Saturday 29 August 2015

Saturday, August 29, 2015 Posted by Jake No comments Labels: , , , , , , , , ,
Posted by Jake on Saturday, August 29, 2015 with No comments | Labels: , , , , , , , , ,

Far from being divisive, Jeremy Corbyn has been a startlingly unifying figure. Corbyn has successfully alloyed, if not allied, the political Left and Right. The Guardian, the Daily Mail, Neil Kinnock, a horde of sniggering Tory infiltrators and many more have all been whiskered into a frothy Anti-Corbyn smoothie. They have combined into a symphony of predictions of disaster, some in hope and some in fear, should Corbyn actually become Labour leader. Corbyn successfully brought Left and Right closer together than Liz Kendall (the Blairite one) could have ever hoped.

Corbyn achieved, ironically, what the anti-Corbyn Labour hierarchy wanted: a chance for Labour to be perceived as being closer to the Tories' economic stance by virtue of being further from Corbyn's. Should Corbyn lose, which he may yet do, the new "Anyone But Corbyn" leader can boast credentials freshly burnished into a sheen of economic competence from beating up the grizzled geezer. After all, as the Bill Clinton campaign once said about winning power: "it's The Economy, stupid".

So, let's take a look at The Economy. The question is actually not why Labour isn't more Tory, but why the Tories aren't more Tory. At least, why the Tories aren't what they say being Tory is about. And why Labour doesn't point this out more effectively.

1) The Economically Competent Party:
In July 2015 the Chancellor, George Osborne, tweeted:
Between the Banking Crash and 2015 Britain underwent the slowest recovery (measured by GDP) in recorded history. 

Could it be due to Osborne's steady hand bringing the economy around slowly but steadily? Actually, by holding down the wages of the many and reducing corporation taxes, it is corporate profits and the wages of the few that are recovering. As a result Britain's recovery is not "motoring along", as shown by the following graphs.

The "Global Wage Report 2014/15" by the United Nations' International Labour Organisation (ILO) shows how lamentably British workers have done compared to other big economies:

With the growing portion of FTSE quoted company shares owned by foreigners, a significant chunk of the 'recovery' is going overseas. 

Which has meant the share of GDP per head that stays in Britain (Net National Disposable Income, NNDI) far from recovering is still distinctly unwell.

2) The Low Tax Party:
Figures from the Adam Smith Institute show since 2010 the Tories have been taking a growing share of what the Nation makes in taxes. "Tax Freedom Day" approximates how long it takes for the average Briton to pay his taxes before he can keep his money. With his sneaky increases to indirect taxes (e.g. VAT) the chancellor takes more with one hand than he gives with the other in direct tax cuts (income and corporation). 

When announcing Tax Freedom Day for 2015 the Director of the Adam Smith Institute, Eamonn Butler, said :
"The Treasury hates Tax Freedom Day, because they don’t want us to know how much tax we really pay. They prefer to conceal the tax burden through stealth taxes and indirect taxes that we don’t even realise we’re paying."

3) The "Reduce The Debt" Party:
The OBR's analysis after the post-election 2015 July Budget shows the Tories borrowing more until 2018-19. Extra borrowing that closely matches the cost of those taxes that are being cut (which themselves are less than those taxes that are being increased). Extra borrowing that is exquisitely timed to disappear in time for the next General Election in 2020.
[RDEL = day-to-day (non-capital) spending on public services and administration]

4) The Productivity Party:
To a degree unseen in the aftermath of previous downturns, productivity in the UK has stagnated.

The Office for National Statistics comments:  
"The shortfall in the level of UK productivity has persisted for many years, and is often attributed to relatively low levels of investment in the UK." 

Does UK business lack confidence in the continuing strength of the economy to invest, after over five years of Tory stewardship? Or has low pay made it more profitable to employ more low-cost people than invest in new processes and technologies? Or is productivity drained due to the growth in low-skill low-value jobs? Where a worker used to spend a day making high value cars, he now spends it serving low value cappucinos?

There are not many ways of spinning chronic low productivity as a credit to Tory economic competence.

5) The Justice Party:
The Magna Carta includes a clause stating "To no one will we sell, to no one deny or delay right or justice." In the period since Cameron became prime minister two of the main pillars of Justice in Britain have been undermined:
[Next two graphs are from the House of Commons Library, Key Issues for the 2015 Parliament]
a) Cuts to the Police of around 11% of officers

b) Cuts to legal aid removed access to the courts unless you can pay for it:
King John promised not to sell justice when he agreed to the Magna Carta (though he subsequently backed out). Under Prime Minister Cameron if you can't pay for it you can't have it.

6) The Border Control Party:
In 2011 David Cameron said:  
"with us, our borders will be under control and immigration will be at levels our country can manage. No ifs. No buts. That's a promise we made to the British people. And it's a promise we are keeping."

Immigration figures released in August 2015 showed net migration for the year ending March 2015 was at a record high of 330,000 entering the UK.

Too many in the Labour Party are in the sorrowful position of believing their party is economically incompetent. For its first five years from 2010 in opposition Labour willingly (and incomprehensibly) took on the role of the bankers' whipping boy, taking the punishment for the Great Recession resulting from the banking collapse.  In spite of kindly reassurances from the former Governor of the Bank of England and the Permanent Secretary to the Treasury that Labour was not to blame, after all the floggings Labour seems to actually believe it themselves.

In August 2015 the Independent newspaper reported Oxford University’s Professor Simon Wren-Lewis, who has been advisor to the Bank of England and the Office for Budget Responsibility, saying: 
“Anyone who continues to describe what is happening in the UK as a ‘strong recovery’ either has not bothered to look at the data, or is being deliberately deceptive.”

The public perceive that Tory policies are more economically competent than Labour's. The public don't look at the data, but believe this through conviction more than evidence. 

You can't blame the Tories for being deceptive as that comes with being in politics. 

However you can blame Labour for wallowing in its self-esteem deficit and not looking at the data.


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