Bolitics The New Condem Government

[Gringo]

"If Lib Dems knowingly lied in their manifesto shouldn't their MP's elections be declared void?" asks Stuart Weir on Open Democracy web site

Stuart Weir is a British journalist, writer, and visiting Professor with the Government Department at the University of Essex.

As a professor with a keen interest in democracy you'd have thought he would have actually read something about the woollarse case before spouting nonsense like that.

[snowychap]

An axe to (or the end of) legal aid for family law cases? :shock:

Labour reduced it quite substantially (at least for children's law) but this proposal sounds pretty appalling.

[ender4]

They will also be the ones who will not be supported with EMA, won't they?

are the EMA's being scrapped totally? or just with tighter restrictions?

i hadn't realised there was any change to them.

[snowychap]

They will also be the ones who will not be supported with EMA, won't they?

are the EMA's being scrapped totally? or just with tighter restrictions?

i hadn't realised there was any change to them.

Maintenance allowance axed in £500m budget raid

Chancellor seizes funds to finance plans to raise participation age to 18 by 2015

Education maintenance allowance (EMA) will be scrapped in order to fund the compulsory education and training of all under-19s.

A replacement programme of targeted support for those most in need is likely to have a budget just a fraction of the size of EMA, as the Government seeks to save £500 million of the total £574 million budget.

George Osborne, the chancellor, told the House of Commons: “We will fund an increase in places for 16 to 19-year-olds, and raise the participation age to 18 by the end of the Parliament - and that enables us to replace education maintenance allowances with more targeted support.”

The Department for Education justified the decision by saying that evaluations of the allowance showed that 90 per cent of the money was “dead weight”, going to students who would have attended anyway.

But an Institute for Fiscal Studies report said EMA was a significant factor in improving staying-on rates in education, particularly for boys and for the poorest students. It said it had boosted participation by around six percentage points.

Child benefit for 16 to 18-year-olds, which is also claimed by parents wealthier than EMA claimants, is to be retained at a cost of £1.8 billion.

It is also not clear if the £500 million saving will be enough to fund full participation by under-19s by 2015, as the Government has promised. The former Department for Children, Schools and Families estimated the cost would be £774 million, while Professor Alison Wolf, now recruited by the Government to review vocational education, estimated that the real figure could be double that, at £1.5 billion.

While the total budget for 16-to-19 education will increase in real terms, increased participation will cause the funding per student to fall, the chancellor admitted.

...more on link

[peterms]

Pretty swingeing cuts

...Other areas of legal advice previously covered by legal aid will be removed from public funding completely, including debt advice, social welfare and employment. Critics were swift to respond, saying the measures would hit the most vulnerable in society and prevent them from defending civil rights affected by cuts elsewhere.

"In an era of budget cuts, job losses and welfare reform that contains some pretty sharp sticks, what now happens to disabled people who fall foul of public and private bureaucracies?" said Richard Hawkes, chief executive of disability charity Scope. "The courts have traditionally been the last line of defence against poor, unfair and unlawful decisions."

Desmond Hudson, chief executive of the Law Society, said: "If the government persists with these proposals it would represent a sharp break from the long-standing bipartisan consensus that effective access to justice is essential to underpin the rule of law."

Experts say that the measures far outstrip cuts to legal aid put forward in the 1980s, the last time significant areas of law were removed from public funding.

"The cuts made under the Thatcher government pale in comparison," said Steve Hynes, director of Legal Action Group, which campaigns on legal aid. "One quarter of the people who get help from the legal aid system will no longer be able to.

"Social welfare law in particular is taking a pasting at a time when these people are suffering from cuts elsewhere. It's going to cause enormous damage. People won't get access to their civil rights. It's unjust."

Nicholas Green, chair of the Bar Council of England and Wales, which represents barristers, said: "The shrinkage of the justice system inevitably means a painful contraction of access to justice.

"The new thresholds for legal aid will mean that many who must be described as poor will be denied legal assistance when they come into contact with the courts at crisis points in their lives, about decisions going to the heart of their personal lives and those of their families."

The legal profession was gearing up to respond to the proposals today. Many of those who deliver legal aid services would lose their jobs as law centres and firms offering free advice would face closure under the measures...

These are things they've wanted to do for some time. Shut the law centres, stop people getting help with employment tribunals.

It's one more example of using this manufactured panic to push through measures which they would struggle to get through in more normal times.

And it's not about the money, it's about redrawing the lines of power between rich and poor. These measures are what people like the CBI and Institute of Directors will have been lobbying for over private dinners and chats on the terrace.

