Driven to suicide by the Tories deadly "bedroom Tax" blundering

In many ways this is the most difficult article I've attempted to write on the Another Angry Voice blog. The subject is so ghastly that I have little inclination to dwell upon it, but it stands as such a damning indictment of government policy towards the most vulnerable in society that it must be addressed.

I am talking of course about the case of Grandmother and Myasthenia Gravis sufferer Stephanie Bottrill, who was driven by the stress of "Bedroom Tax" to commit suicide by stepping in front of a lorry on the M6 at 6:15 am one morning in May 2013. She left a note to her family saying "Don’t blame yourself for me ending my life. The only people to blame are the Government".

It's hard to pick fault with her assertion, especially given the revelation in January 2014 that the "Bedroom Tax" legislation was so clumsily drafted and administered that she wasn't even liable to pay it, yet the money was taken from her anyway, leaving her in desperate poverty and suffering terrible stress.
The people in similar situations who have survived their "Bedroom Tax" impoverishment without having killed themselves under the stress of it should surely be entitled to compensation. But judging by goings on last year, this isn't entirely certain. In March 2013 the Labour leadership were fully complicit in allowing Iain Duncan Smith to rush through an absurd piece of retroactive legislation, which had the duel purpose of keeping the £130 million he stole from the unemployed via his unlawful benefits sanctions regime and sticking two fingers up at the courts that had declared his botched Workfare legislation unlawful.*

Who is to say that Labour won't once again let Iain Duncan Smith retroactively rewrite his botched legislation, this time in order to keep his unlawfully collected "Bedroom Tax" fines?

The "Bedroom Tax" is an abominable piece of legislation. It is so atrocious that it is literally impossible to succinctly explain everything that is wrong with it in one article** but for the sake of the argument I'll cover a few established issues.

"Bedroom Tax" discriminates against disabled people. Some two thirds of families hit by bedroom tax have at least one severely disabled member.

There are simply not enough smaller houses available. One study found that smaller accommodation was not available for 96% of people affected by "Bedroom Tax". Even if they want to move out of their larger homes to somewhere smaller, there are just nowhere near enough available properties for them ever to dream of finding their way to the top of the local council priority list.  

The oft repeated Tory narrative that the "Bedroom Tax" will "save" £480 million is a clear indicator that their stated objective of moving people out of larger properties is utterly misleading. The more people the Tories manage to shift out of their homes, the lower the rates of "Bedroom Tax" they could collect. This means that if the policy successfully drives people out of their homes, the projected savings figure is a fantasy, but if the projected savings figure is real, then extracting wealth from the poor is obviously the real objective, not chasing them out of their homes.

One of the perverse side effects of "Bedroom Tax" is that it chases people out of social housing altogether, but because rents in the private sector are much higher, the taxpayer ends up paying out more Housing Benefit rent subsidies than they did before! The people that are driven out of their social housing end up losing their security of tenure and their adequate housing standards, yet the taxpayer ends up paying more for it. From an economic perspective this is an atrocious outcome because the extra money that the state is shelling out isn't going to anything useful at all (such as infrastructure investment, education other services and the like) it feeds into the inflation of another property price bubble, and allows unproductive members of the rentier class to live a life of idleness, collecting the government subsidised rents on their speculative buy-to-let property investments.

"Bedroom Tax" drives people to seek smaller accommodation in the virtually unregulated free for all of the private rental market, they lose their security of tenure and their adequate housing standards, yet the state pays more in housing benefit rent subsidies for the smaller property than it did paying the social housing rate on the larger property. Therefore, the more successful the policy, the more it costs the taxpayer!

Returning to the tragic case of Stephanie Bottrill: Anyone with a modicum of belief in social justice should feel that extracting £80 a month from this woman's pitiful subsistence income was an absolute obscenity in light of the fact that just a few weeks prior to her suicide RBS - which is 82% owned by the taxpayer -  handed out £607 million in bankers' bonuses despite losing another £5.2 billion over the course of 2012-13. Not only did the Tories lavish taxpayers' cash on RBS bankers in the form of bonuses, they also cut the top rate of income tax the month before Stephanie Bottrill's death, meaning tens of thousands a month in income boosts for RBS bankers, many of whom were the architects of the economic crisis that the Tories have shamelessly used to justify the numerous diabolical austerity measures they have imposed upon "the lower orders".

