Sadiq Khan MP, Labour's Shadow Justice Secretary has criticised Government plans, revealed today, to slash the budget for the Criminal Injuries Compensation Authority by fifty per cent.
He said: “Victims should be at the heart of our justice system but this Tory-led Government is consistently letting victims of crime down.
“The Criminal Injuries Compensation Authority provides a lifeline to those who have been physically or mentally injured because they were a blameless victim of violent crime. Its vital that funds are there to help victims rebuild their lives. It is disgraceful that this Government is planning to reduce by half the financial support available to them.
“We agree that savings need to be made in the Ministry of Justice, but slashing the justice budget by almost one quarter must not be at the expense of victims of crime and their families.
“This Government has cut resources to victim support services, refused to unequivocally back a new Victims’ Law, delayed compensation payments to victims of overseas terrorism and are now planning to slash the budget of the Criminal Injuries Compensation Authority. They should entirely rethink their approach to victims and start putting their needs first.”
Friday, 16 September 2011
Thursday, 15 September 2011
ED MILIBAND DEMANDS CAMERON RETURNS TO PARLIAMENT TO CORRECT INACCURATE STATISTICS
Ed Miliband MP, Leader of the Labour Party, has written to David Cameron to demand that he returns to the House of Commons to correct inaccurate statistics that the Prime Minister used at PMQs yesterday.
Labour has also compiled a document detailing many occasions, over several months, when David Cameron's factual claims at Prime Minister's Questions do not stand up to scrutiny.
This is the letter from Ed Miliband to David Cameron:
Dear Prime Minister,
Yesterday, in response to me at Prime Minister’s Questions, you said that “since the election there are 500,000 more jobs in the private sector. There are more people—300,000 more people—in work than there were a year ago” (Hansard, 14 September 2011, column 1028).
This answer is inaccurate. Between June 2010 and June 2011 the Office of National Statistics has confirmed that private sector employment increased by only 264,000 and that net employment increased by just 24,000. The only way it is possible to claim 500,000 extra private sector jobs is by including jobs created between 1 April and 30 June 2010 – but of course this includes time when Labour was still in office, which is not “since the election” at all.
You also said, after I correctly pointed out that the UK has grown more slowly in the last year than any other EU country apart from Portugal and Romania, that “this year, Britain is growing faster than America” (Hansard, 14 September 2011, column 1029). In fact, the UK has grown by 0.7 per cent over the last year to the end of Q2 2011, the latest period for which figures are available, while the USA grew by 2.6 per cent over the same period.
Everyone in public life has a responsibility to ensure we rebuild and maintain trust in politics and politicians. Ensuring accuracy in our answers in the House of Commons is central to that, a responsibility underlined in the Ministerial Code.
Furthermore, the British people will want to be assured that the decisions you take, which have such profound consequences for families and young people, are being based on properly researched data and empirical evidence.
As such, I trust you will return to the House and correct the record at the earliest opportunity.
Yours,
Ed Miliband MP
Labour has also compiled a document detailing many occasions, over several months, when David Cameron's factual claims at Prime Minister's Questions do not stand up to scrutiny.
This is the letter from Ed Miliband to David Cameron:
Dear Prime Minister,
Yesterday, in response to me at Prime Minister’s Questions, you said that “since the election there are 500,000 more jobs in the private sector. There are more people—300,000 more people—in work than there were a year ago” (Hansard, 14 September 2011, column 1028).
This answer is inaccurate. Between June 2010 and June 2011 the Office of National Statistics has confirmed that private sector employment increased by only 264,000 and that net employment increased by just 24,000. The only way it is possible to claim 500,000 extra private sector jobs is by including jobs created between 1 April and 30 June 2010 – but of course this includes time when Labour was still in office, which is not “since the election” at all.
You also said, after I correctly pointed out that the UK has grown more slowly in the last year than any other EU country apart from Portugal and Romania, that “this year, Britain is growing faster than America” (Hansard, 14 September 2011, column 1029). In fact, the UK has grown by 0.7 per cent over the last year to the end of Q2 2011, the latest period for which figures are available, while the USA grew by 2.6 per cent over the same period.
