The BBC is reporting that, as well as unemployment reaching 1.92 million in November (which means it’s well over 2 million, now), the ‘downturn’* (its infantile name for the ‘recession’ – just like parents use the word ‘pee’) is ‘hitting women harder’, according to a report from the TUC, which found that:
the redundancy rate among women had risen by 2.3%, almost double the rate for men, since last year.
It said more women were in work and more households depended on a woman’s wage than in previous downturns.
It also found many job losses were occurring in retail and hospitality, where more women than men work.
The study, published ahead of Wednesday’s unemployment figures which are expected to show another big rise in the jobless total, also found women now earn more than men in a fifth of couples.
The Labour Government has been panicking, saving men’s jobs in automotive in its marginal seats, but is missing the wood for the trees. It’s ignoring women’s jobs which it just lets go without even a fear for the economic, social, or political consequences.
Remember, it was the ladies (e.g. Worcester women) who largely voted Blair in.
While in the latest Times/IPSOS-Mori opinion poll, 45% would vote Tory compared to 31% Labour, only 28% of women said they’d vote Labour, while 43% plumped for the Conservatives.
Men have now caught up with women in the big 5% swing from Labour to the Conservatives, but it is women who are ‘hardest hit’ – and, in households where the woman fears for her job and doesn’t expect any help from the Government – the man (and the kids) will suffer too. Men say: mess with our women and we won’t vote for you either.
* Which the BBC will upgrade to ‘recession’ this Friday when the growth figures are released.
Julie Hepburn, the next MP for Cumbernauld, Kilsyth & Kirkintilloch East, highlights the scandalous and outrageous proposal by the British Chamber of Commerce’s Mr Frost (or is that Scrooge?) to suspend (or freeze) the National Minimum Wage.
Frost isn’t very festive when he makes this suggestion. While businesses (particularly those in the retail sector) are suffering during the current recession, it is their workers who are facing uncertainty and hardship. Making a profit is important to firms, but business ethics is just as important to society at large – and the individual workers who would be affected by an unethical suspension of the NMW.
Freezing (or Frosting) the National Minimum Wage would equal a reduction of low income workers’ wages in real terms. With inflation and the current low returns on savings, wages should be increased – not frozen. Also this proposal would affect women, many of whom work in minimum wage retail jobs, disproportionately – so it would be sexist.
Let’s see whether Labour, which as the Bishops rightly said is “beguiled by money”, caves into Mr Frost’s ludicrous demands.
The dreadful announcement, and Peer Steinbruck’s accurate assessment of Brown’s economic policy, again demonstrates how Labour has thrown away the golden economic legacy they inherited from the Tories.
The fact that Woolies’ 30,000 jobs are at threat and we are now in economic decline shows why Labour must be booted out – and the sooner, the better.
I remember as a small child, and as a medium-sized child, and as a tween, and as a teenager, and as a twentysomething … etc … going into Woolworths.
If anything is going to sink Labour, it’s the fact that on its watch Woolworths has now gone under.
Robert Peston (who else?) has found out that Woolworths is filing for administration, with the potential loss of TENS OF THOUSANDS of jobs on the High Street…
The board will meet at 6pm to take the formal decision. …
The collapse of Woolworth is likely to lead to the closure of hundreds of stores across the UK.
And it is also likely to lead to many thousands of redundancies.
Woolworth has 815 stores. The store chain employs 25,000 and Entertainment UK employs 5,000.