I don't use the term "the lower orders" flippantly when I describe the Tory attitude towards the poor and ordinary. That this is their true attitude is evidenced by the Workfare policy that the Labour party hierarchy allowed Iain Duncan Smith to salvage with his "I'm above the law" retroactive legislation. A policy which allows the state to herd people like cattle to work for free in highly profitable corporations under threat of absolute impoverishment.

That's right: The Tories hold you in such contempt that if you lose your job for whatever reason, the Tories can strip you of your legally established employment rights and force you to work for no wage, in economically illiterate schemes designed to allow their corporate mates to profit by treating your labour as a free commodity.***

The DWP policy of subjecting the disabled to the Atos administered WCA regime provides another grotesque illustration of the Tory mentality towards "the lower orders". There have now been two court declarations that this WCA regime discriminates against those with mental health conditions, yet Iain Duncan Smith has simply carried on regardless with his policy of making the mentally ill undergo discriminatory assessment regimes.**** Iain Duncan Smith and the DWP are willingly continuing their campaign of terror and discrimination against the disabled because in their view, the victims of their regime are simply unimportant.

The Stephanie Bottrill case provides another searing illustration of the Tory us-and-them antipathy toward "the lower orders". I'm sure many of us can recall the well worn Tory narrative against the proposed Mansion Tax. Oh how they waxed on about the poor hypothetical mansion dwelling old lady, and how this cruel tax would force her out of her home. Yet this exact scenario has been played out tens of thousands of times over in the lives of real people, under this "Bedroom Tax" scheme devised by the very same Tories.

They clearly care much more deeply about the wealthy mansion dwelling old dear (even though she is hypothetical), than they do about the very real victims of their own "Bedroom Tax" regime. The Tories clearly have far more empathy for the hypothetical rich, than they do for the living and breathing poor and ordinary.

That "Bedroom Tax" is a poorly devised and maliciously motivated scheme developed by a government with a shocking antipathy towards "the lower orders", but it is worse even than that. Just like everything else in Iain Duncan Smith's chaotically administered DWP, the implementation was beyond incompetent. Not only was it belligerently imposed against widespread public and professional opposition, it was imposed on tens of thousands of people that should have been made exempt from paying it under the very rules the the Tories had just devised and passed into law. Stephanie Bottrill was one of the people that should have been exempt and now she is dead.

She was killed by a combination of Tory antipathy towards "the lower orders" and Iain Duncan Smith's exceptionally incompetent mismanagement of the DWP. Not only was "Bedroom Tax" bad policy, it was incompetently delivered.

I don't know enough about the life of Stephanie Bottrill to cast any significant judgement upon her as a person, but I feel confident in saying that she is clearly a martyr to Tory belligerence. Not only have the Tory party allowed a man that has been promoted way beyond his abilities to continue making one catastrophic blunder after another, they have continued to obligingly vote reams of his botched legislation through parliament without even bothering to read it, think about its implications or check that it is being applied in even a remotely competent manner.

In conclusion I would like to express my condolences to the friends and family of Stephanie Bottrill. To have lost a family member as a consequence of malicious government policy must have been hellish. To discover later that the "Bedroom Tax" fines that drove her to suicide weren't even applicable in her case must be even worse. I would also like to spare a thought for the poor HGV driver that Stephanie Bottrill stepped out in front of. This person will probably suffer the trauma of that event for the rest of their life, a trauma that would never have happened were the Tories not such a malicious bunch. Neither would it have happened were they a serious political party that would never dream of letting a callous and incompetent intellectual pygmy like Iain Duncan Smith anywhere near a position of power and responsibility.

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* Although this sounds preposterously far-fetched, it is absolutely true. Here's the article I wrote at the time - which includes a list of the few honourable Labour MPs that defied the party leadership demands that they collude with Iain Duncan Smith by abstaining on all of the votes as it was rushed through parliament in a single day.

