Friday 31 August 2012

The Atos disability denial factory


I have had to be extremely careful writing this, since it has been reported that Atos have a track record of using the legal system to shut down websites that criticise their Work Capacity Assessment programme. The article is interspersed with red text disclaimers for the Atos legal team, sorry for the inconvenience. Atos lawyers, please note that the observation about shutting down websites is not a first hand assertion or opinion, it is substantiated reportage (click the green link).
In 2008 the Labour government awarded a contract to the French outsourcing company Atos to manage a programme of Work Capacity Asessments for claimants of disability benefits.The Tory led coalition then expanded the contract and extended it to 2015. According to the Independent, the current WCA current contract is worth £110 million a year. Atos Lawyers, there is nothing controversial in this opening paragraph, all information is in the public domain.

The objective of the revised Work Capacity Assessment programme sems to be to reduce the number of people claiming long term disability benefits, by transferring them to Job Seekers Allowance. The Department of Work and Pensions drew up the specifications of the outsourcing contract. A Channel 4 Dispaches report secretly recorded Atos trainers instructing new assessors that there were specific targets to not find more than 12% of claimants to be eligible for the support group and that the target had been set by the DWP. Atos and the DWP denied the claims that there is a specific target, but it is impossible to deny that during the training process many Atos assesors were made to believe that there are specific targets. Atos Lawyers, the bulk of the criticism in this paragraph is aimed at the DWP, the discussion of the secret recordings is based on the Channel 4 dispaches recordings (green link) and is followed up by the Atos denial.  

The Daily Express reported a DWP spokesman as saying "We’re overhauling the whole system of incapacity benefits to place the emphasis on what work people can do, not what they can’t". A justification narrative that was repeated by David Cameron at the opening of the 2012 Paralympic games in London when he said that "It’s about the inspiration and it will change people’s minds and that’s what matters. It’ll teach people about what they can do, rather than what they can’t do".  Atos Lawyers, there is no inherent criticism (or even mention) of Atos in this paragraph, simply a criticism of the Tory/DWP justification narrative.

The fact that Atos have been allowed to sponsor the Paralympic games is controversial, given the fact that they have found terminally ill cancer patients and severely diabled people "fit for work" and that a Daily Mirror investigation found that an average of 32 people a week were dying after being put in the "work-related activity group" after their ATOS Work Capacity Assessment. The Mirror investigation failed to determine the number of people dying after being found "fit for work" or whilst attempting to appeal their WCA assessment, since the DWP doesn't keep such records. Atos Lawyers, all of the claims in this paragraph are supported by reliable sources (green links), the only opinion I have expressed here is that sponsorship of the Paralympic games is "controversial", hardly grounds for a libel case or an attempt to have this blog unilaterally shut down.

The Citizens Advice Bureaux have recorded a huge upsurge in the number of people seeking their help to overturn Atos assessments, which takes up a huge amount of their time and prevents the CAB from dealing with other cases. Of the 127,000 WCA tribunals in the 2010-11 period, CAB report that 47,000 were successful, these statistics indicate a 37% failure rate. The CAB stated that people regularly complain of "[Atos assessors] that don't listen to the claimants answers", "rushed assessments that do not cover all the claimant's health problems" and "answers attributed to claimants that they insist they did not say". Atos Lawyers, none of these are my own assertions, all of the data and the reported complaints about Atos assessments come from the Citizens Advice Bureaux (green link).

It appears that significantly more WCA decisions are overturned at tribunal with representation. the website Bristol 24-7 reported that 46% of WCA appeals in the Bristol area are overturned at tribunal but that the figure "soars" to 82% when the appellant has representation. Atos Lawyers, the conclusion that appeals against Atos decisions are significantly more successful when the appellant has representation is extrapolated from the figures in the cited webpage (green link).

The Guardian have reported that the huge number of tribunals to appeal Atos WCA assessments are costing the taxpayer £50 million a year. Atos Lawyers, another substantiated claim (green link).

The Labour MP Tom Greatrex has been one of the leading campaigners against the Work Capacity Assessment project. He requested that the National Audit Office investigate the Atos contract after Tory ministers claimed that details, including information about financial penalties, were "commercially confidential". The NAO came back with a damning report which found that less than 10% of the financial penalty clauses in the contract had been activated and that the DWP's bargaining position had been severely undermined by the setting of insufficiently challenging targets. Atos Lawyers, once again, substantiated claims (green link).

At the 2012 annual GP's conference, British General Practitioners voted unanimously in favour of scrapping the Work Capacity Assessment regime.  Laurence Buckman, chair of the BMA's GPs' committee said that "When 40% of appeals against the assessments are successful at tribunal hearings, something is clearly very wrong with the system" and that "The government needs to look again at the whole assessment process and replace it with one that is fit for purpose." Atos Lawyers, all of the claims and quotes in this paragraph are substantiated by the Guardian article (green link).

It has been reported in the Guardian that twelve Atos doctors are under investigation by the General Medical Council (GMC) and if they are found not to have put the care of patients first, they could be struck off the GMC medical register. The Guardian stated that "it is understood that the majority of allegations concern the treatment of vulnerable people capability assessments were carried out" with the caveat that the GMC refuse to comment on individual cases. Atos Lawyers, again, this is reportage based on a Guardian article. All of the assertions in this paragraph are clearly based on the Guardian report.

  It has been alleged that some Atos staff used Facebook to make obscene and degrading remarks about disability claimants, which included calling them "parasitic wankers" and "down and outs". Atos Lawyers, there is a source for these allegations (green link) and I have resisted the urge to speculate about whether these comments may be indicative of the mentality of the wider Atos workforce.

Niel Bateman, a solicitor that handles ESA appeals, stated that on two occasions his clients had successfully appealed against Atos decisions on the grounds that the Romanian doctor assessing them wasn't even licensed to practise in Britain at the time. Perhaps the most absurd Atos employment case so far is that of the Nigerian qualified doctor Dr Usen Samuel Ikidde, who was given a formal warning by the GMC in January after he was found to have worked for Atos whilst on sick leave from an accident and emergency department. A man that pretends to be sick, so that he can claim his NHS salary whilst simultaneously earning another salary at Atos, assessing whether people on disability benefits are actually sick or not. Atos Lawyers, both of these stories were reported in the Guardian here.