Everyone in public life has a responsibility to ensure we rebuild and maintain trust in politics and politicians. Ensuring accuracy in our answers in the House of Commons is central to that, a responsibility underlined in the Ministerial Code.
Furthermore, the British people will want to be assured that the decisions you take, which have such profound consequences for families and young people, are being based on properly researched data and empirical evidence.
As such, I trust you will return to the House and correct the record at the earliest opportunity.
Yours,
Ed Miliband MP
Saturday, 10 September 2011
A PERSONAL MEMORY OF 9/11
A PERSONAL MEMORY OF 9/11
I still have vivid memories of 11 September 2001. I remember switching on the car radio after leaving a meeting of the community legal advice services and tuning in to a special news broadcast. As I listened to the events that were unfolding I initially thought I had tuned into Radio 4’s afternoon play. It was a good few minutes before I realised that the horrific eyewitness accounts were actually true.
It made me think how fragile all our lives are and how they can be snuffed out in an instant. I thought about the sheer terror that the passengers on those airplanes must have felt knowing they were powerless to do anything about the circumstances in which they found themselves.
Just the day before I had returned to the UK on a flight from Brussels where NATO’s headquarters are located, which could just as easily have been targeted like the Pentagon had been. I pondered how I would have reacted had the aeroplane on which I had been travelling had been hijacked. It sent a cold shudder down my spine.
When arrived back in Derby the news had not filtered through. I remember telling my late wife, Lonny Wilsoncroft, what had happened. She thought it would cause a war, but I said a war against who? How prophetic Lonny’s words were. Little did I think then that the events of September 11 would lead two years later to an ill-judged war in Iraq. Still less did I think that 10 years after our young servicemen and women would be losing their lives in a conflict in Afghanistan.
Hindsight is a wonderful thing, but I believe the West’s response to 9/11 was wrong. It did not make the world a safer place and probably contributed to the worst terrorist atrocity on British soil on the 7 July 2005. That was the day that four young British men turned themselves into suicide bombers to kill their own countrymen.
It was Martin Luther King who said: "Hate begets hate; violence begets violence; toughness begets a greater toughness. We must meet the forces of hate with the power of love.” And it was Winston Churchill who acknowledged that “It is better to jaw-jaw than to war-war.”
The ghastly events of 9/11 changed our world forever. But modern day world leaders and policy makers would do well to be guided by the wise words of Martin Luther King and Winston Churchill. It is not a sign of weakness to try to understand why some people resort to evil deeds. It is not a feeble act to meet the forces of hate with love. And there is no betrayal in talking to your enemies.
I accept that when faced with unspeakable acts of violence and cruelty the urge for retribution is understandable. But we must resist that urge and remember Martin Luther King’s counsel. In my view, love, understanding and dialogue are more likely to prevent a repetition of the appalling events of 9/11 in the US and 7/7 in the UK.
I still have vivid memories of 11 September 2001. I remember switching on the car radio after leaving a meeting of the community legal advice services and tuning in to a special news broadcast. As I listened to the events that were unfolding I initially thought I had tuned into Radio 4’s afternoon play. It was a good few minutes before I realised that the horrific eyewitness accounts were actually true.
It made me think how fragile all our lives are and how they can be snuffed out in an instant. I thought about the sheer terror that the passengers on those airplanes must have felt knowing they were powerless to do anything about the circumstances in which they found themselves.
Just the day before I had returned to the UK on a flight from Brussels where NATO’s headquarters are located, which could just as easily have been targeted like the Pentagon had been. I pondered how I would have reacted had the aeroplane on which I had been travelling had been hijacked. It sent a cold shudder down my spine.