**although I have tried to outline some of its innumerable flaws. In four separate articles have still only scratched the surface of what an atrocious piece of legislation it is. Here are my four previous articles on the subject:

• Bedroom Tax and Tory hypocrisy
• Why I oppose "Bedroom Tax"
• The flawed "Bedroom Tax" justification narrative
• "Bedroom Tax": taxing the poor to subsidise the rich

*** The Tory cabinet minister Mark Hoban has explicitly stated his belief that the state has a "right" to extract and distribute the labour of the citizen under threat of absolute destitution (here's my analysis of those comments). To put a libertarian hat on for a moment, I don't believe the state should have the right to coerce the individual to surrender their labour rights under threat of poverty, starvation and/or homelessness.

**** Here's my article exploring many of the implications of Iain Duncan Smith's discriminatory regime against the mentally ill.

An entirely avoidable "Osbornomic" recession

I know I can be a bit long winded in my posts, this is a consequence of my habit of presenting a lot of complicated facts and then conducting extensive critical analysis on them. The subject of this post is of such enormous importance that I've had to strive to explain it in a very simple, but also entirely accurate way in order that as many people as possible understand it. The best way I could think of doing it is by presenting two damning quotes.

Quote One
The Office for Budget Responsibility
2012 Forecast Evaluation Report
October 2012
"The average multiplier over the two years would have needed to be 1.3 – more than double our estimate – to fully explain the weak level of GDP in 2011-12"

What it means 
In order for George Osborne's ideological fiscal austerity experiment to be entirely to blame for the double-dip recession (that the OBR had abjectly failed to predict) the average fiscal multiplier must be 1.3.

Quote Two
The International Monetary Fund
 IMF Global prospects and policies report
October 2012
"[We previously claimed] that fiscal multipliers used in the forecasting process are about 0.5.Our results indicate that multipliers have actually been in the 0.9 to 1.7 range since the Great Recession. This finding is consistent with research suggesting that in today’s environment of substantial economic slack, monetary policy constrained by the zero lower bound, and synchronized fiscal adjustment across numerous economies, multipliers may be well above 1."

What it means
Due to the current economic conditions (quantitative easing, widespread fiscal austerity, financial sector chaos, extensive capital flight and significant wealth retrenchment) the IMF are making an astonishing 80% - 320% revision to their previously stated fiscal multiplier (returns on government investment) values. 1.3 happens to be slap bang in the middle of their newly revised range.

To join the dots
I'll spell it out: These quotes are compelling evidence that Osborne's "austerity" is entirely to blame for the double-dip recession. This is not just an Another Angry Voice opinion, it is a fact established upon economic studies undertaken by the OBR and the IMF.

What makes this evidence such a damning indictment of George Osborne's austerity agenda is that these economic organisations should be two of his very strongest allies.

George Osborne created the OBR, in November 2009, announced them officially in May 2010 and they were formally appointed by the 2011 Budget Responsibility and National Audit Act. While Osborne was slashing 100,000s of public sector jobs, the OBR were the minority of people to have publicly paid jobs created for them. Everyone in the organisation can be thankful to George Osborne for having created their jobs.

Since George Osborne became Chancellor, he has provided £40 billion to the IMF, funds they have used to promote austerity oversees via the structural adjustment conditions on their emergency loans.

The figures from these two organisations clearly demonstrate that it is overwhelmingly likely that fiscal austerity is the principle cause of the double-dip recession. The figures could hardly have been more precise. 

I damn the state of affairs where the mainstream media have utterly failed to grasp the importance of this story, instead focusing the vast bulk of their mid-October coverage, comment and debate on "human interest stories" like the (admittedly very disturbing) Jimmy Saville case, the Gary McKinnon's extradition case, Andrew Mitchell's long overdue resignation, Trenton Oldfield's ridiculous sentence for swimming in the Thames, and George Osborne's fare-dodging exploits.

Although noteworthy all of them, the above listed stories should have been massively overshadowed by this compelling evidence that Osborne's mindless austerity is responsible for the double-dip recession.

I am also aghast that the Labour party have failed to pick up on this story and than not a single mention of Fiscal Multiplers was made at Prime Minister's Questions. In fact, Labour were so pathetic that they even allowed David Cameron to get a dig in about the economic record of the Labour Party before restating the endlessly repeated fallacy that "We have to rebalance our economy because the state sector was too big and the private sector was too small". Ed Miliband and the Labour party completely missed the chance to nail Cameron to the wall with the OBR and IMF evidence; that it has been policy based upon this kind of mindless generalisation about the size of the state that has actually caused the double-dip recession.

