Hopefully this is just the beginning of a crack in the Coalition that continues to get wider resulting in a complete breakdown of the Coalition.

Telegraph – Nick Clegg in climb-down on NHS reforms

politics.co.uk

Guardian

Students are holding a day of action to focus attention on government plans to scrap the Education Maintenance Allowance (EMA) that pays poor teenagers to stay on in education.

What a difference a year makes? At a Cameron Direct event, in January last year before the election, David Cameron responding to Save EMA campaign director James Mills, says that he supports EMAs.

YET ANOTHER BROKEN PROMISE – Will the electorate ever believe a politician again?

Lets put the 2nd statement to bed 1st – this ”mess” was caused by irresponsible Bankers and Financiers with their reckless lending and “deals”. So to recap THIS MESS WAS NOT CAUSED BY THE LABOUR GOVERNMENT.

As for “we are all in it together” – complete rubbish – the poor will bear the brunt of the effects of the spending cuts by a large margin.  Everybody keeps talking about % as if this is what matters. If the rich, say everybody with a combined earning above £100,000 per year, was to loose as much10% of their income they would still be able afford a roof over their head and buy food for their family (if not they don’t deserve any sympathy).

Similarly for middle earners, although due to having taken on too much debt (including mortgages above 90% of property value) they may struggle, at the end of the day the majority would be perfectly OK.

However when it comes to low earners or people, who, by no fault of their own depend on benefits will suffer disproportionately and, they may not even be able to feed their family or get chucked out of their private rented accomodation because of caps on housing benefit.

As for the idea that ‘the private sector’ will create 500,000 jobs to absorb those resulting from the spending cuts.  More rubbish – this is unlikely to happen.  Why? because, for a start it is estimated that the cuts will also result in around 4 to 5 hundred thousand private sector job cuts as well.  The final ‘nail in the coffin’ of these extra jobs is the fact that, in some areas, 90% of new jobs are being taken by migrant European workers over which the Coalition has no control.

What a disgrace, when will the Lib-Dems wake up and stop allowing this carnage to take place?  Please wake up before it’s too late!

For a £50,000 donation per year to the Tory party you can buy access to the Leaders Group including David Cameron himself, a bargain for any wealthy individual or business who wants to make sure their view is heard. If you can only afford £25,ooo per year then you can join the Treasurer’s Group. This continues right down to Fast Tracks which will cost you a measly £21 per month.

S0 it seems that the Conservatives will listen to you as long as you are wealthy enough to pay for the privilege, and the more you can afford  the higher up the political tree your access.  Fundamentally these are the people who have the largest input to influence Government.  Is this what Tory and Liberal Democrats voted for?

Further reading; Guardian: Dinner with David Cameron?, Labour List: Slicing the donations knot

There are two striking pictures in the IFS report. The first is a bar chart that illustrates the tax and benefit reforms introduced by Labour before May: they hit the better-off harder and harder all the way up to the richest 10%. That is what we typically describe as progressive reforms. The second graph shows the effects of Mr Osborne’s inaugural budget – and it shows that the poorer you are, the poorer you will get under this new government.

The Government’s feeble response is that it doesn’t take account of economic growth and getting people off benefit and into jobs.  What jobs? Where exactly are these jobs going to come from when unemployment is bound to rise as a result of the spending cuts?

Nick Clegg, when are you and your party going to stop burying your head in the sand?  You have been well and truly conned by your Conservative Tory partners in backing Osborne’s budget and other measures which go against the the core of the Liberal Democrat values. Get out now before the damage is permanent.

So, in the light of the IFS report, is the government incompetent or hiding the truth.  I suggest both; incompetent for engaging in austerity measures which will affect the most vulnerable in our society most whilst plunging our economy back into recession and now they have been found out are in denial hiding the truth.

Further Reading; Telegraph, Guardian, Taking From The Poor, Politics.co.uk

Peston is the son of economist and later Labour peer Maurice Peston and his wife who was employed by the NHS. Robert attended the local comprehensive school, Highgate Wood Secondary School, in Crouch End, North London. He graduated from Balliol College, Oxford in 1982, and then studied at the Université Libre de Bruxelles after winning a scholarship.

After working briefly as a stockbroker Robert became a journalist in 1983 and joined the new Independent newspaper in 1986.  From 1991-2000 he had various positions including Political Editor and Banking Editor.  In 2002 he joined the Sunday Telegraph as City Editor becoming associate editor in 2005. Robert Preston has been the BBC’s business editor since 13 February 2006.

Peston published his biography of Gordon Brown Brown’s Britain in January 2005, which details the rivalry between Gordon Brown and the then Prime Minister Tony Blair. In February 2008, Hodder & Stoughton published Peston’s latest book, “Who Runs Britain? How the Super-Rich are Changing our Lives.” In The Guardian.

