TUC analysis published today using official figures, shows that the number of men doing part-time jobs because they can’t find full-time work more than doubled to nearly 600,000 between December 2007 and December 2011. The number of under-employed women has increased by 74% to 780,000, bringing the total number of people in involuntary part-time work to a record 1.38 million.

The proportion of women working part-time that don’t want a full-time job, often because of family and caring responsibilities, has also been falling. This shows that the recent rise in part-time employment has mainly come about through necessity rather than choice.

Number of people doing part-time work because couldn’t find full-time jobs,Q4 2011 (by region and gender)

(Quarterly Labour Force Survey, October – December, 2011)

When this crisis began I said 4 million people would be unemployed as a result of it.

Add together the unemployed and underemployed now and we’re there – and it’s only going to get worse.

BOB GELDOF lashed out at a reporter this week after he was asked about his tax arrangements, bizarrely demanding to know how many irrigation ditches her salary had built.

Geldof, who was in the Ethiopian capital Addis Ababa for the World Economic Forum, was interviewed by Times journalist Lucy Bannerman. Their encounter appeared to go very well at first, with Geldof talking about the huge changes that have taken place in Africa since Live Aid in 1985.

Then Bannerman asked him about his tax status. After confirming that he is a non-dom and can legally avoid income and capital gains tax on international earnings, Geldof laughed off the Sunday Times Rich List estimate of his worth (£32 million).

When pressed on how much tax he actually paid – the justification for the question being because his big idea, aid, can come from taxes – Geldof exploded.

“I pay all my taxes,” he shouted. “My time? Is that not a tax? I employ 500 people. I have created business for the UK government. I have given my ideas. I have given half my life to this.”

In a bizarre, heated exchange Geldof jabbed his finger repeatedly at Bannerman and demanded to know how many irrigation ditches she had built with her salary.

The tirade ended with Geldof yelling: “How dare you lecture me about morals”, before being led away by his entourage.

Actually Bob, lots of us would like to lecture you on your tax morals if you don’t pay in full what somebody else living in the UK might owe. I stress we don’t know whether you do or not, but you had the option of saying you do and got angry instead, which makes me think you’ve got something to get angry about.

And candidly, in that case Lucy Bannerman was absolutely right to question you as she did. Paying tax in the right place at the right time is a principle inextricably linked to solving the problems of poverty in Africa – and elsewhere. You can build as many ditches as you like. But candidly if you set an example by tax avoiding then you undo all your good works.

It’s your choice though Bob. You’ve no need to get angry. You can just either drop the non-dom claim or pay up instead. It’s not hard.

The victory of Francois Hollande in the French Presidential contest provides a further insight into the operation of the bond markets. It is frequently argued that there can be no retreat from ‘austerity’, which in reality is simply the transfer of incomes from labour and the poor to capital and the rich, because the bond markets will recoil and long-term interest rates will soar. This is important as significantly higher long-term interest rates could, unchecked, choke off recovery.

As the new French President has made some gestures in the direction away from ‘austerity’, then it should be expected that at least French long-term interest rates would rise as a result. But French government bond yields have fallen since the Socialist victory, by 18bps (basis points, equivalent to one hundredth of a percentage point, or 0.18 per cent). Ten-year French government bond yields declined to 2.79 per cent, lower than before the election.

So much for the markets will run away from austerity. As Michael notes:

The repeated assertion that pro-growth policies cannot be adopted because of the negative reaction of the bond markets is a false one.