People will be furious. There won’t be riots, but people will fume privately – then they will vote Labour out. It may be Woolworths that finally does for Labour…
Labour won the 2005 general election because many voters stayed at home – apart from core Tory voters -and the welfare-dependent turned out in force. This is the calculation that Labour is using in its forthcoming announcement on tax credits, which Melanie Phillips rightly describes as causing ‘pauperisation’:
If Brown’s fiscal stimulus turns out to be merely yet more tax credits, he should be jumped on from a great height since this will increase pauperisation and dependency. What is needed is tax cuts for those in work on modest incomes. The danger is that Brown will simply increase state spending and use the crisis to pursue his agenda of redistribution and control. But the Tories, having got it wrong until now, have proceeded to reverse themselves and got it wrong again. They went along with Brown’s reckless spending programmes in times of plenty solely as a piece of political positioning, because they were terrified of being called ‘heartless’ public service cutters and thought the only way to regain power was by hanging onto the coat-tails of the left. Yet those times of plenty were precisely when they should have been calling for ‘prudence’ and cutting spending to put reserves aside for a when times got hard. They did not – until now, when they have ditched Brown’s spending increases on the grounds that adding to the national debt is an act of recklessness – even though it is probably necessary for these present circumstances and only these present circumstances. Their current position therefore seems to be deflationary and likely to make the situation even worse.
I empathise with her when she says she has “not and never has been a Tory”. She’s not the only one, and there are many like me too who think that, on balance, the UK is better off with a Conservative Government than a Labour one. The “Judas kiss” that the UUP have given the Tories will no doubt come back to haunt Cameron – the UUP is as discredited and as defunct a party as there can possibly be.
But that the UK is better off with a Conservative Government has never been clearer than on the Tories’ Tax cuts to help hard-working families Vs Labour’s Tax credits to win Labour the next General Election.
Hopefully, though Labour’s core welfare-dependent voters will vote for more of the same, other people in England and Wales will vote against Labour. We shall see – looks like June 5th for the General Election.
Mr Boom (Brown) and Mr Bust (Darling) have achieved the recession that their Labour economic policies were always going to deliver – as Merv ‘the Swerve’ and Mr Boom admitted in the last few days. Now, having created a bad situation for the country’s economic and financial position, can they perhaps ease the pain?
Alas, no. Their economic policies have very much been about government intervention – the bank bailouts, nationalisation, the ‘spend our way out of the recession’, and Keynesian (a swear word if ever there were one) spending on public works.
There is one way by which this gutless Government could ease the pain. It is quite simple. They should cut taxes.
But unfortunately that is beyond the leftwing ideologues who run the country. Their socialism has been revealed, as the only way they know how to respond to an economic downturn.
How much longer people in the UK have to suffer from Labour’s policies is anyone’s guess. Tax cuts are the only way to ease the pain, but this lot aren’t going to deliver those.
Recently, we have heard much of the possible Lloyds TSB/HBOS job losses of up to 40,000 as well as the shedding of 4,500 Lehman Brothers jobs in the City. However, what about elsewhere? What is going on to the local economies – where most of us live – in terms of unemployment and worklessness?
Nationally, we know from the Office of National Statistics that:
The unemployment rate was 5.5 per cent for the three months to July 2008, up 0.2 over both the previous quarter and over the year. The number of unemployed people increased by 81,000 over the quarter and by 72,000 over the year, to reach 1.72 million.
But Labour has presided over an increase of unemployment in the entrepreneurial city of Birmingham again (this is of personal interest to me as I worked there for over three years). The birthplace of the industrial revolution is suffering from Brownian economic policy with an unemployment rate of 9.2%.
Source: ONS (2008)
The ONS report also finds that economic inactivity in Birmingham is a staggering 30.7% much higher than the UK’s corresponding 21.6% rate.
Even more of an indictment for Labour – which is supposed to be the party of ethnic minorities – is that in Birmingham the employment rate for non-white adults is only 50.6% (63.1% for the whole population) and their economic inactivity rate is 41.9% (compared to 30.7% overall).
So if you’re black or Pakistani and living in Birmingham – or anywhere else in the UK – you can blame Labour for your economic situation.
And no matter what colour, gender or age you are, if you live in Birmingham, you’re much more likely to be out of work than if you live in many other parts of the country.
The next Government needs to sort this mess out and get people, whatever their ‘demographics’ or background, back into work.
The lessons of Lehman
As Lehman Brothers becomes the biggest business failure in the US, one must remember that entrepreneurship is about risk and reward.