Peston’s scoop on Northern Rock seeking emergency financial help from the Bank of England won the Royal Television Society’s Television Journalism Award for Scoop of the Year in the 2007/8 awards and the Wincott Award for Business News/Current Affairs Programme of the Year. He was Journalist of the Year in the Business Journalism of the Year Awards for 2007/08, and also won in the Scoop category.

He is married to the writer Sian Busby, writer of a book about the warrior queen Boudicca. The couple have two sons. He is a lifelong Arsenal supporter.

Source links: About Robert Peston (BBC), Wikipedia,

David Laws’s resignation. The new coalition government was plunged into its first crisis as the Liberal Democrat cabinet minister charged with cutting the £156bn deficit resigned following revelations about his expenses.

NHS reorganisation. Government has embarked on massive NHS restructuring, even though Tories said before the election that these restructuring exercises caused “terrible” disruption.  For further details see the UTG blog posts on this subject.

The Michael Gove fiasco of the cancellation of the ‘Building for Schools Programme”. Michael Gove should get the incompetence prize for the way he announced the cancellation school building projects. See UTG Blog posts.

The economy.  Despite many warnings Osborne and the coalition are bulldozing ahead with their cuts which is almost certainly going to result in a ‘double-dip” recession.  The plan relies on new jobs being created in the private sector to replace the 600,000 or more which will be lost in the public sector as a result of the cuts. Cloud cuckoo land.

Refusal of the £80m loan to Sheffield Forgemasters being challenged. Its chief executive said directors were willing to sell shares, contrary to what Cameron and Clegg said.

Capital gains tax. Coalition agreement said CGT would go up to rates “similar or close to those applied to income”, but George Osborne only raised it to 28%, not 40%.

VAT increases to 20% in January.  Despite the Lib Dems stating they were against a VAT rise in the run up to the election the Chancellor  announces the poor targeted inflationary VAT rise.

Stabilisation of Fuel prices ruled out. Back in the summer of 2008 Shadow chancellor George Osborne told the BBC the party was looking at plans to cut fuel duty when oil prices rise and increase it when prices fall. This has now been ruled out.  Another case of saying one thing in opposition and another when you get into power.

Abolished The Film Council. This is the body which promoted the British film industry and provided funding for many top British films.

No Crackdown on Tax Avoidance.  There has been a complete lack of any announcements regarding how the coalition is going to plug any of the Tax Avoidance loopholes.

Cancelling The Child Trust Fund.  Stopped this progressive idea which has been copied by other countries.

Scrapped the Sustainable Development Commission (SDC) – the Commission’s latest (and last report) shows that even the modest measures that the previous government introduced to save energy and water and reduce waste have cut the state’s annual bills by £60m to £70m.  See UTG Blog Post.

Scrapping of ASBOs. Abandoning the whole ASBO system suggests the ConDems are returning to a  mentality where  police will only act after a crime has been committed.

Abolition of the Regional Development Agencies. This decision will once again centralise regional decisions in London reversing 10 years of gradual de-centralisation which is being adopted by other European countries.

Scrapping of ID Cards.  Political decision with no real rational behind it.  This will make it harder to catch criminals and terrorists than it would have otherwise been.  Also to illustrate the arrogance and  unfeeling nature of the Government they have refused to refund the relatively few people who have signed up for the trial.

Scrapping of Home Information Packs. This one affected me directly as it closed down my expanding business at a stroke without warning. This move alone increased unemployment by 3000 people with a total of 10,000 being affected. This was done without embarking on a 100 day consultation period which was promised prior to the election.  In doing we have returned to our old, slow and  inefficient house buying and purchasing system.

Announcing a spending review which will result in job losses of at least 600,000 in the public sector. All department (except NHS and overseas aid (why overseas aid)) have to find between 25 and 40% budget savings.  A conservative estimate puts resulting job losses at, at least 600,000.

The Abandonment of Regional House Building Targets.  Desperately need more housing, despite this the Coalition has abandoned targets which aimed to have 3 million more homes by 2020.

I really do hope we do not have 100 more days of the above.  Unfortunately I fear it can only get worse.  The polls indicate that at the moment it appears that it is possible to fool most of the people all of the time.

Further Reading: 100 facts about the coalition’s first 100 days, LabourList 50 mistakes series

I recommend you read William Keegan’s recent article for the Guardian on Sunday (link below).  He pretty much echoes my own thoughts regarding the sounding of alarm bells at the quickness and severity of the cuts being made by George Osborne and the Coalition.