Atos have a contract worth £110 million a year, yet the tribunals stemming from their assessments are costing the taxpayer another £50-60 million a year. The Labour MP Tom Greatrex describes this arrangement as "paying twice to try to correct the mistakes in the initial assessments or the process that leads to the assessments and decisions". The absurd thing is that the taxpayer is paying twice for a service that doesn't even need to be carried out in the first place, since claimants must provide a wealth of evidence from their GP and specialist doctors in order to claim disability benefits in the first place. The Work Capacity Assessments seem to be a case of the government employing Atos to overturn the substantial evidence provided by GPs and specialists on the basis of a short interview and a computerised assessment. It is absolutely no surprise at all that so many cases are being successfully appealed at huge expense to the taxpayer.

Atos are to blame for this fiasco, but a much larger proportion of the blame must go to the government and the DWP that devised this scheme in the first place, drew up a rubbish contract and then failed to trigger financial penalty clauses in the contract once things started to go wrong, leaving the taxpayer, not Atos, to pick up the £50-60 million cost of these mistakes.

Atos Lawyers, I have attempted to provide reliable sources for every assertion made in this article. If you contest any of the assertions made here, I would appreciate it if you would focus upon the mainstream media organisations that originated all of these stories, rather than attempting to have my blog shut down.

Thursday 30 August 2012

Explaining the economic success of Nazi Germany

This is an article that you will struggle to understand if you are a reactionary anti-fascist. There is nothing wrong with being an anti-fascist, but being reactionary about it prevents the development of a more comprehensive understanding of the subject.
One thing that cannot be denied is that what happened in post-Wiemar Germany was an economic miracle. During the inter-war period the German state recovered from one of the worst bouts of hyperinflation in economic history to become a global super-power in a matter of years. In less than a couple of decades Germany climbed out from the post-war economic ruins to become a super-power strong enough to invade and occupy vast swathes of central Europe and create a precursor to the Eurozone, with the Nazi Reichsmark currency providing direct backing to the currencies of the numerous Nazi client states.

The question to ask must be; "how did Germany go from a state of hyperinflation, mass unemployment and unsustainable debt, to a global super-power in such a short space of time?"

From an economic point of view, the answers are quite obvious. The German state intervened in the economy to create near universal employment and maximum productivity. This level of productivity was achieved through massive investment in research, technology and science as well as through the implementation of massive infrastructure improvement and industry modernisation projects.

There is one huge problem with the Nazi economic miracle: The fact that subsequent generations of politicians have fixated on a lot of other stuff to provide their explanation for the rise of Nazi Germany: Modern politicians seem to have concluded that it was the state propaganda, the scaremongering and scapegoating (that soon morphed into full scale genocide), the military industrial complex,  the warmongering, the contempt for international law, the anti-democratic political system, the brutal oppression of dissent and the utterly compliant media that made inter-war Germany so powerful, when it is spectacularly obvious that the German economic miracle was actually built upon foundations of macroeconomic planning, high employment, investment in infrastructure and a goal of achieving maximum productivity.

A cursory look at modern politics shows that the established political classes have studied the Nazi school of  politics but learnt the wrong lessons from the German economic miracle. Nazi techniques such as mass propaganda, media manipulation, scapegoating and the long-term military occupation of foreign territories have become the norm in Anglo-American politics. The mainstream media compliantly regurgitate the establishment narrative; this week they tell the public to hate the unemployed, next week they will tell us that we should suspect all disabled people as workshy scroungers. They applaud interventionist polices that lead to the invasion and occupation of foreign territories and they display as much contempt for the norms of international law as the political  leaders they cheerlead for.

The most notable similarity between modern politics and the Nazi regime is the ubiquitous use of propaganda. One of the German propaganda minister Josef Goebbels' most famous formulations was the big lie technique, which he described as "if you tell a lie big enough and keep repeating it, people will eventually come to believe it". The fact that modern day political classes make a habit of lying to the public is an essential part of modern political discourse, refusal to acknowledge this fact would be hopeless political naivety. Of the countless examples of lying politicians two examples stand out; the distortions, misinformation and outright lies presented to the public by the Blair regime as they desperately pushed for the invasion and occupation of Iraq; and the blatantly false narrative presented by the political right to explain the neoliberal economic meltdown, a narrative referred to as the Great Neoliberal Lie.

Almost every utterance by the modern day politician is carefully vetted by a team of spin-doctors and PR merchants, people that fulfil almost exactly the same function as Goebbel's ministry of propaganda. The important factor to them is not whether the statements are based upon truth, but whether the statements comply with the established narrative that the government are trying to spin out as justification for their policies. The fact that it is all just one big "story" becomes clear when politicians make unguarded comments or make the mistake of thinking on their feet. The narrative of Lib-Dem and Tory "tensions" in Coalition government was completely undermined when Nick Clegg was overheard telling David Cameron that "if we keep doing this we won't have anything to bloody disagree on" and Cameron famously strayed from the Tory narrative by hypocritically condemning the comedian Jimmy Carr for tax-dodging, when the Tory party is financially supported by, and stuffed full of tax-dodgers.

Josef Goebbels may have been a disgusting fascist
that murdered his six children and committed suicide, but
his propaganda techniques live on in modern day politics.
That the modern political classes have embraced Nazi formulated strategies on propaganda and management of the media narrative is undeniable. It is also undeniable that modern politicians can't help using Nazi style demonisation campaigns against minorities like the unemployed, the disabled, Muslims, single parent families and immigrants. In recent decades the UK government have been ever keener to stamp out dissent too, from their protest free zones around Parliament to the Internet snooping bill and from police brutality to imprisonment without trial, both sides of the house have played their part in trying to make Britain a more totalitarian state. Another similarity between modern British politicians and the Nazi regime is the blatant contempt for international law. Tony Blair set the precedent for ignoring the UN to engage in imperialist wars of aggression when he joined the NATO bombing of Serbia in support of the Islamic terrorist group the KLA. Just a few years later and the Islamic terrorists suddenly became our enemy as Blair signed up for the invasion and occupation of Afghanistan, this a couple of years before he once again bypassed the UN to join the American invasion and occupation of Iraq.

