Sunday, 20 March 2016

George Osborne's £22 billion rip-off

It doesn't matter who has been in government, New Labour, the Coalition or the Tories by themselves, the Budget has always contained a few headline grabbing measures that the Chancellor talks up at the dispatch box and the mainstream media fixate their attention upon, whilst much less appealing things are buried in the detail of the budget report. In George Osborne's 2016 "budget of failure" there was one huge buried detail that looks set to cost the taxpayer an incredible £22 billion.

A lightly glittered turd

In the wake of Osborne's "budget of failure" there was a spate of news items focussing on the glitter of a sugary drinks tax and cuts to business rates for small companies, as well as analysis of the huge stinking turd of huge cuts in support for disabled people at the very same time as corporations, the asset rich and high earners are showered with tax cuts.

Goodbye "doctor death"

Iain Duncan Smith's resignation sent the press into overdrive, and understandably so. If George Osborne's brutal austerity cuts are apparently too much even for Iain "doctor death" Duncan Smith*, then even the mainstream media have to begin to entertain the idea that they're pretty damned awful, which is what some of us who don't rely on billionaire Tory sociopaths like Rupert Murdoch (S*n, Times, Sky), Jonathan Harmsworth (Daily Mail, Metro, London Evening Standard) and the Barclay brothers (Telegraph, Spectator) for our pay checks have been saying for quite some time.

George Osborne's £22 billion rip-off

While the majority of the post-budget news coverage is understandably focused on the civil war that has erupted within the Tory party, a few people have noticed that buried deep in the 2016 Budget report is the revelation that the Tories are expecting the taxpayer to take a £22 billion loss when they sell off the government stake in RBS to the private sector.

A £22 billion loss on a £45.5 billion investment is an incredibly poor deal, especially when put into perspective.

James Wright at the Canary claims that £22 billion would be enough to pay 103,000 nurses for ten years, the construction of nearly 150,000 affordable homes, 6,000 new average sized primary schools or 40 brand new state of the art hospitals.

Another way of putting this rip-off into perspective is that £22 billion is more than 62x the projected annual saving (£0.35 billion) the Tories used to justify their brutal policy of slashing the incomes of hundreds of thousands of disabled people by £1,500 per year.

But .. but ... what about Gordon Brown

Right-wing political commentators love to harp on about Gordon Brown's decision to sell off a chunk of the UK gold reserves at the bottom of the gold market as an example of Labour's economic incompetence, yet that blunder only cost the taxpayer an estimated £2 billion, which of course is still an awful lot of money to waste, but less than 10% of the £22 billion George Osborne is planning to rip off the taxpayer by.

If the right-wing blowhards who have produced endless outraged articles about "Brown's bottom" had any integrity whatever, they'd obviously now be far more outraged about George Osborne's plan to rip off the taxpayer by selling our stake in RBS for only marginally more than half of what we paid for it, but we all know that that's never going to happen.

What to do instead

It hardly seems like a coincidence that RBS made vast losses for the majority of time it's been largely owned by the taxpayer, and now that it's recovering towards financial viability the Tories are planning to sell it off at a massive loss to the taxpayer.

In my view the massive public stakes in major banks that were deemed necessary in order to fend off a total financial sector meltdown in 2008 should have been used to create a publicly owned not-for-profit national investment bank to target investment at economically useful activities like infrastructure improvements, housebuilding and support for innovative British industries struggling to raise capital during the credit squeeze.

Instead the publicly owned banks were allowed to return to the exact same reckless and even downright criminal behaviour that preceded the 2007-08 financial sector meltdown: The inflation of another vast unsustainable property bubble, asset stripping of British businesses and the payment of outrageous bonuses (despite the fact the bank was losing £billions every year).

The idea of a national investment bank is still not completely out of the question. but it will be all the more difficult to achieve if George Osborne gets away with selling the public stake in RBS at a £22 billion loss to the taxpayer.

What we can do to oppose this rip-off

Thanks to the 11 million people (24% of the electorate) who voted Tory in 2015 there's not actually a lot that can be done to stop George Osborne selling off our stake in RBS at a vast loss to the taxpayer. Enough people bought into the utterly ludicrous narrative that George Osborne is economically competent that he now gets to conduct the biggest fire-sale of public assets in British history, hammer the poor and ordinary with the burden of ideological austerity and shower corporations and the well-off with ever more lavish tax cuts.

If you do object to this rip-off, it is probably a good idea to write to your local MP to explain your objections. If they are an opposition MP you can ask them to oppose the sale as much as they can, and if they're a Tory, you could ask them to justify this rip-off plan and then post the reply you get in the comments section of this article so that we can see a. the crap excuses they come up with and b. whether they all just use the same utterly contemptuous copy n' paste reply as Tory MPs so often do.

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* It seems unlikely there are many people credulous enough to take Iain Duncan Smith at his word, that he resigned over severe cuts for poor and vulnerable people at the same time as corporations, the asset rich and high earners get showered with tax cuts. The upwards redistribution of wealth is the core ideology of the Tory party, he can't possibly expect anyone to believe that he objects to that. A much more plausible theory is that his resignation is part of the ongoing Tory civil war between the pro- and anti-EU factions. A theory that seems a little less farfetched than IDS suddenly developing a conscience is the idea that it's an effort by Iain Duncan Smith to damage pro-EU Osborne and Cameron as much as possible in order to ingratiate himself with Boris Johnson in the hope of staying at the Tory top table a bit longer.

Austerity is a con
Zac Goldsmith sacked as patron of disability charity