Category Archives: economics

Coalition whacks the poor in the wallet

Last night with his merry majority of 56, Iain Duncan Smith won his vote to cap benefits to a 1% (one percent) rise per year. The Tory logic is that “it’s not fair” on hard-working people (read: “deserving poor”) who haven’t had an wage rise for years.

Very well, but if you look at the list of welfare benefits that this change will effect, most are received by those in work on low incomes – for example, tax credits and income support. Even the Department for Work and Pensions, admitted the poorest would suffer most. That includes those in work, as well as those stuck on Jobseekers Allowance because the recession kicked them out of work.

So what is the point of these changes, if rather than help the poor, they actually push them closer to poverty. IDS referenced the answer in the debate yesterday when he said that Labour spent

“like drunks on a Friday night”.

Meaning that this is not so much about benefit reform as deficit reduction. Then the question is, why do you expect the poor to pay off the deficit? What do you expect to get out of someone on a very low income, apart from beans and crumbs? It seems that by targeting a section of the poor perceived to be scroungers, (and Labour are just as guilty of using this inflammatory language) public attention is diverted away from the real scroungers and cheats – the large corporations and mega-rich individuals who exploit every loophole going to avoid paying the correct amount of tax. That’s you, Vodafone, Amazon, Starbucks and Lord Ashcroft! If the public realised that the financial problems aren’t caused by a single mother struggling to feed her kids on a tiny wage and tax credits, then the Tories may just be worried.

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The Paralympics and Atos

(It’s a slightly black joke, but all good satire is slightly dark)

As we all watch the Paralympics and smile patronisingly at the disabled people competing, a good number of the population sense the irony in one of LOCOG’s choice of sponsors. Atos – also the government’s choice of stick to beat the disabled into work. Are they standing in the changing rooms with clip boards assessing the athletes? “Right. You’ve just wheeled 100m in twenty seconds, you’re fit for work.”

That may not be accurate, but it’s a good illustration of what the company is doing to disabled people across the country. From people in wheelchairs to cancer patients to the visually impaired. People with a range of disabilities have been given less than the 15 points required for Employment and Support Allowance, and are declared fit for work.

To most people this would seem illogical. How can you force people who are not in the physical shape to work? A cancer patient is too sick to have to add work to the schedule of chemo and radiotherapy. A visually impaired person cannot be expected to see dangers, and would be a danger to themselves and others a workplace. How can Atos and the Department for Work and Pensions decide that a wheelchair-bound person is able to work, when many areas of public transport are not open to them? Then there’s an issue of throwing more people into the job cattle market, when there are no jobs to apply for.

See the irony? A stage for people with disabilities (and good at sport) to shine, being sponsored by a company that is contracted to make their lives as horrible as possible. No matter how much the coalition say, “oh we’ve got to cut public spending”, “the previous government left the country’s finances in a mess” – it does not justify picking on those less able or disadvantaged.

So, while you watch the Paralympic coverage and marvel at those disabled people who excel at sport – remember that many people like them (without the “good at sport” bit) are having to fight a dirty war for something they are entitled to.

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Robin of Andalucia

In a town in Andalucia, southern Spain, the mayor is staging robberies of supermarkets (all proceeds go to the poor) and marching across the desert trying to convince other local government officials to ignore central government demands for austerity. The Guardian paints him as a slightly eccentric folk hero and Spanish newspaper El Pais seems to be filing him in the “Dangerous Revolutionary” drawer.

So far, so heart-warming. It’s a guy angry at the way [insert country here]’s government have been punishing the poor for the greed of the rich, and thinking stealing on their behalf is the best way to prove a point. A modern day Robin Hood to cheer us up amid the rain, post-Olympic blues and recession. The end.

If it were that simple, then the media could portray him as a criminal and move along. However, look a little closer and you will find out that rather than a random act of criminality inspired by righteous anger – Mayor Juan Sanchez Gordillo actually has a working economic plan.

The New York Times reported on the low unemployment and low cost of living in Marinaleda about three years ago. No one is out of work for long, as the local farming co-operative will find work for them. This idea is so attractive, that people are moving from as far as Barcelona in search of work there. High employment, low and comfortable cost of living mean more disposable income floating around.

Imagine that – government creating work for people so they don’t starve during a recession! Why didn’t you think of that, Cameron and Osborne?

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The morality of bankers

A couple of new stories about the financial sector caught our attention this week. The first was the LIBOR scandal – Barclays and other banks deliberately fixing the inter-bank lending rate for profit. Then there was the scandal that banks were forcing them to take out Interest rate protection insurance with crippingly high repayments. Proving yet again, that banking is the business of cowboys.

As is understandable, the public reaction has been one of outrage. While millions of people are struggling with the austerity measures and recession, here are the people who caused the crash cheating their way to wealth and celebrating with bottles of Champagne. Ed Miliband has called for a public inquiry into the corrupt practices of the banks, Jonathan Freedland in the Guardian called for the bankers involved to be punished just like last summer’s rioters (the difference between rioters and bankers is the latter have stolen a lot more). Meanwhile, the chief of Barclays, Bob Diamond, called it “inappropriate behaviour” carried out by “a small number of people”, as he tried to deflect the blame from himself and his company.

What is obvious to most people – even, I suspect the Time and Telegraph readers – is that the banking sector have basically been allowed to do what they want for far too long. Not enough regulation has meant they have been free to bully small businesses and individuals, and not enough control has allowed them to get away with activities that are blatantly criminal. A footballer found guilty of match fixing would be banned from the game and jailed. A public sector worker caught stealing from work would be sacked and prosecuted. Why not punish the bankers responsible as well?

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François Hollande: A rejection of Austerity?

It was interesting reading the twitter reaction to François Hollande’s victory in the French Presidential Election yesterday evening.  Those on the Right complained about the high tax rate that he might impose on the rich (fairness is a concept lost on the Right), while Lefties cheered and welcomed M. Hollande as a rejection of the austerity projects being carried out by many European governments at the moment.

Now, I’m not in the position at the moment to determine the exact factors surrounding Nicholas Sarkozy’s ejection from the Elysée Palace, but if you look at the reaction of people across Europe you get the impression that austerity isn’t popular.  From here in the UK were the Conservatives and Liberal Democrats took a battering in the local elections, to Greece where the radical, anti-austerity parties received a lot of support, to France with Hollande’s victorious, pro-growth campaign.

Surely this spells out to David Cameron, Nick Clegg and George Osborne that people do not like losing their public services to pay for the mistakes of the financial sector. People are a little angry that their local library has been closed down, while the likes of Vodafone and Goldman Sachs are avoiding paying their multi-million pound tax bills. The Right might say “the people have voted for financial irresponsibility”, but the reality is people are fed up of governments supporting the rich and squeezing the poor.

Is François Hollande’s victory a rejection of Austerity? I hope so.

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