When arrived back in Derby the news had not filtered through. I remember telling my late wife, Lonny Wilsoncroft, what had happened. She thought it would cause a war, but I said a war against who? How prophetic Lonny’s words were. Little did I think then that the events of September 11 would lead two years later to an ill-judged war in Iraq. Still less did I think that 10 years after our young servicemen and women would be losing their lives in a conflict in Afghanistan.
Hindsight is a wonderful thing, but I believe the West’s response to 9/11 was wrong. It did not make the world a safer place and probably contributed to the worst terrorist atrocity on British soil on the 7 July 2005. That was the day that four young British men turned themselves into suicide bombers to kill their own countrymen.
It was Martin Luther King who said: "Hate begets hate; violence begets violence; toughness begets a greater toughness. We must meet the forces of hate with the power of love.” And it was Winston Churchill who acknowledged that “It is better to jaw-jaw than to war-war.”
The ghastly events of 9/11 changed our world forever. But modern day world leaders and policy makers would do well to be guided by the wise words of Martin Luther King and Winston Churchill. It is not a sign of weakness to try to understand why some people resort to evil deeds. It is not a feeble act to meet the forces of hate with love. And there is no betrayal in talking to your enemies.
I accept that when faced with unspeakable acts of violence and cruelty the urge for retribution is understandable. But we must resist that urge and remember Martin Luther King’s counsel. In my view, love, understanding and dialogue are more likely to prevent a repetition of the appalling events of 9/11 in the US and 7/7 in the UK.
Friday, 9 September 2011
Ed Balls' response to the OECD’s Economic Outlook published today
“A year ago, while the Chancellor was saying he was cautiously optimistic and Britain was out of the danger zone, I warned that there was a hurricane building and this was not the right time to rip out the foundations of the house. And I am even more worried now about Europe, America and Britain than last summer.
“This is now a critical moment for the world economy. We urgently need some leadership from our Chancellor and the G7 meeting this weekend to agree a global plan for growth and more balanced plans to get deficits down in the medium term.
“The deputy head of the OECD was right to warn earlier this year that there is merit in slowing the pace of deficit reduction if weak growth continues, as these latest forecasts suggest. The OECD is now calling for short term fiscal stimulus if needed, following warnings by wise voices including the new head of the IMF and the founder of the largest investment fund in the world on the danger that cutting too far and too fast threatens economic recovery.
“George Osborne should note that over the last twelve months the UK has grown more slowly than any G7 country other than earthquake-hit Japan, as the recovery was choked off by his decision to cut spending and raise taxes too far and too fast. And the forecasts for the next six months are extremely concerning with the UK set to grow more slowly than any G7 country other than Italy.
“As the IMF’s Christine Lagarde has rightly said ‘growth is necessary for fiscal credibility’ and without growth it will not be possible to get deficits down. We cannot afford for George Osborne to continue sitting on his hands and saying Britain will plough on regardless with a reckless policy that is hurting, but clearly not working.”
“This is now a critical moment for the world economy. We urgently need some leadership from our Chancellor and the G7 meeting this weekend to agree a global plan for growth and more balanced plans to get deficits down in the medium term.
“The deputy head of the OECD was right to warn earlier this year that there is merit in slowing the pace of deficit reduction if weak growth continues, as these latest forecasts suggest. The OECD is now calling for short term fiscal stimulus if needed, following warnings by wise voices including the new head of the IMF and the founder of the largest investment fund in the world on the danger that cutting too far and too fast threatens economic recovery.
“George Osborne should note that over the last twelve months the UK has grown more slowly than any G7 country other than earthquake-hit Japan, as the recovery was choked off by his decision to cut spending and raise taxes too far and too fast. And the forecasts for the next six months are extremely concerning with the UK set to grow more slowly than any G7 country other than Italy.
“As the IMF’s Christine Lagarde has rightly said ‘growth is necessary for fiscal credibility’ and without growth it will not be possible to get deficits down. We cannot afford for George Osborne to continue sitting on his hands and saying Britain will plough on regardless with a reckless policy that is hurting, but clearly not working.”