Mind you, it would be helpful to have some sort of yardstick by which to measure the claim that it's about saving money. For example, identify the highest bonus paid to a banker last year and this year, average them out, and for each new attack on our rights, calculate how many of the very top bankers' bonuses that equates to. That might put into perspective first the money saved compared to what we can apparently still afford, and second the claim that "we're all in it together".

[Awol]

[it's one more example of using this manufactured panic to push through measures which they would struggle to get through in more normal times.

I think the notion that ths this is manufactured panic is barmy, if anything we are not paniced enough because it seems to me like the whole thing is going to go to rat shit. China and the US facing off in a currency war, the euro dying in its current form when the debts of Ireland, Spain and Portugal need to be taken on by the ECB..

I think we should probably be shitting ourselves tbh, but we'll see.

[peterms]

[it's one more example of using this manufactured panic to push through measures which they would struggle to get through in more normal times.

I think the notion that ths this is manufactured panic is barmy, if anything we are not paniced enough because it seems to me like the whole thing is going to go to rat shit. China and the US facing off in a currency war, the euro dying in its current form when the debts of Ireland, Spain and Portugal need to be taken on by the ECB..

I think we should probably be shitting ourselves tbh, but we'll see.

The part I mean is manufactured is the panic about the deficit. (Not much else being manufactured these days).

Yes, there's an enormous problem about the world economy. The main problem as I see it is the emergence over several years, many years, of two massively destructive forces, closely linked. First, the growth of the finance sector at the expense of the real economy. Second, the growth in power of financial institutions, irresponsible, footloose, short-sighted, selfish, able to make governments pursue self-defeating agendas in order to profit themselves.

In the face of that, playing along with the notion that there's a massive problem about government budget deficit and we must sacrifice our long-held rights, is stupid in the extreme.

Problem is, we have a government who hold allegiance to the financial institutions which most of their ex-classmates work for, and if you ask them to choose between the interests of bankers or ordinary people in south Wales, Tyneside, Glasgow or pretty well any other conurbation outside Basingstoke and Beaconsfield, it's a safe bet who they'll go with.

Today's news is case in point. Ireland saying they don't want a crisis loan (because of the terms it would come with, no doubt), and flunkies from bond management firms telling them they'd better get on with it, sharpish. Guess who will win. Sovereign governments reduced to dancing to the tune of greedy investors, happy to capsize the economy for years to come if it makes them a few quid.

Shocking, and unacceptable.

[Jon]

The part I mean is manufactured is the panic about the deficit. (Not much else being manufactured these days).

Yes, there's an enormous problem about the world economy. The main problem as I see it is the emergence over several years, many years, of two massively destructive forces, closely linked. First, the growth of the finance sector at the expense of the real economy. Second, the growth in power of financial institutions, irresponsible, footloose, short-sighted, selfish, able to make governments pursue self-defeating agendas in order to profit themselves.

In the face of that, playing along with the notion that there's a massive problem about government budget deficit and we must sacrifice our long-held rights, is stupid in the extreme.

Problem is, we have a government who hold allegiance to the financial institutions which most of their ex-classmates work for, and if you ask them to choose between the interests of bankers or ordinary people in south Wales, Tyneside, Glasgow or pretty well any other conurbation outside Basingstoke and Beaconsfield, it's a safe bet who they'll go with.

Today's news is case in point. Ireland saying they don't want a crisis loan (because of the terms it would come with, no doubt), and flunkies from bond management firms telling them they'd better get on with it, sharpish. Guess who will win. Sovereign governments reduced to dancing to the tune of greedy investors, happy to capsize the economy for years to come if it makes them a few quid.

Shocking, and unacceptable.

Top stuff.

Do I sense another vote for Gringo's BIAD party? Not that you can actually vote for them, as they are outside of the political system, and wish to bring it down and replace it with a system that works, but you get the point ...

[LondonLax]

Today's news is case in point. Ireland saying they don't want a crisis loan (because of the terms it would come with, no doubt), and flunkies from bond management firms telling them they'd better get on with it, sharpish. Guess who will win. Sovereign governments reduced to dancing to the tune of greedy investors, happy to capsize the economy for years to come if it makes them a few quid.

Shocking, and unacceptable.

The Irish government have two options.

Either borrow from bond investors at a high rate of interest which reflects the risk of lending Ireland money right now or borrow money from the EU at a lower interest rate but with a number of strings attached which would be unpalatable to the Irish government.

