One of Michael Meacher’s finest…

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In fondest memory of Michael Meacher who died on Tuesday – he was a ‘good-un’.  And this must have been one of the craziest, most magnificent demonstrations ever.

Michael organised with David Winnick MP and Kelvin Hopkins MP to demonstrate at Chequers against the Bedroom Tax.  Three gents of a certain age, turning up at the PM’s country residence with their home-made posters!  After security had got over their shock and put down their guns, they helped unload the car and offered the three a cup of tea…  a very British protest.

RIP Michael Meacher.  You were highly valued, loved and respected.  You will be much missed.

 

April 5 2013 – reposted from http://www.michaelmeacher.info/weblog/2013/04/ive-just-been-to-protest-about-the-bedroom-tax-at-the-pms-10-bedroom-country-house/

Screen Shot 2015-10-21 at 23.39.41

 

Together with David Winnick MP and Kelvin Hopkins MP, I’ve just been to protest about the government’s Bedroom Tax at the Prime Minister’s official residence at Chequers in Buckinghamshire. We called on Cameron to pay the Bedroom Tax on his 10 spare bedrooms at Chequers – this is what we said in our letter:

The Rt. Hon. David Cameron MP,

Prime Minister,

Chequers,

Near Ellesborough,

Aylesbury,

Bucks.

5 April 2013.

Dear Prime Minister,

We have come to protest at the unjust and cruelly vindictive bedroom tax which you have imposed on 660,000 households in publicly rented housing across the country, up to two-thirds of which are estimated to include a disabled member.   You have decided to penalise them because you argue that they all have more bedrooms than they need.   As a result these families, amongst the poorest in Britain, will be forced to pay from their own subsistence income extra rent amounting to either about £11 a week or about £20-25 a week or, if they cannot afford this extra rent, will be forced out of their homes to find smaller accommodation which is simply not available currently on anywhere near the scale required.

You, on the other hand, are provided by the State for your family’s use with a second home set in 1,000 acres with 10 bedrooms.   You have also constantly claimed that “we are all in this together”.   In that case we would ask you to show as much compassion towards Britain’s poorest as you have been shown generosity.

We would further ask you, do you not therefore think in these circumstances it would be reasonable, given that most of your 10 bedrooms will remain unoccupied for most of the time, that you make an equally proportionate contribution out of your own income towards the costs of the State in the administration of Chequers?

Yours sincerely,

David Winnick MP       Rt. Hon. Michael Meacher MP      Kelvin Hopkins MP

 

Support the Labour Assembly against Austerity Campaign

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Labour Assembly Against Austerity

Published by Socialist Economic Bulletin

Labour Assembly Against Austerity

Speakers


9am – 5pm, Saturday 9th November
Birkbeck College, Malet Street, London WC1E 7HX

Speakers include:

 

Ken Livingstone
Owen Jones
Francesca Martinez
Steve Turner (Unite)
Ann Pettifor

Diane Abbott MP
Katy Clark MP
Jeremy Corbyn MP
Frank Dobson MP
John McDonnell MP
Michael Meacher MP

Professor Keith Ewing
Tosh McDonald (ASLEF)
Peter Willsman (CLPD)
Adrian Weir (Campaign for Trade Union Freedom)
Catherine West PPC
Cat Smith PPC
Murad Qureshi AM
Heather Wakefield Unison

Shelly Asquith
Daniel Blaney
Michael Burke
Mike Hedges (Unite)
Conrad Landin
Cllr Alice Perry
Christine Shawcroft (NEC)
Cllr Kate Taylor
Marsha-Jane Thompson (Defend the Link)

Sessions:

  • The economic alternatives to austerity
  • Housing – solving the crisis
  • No to privatisation – keep health and education public
  • Opposing austerity – defending public services and the welfare state
  • Defend the link – defend trade union rights
  • No scapegoating – immigrants and claimants are not to blame
  • Fund public services not war
  • Ending austerity – Labour policies to win in 2015

£10 full price / £5 concessions
Register now

Visit LabourAssemblyAgainstAusterity.org.uk

Speakers

Labour Assembly Against Austerity –  a forum for Labour Party members to discuss alternatives to austerity and the policies Labour needs to stimulate growth, jobs and rising living standards.

The Labour Assembly Against Austerity is an initiative of Next Generation Labour in support of the People’s Assembly Against Austerity movement and is supported by Unite, UCATT, BECTU, CLPD, Labour Representation Committee, Left Futures, Chartist, Labour Briefing Co-op, Morning Star, Red Labour & Sinistra Ecologia e Liberta UK.