Wednesday, 7 September 2011
NICK CLEGG HAS CLAIMED VICTORY ON TORY HEALTH REFORMS - IS HE HAVING A LAUGH?
Nick Clegg claims that he has secured eleven of the 13 changes demanded by his party at its spring conference in March. This is Labour‟s analysis of how well he has performed according to his own goals.
1. More democratically accountable commissioning. Secured say Lib Dems.
Failed. There will be no elected members or councillors on commissioning consortia boards, while Health and Wellbeing Boards are only able to give their opinion to consortia – consortia are under no obligation to abide by that opinion. (Clause 23 – 14Z12)
2. A much greater degree of coterminosity between local authorities and commissioning areas. Secured say Lib Dems.
Fallen short. Consortia will be more coterminous with local authorities than previously planned, but the populations for whom consortia will be responsible will be based on the practice lists of the GPs not the consortia‟s geographic boundaries. These practice lists don‟t have to bear any relation to local authority boundaries. (Clause 10)
3. No decision about the spending of NHS funds to be made in private and without proper consultation, as can take place by the proposed GP consortia. Secured say Lib Dems.
Fallen short. Consortia will not be as transparent as PCTs are currently. PCTs have to abide by the Nolan principles on public life and the Public Meetings Act, while consortia do not. It is left up to them to decide what business to conduct in private and not in public. (Schedule 2 – 5B)
4. The complete ruling out of any competition based on price to prevent loss-leading corporate providers under-cutting NHS tariffs, and to ensure that healthcare providers 'compete' on quality of care. Secured say Lib Dems.
Fallen short. There will continue to be a number of NHS services not covered by the tariff. With greater competition from private providers, this means that price competition for those services is not ruled out.
5. New private providers to be allowed only where there is no risk of "cherry picking" which would destabilise or undermine the existing NHS service relied upon for emergencies and complex cases, and where the needs of equity, research and training are met. Secured say Lib Dems.
Failed. The Government amendments addressing cherry-picking (now in the Bill as clause 108) only required that a provider be “transparent” in how they chose their patients. It said nothing about actually preventing providers from picking the easiest and most profitable patients. Furthermore picking patients is only one part of cherry-picking. Private providers will also be able to pick the easiest and most profitable types of treatment to provide, for example elective say surgery, while leaving the NHS to do the expensive, loss-making treatment, like emergency inpatient care. Nothing in the Government‟s amendments prevents this, and therefore risks destabilising those NHS services. Labour has tabled an amendment to achieve what the Government has failed to do (Amendments 42 and 43)
6. NHS commissioning being retained as a public function in full compliance with the Human Rights Act and Freedom of Information laws, using the skills and experience of existing NHS staff rather than the sub-contracting of commissioning to private companies. Secured say Lib Dems.
Failed. The Bill does nothing to prevent consortia outsourcing their entire commissioning function to private companies, and only having a limited oversight function. There is no compulsion for consortia to employ any NHS staff. (Schedule 2, 3(3) and 10)
7. The continued separation of the commissioning and provision of services to prevent conflicts of interests. Secured say Lib Dems.
Failed. The Bill gives power to GPs to commission services, and allows GPs to have a stake in health companies that provide services that the consortia might commission. Furthermore the GPs‟ surgeries themselves might be providing community services that the consortia might commission. The provisions against conflicts of interest are very weak – consortia only have to make provision “for dealing with conflicts of interest”. (Schedule 2, 7(2))
8. An NHS, responsive to patients' needs, based on co-operation rather than competition, and which promotes quality and equity not the market. Secured say Lib Dems.
Failed. The Bill gives extensive competition enforcement powers to Monitor, the new economic regulator, including powers to fine hospitals up to 10% of their turnover for anti-competitive behaviour, and powers to investigate and direct commissioning consortia on competition. Monitor has a new duty to promote integration, but that is less undefined, whereas the scope of anti-competitive behaviour is well defined in existing UK and EU competition law.
