget is needed to deal with our country’s debts. This budget is needed to give confidence to the economy. This is an unavoidable budget.’

George Osborne at Conservative Spring Forum 20...
George Osborne at Conservative Spring Forum 2006 in Manchester. (Photo credit: Wikipedia)

Bold words but what has been the outcome? Interest rates have remained low but, as Nobel prizewinning economist Paul Krugman has pointed out, they have remained low in the USA and Japan as well, countries with higher debt levels which didn’t rush into austerity.

On the downside, however, business failures have continued, with almost 4,000 companies going under in the last quarter and retail insolvencies rising by 10.3%. Unemployment remains well above the level Osborne inherited in May 2010, over a million young people are out of work and underemployment has become a major problem with a record 1.42 million people working part time because they can’t find full-time employment. Business and consumer confidence has collapsed to levels not seen since the worst point of the original recession, we have the highest trade deficit in 15 years, national debt is rising and the economy has contracted in the last three quarters, driving us into a double dip recession for only the second time since the Second World War.

And there’s no good news on the horizon either: The Bank of England is predicting a 0.2% contraction in growth this year and probably five further years of economic pain. The National Institute of Economic and Social Research is prediction a 0.5% contraction and the IMF has stated that Britain’s economic outlook is now deteriorating faster than that of any other major economy.

When Britain was facing big economic problems in the 1970s, Dennis Healy said that the first thing to do when you found yourself in a hole was to stop digging. Another smart bloke (either Albert Einstein or Roy Keane, I can’t remember which) said that the definition of insanity was doing the same thing over and over again and expecting different results. But Osborne remains adamant that he will not change course and that there is no Plan B for the economy. Such arrogance from a chancellor and cabinet which have clearly lost the plot is now coming under increasing attack, not only from unions and political opponents but from coalition politicians (one of whom called Osborne a ‘work experience chancellor’), from business organisations and leaders and from the general public. The majority of economists who backed the austerity programme during the 2010 general election are now calling on Osborne to change course. And the IMF, which also previously backed austerity, is now urging the chancellor to think again about cutting back and to focus on growth and on ‘boosting the bargaining power of labour’ to get more demand into the economy.

It’s not as if there is a shortage of good ideas about rebuilding confidence and demand and getting the economy back on its feet again.  For example, stopping or slowing down the public sector and benefit cutbacks (even if only temporarily) would help lower the rate of unemployment, keep people paying taxes and maintain demand in the economy. Borrowing, at our famously low interest rates, to rebuild our creaking infrastructure and to build houses for people to live in, would boost employment in construction and related industries and get people spending again. Putting money back in the hands of ordinary people by cutting VAT (even if only temporarily), ending the freeze on public sector pay and even introducing quantitative easing for people, by creating money to put in the hands of the most needy rather than in the coffers of the banks, would all boost demand and encourage spending.

Indeed PPI refunds by the banks, which totalled £4.8 billion up to May, have already done more to boost the economy than the coalition, because people who have had money refunded have gone out and spent it!

The Olympics showed us that we don’t have to accept mediocrity or assume that we cannot reach new heights. We may have the fight of our lives on our hands but, as the TUC’s Frances O’Grady said, if we keep people together, build confidence and give a sense of hope and vision that things don’t have to be like this, we can build a better world. We can help win that better world by defending our rights in our workplaces and communities. But we can also help win it by mobilising now for the TUC’s national demonstration for a future that works on 20 October. It’s time to stop agonising and start organising!

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

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Disabled people targeted by cuts

An article I want to bring to your attention highlighting how disabled people are being sidelined in society and literally being locked away due to budget cuts – LINK

This is the internationally recognized symbol ...
This is the internationally recognized symbol for accessibility (Photo credit: Wikipedia)

The cumulative effect of cuts to the Disability Living Allowance, Local Councils, Time-Limiting of Employment Support Allowance, Wheelchair voucher allocation, NHS Services and many more means that the most vulnerable in society are most affected by the Tory Liberal approach of cutting too far too fast.

Rhetoric pushed out by even Government Ministers on how benefits are for scroungers and the undeserving out of work has led to it being acceptable to push through cuts that affect people who genuinely have an impairment.

