Taxes up. Debt up. We need another plan. Let's hope it's not Syria

SOURCE GUARDIAN: Osborne reliant on rising immigration levels to achieve budget surplus

During last week’s autumn statement, Osborne boasted: “The OBR’s (Office for Budget Responsibility)... forecast today is that the economy will grow robustly every year, living standards will rise every year, and more than a million extra jobs will be created over the next five years.” The chancellor made no reference to immigration in his statement. But analysis of figures from the OBR, the government’s independent forecasting body, shows that Britain’s finances would not be forecast to hit a budget surplus by 2019-20 without recent upward revisions to net migration numbers. As a result of the extra jobs and tax incomes, and changes to the composition of the UK’s working-age population, generated by the influx, the OBR has revised up the level of potential economic output for the UK by 0.9%. Under the OBR’s calculations, if projected net migration had remained unchanged at 105,000 a year, the boost to output would have been negligible. Without the additional output generated by those changed migration forecasts, the projected budget surplus would drop to zero and the only feasible way to achieve one by 2020 would have been through additional spending cuts or tax rises. Furthermore, based on OBR data and the evidence available, it is highly likely that the government’s intention of reducing net migration to the “tens of thousands” is directly at odds with its fiscal target. The OBR’s latest fiscal sustainability report, published in June, stated that net inward migration in line with the Office for National Statistics (ONS) high migration scenario of 225,000 a year would reduce the primary budget deficit by 0.5% of GDP and net debt by 17% of GDP by 2064-65, relative to the OBR’s central projection. In the low migration scenario (105,000 a year), the primary budget deficit would increase by 0.5% of GDP and net debt by 20% of GDP by 2064-65. The OBR’s outlook also shows the 1.1m increase in employment cited by Osborne is mostly because of upward revisions to net migration, which is predominantly concentrated among people of working age: this boosts the employment rate, GDP, potential output and tax receipts. Figures released last week by the ONS show that annualised net migration to Britain hit a new high of 336,000 in June, indicating that further revisions to the OBR’s projections may be in store.

SOURCE FINANCIAL TIMES: Autumn Statement - Osborne accused of resorting to stealth taxes on big businesses, wealthy property owners and council taxpayers
The decision to raise £11.6bn from an apprenticeship levy on businesses came under immediate fire from some tax professionals, who suggested it was at odds with the government’s “triple lock” ban on increasing any of the three main taxes. The levy requires employers to pay an additional 0.5 per cent on their employment costs to fund apprenticeships, which makes it very similar to a rise in employers’ national insurance contributions. Other big increases related to council tax, fuel duty, stamp duty, capital gains tax, corporation tax and pensions tax relief. Council taxpayers will pay an extra £6.2bn by 2021 after the chancellor announced that some local authorities would be allowed to raise council tax faster than previously assumed to meet some of the costs of social care and policing. One of the biggest increases was £3.8bn of higher stamp duty on buy-to-let property and second homes. Another £1.2bn will be raised from property owners by bringing forward payments of capital gains tax on residential property to within 30 days of completion.

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"1 in 5 Brit Muslims' sympathy for jihadis"? Looks like The Sun will print anything to sell papers. Or worse

KJ and Fee do their own poll...

SOURCE GUARDIAN: Sun criticised by pollster behind controversial 'jihadi sympathy' story

The market research company Survation has distanced itself from how an opinion poll it carried out about British Muslims has been reported by the Sun. The newspaper is facing an increasing backlash against its front-page report of an opinion poll purporting to show that one in five British Muslims had “sympathy for jihadis”. The tabloid has been accused of misrepresenting the results of the poll, which showed that 5% of respondents agreed with the statement: “I have a lot of sympathy with young Muslims who leave the UK to join fighters in Syria” and that 14.5% said they had “some sympathy”. Critics argued that the use of the term “sympathy” was ambiguous and that it was not clear who was meant by “fighters in Syria”. Ben Page, the chief executive of Ipsos Mori, said: “The main issue with this poll is the reporting, which made it appear that one in five of those sampled supported Isis, when in fact they were expressing sympathy with people going to fight in Syria, as I understand it, which could of course include British ex-servicemen fighting against Isis with the Kurds, or anti-Assad Muslim forces who are also fighting against Isis.” Damian Lyons Lowe, Survation’s chief executive, told the Guardian: “Survation do not endorse or support the way in which this poll’s findings have been presented by the Sun newspaper and others. Neither the headline nor the body text of any articles published were shared with or approved by Survation prior to publication. “Survation categorically objects to the use of our findings by any group, as has happened on social networks, to incite racial or religious tensions.” Survation conducted a similar poll for Sky News in March. It showed a higher proportion of Muslims – 28% – showed at least some sympathy with young Muslims leaving the UK to join fighters in Syria. Non-Muslims were also polled at the time, using the same wording, and 14% agreed they had at least some sympathy with the statement. The Sun did not mention these figures in its story on Monday despite being aware of them.