Reward: The employees of Lehman have collectively made hundreds of millions in bonus, and now they’re out on the street looking for new jobs (that includes £4,500 in the UK, ominously). It’s a pity that their bonuses – their rewards for failure, if you like – cannot be clawed bank and handed back to the creditors of Lehman. But such bonuses are cunningly used as an accounting measure to reduce profits and, therefore, corporation tax paid.
Risk: They got it wrong and now they are paying big time for their failure. John McCain is right to describe the financial services sector in the US (AKA Wall Street) as a ‘casino’ – well, the same is true of the City of London’s investment banks. And entrepreneurship can be very much a ‘casino’ if people take extraordinary risks. Or are extraordinarily stupid, as was the case with Lehman.
What does this mean for tax cuts?
I argued on this blog about a year ago that the Taxpayers’ Alliance (TPA), with its brilliant team including Matthew Elliott, Matthew Sinclair and Tim Aker amongst others, has won the argument on tax. Since then,
- Labour made a hamfisted attempt to reduce a tax that it raised in the first place (10p).
- The Conservatives, on the other hand, have about two tax reducing commitments: first, to increase the stamp duty threshold for homeowners from £175k to £250k; and secondly, to increase the inheritance tax threshold to £1m or £2m for married couples. The first favours ordinary people and first-time buyers, and the second largely favours the relatively wealthy (although, as Ian Hislop pointed out on Have I Got News For You, it’s so popular with a large section of the electorate “because they’re going to get the house”).
- The Lib Dems are now the only party that offers tax cuts for the lower paid and middle-income people who are most devastated by the credit crunch. It would have been better had ‘Ozzy’ Osborne ( our next Chancellor of the Exchequer, at only 13 🙂 ) had used those billions to help the poorer and middling sections of society, the true coping classes. This is the obvious next step for the Tories if they are to hold any hope of gaining Lib Dem held seats. While Eastleigh, Solihull and others are in the bag, the Conservatives can forget Nick Clegg’s Sheffield Hallam or Vince Cable’s Twickenham (unless the latter retires as an MP) – people there can vote with their social conscience for the ‘nice liberals’ AND vote for tax cuts.
Tim Aker of TPA points out that:
The Lib Dems have already made a bold stand in putting the case for lower government spending, a move that even outflanks the Conservative message of higher public spending as all part of the ‘sharing’ deal between the government and taxpayer. But the silver bullet in twenty-first-century British politics is staring the Liberal Democrats in the face. In presenting the case for lower taxes on the lowest paid, they should embrace the call to take those in poverty out of income tax by significantly increasing the income tax threshold to the government’s valued level below which poverty begins. Whereas Lady Thatcher locked in the support of the C2 and D voting classes when the government allowed council tenants to buy their own council houses, the same opportunity is there for any party to take the next logical step and to take the poorest out of income tax.
Absolutely spot on, of course, so it is time for the Tories to sit up and listen. It’s all very well being 20 points ahead, but the Lib Dems are still an electoral threat in many places.
Not just that, but it is also morally right to cut taxes on the poorer and middling sections of society who are being skewered by Brownite economic policy and the credit crunch – mortgages, petrol prices, food prices, etc. It is they who elected one of the Tories’ best and most compassionate MPs, Edward Timpson, in Crewe & Nantwich. He is someone whose parents fostered over 30 children and Timpsons is one of the best employers around.
It is time for some compassion on tax too. Now. Or, if not, at least in time for the next general election, which may be sooner than many people expect.
What has this to do with Lehman? Simple. We’re in this mess largely because of the Wall St and City of London ‘casino’, and the Brownian policy vacuum that doesn’t know how to deal with the credit crunch. Ordinary people are suffering – we need to stimulate the economy to ease their financial (and thus emotional) strain, as well as making entrepreneurship attractive, and reviving the housing market. Tax cuts are a good way to start this process.