What the modern quasi-fascist political classes (and their mainstream media apologists) fail to recognise is that it was all this severe Nazi crap that prevented post-Wiemar Germany from succeeding, not what made the success possible in the first place. Had the German people managed to prevent Hitler from realising his genocidal, totalitarian, expansionist ambitions and instead managed to replace him with a leader to remain focused on the maintenance of full employment and maximum productivity; the Second World War would never have happened; German industries and cities would not have been obliterated by Allied carpet bombing; millions of people would not have died; the Soviet occupation of East Germany would have been avoided; Germany would never have been partitioned; and Germany would not have had to wait over half a century to gain the absolute dominance of the European economy that the introduction of the Eurozone has eventually handed them.

It is quite clear that many people in Nazi Germany had come to realise that Hitler's genocidal and megalomaniac tendencies were a grave threat to the future prosperity of Germany and to humanity as a whole, hence more than twenty assassination attempts against Hitler by German citizens

Of course there are differences between the modern political classes and the Nazi regime, the main one being the sheer scale of Nazi brutality. However one key difference demonstrates that modern politicians have learnt some lessons from the failure Nazi regime, the main one being the maintenance of the "illusion of political plurality". All three of the establishment political parties in the UK are fully signed up adherents of the neoliberal ideology, from their track records in government this is absolutely undeniable. Whichever way the British public vote, the government will remain a neoliberal one, the only element of choice being the colour of the ties that they wear as they continue the process of neoliberalisation. This illusion of political plurality leaves people blaming one political faction or the other, whilst the underlying ideology of neoliberalism and economic apartheid remains unchallenged. When politics is done this way, it doesn't matter whether the public manage to remove one figurehead, since they will simply be replaced with another figurehead intent on promoting almost exactly the same ideology.

Sunday 26 August 2012

Scottish Catholics and their campaign against gay equality

Cardinal Keith O'Brien, a man that believes he has the right to impose Catholic
 ideology on non-Catholics against the will of the majority of Scottish people.
In August 2012 the leaders of the Catholic church in Scotland took the extraordinary measure of sending letters to every parish, to be read out to the congregation during Sunday service. The letter outlined the Catholic opposition to the concept of gay marriage, criticised the Scottish National Party government for promising to legalise gay marriage and called upon their followers to continue to act against efforts to "redefine marriage".

The Scottish government have defended their right to introduce same-sex marriages and made clear their determination to bring in the legislation by 2015, despite the objections of the Catholic church. 

Cardinal Keith O'Brien, the leader of the Church in Scotland, a man who has described the concept of gay marriage as a "grotesque subversion of a universally accepted human right" also used the letter to announce the launch of a new group called the National Commission for Marriage and the Family to co-ordinate a campaign against gay marriage.

This letter and the wider Catholic campaign against gay marriage can be seen as yet another example of Catholic bigotry. If they don't believe in Gay marriage, then they don't have to carry out the ceremonies, but their attempts to deny this right to non-Catholics is an absolutely clear demonstration of their determination to impose their own ideology on others. I can't see why any right thinking gay couple would want to be married in a Catholic church (other than perhaps to try and kick up a massive stink), so the Catholics actually have nothing to fear from this legislation.

The Catholic church likes to dress up their stance as an attempt to "support and sustain marriage" and "defend families", but it is quite clearly an expression of their homophobic bigotry and an attempt to impose their values on the rest of Scottish society.

In June 2012 an Ipsus Mori poll found that 64% of Scots agreed that same-sex couples should have the right to marry and 68% agreed that churches should have the freedom to wed same-sex couples if they choose. These results show that the majority of Scots are reasonable and tolerant people that believe that gay couples should be able to express their love and commitment for each other through marriage. The fact that the Catholic church have expressed their determination to undermine same-sex marriage legislation shows that they are a divisive influence acting against the will of the majority of Scottish people.

One particularly interesting fact about gay marriage is that many of the very first nations to have introduced gay marriage legislation have been traditionally Catholic countries (Spain, Argentina, Mexico and Portugal). Perhaps this is indicative of the fact that people in Catholic countries are becoming increasingly sick of Catholic attempts to interfere in secular affairs.

Once the newspapers began reporting the Catholic anti-gay letter, there were a lot of predictable comments from the usual band of atheist reactionaries and anti-theists claiming that this is yet another example of religious bigotry and using the homophobic stance of the Catholic church in order to have a go at religious people and religious organisations in general.

There is one piece of information that should shut up these obnoxious atheists, which is that the Religious Society of Friends (Quakers) have been lobbying the government (and even the Queen) for years to recognise their gay marriage ceremonies as legal marriages. This is an absolutely clear demonstration that not all religious people and organisations are bigots and homophobes.

Anyone making generalised claims of bigotry against all religions and all religious organisations, should be considered bigots themselves. They are displaying their intolerance by lumping all religious people together and then defining them by the attributes of the worst members of the group, exactly the same kind of generalisation and stereotyping strategies used by religious extremists to demonise those that they deem to be "sinners", "heretics" or "apostates".

Sure, atheists and anti-theists should feel free to criticise the Catholic church for their homophobic stance, but they should quit using obvious double-standards to tar all religious people and organisations with the same brush, since some religious organisations are actually very progressive and have done a lot more to bring about gay equality than these reactionary atheists (that ignorantly condemn such religious progressives as bigots with their pathetic generalisations) have ever done.

The Catholic stance on gay marriage and their determination to impose their (warped) values on everyone else is revolting, however having a dig at religion in general isn't going to help. Progressive people; Quakers, deists, atheists, humanists, agnostics, spiritualists or whoever, should stand together in united opposition to Catholic bigotry and condemn their desire to impose Catholic values on many millions of non-Catholics.

See Also

Quantitative Easing explained

Over the last few years there has been much talk about Quantitative Easing in the economic news. Most people have picked up the fact that it is a form of money creation, however there is still a lot of confusion about what it is for, and very limited public understanding of the wider economic consequences of pumping vast amounts of "new money" into the economy.

Many people think of Quantitative Easing (QE) as a form of money printing, however the QE apologist is always keen to point out that "it isn't actually money printing" because no new banknotes are actually printed up. They are presumably keen to make this point in order to prevent the public from making mental comparisons with hyperinflationary economies such as Wiemar Germany and Zimbabwe. The problem with this QE apologist argument is that it is nothing but a semantic defence: OK, there are no printing presses involved, but "magicing up" hundreds of billions with what is little more than an accounting trick is hardly any better is it? Someone at the Bank of England or the US Federal Reserve types a few numbers into a computer and voilĂ , they have tens or hundreds of billions in new currency to play with.