Ed Balls and Peter Mandelson are right, the UK should take a central role in ensuring a future of sustainable growth for the EU, with the funding of infrastructure being centre-stage. The crucial question is what kind of infrastructure. To make Europe’s future a “sustainable” one in an environmental sense will mean rejecting the usual old vanity projects of motorways, airports and high-speed trains. A really job-generating but green infrastructure programme would make all buildings energy-efficient, massively reduce use of raw materials through reuse and recycling, and improve regional transport networks. All this could generate jobs and business opportunities where people live, rejuvenate local economies and so eventually reduce public debt. If François Hollande and the Greeks’ Syriza alliance also call for a shift from austerity to greener prosperity, this could at last result in the replacement of the sado-monetarist lunatics in charge of the EU asylum.
Colin Hines
Convener, Green New Deal Group

The euro is a great concept but was badly conceived, without a central bank or political, fiscal and economic harmonisation. But the greatest problem today is how to manage state finances when billions disappear into the world’s tax havens thanks to the absence of any monetary controls and politicians granting their wealthy friends and multinationals all kinds of tax advantages and favours that have diluted tax revenues to the point where there is not enough in the kitty to maintain public services.

Even Paul Krugman has admitted that a return to temporary monetary controls could be an answer. With regard to Greece I would say that, in exchange for handing over more money, all Greek funds abroad in Switzerland or elsewhere must be returned. Then the same conditions should apply to the rest of Europe’s member states. According to the Tax Justice Network, over a trillion dollars lies in offshore banks and companies in tax havens. Recover this money and governments could not only reduce their debts but pave the way for a lowering of taxes across the board to encourage investment and growth, and increase spending power for the majority.
Peter Fieldman
Madrid

Actually, we think there are about $$11.5 trillion dollars in tax havens. It may well be more.

But Peter Fieldman is right: tax havens were deliberately created to subvert regulation. I call them secrecy jurisdictions. Secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.

Unless we tackle that abuse we can’t win the fight against abuse, and nor can we preserve democracy.

The biggest proponents of tax havens world wide are the Big 4 firms of accountants. That’s why I said yesterday:

I’ve long argued the four biggest threats to democracy in the world are PWC, KPMG, Deloitte and Ernst & Young because they are, together, the biggest global network designed to undermine the revenues of democratically elected governments with intent to ensure that those governments can’t command the resources needed to deliver the services their electorates want and expect which action on their part has to surely undermine democracy and faith in it faster than anything else could.

These firms are, literally, by promoting these places taking away our democratic freedoms. FT columnists realise that. It’s time it was more widely recognised.

We had a really good discussion about what capitalism was during the evening. I have to say in my version of capitalism – where it is accountable, regulated and works in partnership with government in a truly mixed economy as described in the Courageous State (see right) then capitalism would not kill love.

But this morning David Cameron is apparently set on another £25 billion of benefit cuts. That’s not just killing love. That will, quite literally, kill people.

In which case the person who designed the bag may well be right.

Either way, my thanks to those who organised and took part in a great debate last night.

Most tax avoidance would not be caught by the government’s proposed general anti-abuse rule, Graham Black, President of the Association of Revenue and Customs, told Panorama. ‘It’s rather as if you legalise murder and then say that your crime statistics have fallen,’ he said.

Graham is exactly right. Graham Aaranson’s GAAR is, I now realise, a great gift to the tax avoidance industry because by not being a GAAR at all (Aaronson says it isn’t) and by tackling only a tiny minority of the very worst schemes (as Aaranson says it is the most it will do) it provides a fig leaf of respectability for the tax avoidance industry because it will let them claim that thee is a GAAR and their scheme does not fall within it so it must be all right.

No wonder the Chartered Institute of Tax is so keen to say the tax system is suddenly just hunky dory. They’re laughing al the way to Cayman, Jersey, Switzerland and Singapore.

Underpinning the German position is the belief that resolving debt problems is the sole responsibility of the debtor. Keynes, by contrast, held that both creditors and debtors should share the task of getting economies out of holes they had jointly dug. “The absolutists of contract,” he wrote in 1923, “are the real parents of revolution.”

As they also note:

Talks to form a Greek government have collapsed. This is unsurprising: no government pledged to unalloyed austerity in response to its debt obligations can face its voters with confidence.