It is however up to them and is not the fault of bond investors that Ireland are in this situation. You can't force investors to risk their money for a lower return if they don't want to.

[Awol]

Today's news is case in point. Ireland saying they don't want a crisis loan (because of the terms it would come with, no doubt), and flunkies from bond management firms telling them they'd better get on with it, sharpish. Guess who will win. Sovereign governments reduced to dancing to the tune of greedy investors, happy to capsize the economy for years to come if it makes them a few quid.

Shocking, and unacceptable.

The Irish government have two options.

Either borrow from bond investors at a high rate of interest which reflects the risk of lending Ireland money right now or borrow money from the EU at a lower interest rate but with a number of strings attached which would be unpalatable to the Irish government.

It is however up to them and is not the fault of bond investors that Ireland are in this situation. You can't force investors to risk their money for a lower return if they don't want to.

The other option is to withdraw from the Euro, set the Punt at a realistic value and start the long road to recovery.

For Ireland, Spain, Portugal and others it's the Euro that's the problem because it distorts interest rates so badly, a one size fits all approach simply doesn't work for so many different national economies.

Quite a few posters on here have said the Euro is fundamentally flawed until we were blue in the face and it should be pretty obvious to everyone now that this is the case. The problem (imo) is that a broader political agenda is now trying to fly in the face of economic reality and because of that it is ultimately doomed to fail.

Thank God that we stayed out of it because if we hadn't then UKPlc would be truly buggered now.

[LondonLax]

You can also argue that Ireland being in the Euro has helped stave off currency speculators who would have sent Ireland the way of Iceland by now if it wasn't for the protection of the Euro.

It's not the Euro that is the problem, it is the way the Irish government (and Greek) took the low interest lending but spent like there was never a problem coming on the horizon.

[drat01]

You can also argue that Ireland being in the Euro has helped stave off currency speculators who would have sent Ireland the way of Iceland by now if it wasn't for the protection of the Euro.

It's not the Euro that is the problem, it is the way the Irish government (and Greek) took the low interest lending but spent like there was never a problem coming on the horizon.

Absolutely - those making this as point for the abandonment of the Euro are not taking this into any sort of consideration

[LondonLax]

Ooops, George Osbourne's fact finding mission in 2006 does not bode well for the UK...

February 23, 2006

Look and learn from across the Irish Sea

A generation ago it would have seemed ridiculous to go to Ireland for economics lessons.

George Osborne writes

A GENERATION ago, the very idea that a British politician would go to Ireland to see how to run an economy would have been laughable. The Irish Republic was seen as Britain’s poor and troubled country cousin, a rural backwater on the edge of Europe. Today things are different. Ireland stands as a shining example of the art of the possible in long-term economic policymaking, and that is why I am in Dublin: to listen and to learn.

After centuries of lower incomes, Irish average incomes are now 20 per cent higher than in the UK. After being held back for decades, the productivity of Irish companies — the yardstick of economic performance — has grown three times as quickly as ours over the past ten years. Young Irish families once emigrated in their millions to seek a better life overseas; these days it is young people across Europe who come to Ireland to find good jobs. Dublin’s main evening newspaper even carries a Polish-language supplement.

Ireland is no longer on the edge of Europe but is instead an Atlantic bridge. High-tech companies such as Intel, Oracle and Apple have chosen to base their European operations there. I will be asking Google executives today why they set up in Dublin, not London. It is the kind of question I wish the Chancellor of the Exchequer was asking.

What has caused this Irish miracle, and how can we in Britain emulate it? Three lessons stand out. First, Ireland’s education system is world-class. On various different rankings it is placed either third or fourth in the world. By contrast, Britain is ranked 33rd and our poor education performance is repeatedly identified by organisations such as the OECD as our greatest weakness. It is not difficult to see why. Staying ahead in a global economy will mean staying at the cutting edge of technological innovation, and using that to boost our productivity. To do that you need the best-educated workforce possible. It is telling that even limited education reform is proving such a struggle for the Prime Minister.

Secondly, the Irish understand that staying ahead in innovation requires world class research and development. Using the best R&D, businesses can grow and make the most of the huge opportunities that exist in the world. That is why it is shocking that the level of R&D spending actually fell in Britain last year. Ireland’s intellectual property laws give incentives for companies to innovate, and the tax system gives huge incentives to turn R&D into the finished article. No tax is paid on revenue from intellectual property where the underlying R&D work was carried out in Ireland. While the Treasury here fiddles with its complex R&D tax credit system, I want to examine whether we could not adopt elements of Ireland's simple and effective approach.