9. Uphold the NHS Constitution. Secured say Lib Dems.
Fallen short. Consortia and the NHS Commissioning Board have new duties to promote the NHS Constitution. But there are no regulations placed upon them to determine how they should do this, or penalties if they fail to do so. Nor are there any regulations placed on them to ensure they have to treat patients with 18 weeks, as mandated under the NHS Constitution.
10. Ensure full scrutiny, including the power to require attendance, by elected local authorities of all organisations in the local health economy funded by public money, including foundation trusts and any external support for commissioning consortia; ensuring that all such organisations are subject to FoI requirements. Secured say Lib Dems.
Failed. There is nothing in the Bill that ensures that private companies carrying out commissioning functions will be covered by the FoI Act. Their decisions will be stamped „commercial in confidence‟. (Schedule 2, 3(3))
11. Ensure health and wellbeing boards (HWBs) are a strong voice for accountable local people in setting the strategic direction for and co-ordinating provision of health and social care services locally by containing substantial representation from elected local councillors; and by requiring GP commissioning boards to construct their annual plans in conjunction with the HWBs. Secured say Lib Dems.
Fallen short. Consortia are under absolutely no obligation to abide by the views of Health and Wellbeing Boards. All a Health and Wellbeing Board can do if it is dissatisfied with the consortia is pass its opinion on to the NHS Commissioning Board, which has no power to intervene and force changes on the consortia. (Clause 23, 14Z12)
12. Ensure commissioning of health services has some degree of accountability by requiring about half of the members of the board of commissioning consortia, alongside GPs, to be local councillors appointed as non-executive directors. Alternative Secured say Lib Dems: Instead, they say they will strengthen the accountability of commissioning through health and wellbeing boards (which will have a majority of councillors if that is what local councillors want). This has the support of the movers of the conference amendment.
Fallen short. The Health and Wellbeing Board does not have powers to influence consortia. See point 11 above.
13. Offer additional freedoms only to foundation trusts that successfully engage substantial proportions of their local populations as active members. Alternative secured: Monitor, rather than the foundation trusts themselves, will retain a supervisory role.
Failed. Monitor is an independent quango, with no democratic accountability, and cannot be expected to be a local voice for patients at each Foundation Trust. Furthermore if FTs get into trouble there will be no mechanism to turn them back into NHS Trusts, as now.
Nick Clegg claimed to have secured 11 of his Conference‟s 13 demands. The reality is he has failed on 7 of their demands and fallen short on 6.
Original scorecard published here: http://www.guardian.co.uk/politics/2011/jun/12/nick-clegg-health-reform
1. More democratically accountable commissioning. Secured say Lib Dems.
Failed. There will be no elected members or councillors on commissioning consortia boards, while Health and Wellbeing Boards are only able to give their opinion to consortia – consortia are under no obligation to abide by that opinion. (Clause 23 – 14Z12)
2. A much greater degree of coterminosity between local authorities and commissioning areas. Secured say Lib Dems.
Fallen short. Consortia will be more coterminous with local authorities than previously planned, but the populations for whom consortia will be responsible will be based on the practice lists of the GPs not the consortia‟s geographic boundaries. These practice lists don‟t have to bear any relation to local authority boundaries. (Clause 10)
3. No decision about the spending of NHS funds to be made in private and without proper consultation, as can take place by the proposed GP consortia. Secured say Lib Dems.
Fallen short. Consortia will not be as transparent as PCTs are currently. PCTs have to abide by the Nolan principles on public life and the Public Meetings Act, while consortia do not. It is left up to them to decide what business to conduct in private and not in public. (Schedule 2 – 5B)
4. The complete ruling out of any competition based on price to prevent loss-leading corporate providers under-cutting NHS tariffs, and to ensure that healthcare providers 'compete' on quality of care. Secured say Lib Dems.
Fallen short. There will continue to be a number of NHS services not covered by the tariff. With greater competition from private providers, this means that price competition for those services is not ruled out.