Yet Greece is only an extreme example. Centrist governments across the Mediterranean are increasingly seen by their citizens as powerless. They have no independent monetary policy; no capacity to devalue; no right to impose capital controls; limited ability to support failing national enterprises; and now they are mandated to tighten fiscal policy. When moderation fails, the time comes for citizens to turn to those promising to take power into their hands, be they from the right or the left – anything but the pusillanimous centre!

And as they warn:

That is what happened in the 1930s. It is a historical irony that European countries that avoided a repeat of the Great Depression after the banking crisis are now driving into the blind cul-de-sac that led to extremism in that earlier disaster. German historical memory has vivid recall of the hyperinflation of 1920-23. But it is possible to forget it was deflation and the Great Depression that brought Hitler to power in 1933.

The elevation of credibility into a central economic doctrine has turned a sensible point – that policy stability is good for both business and households – into a dogma that endangers stability. The credibility the models describe is impossible in a democracy. Worse, the attempt to achieve it threatens democracy. Pasok, the established party of the Greek left, lost votes to the moderate Democratic Left and more extreme Syriza party because it committed to seeing austerity measures through. Now the Democratic Left cannot commit to that package because it would lose to Syriza if it did. The UK’s Liberal Democrats, by making such a deal, have suffered electoral disaster. The more comprehensive the coalition supporting unpalatable policies, the more votes will go to extremists who reject them.

The writings of these eminent thinkers, and Martin Wolf to whom Kay refers, could not be clearer. We change our economic policies or extremism – most likely in the form of fascism – will result.

That’s how big the stakes are now – and brave people are even willing to say so in the FT.

It’s time to listen.

The home secretary is “on the precipice of destroying a police service that is admired throughout the world”, the Police Federation will warn her when she addresses their annual conference.

The doctors think the same of Lansley.

As do nurses.

And teachers think that of Gove.

Can they all be wrong? I doubt it.

In that case is this cock up or conspiracy?

I’d say neither. The aim is to destroy these services so that they can be privatised. Big business in the UK may be sitting on £700 billion in cash it has no clue what to do with at present. It can see no investment opportunity for the money, on which as a result – as any saver knows – it is making remarkably little return. In the absence of any idea how to make that additional return big business wants to get its hands on the securest income stream in the UK – tax revenue – and it can do that by winning private contracts to delve public service.

Of course they’ll provide a worse service than the state, and they’ll suppress wages and pensions in the process: that’s the business model they’ll knowingly use. But they’ll get rich and that’s all they and the Tories care about.

In that case this is neither cock or nor conspiracy. It could be called a plan, but that would be kind to it. A heist might be the best description. It’s the most massive theft of well being from the majority to feed corporate greed in the history of this country and the Tories, knowing they’re a one term government and even trying to hide the fact.

The European Commission’s head of tax slammed Austria and Luxembourg’s refusal to let it negotiate savings tax agreements for the European Union as a whole following the finance ministers’ meeting here Tuesday.

“The position that Austria and Luxembourg have taken on this issue is grossly unfair,” EU Tax Commissioner Algirdas Semeta told reporters. “They are hindering 25 willing member states from improving tax compliance and finding additional sources of income.”

He added that he’s “extremely frustrated” that ministers couldn’t agree on a mandate for the commission to negotiate new and stronger savings tax agreements with Switzerland and other countries.

“This proposal has been on the table for almost a year now,” Semeta said. “During the same year, law-abiding citizens have been bearing the brunt of austerity so that budget shortfalls can be met…Tackling tax evasion is a growth-friendly way of boosting national budgets.”

I’ve long argued the four biggest threats to democracy in the world are PWC, KPMG, Deloitte and Ernst & Young because they are, together, the biggest global network designed to undermine the revenues of democratically elected governments with intent to ensure that those governments can’t command the resources needed to deliver the services their electorates want and expect which action on their part has to surely undermine democracy and faith in it faster than anything else could.