BRITAIN’S EXPORT PERFORMANCE IS WOEFUL

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BRITAIN’S EXPORT PERFORMANCE IS WOEFUL

By Michael Burke

 

A number of commentators have recently called for a currency devaluation as a way to revive the British economy and outgoing bank of England Governor Mervyn King has described a recent very modest rise in the value of Sterling as ‘unwelcome’.These calls tend to ignore the fact that Britain has already had very substantial devaluation. As the Bank of England chart shown in Fig. 1 below shows the decline in the pound’s exchange rate index (ERI) from 2008 onwards. The ERI fall was nearly 30%, with a slightly larger fall against the US Dollar and a less pronounced fall versus the Euro. The recovery in the currency’s exchange rate has only been a partial one.

Figure 1
12 11 29 Chart 1

There are usually two main effects arsing from a sharp currency devaluation. One is to increase the price of all imported goods which cause inflation. This is what happened and the British economy was the only major economy to experience both a sharp economic downturn and a rapid rise in inflation during the crisis. The other usual effect of currency depreciation is to cheapen the price of exports in foreign currency terms, and so provide a boost to exports and the growth and jobs that depend on them. But following that devaluation exports have barely grown in volume terms.

Figure 2
12 11 29 Chart 2

From their pre-recession peak exports fell by 11.3% to their low-point. They have since recovered but were still 0.8% below that peak in the 2nd quarter of 2012. Since George Osborne announced the ‘march of the makers’ as the theme of his first budget in 2010 export volumes have actually fallen by 0.4%. This is possibly the only time in British history where there has been a very substantial currency depreciation and no recorded improvement in export performance.

This is a remarkably bad performance given that world trade has expanded since the recession of 2008 to 2009, according to the World Trade Organisation, by 13.8% in 2010 and by 5% in 2011. It is also a remarkably poor performance even compared to sluggish major trading partners. Fig. 3 below shows export volumes compared to both the US and the Euro Area. Euro Area export volumes are now 3.6% above their pre-recession peak while US exports have increased by 8.3%.

Figure 3
12 11 29 Chart 3

Of course, these are not the strongest performers. As a group, Newly Industrialising Countries’ exports have risen by approximately 50% over the same period according to WTO data.

There are numerous reasons for the exceptionally poor export performance of the British exports over the recent period. Patterns of trade are highly dependent on the weak export markets of the industrialised countries, financial services played a disproportionate part in the exports of services during the upturn, exporters responded to the devaluation by raising prices rather than winning market share, and so on. But all of these can be essentially reduced to the current problem of not producing enough goods or services that the rest of the world needs to buy. To correct that requires investment.

Given that the private sector remains on an investment strike, the government could respond as a minimum by investing in high-speed rail links, improved port facilities, super-fast broadband and through investing in education by scrapping fees and bringing back EMA. It could also remove the restrictions on visas including student visas so as to increase trade and educational ‘exports’. A government committed to creating hi-tech jobs would invest directly in carbon-reduction and renewable technologies for which there are very large and growing export markets. But that would all require a very different type of government.

Addendum:

Michael Meacher MP wrote in July 2012:

The UK trading performance is much more serious than most people realise.   The last time Britain had a current account surplus was in 1983, 29 years ago.   In the last 55 years Britain has only had a surplus on its traded goods in 6 years.   Initially in the 1970s the surplus in services (insurance, shipping, etc. as well as banking) covered the deficit in goods, but from 1987 the deficit in goods rose much more sharply and a large net deficit between goods and services grew ever wider.   By 2010 the deficit in traded goods had reached the staggering level of £99bn and the surplus on services at £49bn could cover only half of this.   A yawning deficit of this magnitude cannot continue for long without the creditors (like any bank manager) calling time.

Why has this happened, and how can it be reversed?   Our manufacturing capability has been allowed to decline long-term following Thatcher’s elevation of the City after Big Bang 1986 and the converse privatisation and selling-off of so much of the industrial landscape.   The neo-liberal market made the manufacturing decline all the sharper by the preference for mergers and acquisitions over long-term investment, the sale of key British firms to foreign interests, the damaging break-up of crucial supply chains, the relentless emphasis on short-term profiteering over long-term market share, and the neglect of apprenticeships and quality training which along with the decline of R&D stunted UK productivity.

Britain heads for biggest trade deficit ever

Yet in his 2012 budget, Osborne had the ‘nerve’ to trumpet the ‘march of the makers’ – the renaissance of manufacturing industry.

In the event the UK deficit in traded goods hit an all-time high at £100bn in 2010, a level nearly reached again even against a background of fading growth.   There has been no rebalancing of the economy towards industry, no restructuring of finance, no spurt of entrepreneurship – just austerity and rising inequality.

