Thursday, 21 August 2014


I was brought up to believe that the worst thing you could ever call anybody was a liar.  Even when they clearly were.  Even when it was Iain Duncan Smith.  But (I'm sorry, Mum) I have to say it.  Esther McVey lied today in the Mail and the Express.  Since the quote is the same in both I have to assume that it's her lie, not the papers'.  "‘I meet with thousands of young people a year and they all say the negative picture painted by opposition politicians about young people and their bleak future has a very negative effect on them."
You can imagine it.  She's got a captive audience of unemployed kids in a jobcentre or somewhere, and every single one of them says, "Well, it's Labour telling us how bad things are, and there's no future."  
You may say it was just exaggeration.  But what about the substance of this mendacious piece?  Try the Mail's lengthy version.  Count the number of assertions which are simply not true.  The Express resorts to quoting the Mail, but at least it gives Rachel Reeves the chance to describe the comments as "pathetic".
We could dismiss all this as tripe, and rather desperate tripe at that, were it not for a piece on the Huffington Post site which makes it look like part of a concerted effort directed by Lynton Crosby, the Tories' campaign guru.  We heard this week that self-employment is at its highest level since records began, and that of the 1.1 million people who have started a job since January 2008, two thirds are self-employed.  (The figures are on the BBC news site.)  Over the last year it's over half of new "jobs".  But all is wonderful according to scary Tory MP Matthew (call me Matt) Hancock.  "There are more jobs available than ever before in this country, the vast majority of the jobs are full-time contracts of employment, and there has also been a very strong growth in self-employment. " [my italics]  This is simply not true.  The article gives plenty of space to voices refuting Hancock's claims.
But it seems that the tactic is simple.  Get out there and lie.  Blame Labour.  Deny the figures.  Just lie.

Sunday, 17 August 2014

The rich get richer .....

Economists are puzzled.  The figures show that the numbers in work are rising, the numbers claiming benefits going down.  And while, of course, the figures are false for various reasons, the trend is still there.  But the economists' models aren't working.  More people in work should mean that wages are rising; but they're not.  If anything, they're falling.  And more people in work should mean that the tax take is higher; but it's not.  Explanations are cobbled together, some of them more plausible than others.  But I think there's a straightforward story.
At the top of society (if that word has any meaning now) is what's often called "the one per cent" and what I will now call the elite.  They comprise three main groups; the top of the financial industry (banks and the like); the top of big businesses; and the top of government.  They are all inter-connected, know each other well and have a common purpose in making themselves richer and more powerful.  In 2008 the elite crashed the financial system.  Bankers were blamed, but politicians had failed to regulate banking effectively (the Conservatives, in opposition at the time, had wanted even less regulation).  Now, some people claim there was a conspiracy among the elite to do this.  I don't know if that's true, but the result was the same.  Someone had to pay to put the system back together again, and it wasn't going to be the elite.  They suffered not at all.  Many of us were astonished that nobody could be held accountable; there was no criminal responsibility.
The crash was a marvellous opportunity for the elite.  To pay for the failure of the bankers we were to undergo "austerity".  It took a while for us to realise what that meant.  Those at the top of the tree could have a tax cut.  The elite were sitting pretty, as were those in the next layer down, those on £100k a year or more.  These are the people whose pay continued to climb and whose accountants devised ever more complex schemes to get them out of paying back any of their income in tax.  Salaries for top earners, along with bonuses, grew to absurd and obscene levels.  "Austerity" only began to be felt further down, in what we might as well call the middle classes.  Their pay stopped rising but their outgoings didn't.  Many who worked in the public sector found themselves out of work altogether, or having to get by on much less than they were used to.
The elite seized the chance to flog off what was left of the public sector.  Services should be making profits for them.  That could only be done by employing fewer people on lower pay, but that was part of the process of channelling money upwards into the pockets of the elite.  In what little remained of the public sector, pay was frozen.  This gave private employers more reason to freeze pay as well.  For people near the bottom of the heap - the old "working class" - the minimum wage became what it was never intended to be, the normative wage.  And that didn't rise either, except by an insignificant amount.  Employers found new ways to lower their wage bills.  Permanent jobs became casual work via agencies, with workers never knowing what, if any, hours they would get.  Then the "zero hours" notion spread, with even greater insecurity of income.
The cost of living, though, rose inexorably, and more and more working people couldn't survive without top-up benefits.  The biggest cost was housing; but there was no thought of capping rents, or even restoring some sensible regulation.  Instead, the total benefits a household could receive were capped.  For those right at the bottom of the pile, those dependant on benefits, life was made harder and harder.  They were the scapegoats, apparently the cause of all our problems.  Taking money away from them had little effect on the economy, but worked politically.  So inequality has reached unprecedented levels.
Economists believe that there is a natural limit to inequality, because at some point there will be a revolution - unless there is a particularly repressive government.  But the chances of revolution are very low.  Radical change was brought about in the past because people could organise themselves into an effective force.  Yesterday was the 195th anniversary of the Peterloo Massacre.  A crowd of up to 80,000 people had gathered in Manchester to demand change, but government forces killed 15 people and injured many more.  It wasn't the end of revolt, but the beginning.  Chartism very nearly succeeded, let down only by poor leadership.  The trade union movement grew stronger until, through the 20th century, it brought about a shift in power and decent wages and conditions for working people.  The movement was squashed in the 80s and is much weaker than it was.  There is no organisation through which people can fight back, and right-wing governments are adept at pitting the not-very-rich against the poor.
What happens now?  I have no idea.  But economists had better devise some new models if they are to understand what awaits us.