According to the press release he’ll be saying at 4pm this afternoon that whilst the tax system is far from perfect,  a stream of negative – and at times misleading – headlines about HMRC and the tax system risk giving taxpayers the impression the system is broken, which could undermine confidence in the system and reduce compliance by taxpayers. And he will argue that the CIOT should:

combine robust representations to the tax authorities on behalf of taxpayers and their advisers, with robust challenges to exaggerations about the tax system’s failings.

The comparison he will make is between Greece and the UK. Of Greece he says with a degree of overstatement that is almost certainly off the scale of exaggeration:

For the most part, the only people who pay anything close to the right amount of tax in Greece are overseas companies and groups doing business there… [Consequently] the country is completely broke.

But he’ll continue:

In the UK we are in a different place. We respect the rule of law and our laws generally give a sensible result. The correct amounts of tax are paid and the tax system works smoothly most of the time.

Now that’s strange: that’s not a view I hear often from such people as him. For decades I’ve heard the CIOT, ICAEW, ACCA and others lambasting HMRC and the tax system. What has changed? Could it be that something’s rattled him into making such a strange and unaccustomed claim of praise for a tax system that his profession has been maligning for so long? I think there is. He’ll continue:

Nevertheless, over the last couple of years there has been a pretty steady stream of headlines in newspapers about the mistakes made by HMRC, their inefficiencies, the hidden economy, deals done with some large companies and the ability of some companies to do business in the UK while paying very little tax… Everyone in this room knows that we are so far away from the position in Greece that you cannot compare it. But every time those headlines appear, one or more of the passengers on the Clapham omnibus thinks our system must be broken and there is no need for them to join. That affects our members. It is often the perception rather than the reality that is important.

So, now we see what he’s going on about. He doesn’t like the Tax Justice Network, me, UK Uncut, PCS, the TUC and numerous newspapers pointing out that large parts of our tax system are broken.

Multinational corporations – let’s start with Amazon, Google, Apple and many more – don’t pay the tax that is reasonably expected of them by sensible in this country. We know that.

And we know PWC are going out of their way to market tax systems to undermine the chance of the UK economy recovering without massive tax cuts that inflict real harm and real hardship on people in the UK. Panorama reported that last night. I have read the documents.

Hundreds of thousands of small UK companies are not paying the tax due by them. My research has shown that.

And as my research also shows, tax avoidance costs the UK £25 billion a year whilst tax evasion costs the UK £70 billion a year. Our shadow economy is maybe 12.5% of our total economy.

And whilst of course it is entirely true that a 12.5% shadow economy is nothing like as bad as Greece’s 27.5% the idea that a tax system that is losing the UK £95 billion a year is working is ludicrous, and yet Patrick Stevens will say:

We must continue our work to ensure our tax system functions effectively. We tax practitioners and tax directors need to help the HMRC side of the tax profession to get this right. This means that we must draw their attention to problems as they arise and push them towards getting it right. We should be robust – as we have been, for example, over business record checks – when we think they are not getting it right. But we should also support them when journalists, campaign groups and even, on occasion, politicians exaggerate their failings, and present the system as broken when it is not. Imperfect? Yes. Frustrating? Frequently. Over-complex? Undoubtedly. But not broken.”

With the very greatest of respect to Mr Stevens, that is as absurd as his claim about the Greek tax system (which does, incidentally make you wonder about the ethics of his firm in that country, but let’s leave that aside).

Most small practitioners think our tax system is broken because they can never get what they need from the overburdened staff of HMRC.

And most people who have to engage personally with HMRC think the same.

And the evidence on the tax gap is now compelling – even HM Treasury were going out of their way to say how bad tax avoidance was before the last budget.