*Definition of ‘Trade Deficit’

An economic measure of a negative balance of trade in which a country’s imports exceeds its exports. A trade deficit represents an outflow of domestic currency to foreign markets.

Osborne and Cameron’s Big Deficit Myth

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At times, like Thursday’s release of the latest GDP figures, I begin to wonder whether I’ve really lost the plot.  The news headlines and reading the mainstream media financial sections just do not make any sense… they seem to take Expansionary Fiscal Contraction*, Osborne’s economic strategy, at face value …. and their only question, is how long will the recovery will take!

(*The clue is in the name … simultaneous expansion/ contraction.)

Perhaps unsurprisingly, the best example of this ‘madness’, is the Telegraph’s  GDP figures vindicate the Coalition’s fiscal strategy …(1)  This echoes David Cameron’s sound-bite that ‘Today’s figures prove that we’re on track!’  Whilst George Osborne tried hard not to sound triumphal when he said that  ‘The economy is healing.’

What?!!

Fortunately, the intervening days have brought plenty of reactions which chime more nearly with my understanding.  Michael Meacher’s description is, as always, particularly insightful.  :

Clearly the worst of the recession is far from over, but we have been festooned with an all-out PR blitz to convince us that it is.   What it really exposes is how utterly desperate Cameron is to escape the impression ( and the political consequences) of endless austerity whilst at the same time tightening the screw to make sure it bites even deeper. (2)

The simplest way to understand George Osborne’s economic strategy is to consider its analogy to ‘asset strippers’ like Romney’s private equity investment firm Bain Capital…

Asset strippers are a form of corporate raiders that focus their attention on a target company. The goal is to gain ownership and control of the company over time. Once the company is in the control of an asset stripper, various assets of the company are sold off, often in order to handle the outstanding debt incurred when gaining control of the company. The strategy involves making sure there is a strong chance that once a portion of the company’s assets have been sold, the remaining assets will still be sufficient enough to operate the company at a profit or make the company attractive to potential buyers. (3)

 Which suggests that George Osborne’s task is to keep a balance between totally crashing the economy and still ensuring that it is sufficiently debilitated to justify ‘austerity’, which in turn justifies privatizing public services, lowering taxes for the corporations and the rich, lowering wages and shrinking benefits…

Conservative economist and journalist, Ramesh Patel more or less agrees with this assessment:

Finally!  Exposed!  The Deficit Myth!  So, David Cameron When are you Going to Apologise?’ (4)

‘… as the truth is the greatest enemy of the a lie I urge you to share this on Facebook, Twitter, Blogs, text and email … So the truth can be discovered by all. Finally, have no doubt, people have been misled by the use of the following strategy:

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it” Joseph Goebbels

 What is the big lie that Patel exposes?

Cameron is playing the blame game to depress confidence and growth to justify austerity. Secondly, to use austerity as justification for a smaller state to gain lower taxes. Thirdly, to paint Labour as a party that can not be trusted with the country’s finances again. Therefore, we Conservatives will win a second term because, people vote out of fear. The latter strategy worked the last time in office (18 years) and will work again because, in the end, elections are won and lost on economic credibility. Hence, as people believe Labour created the mess they won’t be trusted again. (4)

To be honest, this is hardly news to left-wing bloggers but finally, the Osborne/Cameron lies about the economy are being refuted by one of their own.  As the quote suggests:

Everyone is entitled to their own opinions, but they are not entitled to their own facts.

  What are the three deficit claims that Ramesh Patel exposes as untrue?

Below are the 3 deficit claims – the mess. The evidence comes from the IMF, OECD, OBR, HM Treasury, ONS and even George Osborne. The claims put into context are:

CLAIM 1 The last government left the biggest debt in the developed world.

After continuously stating the UK had the biggest debt in the world George Osborne admits to the Treasury Select Committee that he did not know the UK had the lowest debt in the G7? Watch: Also, confirmed by the OECD Those who use cash terms (instead of percentages) do so to scare, mislead and give half the story.

Its common sense, in cash terms a millionaire’s debt would be greater than most people. Therefore, the UK would have a higher debt and deficit than most countries because, we are the sixth largest economy. Hence, its laughable to compare UK’s debt and deficit with Tuvalu’s who only have a GDP/Income of £24 million whilst, the UK’s income is £1.7 Trillion.

Finally, Labour in 1997 inherited a debt of 42% of GDP. By the start of the global banking crises 2008 the debt had fallen to 35% – a near 22% reduction page 6 ONS Surprisingly, a debt of 42% was not seen as a major problem and yet at 35% the sky was falling down?