The Osborne Effect

The LabourList website has an illustration of how [in]effective the Tory Liberal Government have been since inheriting a growing economy from Labour – LINK

Their policy of cutting too far too fast has had a negative impact on economic growth. As a result, this Tory Liberal Coalition Government has increased public debt in this country.

Guest Blogpost from Richard Lynch: “So much for cracking down on executive pay!”

English: Me Reading the Financial Times
WikiImage

The way Britain’s top executives have been awarding themselves grossly excessive pay increases, at a time when the rest of us are having to contend with falling living standards, has caused such public outrage that the coalition had to promise action on the issue. But when it arrived, by way of a package of proposals from Business Secretary Vince Cable, it proved to be so weak that its biggest supporters included the top executives themselves!

In what the Financial Times described as “the most far-reaching attempt in a decade to rein in soaring executive pay” Cable proposed:

  • Greater pay transparency, with a single figure and full explanation for each  senior executive’s increase to be given, together with a “distribution statement” showing how spending on executive pay compares with spending on dividends, tax and employee costs.
  • A binding vote at AGMs on executive pay policy and payouts to departing executives.
  • Increased diversity on boards, with two places to be reserved for people who have not been directors before and companies to consider banning executives of one company from sitting on the remuneration committees of other companies.
  • Increased employee engagement, with employees encouraged to ask to be consulted on executive pay and companies having to explain how they have responded.

Calls for companies to put an employee representative on remuneration committees were rejected. Calls for them to publish the ratios between executive pay and employee earnings (currently 102–1 for CEOs in FTSE 100 companies) were also rejected. And the simple expedient of putting a cap on executive pay and bonuses was rejected as well, even though the coalition sees no difficulty in capping pay for public sector workers.

Greater transparency, putting a few new faces on boards and encouraging companies to consult their employees on executive pay are all very well but they will be totally ineffective in moderating such pay. And allowing binding votes at AGMs is unlikely to achieve much either because individual shareholders, who are most likely to oppose executive excess, hold only about 10% of shares. They can easily be outvoted by pension funds (which hold over 12% of shares), insurance companies (13%) and foreign owners (41%) for example. And the executives who control big blocks of shares are unlikely to vote down executive pay deals in case it encourages others to vote down their own pay deals.

So a coalition cabinet made up mainly of multi-millionaires is doing next to nothing to crack down on grossly excessive pay increases for other multi-millionaires. The only surprising thing about this is why anybody should be surprised!

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Cllr Hirani Slams Brent Tory Liberal Hypocrisy

I was absolutely dismayed at the level of hypocrisy shown by the Brent Liberal Democrats and Brent Tories at the Full Brent Council meeting this week. I tabled a motion at the meeting reading, “This Council condemns the £104 million cut to Brent’s Budget over the spending review period”, which Brent Liberal Democrat and Brent Tory Councillors failed to support.

While appearing to fight for local services they have adopted a peculiar position of apparently supporting the Coalition’s chosen method of cutting public spending which has led to more cuts to Brent’s Central Government grant than in other Councils.

There are two main arguments floating around as to why we have a large public debt. In short, one that it was a global economic crisis that led to a collapse of the banking system meaning that the Government had to borrow to stimulate the economy, bail out the financial sector and lost out on projected tax revenue income. The second that Labour public spending was out of control and is to blame for the country’s deficit and deficits of USA, Greece, Spain, Ireland, Germany, France and many more, which we have to pay for now.

Regardless of what line of argument you believe, I thought that all Councillors of all parties would be unified in condemning the scale of cuts to Brent compared to other Boroughs.

Even if you believe that the scale of cuts is necessary nationally and that the debt should be tackled within one Parliament (The Coalition Government’s original plan A on the economy), is it fair that Brent Council has to make cuts in the region of 27-28% of our controllable budget whilst other Councils are not being hurt as bad as Brent? Brent is losing out on £73 per resident whereas Guildford faces a cut of £10 a person and Richmond £5.39 a person.

If Brent Tory Liberal Councillors do blame Labour for creating the deficit, do they believe that people in Brent caused the recession more than residents from other areas and therefore should be made to pay and suffer more?

Are we really all in this together?