But oddly Mr Stevens doesn’t. I wondered why so I checked his CV. It’s here:

Patrick Stevens started his career with a two partner firm of accountants in Norfolk and since then has experienced life in most segments of the profession. This includes several years with a firm just outside the top twenty accountants, some time with BDO, and the last 14 years as a partner at Ernst & Young in London. While there he spent a number of years as managing partner of the growth markets part of the business. His areas of tax specialisation include entrepreneurial companies and their shareholders, professional partnerships, retail investment funds and private clients.

These days he has a range of responsibilities within Ernst & Young including looking after the tax affairs of the firm in the UK, the EMEIA Area and the Global organisation as well as commenting to the newspapers and television on current tax matters.

So now we get it. Ernst & Young – present in many of the world’s tax havens and purveyors of tax avoidance to multinational companies and wealthy individuals – think the UK’s tax system works.

Well, suddenly in 2012 it does, for them. UK multinationals – thanks to George Osborne – can now tax avoid in tax havens to their heart’s content because he’s shifted us to a territorial tax system and has allowed UK multinational corporations to set up tax haven treasury functions to legitimately undertake the very abuse last night’s Panorama highlighted. And what is more, we’re even going to have a wholly ineffective general anti-avoidance rule that will let almost all tax schemes the Big 4 sell pass muster. And all the time the staff at HMRC are being hacked back so that fewer and fewer enquiries can be made and more and more rough and ready deals have to be completed.

Oh yes, the tax system works just fine from the perspective of the Big 4 all of a sudden. They’ve now got the tax system they want where corporation tax will soon be a voluntary donations box, a general anti-avoidance rule that has no teeth lets them say all they’re doing is both legal and ethical and there are so few resources at HMRC that less and less tax is paid.

But for the rets of us – the 99% – the abuse is real and ongoing and will be seen in the cuts that will bring misery to this country. Mr Stevens brings shame on the whole tax profession by his blatant propaganda delivered not even in the interests of his professional body but in the obvious interests of his firm and those firms like it and their clients, which flies in the face of all the evidence and which is designed solely to undermine the effectiveness of the UK tax system.

But then we shouldn’t be surprised. I’ve long argued the four biggest threats to democracy in the world are PWC, KPMG, Deloitte and Ernst & Young because they are, together, the biggest global network designed to undermine the revenues of democratically elected governments with intent to ensure that those governments can’t command the resources needed to deliver the services their electorates want and expect which action on their part has to surely undermine democracy and faith in it faster than anything else could. We’re just seeing that writ large in this speech.

France’s future depends on delivering all three of growth, social inclusiveness and budgetary discipline. No one element can be achieved without the other two. Without a belief among the French that burdens are shared, it is hard to elicit the necessary sacrifices to achieve budgetary discipline. In turn, fiscal discipline should allow the government to conduct more expansive fiscal policies to boost growth if demand is depressed. Fiscal reform and spending cuts will also allow France to fund investments that support growth.

I am not sure that I agree. The difficulty with economists like Aghion is that they really don’t get accounting – and for all its deficiencies accounting also has some important insights to offer.

I’ve argued before that in macro-economics there are just four drives of growth. They are increases in consumer spending, exports, business investment and government spending. Hollande cannot expect any increase in the first three right now so growth has to come from the government. Let’s not beat around the bush: this is the only way out of the recessionary environment we’re in now.

But, and I make the point very strongly, to treat all government spending as equal would be a big mistake. It is not. There is a very big difference between the revenue and capital cycles and it is vital that people beging to talk about it.

There is not a shadow of doubt we need new investment in our economy. We need social housing, new generation capacity, a water grid, flood protection, improved railways, innovation in low carbon impact road vehicles and more. No one but the government is going to lead those processes. and there is money to do it. There is £2.2 trillion in pension funds in total. There are about £80 billion of pension contributions a year. Requiring just one quarter of all new pension contributions go into new infrastructure investment - in exchange for a guaranteed and proper return, maybe with an upside if something went especially well, is a wholly reasonable condition of giving pension tax relief. And green quantitative easing could provide the £20 billion capital for a national investment bank needed in the UK – which is being denied to it at present.