Thirdly, in a world where cheap, rapid communication means that investment decisions are made on a global basis, capital will go wherever investment is most attractive. Ireland’s business tax rates are only 12.5 per cent, while Britain's are becoming among the highest in the developed world.

Economic stability must come before promises of tax cuts. If, over time, you reduce the share of national income taken by the State, then you can share the proceeds of growth between investment in public services and sustainably lower taxes. In Britain, the Left have us stuck debating a false choice. They suggest you have to choose between lower taxes and public services. Yet in Ireland they have doubled spending on public services in the past decade while reducing taxes and shrinking the State’s share of national income. So not only does Ireland now have lower business and income taxes than the UK, there are also twice as many hospital beds per head of population.

World-class education, high rates of innovation and an attractive climate for investment: these are all elements that have helped to raise productivity in Ireland. It is not the only advanced economy to have achieved this uplift. Last week in Washington the new Chairman of the Federal Reserve, Ben Bernanke, told me about the impact that the sustained increase in productivity growth had made in generating prosperity in the US. By contrast, in Britain productivity growth has fallen in recent years and is far behind the likes of the US and Ireland. Indeed, it is one fifth the rate it was when Gordon Brown walked into the Treasury. Poor skill levels, rising taxes, bureaucratic planning controls and chronic overregulation are high on the list of culprits. Britain is being left behind.

Faced with the extraordinary rise of economies such as China, India and Brazil, many European governments seem to have accepted that long-term decline is inevitable. I detect a similar pessimism here. How on earth, people ask, will we ever compete in such a fiercely competitive world? The Chancellor’s answer is to put up the shutters and stick on a path of ever-higher taxation and an ever- growing State. But you cannot shut out the future.

The new global economy poses real long-term challenges to Britain, but also real opportunities for us to prosper and succeed. In Ireland they understand this. They have freed their markets, developed the skills of their workforce, encouraged enterprise and innovation and created a dynamic economy. They have much to teach us, if only we are willing to learn.

The author is MP for Tatton and Shadow Chancellor

[Gringo]

The strings that are mentioned is to force the republic to realign their corporate tax rates with the rest of europe - so the banks get bailed out and all the tax generating companies leave the country - so little point in that. So Ireland have been talking to the IMF - It must be bad if you'd rather take their money than the EU dollar - which would as Awol says, mean dropping out of the euro. Is it a scare tactic?

It's not the Euro that is the problem, it is the way the Irish government (and Greek) took the low interest lending but spent like there was never a problem coming on the horizon.

Well it is the EURO that is the problem - you can't have moentary union without political union.

[LondonLax]

The strings that are mentioned is to force the republic to realign their corporate tax rates with the rest of europe - so the banks get bailed out and all the tax generating companies leave the country - so little point in that. So Ireland have been talking to the IMF - It must be bad if you'd rather take their money than the EU dollar - which would as Awol says, mean dropping out of the euro. Is it a scare tactic?

It's not the Euro that is the problem, it is the way the Irish government (and Greek) took the low interest lending but spent like there was never a problem coming on the horizon.

Well it is the EURO that is the problem - you can't have moentary union without political union.

No it's more that you can't take the benefits of being in the Euro without any restraints. Whether the restraints come from a central government or from the individual countries themselves.

Not all countries in the Euro have had this problem and the countries that have will have their domestic finance policies dictated from Brussels once they take a bailout.

[Gringo]

[Awol]

You can also argue that Ireland being in the Euro has helped stave off currency speculators who would have sent Ireland the way of Iceland by now if it wasn't for the protection of the Euro.

It's not the Euro that is the problem, it is the way the Irish government (and Greek) took the low interest lending but spent like there was never a problem coming on the horizon.

Absolutely - those making this as point for the abandonment of the Euro are not taking this into any sort of consideration

Because it is utterly irrelevant to the decisions Ireland faces now, although the bold above highlights the inherent structural flaw in the Eurozone.

Ireland has two choices, get out of the Euro and face a long struggle back to independent economic health, or hand over their economic and political sovereignty to Brussels... Lisbon treaty anyone? Shit, they fought for long enough for independence from Britain, are they really going to chuck it all in now?

The EU agenda is to progress the integration of the union at any cost, "if the Euro fails, Europe fails" were Merkel's words. If that cost happens to be the future and independence of the Irish Republic then they appear quite willing to pay it.

