High on Hubris and Bloated on Bribery and Corruption: The Tory 1% is leading us back to a grim future of casual prejudice and divisiveness

The Organisation for Economic Cooperation and Development (OECD), the West’s most respected economic think-tank, has rejected the whole concept of “trickle-down” economics being pursued by David Cameron and George Osbourne and cites evidence showing that “income inequality has a sizeable and statistically negative impact on growth”.

Based on its latest research, the organisation states that the UK economy would have been more than 20% bigger if the gap between rich and poor had not widened so much since the 1980s (across OECD countries, the richest 10% now earn 9.5 times the income of the poorest 10%, up from 7 times as much in the previous period).

Far from cutting taxes for the top 10%, the OECD proposes a rejigging of tax systems to ensure wealthy individuals pay their fair share. The proposals include increasing top rates of income tax, scrapping tax breaks and reassessing the role of all forms of taxes on property and wealth. The think-tank also recommends putting in place redistributive policies to achieve greater equality in disposable income and thus improve life for the bottom 40%.

This is reminiscent of Ed Miliband’s recent speech at the University of London where he described the current state of the country as “deeply unequal, deeply unfair, deeply unjust”, and pledged to change the “zero-zero economy” where some people are on zero hours contracts and those at the top are paying zero tax.

The OECD report was well covered across all media, from The Guardian (Revealed: How the wealth gap holds back economic growth) to the BBC (Inequality “significantly” curbs economic growth: OECD) to Sky News (Wealth gap harms countries’ growth – OECD). Not even The Daily Telegraph (Inequality worst in decades) or The Daily Mail (Reducing inequality would boost economic growth) could spin the story in favour of Cameron and Osbourne’s awful economic policies.

Meanwhile many (including We Ladies) were wondering what the hell took the OECD so long! But be that as it may, beyond the economic-speak of “trickle down”, “growth”, and “redistributive policies”, we were also struck by some other recent stories that speak volumes about the corrosive effects of income inequality on the health of the society.

Bribery and corruption

The OECD had also made headlines the week before with its report that bribes in company deals average $14m, with 57% of them paid to win public procurement contracts, mainly in wealthy countries.

Here, two recent deals come to mind. The Royal Mail rip-off is estimated to have lost the government £1 billion and made a profit of £36 million for the hedge fund of George Osbourne’s university pal and best man. And why would the government privatise the profitable, publicly owned East coast mainline in a time of austerity?

Then there’s the case of Stephen Dorrell, the Tory MP who won’t give up his parliamentary seat until after the May 2015 General Election, despite taking up a job with KPMG, a private company that wants to bid on a £1 billion NHS contract. Dorrell himself admits his new job is “incompatible” with his role as an MP. So who’s his boss for the next five months, his constituents or KPMG?

Upstairs, downstairs?

Moreover, on the day the OECD inequality story led the news, Tory peer Baroness Jenkins proclaimed that poor people go hungry because “they don’t know how to cook” (to which one Twitter wag responded that poor people certainly know how to cook as they’ve been working below stairs for generations to feed the upper classes). What’s more, the peer showcased this gem of ingrained class prejudice while launching the damning report of an all-party parliamentary inquiry into hunger and footumblr_mcvxgkZqh11qk8yisd poverty in Britain.

Feeding Britain” identifies a “growing budgetary crisis for many low-income families”, with a considerable number finding it difficult to afford the “three main essentials of food, housing and utilities”, due to low pay, growing inequality, the harsh benefits sanctions regime and social breakdown.

In a typically Tory mealy-mouthed way, the Baroness later faux-apologised “to anybody who’s been offended”. She should have “learned the lessons” after criticism of the House of Lords refreshment committee, on which she sits, for its refusal to share catering facilities with the Commons because they were worried the quality of the bubbly might suffer.

Also showing his intense interest in the fate of the poor was Tory MP Nigel Mills, who was photographed playing the online game Candy Crush during a meeting of the Works and Pensions Committee.

Sexism and racism too

On the same day the Baroness put her foot in her mouth about what poor people can’t do, Janet Suzman, the actor and Dame, declared from hubristic heights that theatre was invented by white people. We don’t know from whence came this flight of ignorance; we can only hope that she takes on board the ensuing criticism.

However, Suzman’s ignorant comment pales when set against Nigel Farage who, late for a meeting in Wales, blamed immigrants for there being too many cars on the road. The Daily Mail was surprisingly unsympathetic, noting that, “UKIP pays £60,000-a-year for Mr. Farage to enjoy the services of a chauffeur”.