So long as these funds were invested witha  view to returns then they’re not part of the revenue cycle and should not be considered part of the deficit or government borrowing. It is ludicrous that such stupid accounting definition are destroying real lives and constraining rela growth – precisely because the government is slashing investment now to try to balance books to meet these accounting rules, and is destroying lives in the process. No business is constrained by such stupidity. When they invest the profit and loss account is not punished – the asset is put on the balance sheet and the behaviour is applauded.  That should be true for government too.

Until we realise this we won’t get out of our current mess – whatever happens to the Euro.

Default will be disastrous for Greece and the resulting contagion would be damaging for Europe. So goes the conventional wisdom. The only debate has been about the strength of contagion and the appropriate response of vulnerable countries and of the cheque-writing country. Might the debate be misguided because the premise is flawed? Expelled from the eurozone, Greece might prove more dangerous to the system than it ever was inside it – by providing a model of successful recovery.

The whole article is worth reading.

His point is a serious one: after a period of extreme misery (and grant aid for the relief of poverty and maintenance of essential services in Greece will be essential if its people are to get through the two year period following withdrawal from the Euro) Greece will recover. At the very least Greek holidays will suddenly become very cheap and export markets such as tourism should grow again after the horrible interregnum, quite rapidly. Argentina, Iceland and others provide the precedent, uncomfortable as the ride is.

But the other side of the coin is as important. As Greece recovers, and if Spain, Italy, Portugal and Ireland follow it and also recover, the cost will be born by someone and that someone is Germany. They’ll no longer have massive capital inflows and so low interest rates as the safe haven of Europe. Their banks will lose, badly – as they had the money to lose. And Germany will no longer have guaranteed export markets with efficiency differentials built in that bias towards the productivity of German labour.

The short term pain of Greek exit will be in Greece – and serious aid operations as well as rapid lessons in the management of capital controls will be needed very soon I expect – but the cost will eventually be on Germany.

The difficulty is persuading the Germans of that. It’s taken two years for the people of Europe to rumble the madness of austerity. Can the Germans send Merkel a strong enough message before Greece defaults? That’s a big question.

Twentieth century capitalism has broken down leaving the markets and government in crisis.  No one seems too sure what to do.  Our leaders talk of responsible capitalism while the financial sector seems to continue business pretty much as usual.  What would responsible capitalism look like?  Where are the examples we can learn from and what needs to be changed for responsible capitalism and our economy to flourish?  Join our Question Time style debate with leaders from the worlds of business and society and chaired by the Guardian commentator John Harris. 

Our panelists are:

John Morrison
Executive director of the Institute of Human Rights and Business.

Richard Murphy
Founder of the Tax Justice Network, Tax consultant and author of ‘The Courageous State’.

John Harris
Guardian journalist.

£8 / £4 (under 25s)
Tuesday 15 May, 19.30 – 21.00 

 BOOK TICKETS

Spain’s credit boom peaked in 2008 when the supply of cheap, external finance began to fall sharply. Four years later, Spanish banks’ asset quality continues to plummet. The sector will require €100-250bn in recapitalisation later this year to maintain a 9 per cent core tier one capital ratio, the minimum stipulated by the European Banking Authority. In the meantime, there are concerns about the capacity and appetite of Spanish banks to support the sovereign debt, particularly amid rating downgrades and deposit withdrawals.

Let’s put that in context. Call it €150bn and that’s the NHS budget is going to be needed to cover Spain’s banks, this year.

Or it’s 15% of the value of UK pension funds (excluding insurance funds).

Now that’s not going to happen is it?  The market’s not going to throw that good money after bad. So it’s the Trokia that will be back in action. And that’s where Greece is now.

Is Spain going down the same road?

If so this is going to be a road well travelled – but at massive cost.

Germany had better start reconciling itself to bail outs for all our sakes is all I can say.