I don't think it's coincidence that a certain Gerry Adams has just binned Northern Irish politics to stand for election down south. Some people can see the writing on the wall, and chaos breeds opportunity..

[Awol]

Yes, there's an enormous problem about the world economy. The main problem as I see it is the emergence over several years, many years, of two massively destructive forces, closely linked. First, the growth of the finance sector at the expense of the real economy. Second, the growth in power of financial institutions, irresponsible, footloose, short-sighted, selfish, able to make governments pursue self-defeating agendas in order to profit themselves.

Nail and head interface there, Peter.

In the face of that, playing along with the notion that there's a massive problem about government budget deficit and we must sacrifice our long-held rights, is stupid in the extreme.

Unless we have a ready made system to replace global capitalism that can be parachuted in and universally agreed to on the day we tell 'the man' to go and swivel, I'm not sure what other option we have to paying our debts.

Unless we want to bin free trade and globalisation, we will have to compete with countries whose 'austere' social systems and wage structure would give your average European (steeped in the entitlement culture) a heart attack. How we achieve that is anyones guess and may be too painful politically to even attempt. Which leaves option one..

[peterms]

The strings that are mentioned is to force the republic to realign their corporate tax rates with the rest of europe - so the banks get bailed out and all the tax generating companies leave the country - so little point in that. So Ireland have been talking to the IMF - It must be bad if you'd rather take their money than the EU dollar - which would as Awol says, mean dropping out of the euro. Is it a scare tactic?

It's not the Euro that is the problem, it is the way the Irish government (and Greek) took the low interest lending but spent like there was never a problem coming on the horizon.

Well it is the EURO that is the problem - you can't have moentary union without political union.

No it's more that you can't take the benefits of being in the Euro without any restraints. Whether the restraints come from a central government or from the individual countries themselves.

Not all countries in the Euro have had this problem and the countries that have will have their domestic finance policies dictated from Brussels once they take a bailout.

Yes indeed. Being in the Euro first and foremost means you no longer have a sovereign currency. You have given up the ability to devalue, and to create a deficit in your budget to counter any problems the economy is having. It's like being the UK one day, and choosing to be Northumberland or Rutland the next. Your monetary policy will be decided in the interests of a far larger area of which you are a pretty insignificant part.

The benefits to Ireland came from membership of the EU, not from the euro. When I was a kid, we used to make up parcels of old clothes to send across to relatives in Ireland. 15 years later, driving around Ireland, it seemed every second farmhouse had been abandoned and a new house built about 30 feet away. This change was not the result of endogenous growth. But neither was it the euro, which didn't yet exist. It was probably the wider benefits of EU membership, especially for a country with a large peasant class, like France, via the CAP.

What's interesting about the euro is that it was first proposed several years before the US collapsed the Bretton Woods system, but was introduced afterwards, and yet proceeded despite the new advantages to single currencies in the light of that pretty momentous change in 1971. Neither do the countries who have bought into it appear to have thought too much about how it restricts their own freedom for manoeuvre, and how that changes of 1971 required a reassessment of the options.

The loans which Ireland may be required to take will come at a high cost. Like any loan, they will safeguard the position of the lender, while caring little or nothing about the position of the borrower.

If they weren't in the euro, their position would be stronger, though maybe not even then strong enough.

[Corcaigh]

Ooops, George Osbourne's fact finding mission in 2006 does not bode well for the UK...

February 23, 2006

Look and learn from across the Irish Sea

A generation ago it would have seemed ridiculous to go to Ireland for economics lessons.

George Osborne writes

A GENERATION ago, the very idea that a British politician would go to Ireland to see how to run an economy would have been laughable...blah blah blah

Ozzy only needed to learn one thing, cut Corpo tax and the big fish will launder their profits in your jurisdiction.

Although i've argued that a readjustment of our corpo tax rate is needed to help pay off the bank debts, it'd be in the range of a 1-2% increase lest we scare off the Googles, Microsofts & Pfizers of this world. Sarko and the lads would almost certainly want to see it doubled. That's not going to happen as it'll collapse pretty much the last sector of the Irish economy which is making serious cash for the DoF.

The French & Germans have been moaning about Irelands corpo tax for years, if fat bitch Merkel insists on including the proposal as part of a bail out of Ireland then it'll end in tears. It would be further proof, if proof were needed, that the whole EU/EMU project is run in the interests of the 2 big players. It would be at that point that i'd imagine Ireland pulling out of the Euro & EU would become a distinct possibility.