Archive for January, 2013

In, out or shake it all about.

Members of the Conservative party have made Europe a high priority for themselves for sometime. By high priority, read get the hell out of the club.

This obsession has caused difficulties to a succession of conservative leaders.  David Cameron is the latest  whose had to pander to the euro-sceptics within his party.

But he’s gone further than any of his predecessors in offering an in/out referendum. This of course will only happen if the Conservatives win the next election.

His strategy is to renegotiate the terms of the country’s relationship with  the European Union. If he gets his way he’ll offer the country a referendum with him campaigning to stay in.

According to the PM British people would have a “very simple choice” to accept the result of the talks or to leave the EU altogether.

Now of course in all of this there are an awful lot of ‘ifs.’

The first ‘if’. He has to win an overall majority at the 2016 general election. Unless the economy improves this is going to be a very hard call for his party. Indeed the uncertainty this speech has caused in the business community may make it even more difficult for the economy to be turned around.

The other ‘if’ is what does renegotiation mean and will the Europeans be interested in delivering a negotiated settlement in the time table laid down by Cameron. Why should they rush to help a party that’s blackmailing them with the exit door if they don’t concede to the UK’s unilateral demands.

In his speech Mr Cameron did not spell out what powers he would like to see the UK take back as part of a new settlement. He didn’t even say what would happen if the negotiations did not go his way.

His speech has given him brownie points with a large section of the Conservative MPs and his party in the country.  There’s no doubt he will be the darling of his party.

But the threat to leave the EU will create a great deal of uncertainty. And the last thing the economy needs at the moment is uncertainty. It’s hard to see that his stance is in the UK’s economic interest. It certainly won’t help the Welsh Government in their efforts to attract inward investment.

No foreign firm that wants to access the European market will consider Wales as their base if they think there’s a chance that the country will leave Europe. Other countries will gain at Wales’s loss.

Wales continue to get a great deal of help from Europe through structural funding to create jobs and build the economy. If we’re out there is little in the track record of Westminster to indicate that they’d help. If reform of Barnett  is an indication Wales  is far down the English governments agenda.

No, today’s speech may do Cameron some short term good  but the real winners are UKIP. Europe is now up the agenda and the prospect of a campaign to exit will put a fresh step in Farage’s stride.

And of course Alex Salmon must be laughing all the way to his referendum. He’s now able to argue  for an independent Scotland seated at the European table in the seat shortly to be vacated by the UK. The anti-unionist cause has been greatly helped by today’s speech. Good one, Dave.

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Stop the bullying

Nobody likes a bully. When someone uses his strength or position to threaten someone weaker, we’re all outraged. And rightly so.
But as an instrument of policy the government is prepared to reduce the living standards of the already downtrodden and there is little condemnation.
Many poor people who find it desperately difficult to live on existing benefits are becoming more and more desperate. A social crisis is happening and there is scarcely a peep from the rest.
The growth of food banks is testimony enough that many are finding it difficult to meet their most basic need, the need for food for them and their families. Rent arrears are on the up. And just as night follows day evictions will also follow. Resulting in even more family breakdown and misery.
Yes, its hard out there. And the response. These are straightened times and all should share the burden.
How facile. Its the equivalent of backing the bully and ignoring the victim. Both the left and right in politics are turning their back on the welfare state. The sharing of the burden between everyone in society is definitely not on any parties agenda.
The wealthy get their tax reduced and the poor get their incomes cut.  This is not sharing the burden. It is adding to the riches of the one and adding to the misery of the other.
There’s a propaganda war to demonise the poor and desensitise the rest of society to their plight. They’re feckless, they’re scroungers, work shy  and basically a drain on all. They’re not the ones that should benefit. They’re the undeserving poor.
The coalition government rhetoric says they’re going to concentrate on the deserving poor, those that are in “real’ need. They’ve a funny of showing it, cutting their benefits.
 Attlee and his government set up the welfare state on the model outlined by William Beveridge a Liberal.  The universal basis of the welfare state continued under Winston Churchill a Conservative.
All three were of the view that universality of benefit was the best way to deal with the scourge of poverty. Be it poverty caused by unemployment, sickness or old age.
It was called the postwar consensus.
This consensus was of the view that the fairest way of reducing “want” and the most efficient too was for everyone to pay and everyone take out when they were in need.
 
Selectivity and means testing not only stigmatise recipients but is also a very costly ways of tackling the problem. How many kids that are entitled to free school meals don’t get them? Its reckoned about a quarter.
Giving benefits to all and then using a progressive tax system to claw back the cash from those well-off  is not only more efficient but also the best way of ensuring that aid gets to everyone. The UK needs to get back to these basics.
Lets spend more on tax collectors rather than on benefit administrators. All  should pay their dues.
Lets keep, child benefits, heating allowance and bus passes etc and lets even add to the list.
Then we’d all really be in it together.
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Building jobs

A lot less people will find jobs in construction in Wales in the near future. According to the The Construction Skills Network the recession in the industry in Wales reflects the wider job losses in the sector across the UK.

In the UK as a whole the sector lost 60,000 jobs in 2012, while output fell 9%, in large part because of public spending cuts. Employment in sector is expected to continue to fall every year until 2016.
The construction industry is an important barometer to what’s happening to the economy.  No growth in construction, means no growth in the economy.
But we’re constantly told that “jobs” in the economy are not going down. Employment figures don’t reflect the recession in the economy. A strange phenomena, recession without an increase unemployment.
Now an explanation. Those on government work programmes are also regarded as having a “job” although, of course they’re not paid.
Added to these are the half a million people working fewer than six hours a week.  Looking at these you begin to get the narrative. Unemployment figures become misleading.
Such figures create the impression that the economy is in a better place than it is. It’s not.
The net rise in employment these last two years has gone hand in hand with growth in underemployment, more than 3 million people in jobs (almost a tenth of the workforce) at present crying out for more hours.
Dodgy figures lead to dodgy answers. Knowing you’r in the mire is a start to getting out of the mess. Unless the gravity of our economic predicament is acknowledged the country will continue to put its collective heads in the sand and policy will continue without change.
The government’s policy of austerity will continue, unchanged. Even though a realistic look at the statistics show that the policy is failing.
Change is needed. More government borrowing is required. Yes, borrowing.
Thrift is not good in a recession. It’s only a policy for the good times.
Temporary borrowing at low interest rates is a sensible way forward.
Borrowing only becomes a problem when it underestimates the risks involved, and when the borrower may not be able to afford the repayments. None of these apply, although the government would want us to think otherwise.
The financial crisis was caused in part by excessive borrowing by consumers who thought house prices could never fall, but mainly it was banks over-extending themselves.
The recession caused high government borrowing, and not the other way around.The right time to cut government borrowing is when the economy is strong, and the cost of borrowing is high. Not now.
The government are right this is the time to build Wylfa B and electrify the railways. But more, much more investment needs to happen. Schools and hospitals need to be built.  The housing sector needs to be boosted.
Borrowing for investment purposes is a correct policy. Most mortgage holders have worked this out, but it seems that the Chancellor hasn’t got it.
The figures on construction jobs are a timely reminder the George Osborne has got it wrong. It’s his policies that are leading us to ruin.
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