5. New private providers to be allowed only where there is no risk of "cherry picking" which would destabilise or undermine the existing NHS service relied upon for emergencies and complex cases, and where the needs of equity, research and training are met. Secured say Lib Dems.
Failed. The Government amendments addressing cherry-picking (now in the Bill as clause 108) only required that a provider be “transparent” in how they chose their patients. It said nothing about actually preventing providers from picking the easiest and most profitable patients. Furthermore picking patients is only one part of cherry-picking. Private providers will also be able to pick the easiest and most profitable types of treatment to provide, for example elective say surgery, while leaving the NHS to do the expensive, loss-making treatment, like emergency inpatient care. Nothing in the Government‟s amendments prevents this, and therefore risks destabilising those NHS services. Labour has tabled an amendment to achieve what the Government has failed to do (Amendments 42 and 43)
6. NHS commissioning being retained as a public function in full compliance with the Human Rights Act and Freedom of Information laws, using the skills and experience of existing NHS staff rather than the sub-contracting of commissioning to private companies. Secured say Lib Dems.
Failed. The Bill does nothing to prevent consortia outsourcing their entire commissioning function to private companies, and only having a limited oversight function. There is no compulsion for consortia to employ any NHS staff. (Schedule 2, 3(3) and 10)
7. The continued separation of the commissioning and provision of services to prevent conflicts of interests. Secured say Lib Dems.
Failed. The Bill gives power to GPs to commission services, and allows GPs to have a stake in health companies that provide services that the consortia might commission. Furthermore the GPs‟ surgeries themselves might be providing community services that the consortia might commission. The provisions against conflicts of interest are very weak – consortia only have to make provision “for dealing with conflicts of interest”. (Schedule 2, 7(2))
8. An NHS, responsive to patients' needs, based on co-operation rather than competition, and which promotes quality and equity not the market. Secured say Lib Dems.
Failed. The Bill gives extensive competition enforcement powers to Monitor, the new economic regulator, including powers to fine hospitals up to 10% of their turnover for anti-competitive behaviour, and powers to investigate and direct commissioning consortia on competition. Monitor has a new duty to promote integration, but that is less undefined, whereas the scope of anti-competitive behaviour is well defined in existing UK and EU competition law.
9. Uphold the NHS Constitution. Secured say Lib Dems.
Fallen short. Consortia and the NHS Commissioning Board have new duties to promote the NHS Constitution. But there are no regulations placed upon them to determine how they should do this, or penalties if they fail to do so. Nor are there any regulations placed on them to ensure they have to treat patients with 18 weeks, as mandated under the NHS Constitution.
10. Ensure full scrutiny, including the power to require attendance, by elected local authorities of all organisations in the local health economy funded by public money, including foundation trusts and any external support for commissioning consortia; ensuring that all such organisations are subject to FoI requirements. Secured say Lib Dems.
Failed. There is nothing in the Bill that ensures that private companies carrying out commissioning functions will be covered by the FoI Act. Their decisions will be stamped „commercial in confidence‟. (Schedule 2, 3(3))
11. Ensure health and wellbeing boards (HWBs) are a strong voice for accountable local people in setting the strategic direction for and co-ordinating provision of health and social care services locally by containing substantial representation from elected local councillors; and by requiring GP commissioning boards to construct their annual plans in conjunction with the HWBs. Secured say Lib Dems.
Fallen short. Consortia are under absolutely no obligation to abide by the views of Health and Wellbeing Boards. All a Health and Wellbeing Board can do if it is dissatisfied with the consortia is pass its opinion on to the NHS Commissioning Board, which has no power to intervene and force changes on the consortia. (Clause 23, 14Z12)
12. Ensure commissioning of health services has some degree of accountability by requiring about half of the members of the board of commissioning consortia, alongside GPs, to be local councillors appointed as non-executive directors. Alternative Secured say Lib Dems: Instead, they say they will strengthen the accountability of commissioning through health and wellbeing boards (which will have a majority of councillors if that is what local councillors want). This has the support of the movers of the conference amendment.