The well respected Institute for Fiscal Studies has analysed the figures from the Chancellor’s Autumn statement last week. They show that the poorest in society are taking on the biggest burden as a result of the Coalition Government’s policies.

This graph sums and illustrates their approach:

In addition the Autumn statement is projected to make the richest in society better off when taking pre-announced figures into account. Even if you agree with the Coalition Government’s way of dealing with the deficit, is it right that the poorest in society are paying and suffering more than those who are wealthier and have more ability to pay?

EXCLUSIVE: Government figures value public sector contribution to economy at £130 billion a year!!!!

According to Government calculations, the strikes over public sector pensions on 30th Novermber will cost the UK £500million (LINK).

That is just for a single day’s strike.

So let me see….  if I multiply that figure by 5 (for five working weekdays in a week) I get £2.5 billion…

And if I multiply that by a further 52 (52 weeks in a year) I get a whopping… wait for it… £130 billion!!!!

Given the value of public sector workers to our economy, maybe the Government should work harder to negotiate and maintain a peaceful relationship with them, rather than the bullying and antagonistic approach that we see them adopting today. The Government should value the role of public sector workers and the contribution that they make to our economy and respect them, rather than vilify them.… after all they have done the maths themselves.

Full Council meeting yesterday

Logo of Brent London Borough Council

Yesterday was the first reading of the Budget in the Brent Town Hall Council chamber.

There is a bit of a gloomy outlook with Brent having to make further cuts to the Budget as part of the wider £104 million that Brent has to make over the comprehensive spending review period.

Tory Liberal Councillors did their best to let the bankers off scot-free and set the blame on the previous Labour Government.

However, I spoke and made a contribution saying that regardless of whether you believe that the international banking crisis or the previous Labour Government and Gordon Brown is to blame for the country’s deficit and deficits of USA, Greece, Spain, Ireland, Germany, France and many more…. why don’t we think about Brent for a second.

Even if you believe that the cuts are necessary and that the debt should be tackled within one Parliament, is it fair that Brent Council has to make cuts in the region of 27-28% of our controllable budget whilst other Councils are getting more money?

How can the Brent Tory Liberals defend Brent losing out on resources while other areas are having Budget increases?

I have blogged about this before LINK.

Why should Brent have to cut more than others? If Tory Liberal Councillors do blame Labour for creating the deficit and the Coalition Government are holier than thou, are they still defending the level of cuts to Brent compared to others and supporting the damage made to Brent while other Councils are being given more money?

University applications down

An article on the BBC website has revealed that initial figures show that “University applications for 2012 are running at 9% below last year’s level.”

Even more concerning, is that “when overseas applications are taken out, the figures show a 12% drop in applications from UK students.”

I sincerely hope that it is being monitored what our young people are doing instead of going to University, given the huge intake drop. If people are not going to University because of choice, we cannot fail the next generation by not providing quality further education and training opportunities and support to make sure they are well equipped and have the skills necessary to enter the labour market.

Meanwhile, the One Show on BBC1, broadcasted on Monday 24th October (video only available for a limited time) revealed that when interest payments are taken into account, people who take out the maximum loan amount could find themselves paying £75,000 in debt.

Another survey has revealed that 10% will be put off going to University because of the new fees system that will start from next year onwards.

Coalition in denial about child poverty

Brent Labour is concerned about the impact of the Lib Dem and Conservative policies that are putting more people into poverty. The renowned Institute for Fiscal Studies (IFS) has produced a report which says that the UK is seeing a big rise in poverty and that 600,000 more children will be pushed into poverty.

With one in three children living in poverty in Brent, Labour is concerned that the Coalition Government is making things worse for our future generations.

Lead member for Children and Families Cllr Mary Arnold said,

“Changes to tax credits for working families, reduction in childcare grants, increasing VAT, scrapping of Building Schools for the Future, fewer opportunities for apprenticeships than Labour proposed, slashing the Education Maintenance Allowance and the trebling of tuition fees is making it more difficult for the next generation to reach their aspirations.”

Leader of Brent Council, Cllr Ann John OBE said,

“It is not fair that that people are being affected in this way, when at the same time, the Government has refused to continue the Bankers Bonus Tax that was in place last year and could be used right now to help pay off the deficit. There is a fairer way to address this deficit; a Plan B, which the Government are not looking into.”