I know economics based stories are difficult to sell to the public, it is often difficult to spin a narrative to give the story enough "human interest" appeal. However there is significant human interest at the very centre of this economic story, a human who should be being made to answer significantly more challenging questions than "what is your excuse for fare-dodging". The fact that the mainstream media and the Labour party are overlooking this story of compelling evidence that George Osborne caused the double-dip recession, leaves me feeling that I've been left to do the job of the entire mainstream media and the political opposition all by myself.

Please share this post as widely as possible.

Thomas G Clark (Another Angry Voice) 








To see more detailed analysis of this story and the case that George Osborne should be held accountable, follow this link:
George Osborne's indiscriminate austerity

For more information on what Fiscal Multipliers are, follow this link:
What is... Fiscal multiplication? 

To learn more about the Office for Budget Responsibility, follow this one:
The Office for Budget Recklessness?

To see the case I was making against Osborne before these compelling Fiscal Multiplier figures came out, follow any of these:
The catastrophic failure of "Osbornomics"
Austerity and the double-dip
Osborne's fallacy of bond confidence 

Osborne's indiscriminate austerity

Whatcha got in da case Gideon? Another £76 billion accounting error?

In October 2012 the TUC presented an astonishing study that clearly demonstrated the abject incompetence of George Osborne. The study showed that false assumptions in economic forecasts had caused an estimated £76 billion underestimation of the economic damage inflicted through Osborne's indiscriminate austerity agenda.

The miscalculation was an astonishingly bad one. Instead of undertaking analysis to determine the value for money for each area of government spending, the Office for Budget Responsibility uniformally applied an arbitrary fiscal multiplication value of 0.5 to all areas of government spending. It is absurd to simply assume that all government spending only returns 50p in the Pound back into the economy. This kind of reckless assumption shows such a mindless disregard for the economic evidence as is possible.

It should be stunningly obvious to anyone (even a modern history graduate like Gideon) that different forms of government spending have create economic returns. Some government investments are more obviously of more intrinsic "economic benefit" than others. Also there are obviously large efficiency disparities between different departments doing the same kinds of activities (for example some forms of health spending are more economically efficient than others). To simply assume that all departments across all sectors of government have a uniform efficiency of 50% shows abject contempt for the concept of evidence based analysis.

After a lot of pressure to revise their absurd assumption, the IMF eventually admitted that the real fiscal multiplication values of government spending range between 0.9 and 1.7; that for every Pound in government spending, between 90p and £1.70 was being returned to the economy and contributing to economic growth. This means that for every £1 billion in "austerity" cuts, the economic damage is between £0.4 - £1.2 billion more than the Tories and the OBR have been claiming.

The TUC obtained their £76 billion figure by estimating that cut services have fiscal multiplication values in the middle of the IMF range (1.3) and calculating the difference between this figure and the OBR's assumption (0.5).

Some Tory apologists might be tempted to try to deflect the criticism away from Osborne by claiming that the OBR are an "independent body", however they were established just two years ago by George Osborne. It must be his responsibility to ensure that the organisation he is creating is actually capable of properly applying rudimentary economic techniques before handing them control of economic forecasting for the whole nation.

To summarise the result of this study in everyday language: Osborne's ideologically driven austerity agenda (Osbornomics) has been destroying countless valuable functions of society that actually put more net worth back into the economy than they cost in government spending. Osborne had been mindlessly eliminating government efficiency.

Another economic excuse that the Osborne apologist might try is the "crowding out" fallacy. They might try to defend the destruction of services that actually generate more wealth than they cost by claiming that these economically beneficial services crowd out the private sector., At the best of times crowding out is just another neoliberal smokescreen to obscure the ideological nature of attacks on state spending, at a time of unprecedented credit drought it is frankly absurd.

Even if they still want to argue the case for crowding out, their argument is torpedoed by the incompetence of forecasting and analysis regime Osborne has implemented. Without the kind of rudimentary economic analysis(determining the fiscal multiplication values of state services) it is impossible to even determine the extent of the so-called crowding out effect. By replacing fiscal evidence with simplistic assumptions, the OBR have demonstrated that to the government and their economic advisers, "government inefficiency" and "crowding out" are unquestionable articles of faith to them. So firmly do they believe in these absurd right-wing myths that they take such primacy over economic analysis, that the economic analysis is simply considered not worth doing. This "let's just guesstimate" attitude is such a crime against economics that it defies reason.