It’s been a bad week for Farage altogether (as we’re always glad to point out). Apart from crass immigrant paranoia, he also reminded us of his lack of empathy towards women, telling a radio interviewer that women should breastfeed “in a way that’s not openly ostentatious”, perhaps sitting “in a corner”. A follow up, it would seem, to his recent remarks that women who work in the City and have children are worth less than men.

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Cameron and Osbourne Stick to their Guns: More austerity for us, more prosperity for them

So, post Autumn Statement, we are now clear on the extent of the square-jawed resoluteness of the Prime Minister and the Chancellor of the Exchequer. They read from the same script: “our Long Term Economic Plan is working” and the UK must “stay on the course to prosperity“. The question is, whose prosperity?

Missed targets

Contrary to the script, what the Autumn Statement demonstrated is that the long-term plan isn’t working (at least not for the purpose stated). As Ed Miliband had already noted, speaking in Nottinghamshire on Monday, they have missed “every single target they set themselves on clearing the deficit and balancing the books by the end of this Parliament”. This includes:

  • A shortfall of more than £66bn in income tax receipts
  • National Insurance contributions £25.5bn lower than expected
  • Social security expenditure £25bn higher than planned
  • Borrowing going up and the deficit has worsened

Ed Balls has pointed out that the deficit will not come down “unless growth is strong and wages are rising for working people”. But growth is actually slowing and pay is falling, with people on low incomes seeing their wages fall the most.

The government will have to borrow as much as £75bn more than it intended over the next five years to make up for collapsing revenues from income tax, oil sales and stamp duty. Tax receipts are forecast to be £23bn lower in 2014-15 than predicted. Maybe that’s because poor people can’t pay tax and corporations won’t pay (or are gifted tax cuts).

Smoke and mirrors

The Autumn Statement is full of dodgy accounting. The Independent lists several of these tricks. For instance, Cameron had already announced the headlining £15bn road-building programme at the CBI conference last month (and, as reported in the Daily Mail, no less, the Campaign for Better Transport says it “will trash protected areas and do nothing for the economy”).

The £2.3bn for flood defences had already been allocated as part of a “national infrastructure plan” that will span the next six years, and £750m of the £2bn for the NHS is being reallocated from the existing health budget with the rest coming from under-spending by other Whitehall departments.

The Institute for Fiscal Studies says Cameron is using an inconsistent definition of “savings” when he says the government has made £100bn worth. And as for the deficit, having failed to erase it as promised, Osbourne’s plan now is to halve it by the election.

Then there’s the announcement that the government will pay back all the World War I debt – what Osbourne calls “a moment for Britain to be proud of” and “a sign of our fiscal credibility”. Only problem is, it’s not true; he’s actually refinancing it.

The cover up

All of this obscures Cameron and Osbourne’s real agenda of shrinking the government, buttressing the financial sector and adding even more to the coffers of the already mega rich. And they are succeeding in advancing these goals.

They have fooled many into believing the myth that Labour “got us into this mess” and the even bigger lie that it is they who are clearing up the mess by “making the difficult choices” in a painful austerity programme that takes from the poor and gives to the rich. It is all a big scam.

In “Pain, No Gain: The Austerity Scam”, John Weeks recalls how Osborne predicated the programme of cuts on “a deficit, expenditure over revenue, of 10% of gross national product, allegedly unprecedented during peacetime”. But as Weeks points out “the deficit … was higher under the John Major government in 1994 (minus 9.1% of GDP compared to 8% in 2010)”.

The fact is that the deficit was not caused by Labour’s spending or by “welfare scroungers”. The global financial melt down was a direct result of corruption and fraud in the global banking sector. Yet the government led by Cameron and Osbourne has taken no action to get that sector under control.

But who is paying the cost?

The evidence is clear. “Britain is on the brink of becoming a nation permanently divided between rich and poor,” according to the Social Mobility and Child Poverty Commission, which predicts a rise in absolute poverty from 2.6 million households in 2010 to 3.5 million in 2020.

The numbers on child poverty, homelessness and reliance on food banks are increasing in tandem with the numbers of billionaires taking up residence in London (up from 39 in 2012 to 43 in 2013 and on Forbes list of the top 10 cities for billionaires).

Osbourne wants MPs to vote next week on his “Charter for Budget Responsibility”, which would set a target in law to eliminate the deficit and balance the books by 2017–18. It’s easy to see what the trickster is up to. The next government will be locked into his austerity programme; win or (more likely) lose, he wins. And we will lose too, with the state projected to fall to its lowest size since the 1930s, according to projections by the Office for Budget Responsibility.

On a final note

The Twitter hashtag, #CameronMustGo continues to soar – still trending unabated and projected to reach a million tweets today. One positive thing that can be said about Osbourne’s Autumn Statement; it provides plenty more fodder to keep the hashtag trending for some time to come.

Amy

Grace

MrsVB