Low-paid council workers are right to strike for better wages in the current economic context. And yet there are many economic fallacies – in fact, outright lies – being bandied about by the treacherous, traitorous Labour Government. These are the very people who have suffered most as a result of 11 years of Brownian economic policy: and yet many of them will have rejoiced at Blair’s 1997 election victory and will have faithfully voted Labour in every subsequent election.
Why do I support a strike by UNISON members? Because improving the pay of the low paid in the economic climate caused by Brownian-Darlingian economic mismanagement, the ‘credit crisis’ and rising prices is morally right and socially just.
Let’s clarify two facts to begin with. First, 250,000 low-paid public sector workers on £6.50 an hour (of whom 75% are women, according to UNISON) have rejected a derisory 2.45% pay offer. So it’s not just about low-paid workers (on around £13k a year for a 40-hour week) who need improved pay in order to be able to pay the bills, school uniforms, mortgage or rent etc, but it’s about equal pay for women. These workers provide essential services such as:
social workers, housing benefit workers, rent collectors refuse workers, school meals staff, teaching assistants, cooks, cleaners, architects and surveyors.
These workers have been hammered by the 10p tax rate debacle and by other factors such as rising petrol and food prices. They’re now seeking a 6%, or 50p an hour, increase in their pay. Darling’s attitude is that, ‘we have introduced the minimum wage so there.’ However, it was never supposed to be a maximum wage.
Second, the economic fallacy that increasing the wages of low-paid public sector workers would be inflationary. This is an outright lie. This is a small part of the workforce which is in the public sector – therefore, their wage increases do not increase prices of private sector goods and services.
Yes, the money would have to come from somewhere – council tax or from Central Government – but it is simply not right to say that this scenario is similar to the 1970s winter of discontent. There is no hyperinflation like then and food price rises are largely due to external factors as well as the actions of City speculators and the biofuel industry, as last night’s Dispatches reported.
So there will be a strike and hopefully the Government and the councils’ employer association will see sense on this matter. And save these low-paid workers from financial ruin. But let’s not forget that the Government has got these workers into this mess with its policies.
UNISON should have broken its links with the Labour Party in the interests of its members – do low-paid union members really wish to see their money go into the coffers of the Government that has ruined them? And the union should not bankroll Labour at the next election – all they’ll get is slapped in the face.
Amazing as may sound to many trade unionists, the interests of UNISON members would be better served by a Government that implements radical low-tax policies for low-paid workers (as advocated by Conservative Home’s Tim Montgomerie). If public sector workers on £6.50 an hour could keep more of their own money, then there wouldn’t be any need for this strike.
Labour makes the “Poverty Trap” worse: it hasn’t been the party of the working class for a long time
As someone whose father worked in a low-income job, I know what effect this has on the family finances. But people who work in these jobs, when they could just as easily claim the dole or incapacity benefit, are the unsung heroes of the UK today.
Labour’s hatred of these people, who could potentially have been its staunchest supporters (and many of whom probably were in the past), is reprehensible.
Not only has Labour ratcheted up the “Poverty Trap”, where people are better off on benefits than in work, by a variety of measures including the structure of its tax credits system. But now, as BBC News reports, by abolishing the 10p income tax band, the Government:
penalises childless people in low-paid jobs. The Treasury Select Committee warned the ‘main losers’ could be deprived of as much as £232 a year. Chairman John McFall said they were an ‘unreasonable target’ for the tax simplification measure.
How many more people, whether white British or, in many cases, black and Asian, (and including a lot of women) are going to be forced into worse economic conditions and possibly out of work all together, by this discredited, despicable Government?
On a day on which, for many people, income tax falls from 22p to 20p in the pound – only to be cancelled out by the abolition of the 10p band – I would not even soil the phrase “tax cut” by using it to describe this dishonest policy by Brown and Darling.
What are needed are genuine cuts in taxation for people on low income – whether Single People, Couples without Children, or Families – to incentivise work and also to reward those who actually are working.