The idea behind Quantitative Easing is that the central bank uses this supply of newly created money to buy up government bonds and other financial sector assets such as gilts. The intended purpose being to drive down yields (interest payments) on government bonds and to provide more financial sector liquidity (the ability to immediately perform economic actions like buying, selling, or paying debt) by replacing financial sector asset holdings with cash.

Quantitative Easing is an unconventional approach that has been introduced in economies where the use of normal expansionary monetary policies has become impossible. The main reasons that normal monetary policies no longer work are that base interest rates have already been reduced to such an extent that it is not really possible to lower them any further (the Bank of England base rate has been held at the all time low of 0.5% for over four years). The traditional tool of reducing financial capital requirements (the small proportion of capital that a bank must keep in reserve when it makes loans) would be insane given that the neoliberal economic meltdown came about largely because so many financial sector institutions recklessly over-leveraged themselves betting on rubbish like sub-prime mortgages, Greek government bonds, Irish bank shares and Spanish property assets in the first place.

Essentially the maintenance of all time low interest rates and the creation of vast sums of "new money" can be seen as concurring policies, since both are controlled by the central banks. In the case of the UK economy, the Bank of England lowered interest rates in the wake of the neoliberal financial sector meltdown of 2007-08 and then began "magicing up" money once they couldn't slash interest rates any further. The obvious reason for the combined strategy of negative real interest rates policy (NIRP) and Quantitative Easing (QE) is to prevent the recklessly over-leveraged financial sector institutions collapsing into their own black holes of debt. Since 2008 the Bank of England has created £375 billion (as of August 2012) for distribution to the financial sector.

Quantitative Easing is only possible in countries that have not signed away their monetary autonomy. The central banks in the US, UK and Japan can control their own currencies, whilst Eurozone countries such as Spain and Italy have signed away the ability to adjust money supply to the European Central Bank. Take this comparison between the UK and Spain. Both countries suffered from broadly similar economic crises; recklessly over-leveraged banks, the implosion of "easy credit" backed property bubbles, rising levels of personal and corporate debt and rising unemployment and underemployment. The economic chaos in Spain has driven up the cost of government borrowing to practically unsustainable levels (6-7% interest) whilst the Bank of England have managed to entice investors to buy up British government bonds with the virtual guarantee that they will be bought up for cash via Quantitative Easing, a policy which has driven the yields on UK bonds down to all time historic lows.

The UK Chancellor George Osborne likes to boast that these historic lows in the cost of government borrowing have been achieved because "the market" has confidence in his barmy "cut now, think later" indiscriminate austerity policies. However the real reason that yields have fallen is that the Bank of England have Quantitatively Eased £375 billion into the economy in order to artificially manipulate interest rates on UK government bonds. Either Osborne is being utterly disingenuous, or he has very little idea of how the post neoliberal meltdown economy actually works.

There are stark warnings from history about the dangers of Quantitative Easing. Japan was the first major economy to try it out in the 1990s after the collapse of an unsustainable property boom. Since then the Japanese economy has stagnated and Japanese government borrowing has risen well above 200% of GDP. The economic stagnation since QE was introduced in Japan have led to the period being described as "the lost decades".

The Bank of England has been forced into taking the same kind of measures in order to prevent systemic collapse of the UK financial sector. Without QE and another £900 billion in direct government interventions (bailouts, nationalisations etc) several of Britain's largest banks would certainly have collapsed into insolvency, bringing down many other institutions with them. There is a strong case to be argued that this should have been allowed to happen in order to clear out the recklessly speculative banks and allow more prudent and competent financial sector institutions to increase their market share (creative destruction). QE (and the direct government bailouts) can be seen as a desperate attempt to maintain the economic status quo by postponing the inevitable financial sector collapse, a strategy often described by Max Keiser as "kicking the can down the road".

As with all economic policies, there are winners and losers. The Bank of England's own research estimates that QE has disproportionately benefited the wealthiest 5% of British households, with over 40% of the economic benefits of QE going to them. The fact that the extremely wealthy are the main beneficiaries of QE is extremely concerning, since the richest 5% are also by far the most likely to avoid paying tax on their gains by funnelling them through elaborate tax-dodging scams, meaning that much of this newly created money has already been siphoned directly out of the UK economy into tax havens such as the Cayman Islands or Liechtenstein.

Another problem with the already wealthy getting the lion's share of the economic benefit is that they have a much lower Marginal Propensity to Consume, which is a fancy way of saying that the rich spend a lower proportion of their wealth in the "real economy", so the economy would have benefited more had the benefit of QE gone to the poor and ordinary, rather than to the already wealthy speculator class.

Since the super-rich have taken a disproportionate amount of the benefit of QE, it is quite obvious that ordinary people are paying a disproportionate amount of the cost. There are several explanations, the main ones being wage deflation and capital value deflation. The simplest example to explain is the case of savers, who have seen returns on their savings plummet since 2008. The Bank of England admits that savers have lost £70 billion since 2008 due to low interest rates, but this is an extremely conservative estimate since it fails to take into account soaring inflation. Ordinary working people are also losing out since their wages are failing to keep pace with inflation. The prices of fuel, food, utilities bills and public transport have soared, whilst wages for the majority of workers have barely increased for several years.

It is absolutely clear that the beneficiaries of these twin policies of maintaining extremely low interest rates and "magicing up" £375 billion in new cash are the extremely wealthy and the reckless speculator class, whilst the losers are ordinary working people and prudent people like savers and pensioners. There is a growing body of evidence (which includes the Bank of England's own research) to demonstrate that the policies of Quantitative Easing and maintaining ultra-low interest rates are nothing but a scheme to transfer wealth to the super rich economic minority, the very people that caused the economic crisis in the first place with their reckless gambling.