CLAIM 2 Labour created the biggest deficit in the developed world by overspending.

Firstly, the much banded about 2010 deficit of over 11% is false. This is the PSNB (total borrowings) and not the actual budget deficit which was -7.7% – OBR Economic and Fiscal Outlook March 2012 page 19 table 1.2

Secondly, in 1997 Labour inherited a deficit of 3.9% of GDP (not a balanced budget ) and by 2008 it had fallen to 2.1% – a reduction of a near 50% – Impressive! Hence, it’s implausible and ludicrous to claim there was overspending. The deficit was then exacerbated by the global banking crises after 2008. See HM Treasury. Note, the 1994 deficit of near 8% haaaaaah!

Thirdly, the IMF have also concluded the same. They reveal the UK experienced an increase in the deficit as result of a large loss in output/GDP caused by the global banking crisis and not even as result of the bank bailouts, fiscal stimulus and bringing forward of capital spending. It’s basic economics: when output falls the deficit increases.

Finally, the large loss in output occurred because the UK like the US have the biggest financial centres and as this was a global banking crises we suffered the most. Hence, the UK had the 2nd highest deficit in the G7 (Not The World) after the US and not as a result of overspending prior to and after 2008- as the IMF concur.

Claim 3 Our borrowing costs are low because the markets have confidence in George Osborne’s austerity plan and without it the UK will end up like Greece.

Yes, the markets have confidence in our austerity plan and that’s why PIMCO the worlds largest bond holder have been warning against buying UK debt.

The real reason why our borrowing costs have fallen and remained low since 2008 is because, savings have increased. As a result, the demand and price for bonds have increased and as there is inverse relationship between the price of bonds and its yield (interest rate) the rates have fallen. Also, the markets expect the economy to remain stagnate. Which means the price for bonds will remain high and hence, our borrowing costs will also remain low.

Secondly, the UK is considered a safe heaven because, investors are reassured the Bank of England will buy up bonds in an event of any sell off – which increases the price of bonds and reduces the effective rate. Note, how rates fell across the EU recently when the ECB announced its bond buying program. Thirdly, because, we are not in the Euro we can devalue our currency to increase exports. Moreover, UK bonds are attractive because, we haven’t defaulted on its debt for over 300 yrs.

David Cameron would like people to believe the markets lend in the same way as retail banks lend to you and I.

Overall, when the facts and figures are put into context these juvenile deficit narratives and sound bites (“mere words and no evidence”) simply fail to stand up to the actual facts. The deficit myth is the [most] gross lie ever enforced upon the people and it has been sold by exploiting people’s economic illiteracy. (4)

So, David Cameron when are you going to apologise?  But more importantly, when and how are we going to stop George Osborne in his economy-wrecking, asset-stripping spree?  The economy is currently foundering because of a lack of demand, not the deficit or government overspending.  The last word is left to Michael Meacher MP:

The root cause of this global dilemma is that for the last 30 years, growth under conditions of neoliberal capitalism has been driven by financialisation of the economy, in particular the use of debt to create demand.   It has been assisted also by steadily phasing out constraints on trashing the environment and by mis-pricing non-renewable natural resources like oil and water, all in the false name of puffing up demand and thereby future profits.   Debt does allow consumption and investment to be enhanced in the short term, but of course it has to be paid back in the future.   It warps the production-consumption balance between the present and the future, and if allowed to get out of hand generates unsustainable imbalances.   This is exactly what has happened…..  Expansionary fiscal contraction, Osborne’s fantasy model, has been revealed as the pretence it always was.  (5)

[Emphasis added]

Related Posts:

https://think-left.org/2012/09/25/the-fundamental-deceit-of-theres-no-money-left/

https://think-left.org/2012/08/20/has-george-osborne-been-taking-trans-atlantic-lessons-from-the-jude-wanniski-and-the-republicans/

Cameron and Osborne dwell on Bullshit Mountain, UK

https://think-left.org/2012/10/15/how-to-be-a-deficit-owl/

THE UK’S BUDGET DEFICIT IS RISING NOT FALLING

(1)  http://www.telegraph.co.uk/comment/telegraph-view/9633368/Good-news-on-GDP-bad-news-for-Labour.html

(2)  http://www.michaelmeacher.info/weblog/2012/10/camerons-worst-of-recession-is-over-will-come-back-to-haunt-him/

(3)  http://www.wisegeek.com/what-is-an-asset-stripper.htm

(4)

http://www.huffingtonpost.co.uk/ramesh-patel/growth-cameron-austerity_b_2007552.html

(5)  http://www.michaelmeacher.info/weblog/2012/10/does-anybody-know-where-the-long-term-growth-is-to-come-from/