Osborne and the OBR people he's put in charge of economic forecasting are ideologically driven fools that have brazenly disregarded economic evidence in order to justify Osborne's austerity experiment.

I've accused Osborne of "indiscriminate austerity" before; now I have conservatively estimated £76 billion worth of hard evidence, and what's more it is from an organisation the the neoliberal right-wing nut jobs can't possibly criticise. When the most high profile pushers of neoliberal pseudo-economics in the World release a report criticising the mindlessness of Osborne's neoliberalisation strategy and estimating the economic damage at £76 billion, the man is in an undeniably untenable position.

Osborne's performance as chancellor has been so catastrophically bad even his right wing friends are turning on him. What is even more astonishing about this IMF criticism is that Osborne has handed £40 billion over to the IMF under the Tories. The economic shambles must be almost unimaginably bad for them to turn on one of their biggest donors like that.

It is quite amazing that Osborne has handed £40 billion to the IMF for them to impose austerity on other countries via the structural adjustment conditions on their loans, while the appalling austerity miscalculation from his OBR "pet project" has cost the UK another estimated £76 billion.

Given the sheer scale of Osborne's incompetence perhaps the UK might need to ask for its £40 billion IMF donation back. I'm left wondering whether the IMF would apply structural adjustment conditions on the money, I mean that's their usual modus operandi Isn't it?

On second thoughts this probably doesn't matter anyway, Osborne has already voluntarily and enthusiastically done all the barmy right-wing "structural adjusting" that the IMF usually have to force governments to inflict upon their own economies and people. Osborne has wilfully inflicted immeasurable amounts of economic and social harm and on a much grander scale than the IMF would ever have forced a British government to do, based on nothing more than defunct neoliberal ideological convictions.

Bullingdon boys Cameron and Osborne are sure to
just laugh off their  £76 billion accounting error.

The fact that Osborne and the OBR utterly neglected their obligation to carry out due fiscal analysis before embarking on their austerity drive is an obvious dereliction of duty. That Osborne and his OBR team have let ideology over-rule evidence based analysis at such a fundamental level has cost the economy an estimated £76 billion worth of economic damage and an immeasurable amount of social damage (lost services, lost jobs, needlessly unemployed, broken families, chronic depression, damaged communities, child poverty, suicides).

£76 billion worth of incompetence and an immeasurable amount of social damage. How are these people still in their jobs?

I'd like to remind you of David Cameron's words back in June, when he was pressurising the Chief Executive of Barclays to resign over the Libor scandal:

"This must go right to the top"

"People have to take responsibility for the actions and show how they're going to be accountable for these actions"

"It's very important that goes all the way to the top of the organisation."

However there is absolutely no doubt that Cameron will pay no heed to his own words and resign over this catastrophic miscalculation. In fact I'm certain that he will do absolutely everything in his power to protect Osborne from the consequences of his own incompetence too. A £76 billion accounting error and the people that devised the shambolic, ideologically driven setup will just laugh it off and carry on as if nothing even happened.

If an estimated £76 billion worth of damage from their reckless assumptions isn't enough to bring down this malicious, divisive, shambolic and brazenly incompetent government, nothing ever will be.

See also

The catastrophic failure of "Osbornomics"

The Golden Hammer of Neoliberalism

Austerity and the double-dip

The Office for Budget Recklessness?

What is... Fiscal multiplication?

The case for evidence based policy in UK politics

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

Austerity and the Double-Dip

The catastrophic failure of "Osbornomics"

The case for evidence based policy

George Osborne's "philanthropy tax"

The catastrophic failure of Osbornomics

What happens when you let a hugely over-privileged and under-qualified
upper-class twonk seize control of your economy and begin implementing
their defunct brand of pseudo-economic dogma,with absolutely no concern
 for (and many would say extreme malice towards) anyone that does not
share their extremely wealthy and privileged background?

On the 25th of July 2012 the Office for National Statistics announced that the UK economy shrank 0.7% during the second quarter of 2012, meaning that the UK is in the worst double-dip recession since quarterly figures were first produced back in the 1950s. The ONS padded out the dismal economic figures with a package of pre-made excuses such as bad weather, supposed structural weaknesses in the manufacturing and construction sector and the extra bank holiday for the Queen's Jubilee celebrations.