What is... Neoliberalism?
What is ... Capital Flight?
What is... Fiscal Multiplication?
The economic case against tax-dodging

Who is to blame for the economic crisis?
George Osborne's economic extremism
What is ... Hidden Inflation?
What is ... Wage Repression?
The Great Neoliberal Lie

Friday 24 August 2012

Regional Pay & Crowding out, more Tory malice

George Osborne's "Millionaire's budget" in March 2012 has already taken an absolute battering from the press and public alike. He was forced into humiliating climb-downs on his proposed "pasty tax", the "static caravan tax" and the "philanthropy tax". These U-turns demonstrated how badly thought through his proposals were, however there are a number of other budget proposals still standing; amongst the worst of which are a stunningly hypocritical tax break to allow British companies to dodge Third World taxes by exporting their profits to tax havens (from a man who boasted only months before that "With this coalition government the hiding places for tax cheats are systematically being shut down") and another scheme to attack public sector wages by introducing "Regional Pay". 

Osborne's stated reason for trying to undermine the pay of public sector workers in low income areas is that the private sector is "crowded out" of poor areas by high paying public sector jobs. The implication being that if public sector pay is slashed, then the private sector will flood into the poor areas to provide plentiful low-paid work.

In June 2012 Tory backbencher Guy Opperman (the only Tory MP from the entire North-East region) spoke out against Regional Pay, claiming that there was no economic argument for the introduction of regional pay. He was quoted by the Daily Telegraph as saying I see no economic argument for introducing regional pay. Our current pay system, which sets a base pay rate, already allows for adjustments in high cost areas like London.

1. Public and private sector employers do not compete for the same workers.
2. Crowding out theory cannot work when unemployment is high.
3. Private sector pay does not vary hugely across the regions.
4. Private sector job creation and job losses appear to be completely unaffected by public sector pay.
5. Public sector employment isn’t crowding out, it actually supports the local economy.
As if criticism from within his own party and a comprehensive evidence based demolition of Regional Pay are not enough, there are numerous other arguments to be made against the policy too:

Many people that work in less wealthy areas commute in from wealthier areas with higher living costs, mortgage repayments and council tax rates. If pay is to be cut in less wealthy areas it may disproportionately effect these people. If this is taken into account and only people who actually live in the less wealthy areas suffer the pay cuts, they could end up getting less pay than a colleague doing exactly the same job but commuting from a wealthy area to do it, which would hardly be fair.

Another foreseeable problem with Regional Pay is the huge size of certain public sector organisations. Take Primary Care Trusts as an example. Many Primary Care trusts encompass very diverse communities. There are many examples of PCTs that include very wealthy rural market towns or suburbs alongside extremely deprived post-industrial towns or poverty stricken inner-cities. Either certain places are going to end up misclassified as poor or wealthy due to their exceptional nature within their particular Primary Care Trust, or Regional Pay must be extended down to the sub Primary Care Trust level, dependent on the wealth of the specific sub-locality. Such sub-regional pay bargaining would almost certainly turn out to be a bureaucratic nightmare that may actually cost the taxpayer more to administer than it ends up saving through payroll cuts.

Another strong argument against Regional Pay is that public sector workers in less wealthy areas often have a much higher workload than workers in picturesque market towns or leafy suburbs. This is especially true in health, social services and policing, where public sector employees in very deprived areas have many more extremely challenging cases to deal with due to the proven links between poverty and issues such as poor general health, mental health problems and criminal behaviour. There is actually an argument to be made for higher public sector pay in more challenging areas, however the current arrangement provides some incentive for public sector workers to choose to work in more challenging areas, since they can benefit from the slightly lower cost of living and significantly lower rent or mortgage repayments.

The introduction of Regional Pay would remove this kind of "cost of living incentive" leading to a brain-drain, as public sector workers are incentivised to seek work in high pay regions, meaning that the wealthier regions get the pick of the talent, whilst the poorer regions are left with the leftovers that couldn't find work in the higher pay grade areas.

The flight of talented public sector workers out of poor areas would inflict socio-economic damage on the local economy, with poorer health services and higher crime rates due to inadequate policing being easily foreseeable consequences. Another economic consequence would be the reduction in demand at the local level as public sector workers are forced to cut their spending in order to get by on their diminished wages, meaning that local shops and businesses would feel the squeeze. The Tory justification that the local economy would benefit from the creation of new private sector jobs relies on the fallacy that they have been "crowded out", when in fact the crowding out effect doesn't exist in areas of high unemployment. Rather than incentivising private sector businesses to set up in poorer regions, it is conceivable that they may actually be incentivised to leave the region due to rising crime rates and declining standards in local government services caused by Osborne's Regional Pay experiment.

Given the wealth of socio-economic evidence against Regional Pay and the fact that Osborne's stated "crowding out" justification for the policy has been completely discredited, one should be left wondering what the real reasons are behind Osborne's determination to drive through this policy. 

There seem to be four key reasons for Osborne's determination to force through these changes despite the wealth of evidence that they could be extremely counterproductive.

1. The Tory ideological opposition to the public sector: Osborne is simply acting out the small-state Conservative mantra. The socio-economic evidence doesn't matter at all when you have an ideological obsession with neoliberal pseudo-economics. It is an article of faith in free market dogma that the size of the state should be diminished and state spending should be cut, so facts and analysis just don't come into Osborne's calculations. He will attack state spending, no matter what the socio-economic consequences, since his economic policies are based upon ideology rather than evidence.

2. Priming for privatisation: Another sacrament of the orthodox neoliberal doctrine is privatisation. To ideologically driven free-market fundamentalists like George Osborne, the necessity to privatise is an unquestionable aspect of their faith. The slashing of wages and the trashing of labour rights in the public sector can be seen as sacrificial enticements to the private sector Gods. The right-wing government can do the "dirty work" of cutting labour costs and eliminating labour rights at the national level as a gift to the private sector. Once this has been achieved the public sector services and industries can then be flogged off on the cheap or simply just given away for free (as Osborne's colleague Michael Gove has done with almost 2,000 secondary schools). Regional Pay can be seen as an attempt to break national pay bargaining in order to make it significantly easier for the beneficiaries of future privatisations to slash wages to boost corporate profits or to lay off workforces in order to asset strip their acquisitions.

3. Political tribalism: It is absolutely no coincidence that the vast majority of poor areas that will be facing public sector wage cuts happen to be Labour voting areas. Essentially, Osborne has found a way of attacking local public services in poor Labour voting areas, whilst maintaining, or even improving public service provision in wealthy Tory voting areas (via the brain-drain effect). This policy can, and should be seen as Osborne's way of rewarding Tory areas with better services, whilst punishing Labour voting areas with severe pay cuts and declining standards.