SOURCE GUARDIAN: Arab states pose 'critical' risk of defence corruption

Arab states that buy billions of dollars worth of weapons are at high risk of corruption and pose a continuing threat to regional security and stability, according to a new report by watchdog Transparency International. All 17 countries suffer from lack of oversight, excessive secrecy and widespread nepotism, with networks based on family and business ties in the procurement of defence contracts. High-ranking Saudi princes preside over powerful agencies and use them to distribute patronage. Overall the region has some of the most rapidly growing defence budgets in the world, with a total spend of $135bn. Up to a third of all government spending can be on defence. There is also well-documented evidence of weapons from a wide range of countries reaching terrorist groups such as Islamic State and the Houthis in Yemen.

SOURCE TELEGRAPH: Arms companies warned by defence secretary not to rip off the taxpayer, as defence budget rises

Arms companies are to be warned that the Government’s Budget commitment to boost military spending is not a licence to rip off the Ministry of Defence, which will “not tolerate inefficiency or poor performance”. Defence Secretary Michael Fallon used a keynote speech at the world’s largest military airshow to fire the warning shot across the bows of some of the UK’s biggest companies. “While the defence budget is now protected, that doesn’t mean going back to padding profit margins through fat government contracts,” Mr Fallon is due to say. The Government will expect industry to take on more of the risk involved in future projects, the minister will also warn. This could come in the form of sharing cost over-runs. Building the Navy’s new aircraft carriers was originally budgeted at £3.65bn, though the final figure is now £6.2bn after specification changes by the MoD. Any further cost over-runs will be split between the MoD and the project’s contractors.

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Vodafone to pay no UK tax on £84bn Verizon sale

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Graphs at a glance: see which government departments spend more than half their total staffing budget on consultants: it's outsourcing in all but name

If you thought the only way to outsource public services was to hand them over wholesale to Capita and G4S you'd be wrong. For some years government departments' use of consultants and interim staff has de-facto outsourced central government functions to a staggering degree. 

This has actually been most stunning in the period before the current Conservative-Liberal coalition government, a time when Labour were in power. Maybe the current coalition government no longer needs to hire so many consultants for hospitals, schools and prisons. After all the hospitals, schools and prisons themselves are being handed over wholesale to the consultants, not to advise on but to own and extract profits from. Even if the new owners do hire consultants, they aren't on the government's books.

Data below is from the National Audit Office's (NAO's) report "Central government's use of consultants and interims". Here we found a truly gob-smacking graph showing the cost of consultants was 40% or more of total staff costs in the Departments of Transport, Education, Energy, and the Home Office. 

What is a minister to do? Given the choice of public servants serving the public, or a consultant hand-picked, hired, paid, bonussed, and under threat of being fired by the minister himself?

Is it a coincidence that the departments most enthusiastically shovelling public money into private purses, Transport; Energy; Education; Health, are the heaviest users of consultants?

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Most people eligible for benefits are in work, because benefits subsidise employers who pay low wages

Fee and KJ work out who the real scroungers are...

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Who should pay for the defence of the nation? The wealthiest, in the form of higher tax, or the poorest having their benefits cut?

The UK Minister of Defence said, in an interview with the Telegraph, the "kind of Conservatism I was brought up on says that the first priority of the government is defending the country and maintaining law and order. Those are the two top priorities for me” . Which seems reasonable. There is no doubt that paying for the banking crisis required us to cut defence spending, probably beyond what is prudent. However, he then goes on to say the people from whom money should be taken to pay for Defence are not those with the most money (including bankers), but those with the least. 

The minister went on to say: “There is a body of opinion within Cabinet that we have to look at the welfare budget again. The welfare budget is the bit of public spending that has risen the furthest and the fastest and if we are going to get control of public spending on a sustainable basis, we are going to have to do more to tackle the growth in the welfare budget.”

At least he is being consistently true to the "kind of Conservatism [he] was brought up on". Defence and Law&Order are the "two top priorities" apart from keeping tax down.

They pick us off one at a time. Public servants, then teachers, then 'skivers and strivers'. So who is next? Nick Clegg, Iain Duncan Smith, and various 'think tanks' are softening us up to the idea of cutting benefits to the elderly. Are pensioners so feather-bedded they can afford to lose their benefits?

Fortunately the Office of National Statistics (ONS) is still manned by ordinary Britons driven by maths, and still manages to publish their statistics regardless of the bums on the ministerial seats. They know they need to be careful, as does The National Audit Office (NAO) whose criticisms of various government departments including, among so many others, HMRC and the Department of Works and Pensions may send it the way of the abolished Audit Commission. Following the Audit Commission's abolition it will be for the various government bodies to choose their own auditors. We need look no further than the banks to see what happens when organisations are the paymasters of their own auditors. 

So let's appreciate some of the truths brought to us by the ONS while it is still alive and counting:

a) The UK has similar percentages in poverty to the EU average for those up to 64 years of age (children and what used to be 'working age' before retirement ages were pushed up). However, the percentage of over 65's in poverty is much greater than the EU average.

b) The reason poverty has fallen in the UK since 2008 is that the definition of 'poverty' sets it at 60% of the median income. So when the median (average) income falls there are fewer people in 'poverty'. 

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HMS Ark Royal sold as scrap for £3m

KJ and Fee consider an alternative future for HMS Ark Royal

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NHS IT chaos

Chris, Fee and KJ discuss the NHS's infamous patient IT system

rip-off rip off aircraft carrier patient care record system

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