It is difficult to figure out what the ONS are playing at by offering a list of pre-packaged excuses in lieu of actual economic analysis, other than trying to curry favour with the Tory party top brass by refusing to mention the elephant in the room; George Osborne's ideologically driven adherence to socially damaging, self-defeating, neoliberal pseudo-economics dressed up as "austerity".

By refusing to even hint at Osborne's culpability for the third consecutive quarter of dismal economic performance the ONS are now in the minority. Liberal Democrat peer Lord Oakshott responded to the 0.7% economic contraction by called Osborne a "work experience chancellor" who has "no business experience [and] has never worked outside politics".  Only a few days previously the Tory mayor of London Boris Johnson criticised Osborne's cut-now, think-later economic policies and a number of high profile (and normally very Conservative) business organisations have also publicly criticised Osborne's mindless obsession with cost-cutting. The head of the CBI, John Cridland criticised Osborne's ineffective growth strategy, Pierre Williams of the Federation of Small Businesses claimed that Tory strategies to improve funding for growth industries simply hadn't worked and the head of the BCC, John Longworth went even further accusing Osborne of "stifling growth". Even the IMF have shown signs of losing faith in Osborne's ideologically driven austerity experiment and they are the most powerful pushers of neoliberal pseudo-economics on Earth and the beneficiaries of £40 billion worth of Tory largess. If Osborne's strategies are considered too extreme for hardline Tories like Boris Johnson, assorted Tory supporting British business leaders and even the most powerful ultra-conservative neoliberal pushers on Earth at the IMF, it is quite remarkable that the ONS have refused to even consider the possibility that Osborne's obsession with implementing defunct neoliberal pseudo-economic reforms may have something to do with the desperate state of the economy.

Brendan Barber, the general secretary of the TUC, pointed out that the UK economy is now actually smaller than it was when the Tory led coalition came to power in 2010. An astonishingly bad economic performance given the all time low 0.5% Bank of England base rate, £375bn of quantitative easing cash handouts to the financial sector and the lowest cost of government borrowing in recorded history. Osborne's ideological experiment has been nothing short of an economic catastrophe and a crystal clear vindication of the many people who that tried to tell Osborne and the Tories that trying to cut your way out of a recession is economic lunacy.

The fact that the economy has actually contracted over Gideon's time at the helm is absolutely terrible news for him because a shrunken economy means a smaller tax take.  A smaller tax take means that savings made through his ideologically driven cost-cutting measures will be wiped out by losses in tax revenues, meaning that the structural deficit will remain. This latest 0.7% contraction shows up Gideon's economic projections as the insanely over-optimistic fantasies they always were. Without a growing economy, severe cuts in spending wont work, and with severe spending cuts the economy wont grow.

Still Osborne has never been one to accept criticism, his statements on the shocking scale of economic contraction consisted of little more than veiled attacks on the previous Labour administration and excuses about problems in the Eurozone. Both of these excuses are transparently lame. Osborne's statement that "We all know the country has deep-rooted economic problems" is clearly a thinly veiled attack on the previous administration. Neo-Labour were culpable of allowing the financial sector to inflate a vast bubble of "easy credit" that eventually resulted in the most significant economic crisis since the Second World War, however in the subsequent two years they took measures to get the economy growing again. Osborne inherited a weak but recovering economy from Labour and drove it rapidly back into recession.

Osborne's "debt crisis abroad" excuse is even more pathetic, yes there are problems in the Eurozone, but these are largely problems created by austerity. Thanks to the strong economic performance of Germany and the relatively stable economic performance of France, the chaos in Spain and Greece has largely been balanced out if the Eurozone is taken as a whole. All four of Britain's major export markets (the US, Germany, France & the Netherlands) are weathering the economic storm much better than the UK and it would be fair to expect the UK to benefit from the fact that there is still demand in the economies of their four key trading partners, however under the Tories the trade deficit has been ballooning back towards pre-crisis levels, meaning that the economic benefits of UK exports are more than cancelled out by the UK reliance on imports.