4. The social mobility war: Despite all of the hot air about "promoting social mobility" coming from the Liberal Democrat members of the government, it is quite clear from coalition economic policies that what is actually going on is a concerted war against social mobility. There is no clearer example of this than the tripling of tuition fees and the recalculation of interest repayments on student loans from simply tracking interest rates to the new measure that ensures a large inflation plus three percent profit for the lenders. The objective of course is to ensure that the children of the establishment get yet another huge life advantage over their peers from ordinary backgrounds. Wealthy parents can ensure their children avoid the fees and the 9% "aspiration tax" by paying the fees up front, whilst the children of the ordinary face massive deductions from what should be their disposable income, a situation that will last most of their working lives if they fail to find a job that pays significantly more than £45,000 a year. Attacking pay and standards in local services for less wealthy areas can be seen as just another Tory campaign in the social mobility war to ensure that the wealthy always get the best advantages in life.

In conclusion, Osborne's stated justification for Regional Pay has been comprehensively undermined, however "crowding out" was only ever a buzzword based on textbook neoliberal gibberish used solely to obscure his real intentions anyway. Having the weight of evidence against him didn't stop him from implementing his ideologically driven "cut now think later" indiscriminate austerity policies and it won't stop him from pushing Regional Pay.

To those that can read between the lines of Tory "Newspeak", the real reasons for pushing Regional Pay are simple. Regional Pay is a policy that is compatible with their beloved pseudo-economic dogma, one that can be seen as a primer to the privatisation of local services. As a political bonus Regional Pay also allows them to attack pay and public services in Labour voting areas whilst safeguarding wages and public service provision in Tory areas, which is essentially a part of their divisive brand of class warfare. Regional Pay is yet another Tory policy aimed at preventing people from ordinary backgrounds from providing an economic challenge to the establishment elite by directly reducing their disposable income and trashing their local services.

See Also

Thursday 23 August 2012

George Osborne's 3rd World tax loophole

There are two main causal factors in the Tory party's slump in popularity in 2012; the fact that George Osborne's "cut now, think later" economic policies have driven the UK back into recession and Osborne's spectacularly ill thought out "Millionaire's budget", described by one Tory backbencher as having been drawn up on the back of a cigarette packet.

Pretty much everyone is tired of hearing Osborne's lame excuses for the economic nosedive he has masterminded: "Labour left us a mess", "The Royal wedding", "the Eurozone crisis", "The Jubilee bank holiday",  "the winter was too cold",  "the spring was too wet", "leaves on the line", "the dog ate my homework"... And pretty much everyone has heard about Osborne's half baked budget policies; "the Granny tax", "the millionaire's tax cut", "the pasty tax", "the philanthropy tax", "the static caravan tax" and all of the subsequent U-turns required because his budget was quite clearly based upon a foundation of ideology, not evidence.

One aspect of Osborne's "millionaire's budget" that has until now, not received a lot of attention is the changes he made to Controlled Foreign Companies (CFC) rules, which will allow British registered companies with foreign operations to begin evading tax in their host countries from January 2013, by shifting their profits into tax havens. This is a regulatory change that should be of grave concern to British taxpayers, since many of these counties are in receipt of British foreign aid. It would be frankly absurd for the British taxpayer to fund these struggling economies to the tune of tens of millions a year, only for British based corporations to use Osborne's tax loophole to extract hundreds of millions a year to be stashed in tax havens. If these changes do go through, Osborne will not only be facilitating theft from poor countries, he will be facilitating theft from the British taxpayer that supports these economies through foreign aid donations.

Given all of his rhetoric about tackling tax-dodgers, forcing through a regulatory change that has clearly been designed with the express purpose of allowing British corporations to dodge their taxes in other countries, is yet another case of glaringly obvious Tory tax hypocrisy.

The charity ActionAid have estimated that Osborne's regulation changes will end up costing Third World countries £4 billion a year in lost tax revenues. The government can't refute the figures since no impact assessment has actually been done to estimate the consequences of this regulation change (as is Osborne's way of doing things). Various international organisations (including the barkingly right-wing IMF) have demanded that the UK government conduct impact assessments before formalising these tax changes, however Osborne and the Tories remain reluctant to embrace the concept of evidence based policy, presumably because they fear that many of their other harebrained and ideologically driven schemes would spectacularly fail any rigorous evidence based analysis.

The public are already increasingly aware that George Osborne is an economic liability, however two more things are absolutely clear from this forgotten aspect of Osborne's budget; Osborne is a tax hypocrite who regularly sounds off about the immorality of tax-dodging, then goes on to introduce legislation that is clearly designed to allow British corporations to steal £ billions in tax revenues from the Third World; and that Osborne is not just reluctant to embrace the concept of evidence based economic policy, he is downright opposed to it, preferring to base his economic strategy for the UK upon a foundation of ideologically driven neoliberal pseudo-economics instead.

See Also

Wednesday 22 August 2012

The unpatriotic left fallacy

Would you call it patriotic behaviour to attack your
fellow countrymen as "the enemy within"?
Or would you call it divisive and unpatriotic?
Read the comments below any left wing blog post and it probably won't take you long to find some right-wing shit-stirrer claiming that "the left" is somehow unpatriotic.

Their argument usually goes along the line of "lefties" are unpatriotic because they have no respect for "British values" and that it is somehow unpatriotic to take industrial action. A recent example of this can be seen in the official government response to threats of transport and Border Agency strikes during the 2012 Olympics, when an official spokesman for the Prime Minister claimed that industrial action during the games would be "completely unacceptable and unpatriotic".

In terms of "British values" it is true that a larger proportion of left-wing people would like to see the abolition of the monarchy than those with right-wing sympathies, however this can hardly be seen as unpatriotic. There is nothing unpatriotic in wanting to see Britain become a properly democratic republic. In fact calling for the removal of the anti-democratic powers and privileges held by a family of German and Greek origin could actually be seen as more patriotic stance than blindly supporting the status quo. The attitude that agitators for change are somehow unpatriotic is an extremely reactionary position that relies on very conservative definitions of "Britishness" and "British values".