Wednesday, 13 August 2014

A4e pulls out of another prison contract

One of our commenters broke the news yesterday, but now we have confirmation and the details in the Guardian.  A4e has pulled out early from a £17m contract to provide prison education (OLASS) in 12 London prisons.  The contract had almost two more years to run, so we can assume that pulling out has cost the company dear.  But it claims that it couldn't run the contract at a profit.  Without any more details from the company, there is speculation that the reason is that overcrowding and under-staffing in prisons is resulting in prisoners being unable to attend classes, and this impacts on the private companies which are paid according to the number of classes they run.  To add to A4e's embarrassment, the contract was initially delayed by the extended audit of its activities which followed fraud allegations.  And, as the Guardian points out and as we reported at the time, it's not the first time A4e has done this.  In 2008 it pulled out of 8 OLASS contracts in Kent prisons because it was making huge losses.  It had then severely underestimated the costs of providing a pension scheme for the professional teachers it took over from the previous providers.  Presumably it factored all that in to the London bid.
Maybe it's an indication that A4e now can't withstand the losses it might once have absorbed.  It adds to the sense that this is a company in trouble.

Monday, 11 August 2014

The latest fantasy from Iain Duncan Smith

Wearily we have to notice the speech IDS was due to make today, which was trailed so exhaustively that there's no need to read it.  Yesterday's Telegraph naturally had the most sympathetic coverage.  Apparently the government is "matching economic recovery with social recovery", but "the economy will never fully recover unless families on benefits return to work".  That's the big problem for Smith.  His big plans have failed to get well over 2 million people back into work (or into work for the first time) and he takes it personally.  How dare they remain unemployed?  He has stated that "the way our benefits system is constructed" is responsible for the number of immigrants, coming to take the jobs British people refuse to take.  The Guardian gives more detail on the figures IDS will cite and they quote him: 
"When we took office, there were nearly five million people on out-of-work benefits. It was clear to me that in large part this situation was the product of a dysfunctional welfare system that often trapped those it was supposed to help in cycles of worklessness and dependency.  My one aim as work and pensions secretary has been to change this culture – and everything we have done, every programme we have introduced, has been about supporting everyone who is able to into work.  The scale of the change has been enormous – but we are delivering, and it is changing our country for the better."
If that makes you want to scream and throw things, I'm sorry.  That's the make-believe world that IDS lives in.  All those lives he's ruined; the trail of misery and destitution he's left; the lies about sanctions - they are nothing to him.  He was asked by a BBC reporter recently if he worried about cases of people suffering.  He said they made him "sad" and he wanted to understand them.  It was actually revealing.  These cases, these people, are not real to him.  They are shadows he can dismiss.
Policy Exchange, the Tory "think tank", has come up with some ways of slashing the income of the poorest even further.  One idea is to reduce the benefit cap, currently £26,000 pa, still further outside the south-east corner of the country.  IDS said, "We're not working on that," which doesn't rule it out for the future.  It's an acknowledgement that the biggest driver of high household benefits is rent; but it ignores the fact that there are people needing benefits in some high-cost areas outside London.  PE also wants to limit child benefits to 4 children.  That might get a sympathetic hearing; but it would significantly increase child poverty.
This is the message which the Tories will take into the election.  The out-of-work are wilfully unemployed and they are the cause of all society's ills.  But by making them suffer ever greater deprivation the Tories will persuade them to get a job.
I read an interesting piece recently (I've lost the link) which said that the only conclusion to be drawn from the puzzling employment statistics was that lots of people were working without paying tax.  They must be in very casual work or notional self-employment, or the deliberate black economy.  Yes.