Tax cuts for the rest of us could wait until later, but at least can we stop penalising the people who don’t have to work but do because of a “work ethic”, or because it makes them feel as if there is meaning to their lives, or for whatever motivation.
It is also time to stop the lie that Labour is a Party for the working-class. It gave up that distinction a long time ago.
The TaxPayers’ Alliance (TPA), which was only formed in 2004 by Andrew Allum, Matthew Elliott and Florence Heath “to represent taxpayers and to fight for lower taxes”, has won the argument on taxes. The old consensus, which formed some time in the 1990s, that taxes should not be cut but in fact should be raised in certain circumstances, has been well and truly broken by the TPA.
Whilst the TPA has won the argument on tax – for example, Labour scrambled to make a pale imitation of George Osborne’s brilliant inheritance tax proposals – elements of the Labour left are still influencing Government policies.
No doubt the business start-up rate will fall, and indeed there may be a rush to sell small firms, due to the despicable increase in Capital Gains Tax from 10% to 18%. This was a sop to the Trades Unions, who promise to fund Labour’s election whenever that is, who have been aggravating about Private Equity bosses for years. Whilst the CGT increase means that Private Equity Bosses still pay less than the 20% lower band tax paid by everyone else, this measure has inadvertently penalised many small business owners. We all knew that Brown never meant what he said about entrepreneurship, and ‘enterprise for all’, and in fact all he has achieved is damaging the British economy and the main creators of new jobs – small firms.
It was reported that £1.4bn of taxes are being raised by Darling’s “mini budget”, for example by robbing pension funds (again) and many other tax-raising, entrepreneurship-harming, family-crushing measures.
More gallingly, today’s Telegraph reports that a Labour ‘opinion former’, an adviser to Brown, recommends replacing council tax with a new income tax:
“Take Council Tax away from the local authorities and make it a national property tax, easier to administer; easier to administer more fairly. Cap the property tax by reference to income, to solve the problem of the asset rich, income poor households. But don’t do any of this without serious investment in public sector skills to capture the benefit of change.”
Yes, Council Tax is unfair, but if Labour were to go down this road they would risk experiencing the same slump in popularity that the Tories achieved when they introduced the Community Charge. Indeed, this could be Labour’s own poll tax. Brown is so risk averse that it is unlikely he would go down this road, but one never knows.
The TPA has won the argument on taxation, so it is time that someone actually told Labour that this is the case. Their tax-raising ‘mini-budget’, and the fact that the TPA is leading the debate on policy, has already contributed to a slump in the Government’s fall in the opinion polls.
Such policy measures may have been popular with Labour’s ‘core vote’ when it governed in 1945-1950, 1964-1970 and 1974-1979, but (a) Labour lost the subsequent election, and (b) the Labour ‘core vote’ is not the old socialist, ‘soak-the-rich’ (i.e. soak-the-middle-classes) types of generations past. Many people who have voted Labour since 1997 are exactly the sort of people who would be damaged by such a measure.
Think again, Gordon et al, the TPA has won the argument. If you go down the road of a new property/income tax, you will be well and truly obliterated at the following election. But actually that would quite suit the youngsters, such as David Miliband, who can’t wait to get the top job, but by then the top job will be Leader of the Opposition in a Labour Party that will be out of power for a long time.
The Friday View
It must be one of the most clichéd and overused political quotes — and from a man with somewhat dubious morals — but Bill Clinton’s “It’s the Economy Stupid” was one of the most brilliant and most appropriate slogans ever used in an election. And on this basis we state that Gordon Brown may be, yet again, humming the same slogan to himself. But a relevant catch-phrase for Brown could be “It’s the Opinions Polls, stupid”.