Another classic complaint against the "unpatriotic left" is that left-wingers are much more likely to protest against British wars. Accusations of unpatriotism have been made against dissenters throughout history. Quakers and other conscientious objectors were vilified and imprisoned during the two World Wars, and anti-war protesters at the biggest public demonstration in British history in 2003 were maligned as unpatriotic traitors by elements of the press and even dereided as Saddam Hussein supporters by then Prime Minister Tony Blair (please don't even dare try to claim that Blair wasn't right-wing).

Returning to the concept that taking industrial action is somehow "unpatriotic", this accusation is frankly laughable. It is difficult to see how demonstrating solidarity with your fellow workers and fellow countrymen could be seen as inherently "unpatriotic". The right-wing critic of trade unionism will try to dress up their bias in emotive language by claiming that strike action is "holding the country to ransom", however this is an extremely one-sided way of viewing strike action. Isn't it just as fair to say that employers are "holding the country to ransom" when they undermine the wages and working conditions of their employees to such an extent that they refuse to work?

Even if you don't accept that undermining the wages and working conditions of your fellow countrymen so much that they openly revolt could be considered to be unpatriotic, right-wing elements of British society have a long history of unpatriotic behavior.

Lord Sempill; a Tory and a proper British traitor.
Inspired by the rise of fascism in the 1930s dozens of Tory party politicians and other establishment figures became involved in unpatriotic and anti-semitic activities. Whilst the Tory Prime Minister Neville Chamberlain was busy appeasing Nazi Germany, scores of Tories joined secretive far-right organisations such as the pro-Nazi Anglo-German Link organisation and the disgustingly anti-semitic (and largely forgotten) Right Club, which had the stated purpose of ridding the Tory party of Jewish influence. One extremely notable member of the Right Club was the Tory traitor Lord Sempill who spent the 1920s and 1930s as a paid spy for Japan and continued to aid the Japanese even after Britain and Japan were at war.

Winston Churchill was one of the notable exceptions to this rise in Nazi sympathising within the Tory party. For years he was considered an extremist and a fear-monger by his Tory peers for speaking out against the rise of Fascism. Eventually Churchill was proved right and became our wartime Prime Minister, however he still used his influence to protect his Tory colleague Lord Sempill from being exposed as the traitor he certainly was. The Tories were not alone in embracing fascism in the 1930s, many Labour MPs defected to join Oswald Moseley's British Union of Fascists, but the Labour Party themselves never openly embraced fascism to the same extent as the Tories.

After the war, the Tory party embraced one-nation Conservatism and for a few glorious decades the old class divides were diminished as Britain rebuilt and regained her prosperity. In this post-war consensus mixed economy period every sector of society benefited, the rich became richer, the poorest too, and everyone else in between. The people of Britain were rewarded for their suffering and endeavour during the war with improved pay and working conditions, the creation of the welfare state to help them in old age and infirmity and a massive campaign to improve the standards of British housing. The Tory Prime Minister Harold MacMillan once boasted that "you've never had it so good" and he was right, because at that time, the majority of British people were actually working together to create prosperity for all. This period (often referred to as "the Golden Age of Capitalism") came to an end in 1979 when a new breed of Conservativism, driven by neoliberal pseudo-economic theory, began another period of deeply unpatriotic right-wing behaviour which has continued until the present day.

One of the core tactics of the Thatcher regime was the divide and rule strategy, where sections of society were set against each other in order that they didn't stand together in solidarity against the common enemy, the profoundly unpatriotic Tory party. The treatment of industrial workers during the Thatcher regime was indicative of this divide and rule strategy. To use terms such as "the enemy within" to describe the hard working industrial workers who had provided the backbone of Britain's prosperity from the industrial revolution onwards, was an absolutely clear demonstration that Tory interests were at odds with the interests of vast swathes of the British population.

The Tory party obsession with unpatriotic neoliberal pseudo-economic
dogma has created the absurd situation where British built nuclear reactors
like Hartlepool are now owned and operated by the French state via EdF.
The whole ideology of neoliberalism that has dominated British politics since Thatcher came to power in 1979 is extremely unpatriotic. Small state conservatism is in effect a policy of destroying the British state from within, in order to distribute power to the wealthy, whether they are British or not.

Countless core services that were built up at the expense of the British taxpayer were sold off for a pittance, often to foreigners.

Take the eight nuclear facilities that were privatised for the astonishingly small fee of £2.1 billion in 1995. These taxpayer funded facilities eventually fell into the hands of the French company EdF. What makes this French ownership of British nuclear facilities so remarkable is that EdF is 85% owned by the French state.

The Tory small-state ideology has led to the absurd situation where the British state is derided as inherently incapable of running it's own nuclear facilities efficiently, providing the justification to sell them off, only for them to be taken over by the French state in the guise of EdF. This is far from the only example of British taxpayer funded industries being sold off to foreign interests. The Tory ideological obsession with globalisation and privatisation has led to the situation that loads of formerly taxpayer owned British industrial and service sector infrastructure has fallen under foreign ownership; from power stations (France) to rail franchises (France, Germany, Netherlands); from mains water supplies (France, Germany) to steel factories (India); and from many of Britain's biggest airports (Spain) to HMRC tax offices (Bermuda).

The fire sale of British infrastructure on the grounds that the British state is inherently inefficient, is unpatriotic because if vital British infrastructure falls into the hands of foreign companies, the underlying case for sale is completely and totally undermined if that company happens to be owned by a foreign state.

It is hard to imagine a clearer case of unpatriotic behavior than allowing foreign states to seize control of British taxpayer funded infrastructure on the grounds that the British state is "inefficient".

As if selling off British infrastructure to foreign corporations and governments wasn't enough, the Tories also signed away large areas of British sovereignty by signing the ESA treaty in 1985, joining the ERM in 1990 (which eventually led to Black Wednesday) and then ratifying the Maastricht treaty in 1992. Even after the Tories were booted out in 1997, the centre-right Neo-Labour party continued the strategy of signing away British sovereignty to the unelected anti-democratic EU technocrats.

Another area in which the right-wing have a long tradition of unpatriotic behavior is tax-dodging. A great number of extremely wealthy right-wing people do everything they can to minimise the social contribution they make through taxation.

There are so-called "lefties" who doge tax too of course (Ken Livingstone for example) but the right-wing can count many more serial tax dodgers amongst their numbers. The Tory party played an instrumental role in creating this tax-dodging bonanza by abolishing capital controls in the 1980s.