The fact that Osborne has concentrated his energies on his facile neoliberal cost-cutting exercises, digging for dirt in order to smear his political opponents and giving huge tax breaks to his rich mates instead of supporting the manufacturing and construction sectors has had the triple consequence of reducing aggregate demand, increasing the trade deficit and stifling economic growth.

Given the abject failure of Osbornomics, one is reminded of David Cameron's comments in regard to the Barclays Libor rigging scandal: "People have to take responsibility for the actions and show how they're going to be accountable for these actions....It's very important that goes all the way to the top of the organisation." I'm pretty sure that this sentiment will be completely forgotten about when it comes to Osborne's catastrophic mishandling of the UK economy.

See Also

Tory tax scandals and some new tax proposals

Austerity and the Double-Dip

More riches for the rich, recession for the rest

The Tory contempt for ordinary working people

 

What is Boris up to?

Boris Johnson, much smarter than he looks

Over the years the London Mayor Boris Johnson has carefully crafted a demeanour of harmless buffoonery with bumbling appearances on the topical news quiz Have I Got News For You, an occasionally outlandish dress sense and his trademark scruffy blond barnet.

I am of the opinion that one of the core Tory party strategies is to hide their malicious intentions behind a smokescreen of feigned incompetence and that Boris is one of the most adept at using this strategy. Behind this public image of harmless upper-class twittery there lies a cool and calculating political strategist.

This "don't blame me, I'm just an idiot" self-defence strategy seems to be underpinned by one of the most infuriating adages in the English language; Hanlon's Razor, which goes "Never attribute to malice that which is adequately explained by stupidity". In my opinion this adage is completely backwards. Despite a few notable exceptions, extremely stupid people rarely manage to obtain positions of political power, so to offer them the eternal excuse of "incompetence" is idiotic. If these people have demonstrated the drive and determination to get their hands on the levers of power, should we assume that they have just been pulling the levers randomly until they caused some unforeseen consequence? Or should we generally assume that they were pulling the levers for their own personal benefit until they got caught out?

When analysing the political activities of neoliberals, it is always useful to remember that one of the fundamental assumptions that underpin neoliberal theory is that economic efficiency is supposedly achieved through individuals pursuing their own personal self-interest. If we accept that the key factor behind most of the litany of Tory scandals is incompetence rather than malicious self-interest, we are actually conning ourselves into believing that these people are ignoring one of the tenants of their beloved greed-is-a-virtue neoliberalism and allowing ourselves to be tricked into thinking that they are too stupid to even serve their own self-interests.  

This strategy of feigning uselessness is not just limited to modern day Tories. Top businessmen such as Nick Buckles of G4S and Bob Diamond of Barclays have tried feeble last-ditch attempts to protect themselves from criticism with claims of ignorance of the widespread corruption and incompetence within the companies they were supposedly running.

Returning to Boris Johnson, I believe that within his recent statements to the press there is plenty of evidence that this guy is a cold and calculating political strategist rather than the charming and eccentric upper-class buffoon he pretends to be.

In the wake of the Barclays Libor scandal and the HSBC money laundering scandal Boris has been keen to speak out against the tightening of financial sector regulation, in his words: "What I certainly don't think you should try to do is address people's general economic malaise and anxiety by over-regulating one sector, and causing gloom and despondency in financial services". He has also been keen to put the boot into George Osborne's disastrous self-defeating austerity agenda.

Boris has begun criticising Osborne because it is increasingly clear
that Gideon's mindless obsession with cust-cutting and his hubristic
 temperament are going to eventually lead to his downfall.

The reason he is attacking Osbornomics is absolutely clear, Osborne's ideological obsession with austerity has driven the UK back into recession. More and more people are recognising the idiocy of imposing across the board cuts at a time of reduced aggregate demand. Several extremely conservative business organisations such as the CBI and the BCC have publicly criticised Osbornomics and called for more government action to increase investment, instead of maintaining their ideological obsession with cost-cutting.

Osborne's response to the criticism has been a quite astonishing combination of hubris and idiocy. Alienating British business leaders by deciding to turn the blame back onto them, the very people that were cheering him to the rafters just a couple of years before, is an act of unbelievable petulance and a lunatic political strategy for a man that needs the support of the private sector more than ever. Osborne's hubris looks certain to lead to his downfall and Boris is positioning himself ahead of the curve. It seems inevitable that there is going to be an almighty backlash against Osborne's mindless obsession with austerity (possibly when the third consecutive quarter of negative economic growth is announced). Boris wants to be able to say that he he was one of the ones speaking out against Osbornomics so that he can be seen as one of the few Tories to have opposed Osborne's failed economic "strategy". He is hoping that this will be enough to win him support from business leaders.