You see, Brown is at a crossroads and it is one at which he dare not take the wrong turning. He has several choices regarding the next General Election: go to the country in the autumn, hang on a while and try next spring, or some other undefined date in the future. Brown dare not get the timing of the election wrong – for he knows too well the lessons of the past, i.e. how it cost Labour dearly in 1979 when Callaghan misjudged its timing. Ironically, it is this obsession with what happened to the Labour Party in the past that may lead Brown to make a rash decision: to go to the country in the next few months. In some respects, he is terrified of what happened to John Major and the Conservatives after the 1992 General Election. Some facts, though, need to be borne in mind:-
- There appears, on paper, to be a strong chance of Labour winning a snap General Election – opinion polls such as the Sunday Times/YouGov poll that gave Lab 42%, Con 32% and LD 14% and others published on Electoral Calculus, suggest that Labour is in with a winning chance.
- And yet, look at the variation; several recent polls only have Labour 3 or 4 points ahead, and the margin of error is notorious, at around 3%, and even then it bears little relation to what happens on election night.
- An average of Lab 39%, Con 32%, LD 16% translates into 379, 219 and 19 respectively (a Lab majority of 108), according to the same website.
- But if you make your own prediction, and try Lab 35%, Con 35%, LD 20% – not far off the margin of error – the Labour majority drops to 16, and increasing the LD or Con percentages leads to a hung parliament.
The truth is that Labour has no idea what will happen if it goes to the polls; but it is convinced that it needs to, otherwise something nasty may be lurking around the corner that may wipe out the ‘Brown Bounce’. So a Labour Government may fall because it would rather risk the opinion polls than the economy. And, in such circumstances, the public needs to take stock, and think, how can we re-elect a Government that is rushing towards a General Election because it doesn’t have faith in its own ability to provide economic stability?
Much focus has been directed towards the international financial crisis caused by the American sub-prime market collapse. Whilst the US Federal Reserve has slashed its lending rate to banks, the ‘independent’ Bank of England — guided by the lower inflation figures and by the impact of the international crisis — has stalled its own interest rate rises. Meanwhile, parts of the UK economy, which would prefer lower interest rates, are being pulverised – while home repossessions are rising. Lulled into a false sense of security by the apparent improvement in the markets, the Bank will no doubt eventually start raising interest rates again.
Meanwhile, Gordon Brown can only look on as the Bank’s tinkering undermines the UK economy, and fearful that something disastrous may happen economically, he feels the need to rush to the polls. But what if it all goes pear-shaped?
Let’s face it: things have gone pear-shaped already in many ways, with the burden of taxation including the social injustice of impoverished elderly people being forced to pay huge Council Tax bills for their modest (but over-priced – thank you, Gordon!) homes.
Whilst these old people are denied decent healthcare (amply highlighted by the Purple Scorpion today) and worry about their future if they need help from social services but don’t qualify because they’re not “needy enough”.
They worry about social services stealing their grandchildren because the wealthy couple down the road, who paid £300,000 for a similar sized house as theirs and have the same Council Tax bill, have left it too late to have children. Crime blights their neighbourhood including gun crime, another key election battleground, and discussed today by Iain Dale.
Their grown-up children and their families cannot afford to buy in the area where they work, so they are renting, which means that their kids, if they get to keep them, would not be in the catchment area for a good school. At the same time, these families are paying higher marginal tax rates than the wealthy couple up the road from their elderly parents. They don’t see much value for money for their Council Tax either.
Brown is counting on people like these to stay at home because he thinks, although they do not like his Government, they won’t vote for any of the alternatives either. He believes if he can call a General Election at the right time, when people are apathetic enough but not scared, he could suppress turnout and win by default. At the moment the economy is looking shaky and he worries that it may enter a crisis during a General Election campaign … or just that the opinion polls may not translate into a win for him.
Our hunch is that Brown is terrified of a snap election, so will probably leave it until sometime next year ‘to establish his credentials’, by which time the opinion polls may have turned against him – and the economy may have gone haywire. Then what will he do?
A spring General Election is probably the most likely outcome unless the UK economy and/or the opinion polls take a nosedive.
18.55 Update: John Redwood reports that the new Scots Labour Leader, Wendy Alexander has come out in favour of tax cuts, i.e. lower corporation tax in Scotland, despite Labour nationally being opposed to tax cuts.
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