The Tories have also gathered many tens of millions of pounds in donations from serial tax-dodgers such as Michael Ashcroft, Phillip Green and George Robinson; The Tory Prime Minister David Cameron inherited a fortune from his father's tax dodging empire; the Chancellor George Osborne snuck a regulatory reform into the 2012 budget to facilitate British companies in their tax dodging exploits; and even the celebrity Tory supporter Gary Barlow is a blatant tax-dodger. Tax-dodging is nothing but the unpatriotic evasion of social contributions to your own country, inspired by pure self-interest.

Take the super-rich and the financial sector elite who donate so generously to the Tory party, what do they do if there is any talk of regulating their industry or increasing taxation on the super rich? They immediately threaten to leave the country. This is yet another example of the rich establishment elite putting their own interests above the interests of their fellow countrymen. Recall the Tory government claims that striking union workers are "holding the country to ransom". How exactly is the threat to leave the country altogether, taking their money and businesses with them if they don't get their own way, not a much more blatant case of trying to "hold the country to ransom"?

Take Aidan Burley's comments about the Olympic opening ceremony. He hated it because it celebrated the NHS and multiculturalism, which, like it or not, are now fundamental parts of modern British life. Take the Daily Mail's racist rant about mixed-race families and their accusations that several of Britain's most successful Olympic athletes (Bradley Wiggins, Mo Farah, Laura Bechtolsheimer) shouldn't be considered as British, since they happened to be born abroad.

Whilst the majority of Britain celebrated the successes of our diverse band of athletes, the right-wing continued churning out their divisive and deeply unpatriotic bile.

The unpatriotic attitude of the right-wing press isn't just limited to the world of sport. The Daily Telegraph ran an excruciating article in which their columnist Janet Daley attempted to defend bankers and capitalists by laying blame for the neoliberal economic meltdown squarely at the door of ordinary working British people by claiming that "the real British disease [is] unseriousness, lack of rigour, ill-discipline, failure to attend to detail and inadequate follow-through".

As if deriding your own countrymen like that is not unpatriotic.

According to Daley the reason that Britain is going through a prolonged recession has nothing to do with the type of wealthy capitalist and financial sector billionaire who threatens to flee the country altogether if they don't get everything their way, it is due to her own countrymen being somehow less serious, less rigorous, less disciplined and less likely to do their jobs properly than workers in other countries!

Tory MPs Patel, Skidmore and Raab call British workers "lazy",
I call people that make up lies in order to attack their fellow
countrymen "profoundly unpatriotic".
You do have to read between the lines to see the point that Daley was making to defend the corporatist-neoliberal economic model. However a group of "bright young things" in the Tory party have written a book called Britannia Unchained in which they made exactly the same kind of claims but in much more explicit terms.

In the book co-authored by Tory MPs Pritti Patel, Kwasi Kwarteng, Chris Skidmore, Elizabeth Truss and Dominic Raab, the extraordinary claim is made that “Once they enter the workplace, the British are among the worst idlers in the world... we work among the lowest hours, we retire early and our productivity is poor.” The idea being of course that pay and labour conditions must be attacked and the retirement age must be raised in order to raise productivity. The problem is that the whole argument is based upon lies. The average full-time worker in the UK works longer hours than the average worker anywhere else in the EU aside from Austria and Greece, and the average age of retirement in the UK is one of the highest in the OECD. To make up lies and disparage you fellow countrymen as inherently "lazy", simply in order to justify an agenda to undermine their labour rights and working conditions, is a stunningly clear case of unpatriotic behaviour from the right-wing.

Right-wing people love to wrap themselves in the flag and claim that they alone are the true patriots, but their behaviour betrays their real contempt for Britain, British industry and British workers. They supported fascism in the 30s; they repeatedly signed away our sovereignty to the anti-democratic technocrats at the EU; they repeatedly hand our industries over to foreign interests; they use tax-dodging scams to evade their social contributions; they threaten to leave the country if they don't get their own way; they hate their own countrymen if they happen to have the wrong skin colour, the wrong social background, the wrong political orientation or the wrong birth certificate; and they make up lies about British workers being inherently "lazy" to justify their unpatriotic right-wing political agenda.

It is difficult to imagine how these people manage to hate so much about Britain and their fellow British countrymen and engage in such openly unpatriotic behaviour, yet continue to claim to be patriots. I believe the answer lies in the fact that they insulate themselves in a world of wealth and privilege. A world where the barmy neoliberal ideology of greed-is-the-highest-virtue is gospel; a world where the processes of privatisation and giving tax cuts to the wealthy are unquestionable; a world where anyone who opposes their pseudo-economic ideology is an "enemy"; a world where this greed-worshiping ideology has supremacy over all other ideals, even patriotism.

George Osborne, the embodiment of the warped right-wing
"British values" that allow massively underqualified people
to assume hugely important positions through
privilege and entitlement alone.
It is precisely because they hide themselves away in this establishment cocoon of privilege and greed-worship that they can only recognise the establishment itself as "properly British".

This establishment attitude seems to be that the only "true Brits" are people from privileged backgrounds and the only "lower orders" who are ever allowed to join them are the ones who openly embrace their orthodox neoliberal ideology. Anyone else (no matter how British they actually are) can then be dismissed as unpatriotic or an "enemy within" if they dare to criticise the behaviour of the wealthy establishment.

The problem of course is that the establishment practices of entitlement and neoliberal orthodoxy are exactly what are creating the low productivity they complain about.

These right-wing "British values" allow massively under-qualified people to be parachuted into hugely important jobs simply because they have the right old school ties and connections, and allow crazy neoliberal fanatics to asset strip the country and instigate class warfare between the workers and the ruling elite by undermining labour rights, attacking working conditions and running media demonisation campaigns against immigrants, the unemployed and public sector workers in order to divide the people who should be standing in solidarity in opposition to the ideological agenda of the establishment.

This warped right-wing idea of "Britishness", built upon foundation stones of entitlement, greed-worship and social division is the real reason that the UK can't compete with Germany, not the pathetic right-wing fantasy that everyone else is to blame but those who are actually in charge of the economy.

In conclusion, there are some unpatriotic people on "the left". However before they start making lazy generalisations about other ideologies being somehow inherently unpatriotic the "right" really should get their own house in order, given that their warped and extremely unpatriotic version of "British values" celebrates the culture of entitlement and remains subordinate to the ideology of greed.

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