His trenchant defence of the London financial sector is a completely different kind of strategy. On the surface, speaking out in favour of the corruption riddled bankers at a time of public anger looks like a very poor strategy for a political populist like Boris. He knows that the public are rightly enraged about financial sector corruption and greed so why is he doing it? The answer is actually quite simple, the financial sector are by far the biggest donors to the Tory party. They donate such a large proportion of Tory party funds that they have a de facto controlling interest in the running of the Conservative Party. Making himself an unofficial spokesman for the financial interests of the London financial elite, when everyone else is playing up to the public outrage looks a lot like a strategy to assume control of the Tory party once Cameron and Osborne are turfed out.

So there we have it; the subtext of Johnson's statements make it abundantly clear that he is positioning himself as the lead candidate to replace Cameron as the leader of the Tory party. In his recent statements he has positioned himself as the friend of British businesses and of the London financial sector, probably the two most important groups he needs to impress if he is serious about replacing Cameron. Boris isn't the blundering upper-class twit that people like to think he is, he is a calculating political strategist who seems to be in the process of launching an audacious power play.

See Also

 

Austerity and the Double-Dip

Undermining financial sector regulation; a Tory policy

UK businessmen turn on Osbornomics

Tory U-turns are welcome but we're still waiting for the big one

 

Caroline Spelman; floods and false economies

Flooding in Kendal, a small price to pay for Caroline Spelman to win
 some brownie points from the Tory grandees with her zealous
slashing of flood defence budgets.

In many ways Caroline Spelman is the perfect example of the modern Tory. From the moment she became environment secretary in the coalition government she set about currying favour from George Osborne and David Cameron by volunteering huge 30% austerity cuts to her own department and drawing up plans to sell off publicly owned forests.

The forests sell-off was one of the first of a litany of PR disasters to hit the coalition government. Under huge public pressure Spelman's plans to sell-off publicly owned forests to the private sector were shelved and then quietly killed off. Such a spectacular misjudgement of public opinion is easy to understand when you consider that the prime motivating force behind the modern day Conservative is to reduce the role of the state at all costs. To an ideologically driven Tory, it is "common sense" that all publicly owned assets must be sold off to the highest bidder as soon as possible.

Spelman's self inflicted 30% budget cuts to the environment department in order to win favour from the cut-now, think-later austerians at the top of the Tory party were even more insane than her plans to sell off the forests but it took a little longer for the disastrous consequences to become clear.

Thanks to Spelman's brutal self-inflicted cuts to her own department more than 300 planed flood defences had to be cancelled because of her £860 million pound cut over the 2010-2015 period. It has been estimated that for every £1 spent on flood defences the country saves £8, an astonishingly high fiscal multiplication effect of 8.00. This means that cuts to flood defence budgets are a spectacularly obvious example of false economies (chucking the baby out with the bathwater). After the huge floods of 2007, the Pitt review concluded that spending on river and coastal flood defences needed to be increased. To their credit Neo-Labour actually did pretty well, boosting spending on flood defences by 33% between 2007 and 2010. Spelman's ideologically driven cuts undid much of their work and ensured that spending fell back again by over 25% in the first year of the new government.

Exceptionally wet weather in the summer of 2012 saw large floods overwhelm thousands of homes and businesses and cause hundreds of millions of pounds worth of damage across the UK. Kendal in Cumbria was one of the locations particularly badly hit and was one of the 300 places to have funding for flood defences cut as part of Spelman's barmy "cost-cutting" exercise. Perhaps the people of Kendal are glad to know that the misery and financial cost of being flooded is simply a consequence of Spelman's attempt to win favour with the Tory grandees, that their lives have been turned upside-down just to serve her personal self-interest.

Spelman should go far in the Tory party, she has all of the traits of the modern Conservative, a noxious blend of incompetence, malice, economic illiteracy and pure unrestrained self-interest.

See also

No new ideas, just more Tory cuts
 

Evidence based policy in UK politics

Austerity and the double-dip

Gideon's Folly