Tuesday, 5 August 2014

Selling off A4e?

News today that A4e has sold its business in India to a local company, Skills Academy.  A4e was providing skills training and "placements" mainly in rural areas.  I don't know when A4e's own website was last updated, but they say that have been working in India for over 3 years and talk in the future tense about the contract they will be delivering, having signed it in January 2012.
What's the significance of this?  There was a time, not so long ago, when A4e boasted of operating in eleven countries.  Now, the only overseas business is in Australia.  Are they shrinking sensibly, having spread the business too thinly?  Or is this a sign of continuing financial problems?

Wednesday, 30 July 2014

The brutality of sanctions

You will probably have read about the tragic case of David Clapson (at least, if you read the Daily Mirror or get your news from the internet).  The story first emerged on the same day that Matthew Oakley published his report into the way that sanctions were working.  Clapson's death was first reported in his local paper, but then was taken up by the Mirror with an uncompromising headline: "Killed by benefits cuts: Starving soldier died 'as result of Iain Duncan Smith's welfare reform'."  What made this case so difficult to brush aside was that Clapson couldn't be labelled as a scrounger, even by the most bigoted of right-wingers.  He was a former soldier who had given up work to care for his sick mother and, since her death, was looking for work.  He was sanctioned for missing an appointment.  He was a diabetic, dependent on insulin (which he couldn't take when his electricity was cut off and he couldn't keep it cool).  He died of the consequences of not having the insulin; but there was also no food in his stomach.
The Mirror returned to the story yesterday when David's sister launched a petition for an enquiry into sanctions.  A campaigner for just such a petition is Debbie Abrahams MP, a member of the Work & Pensions select committee.  She thought that Esther McVey had agreed to it at one of the committee's meetings; but I watched that meeting, and felt that McVey had dodged it.  And why would McVey, let alone IDS, agree to such an enquiry?  McVey has lied to the House of Commons (supposedly a serious offence) by stating that sanctions are "only used as a last resort".  Even Matthew Oakley pointed out that that is not true.  And why would they want to investigate the fact that, as the Mirror says, almost a million people apparently deserved punishment by destitution last year?
They know that not enough voters care to make a difference.  Even with the Clapson case there were plenty of people saying that he must have been mentally ill - as if that would make it understandable.  But the ministers also take the view that these are not really people at all.  They inhabit a totally different conceptual universe, one in which the poor are not really human.  And once you've dehumanised someone it is easy to treat him with brutality.
The sanctions regime is brutal.  Every time someone is sanctioned without good reason a crime is being committed.  No, they won't have an enquiry.

Tuesday, 22 July 2014

The sanctions report

Matthew Oakley's report is out.  You can read it here.  His brief was to look at how the sanctions system was working amongst certain groups; in particular at the communications with, and understanding by, claimants.  It was said from the beginning that the remit was far too narrow, a cosmetic exercise to justify the DWP but ignoring the real issues.  And it was said that Oakley was the wrong person to do it.  If you read the Foreword to the report you do get the impression that Oakley dutifully applauds the system.  But in fact he has gone beyond his brief, and there are some very important points in the document.
The Financial Times wrote a fair piece, highlighting the poor way in which the DWP communicates with claimants who have been sanctioned.  They also got a quote out of Esther McVey: "I have already started to make improvements ..."  Far be it from me to call anyone a liar, but I doubt that this is true.  The Guardian went with the fact that "Benefit sanctions hit most vulnerable people the hardest", sending out unintelligible letters, and not telling people about the availability of hardship payments unless they asked.  There's also a very significant observation from the report: "It also revealed serious flaws in how sanctions were imposed, with Work Programme providers required to send participants for sanctions when they knew they had done nothing wrong, leaving 'claimants … sent from pillar to post'".  This is the first time I've seen this fact in print.  The Guardian produced an update on this article this evening to take account of the fact that the government is to "overhaul the way it treats benefit recipients threatened by sanctions".  This must be based on the DWP's press release, which doesn't use the word overhaul and promises very little.  It does provide a quote from McVey which is probably made up by the DWP Press Office.  (You can play meaningless platitude bingo with it.)  The BBC website has a very careful piece which isn't worth reading.  And from Iain Duncan Smith, not a peep.  
This report is, of course, far from sufficient.  As the TUC has said, there must be a much wider review into the sanctions regime.  Perhaps it should look at this case reported today in a Hertfordshire local paper.  It's as bad as it gets.