Related sources: John Keynes  Echoes that of Thatcher’s first government

Back in the summer of 2008 Shadow chancellor George Osborne told the BBC the party was looking at plans to cut fuel duty when oil prices rise and increase it when prices fall. He was reported as saying;

“What this would mean is that when the price of oil goes up, fuel duty comes down to help families, but the quid pro quo is that when the price of oil falls the duty goes up” and  “So government is sharing the pain of rising oil prices, but the government is also sharing the gain when oil prices fall.”

Looks like Osborne and the Conservatives say one thing when in opposition then quietly forget about it when in power.  It’s a shame as it actually looked like a good idea.

Further Reading; Tories propose fuel duty changes     Anger at Looming Fuel Price Rises    George Osborne U-turn on Tory low-fuel pledge

The survey showed that 32% of employers across the state and private sectors said they expected to make some workers redundant during the next three months. It marks a rise on the 29% recorded in the previous quarter.

This deals another blow to the government’s hope that private sector employers will create enough jobs to make up for public sector cuts have been dealt another blow with news that a growing number of businesses are planning to cut staff.

Source: More private sector job cuts on way, says survey

The figures are worsened by the indications that there is also a slow down in consumer spending.

Thus the threat of a double-dip recession has intensified jeopardising hopes of a sustained recovery. This is exactly what Labour warned would happen if the cuts to our fragile economy were made too soon.

Source: Guardian

Part of the good news at Lloyds was due to job losses resulting in a reduction of costs by about £1bn.  Lloyds stocks are currently up 2.4% at 73.65 since opening. HSBC and RBS are down slightly.

Obviously these banks have been improving under the policies of a Labour Government. It will be interesting to see how the banks are doing this time next year (Aug 2011) after the Coalition policies have had a chance to bite.

Meanwhile RBS (Royal Bank of Scotland Group who also owns NatWest) is to sell 318 branches to Spanish banking giant Santander (I personally feel very sad about this as it’s yet a another part of British business being sold to an oversees business).

Main source: Politics.co.uk

The group is suggesting a “more joined up” approach should be applied.

Some strange decisions have already been mentioned in this blog:
Government’s attempt to save £3m could cost many times this, 
Clegg’s Blunder during PMQ – ‘Illegal’ Iraq War (mention of withdrawn Forgemasters loan)

Source: BBC News:Spending cuts: Think-tank calls for joined-up approach

Osborne is the eldest son of four children and heir of Sir Peter Osborne, 17th Baronet, who co-founded the firm of fabric and wallpapers designers, Osborne & Little. Originally named Gideon, he changed his name to George when he was 13. In an interview in July 2005, Osborne said: “It was my small act of rebellion. I never liked it. When I finally told my mother she said, ‘Nor do I’. So I decided to be George after my grandfather, who was a war hero. Life was easier as a George; it was a straightforward name.”

He joined the Conservative Research Department in 1994 and became head of the Political Section. Elected as the Member of Parliament for Tatton, Cheshire, in June 2001, he succeeded the Independent MP Martin Bell, who had famously defeated the controversial former Conservative minister Neil Hamilton at the 1997 election. Osborne won with a majority of 8,611, becoming (at that time) the youngest Conservative MP in the House of Commons. At the 2005 election, he was re-elected with an increased majority.

George is married to the writer Frances Osborne. They have two young children and they live in London and Cheshire.

Following the 2005 general election, he was promoted to Shadow Chancellor of the Exchequer at the young age of 33 by the then-Conservative Party leader Michael Howard. His appointment to such a senior shadow cabinet post at such a young age surprised many Conservative MPs.

In 2009, he received criticism for the way he had handled his expenses, after he was found to have “flipped” his second  home, changing which property he designated as his second home in order to pay less capital gains tax. The Lib Dems estimated he owed £55,000 to the public purse as a result of this.

Osborne was appointed Chancellor of the Exchequer on 12 May 2010 and as per custom with Cabinet Minsters, was sworn in as a Privy Counsellor the next day.

On 24 May 2010, he outlined £6.2bn cuts. Among the bigger savings for this financial year outlined by Osborne were £683m at the Department for Transport, £780m at Communities and Local Government, £836m at Business, £670m at Education and £325m Department for Justice. Osborne said: “We simply cannot afford to increase public debt at the rate of £3bn each week. Our huge public debts threatened financial stability and if left unchecked would derail the economic recovery.” He continued saying “Public borrowing is only taxation deferred and it would be deeply irresponsible to continue to accumulate vast debts that would have to be paid off by our children, and our grand children for many decades to come.“^[

I know it’s unfair to write this in a profile but the cuts initiated in his emergency budget will have no effect on the wealth or financial status of George Osborne.

Source links: Tom Watson MP – George Osborne, Wikipedia – George Osborne, George Osbortne