Fallen short. The Health and Wellbeing Board does not have powers to influence consortia. See point 11 above.
13. Offer additional freedoms only to foundation trusts that successfully engage substantial proportions of their local populations as active members. Alternative secured: Monitor, rather than the foundation trusts themselves, will retain a supervisory role.
Failed. Monitor is an independent quango, with no democratic accountability, and cannot be expected to be a local voice for patients at each Foundation Trust. Furthermore if FTs get into trouble there will be no mechanism to turn them back into NHS Trusts, as now.
Nick Clegg claimed to have secured 11 of his Conference‟s 13 demands. The reality is he has failed on 7 of their demands and fallen short on 6.
Original scorecard published here: http://www.guardian.co.uk/politics/2011/jun/12/nick-clegg-health-reform
Tuesday, 6 September 2011
We need internationalist spirit – and a plan for global growth
By Ed Balls
A Republican-supporting economics professor, with a dog called Keynes, whose other economics hero was Milton Friedman? As I sat in my first Harvard economics lecture, listening to Greg Mankiw introduce himself to his new graduate class, my head was in a spin.
Could he really be a Republican Keynesian? And a Keynesian disciple of Milton Friedman? For a young Brit, just graduated from Oxford, this was revolutionary; what I thought was the conventional economic wisdom was being turned upside down.
Because, as with every other PPE graduate – including my contemporary, David Cameron – I was well-schooled in the ideological economic debates of 1980s Thatcherite Britain. Were you a Keynesian or a monetarist? A follower of Willem Buiter or Friedman? Fiscal activist or PSBR hawk? Would you trade a little more inflation for a little less unemployment? Did you read Bill Keegan in the Observer or Samuel Brittan in the FT?
Of course, the serious economic debate was more sophisticated than that. But the divides were real, and reflected in the political debate. So much so that in Conservative circles the label Keynesian became a dirty word – profligate, irresponsible, statist, inflation-loving, not to be trusted.
And listening this summer to right-of-centre politicians and commentators, I have regularly been transported back to those 1980s myths that were exploded in that first Harvard economics class 23 years ago. Because the old caricatures are back with a vengeance, on both sides of the Atlantic.
We have all seen financial markets crashing as governments have rushed to embrace fiscal austerity. But warn about the risks of deflationary fiscal policy and that makes you a deficit denier. Worry about the dangers of all countries trying to cut deficits at once and you are a deluded Keynesian. Counsel that the world needs a plan for growth as well as deficit reduction and you are an irresponsible Keynesian deficit denier.
Keynes himself must be turning in his grave. For – as that Greg Mankiw class highlighted to me, and has now been fully documented in Lord Skidelsky's biography – the real Keynes was no profligate tax-and-spender. His seminal 1930 Treatise on Money was as hawkish on inflation as Friedman decades later. His attitude to irresponsible wage bargaining in the 1920s was as unforgiving as Thatcher in the
1980s
Central bank independence? I think Keynes would have backed it, though not if Montagu Norman was the governor. The irresponsible and inflationary profligacy of the 1970s Barber boom? He would have abhorred it. But – and this was his great insight – Keynes also knew that economies could occasionally get stuck in a deflationary rut. Although he called it The General Theory, it was actually a special case: when interest rates are so low that they can't be cut any further; when the "animal spirits" of companies and consumers are so depressed that private spending stagnates; when governments crudely cutting spending risks make deficits worse.
Of course, there will be naive Keynesians who will think it is always a special case – time to let rip. And that is what gave Keynesianism a bad name. Jim Callaghan was right to tell the Labour party conference in 1976 that you can't just spend your way to full employment. And while you can argue about her methods, Margaret Thatcher was right in 1979 to say it was a priority to get inflation down.
But, as I argued a year ago in my Bloomberg speech, the global economy is sliding into that rare and dangerous "special case" that Keynes identified in the 1930s and Japan suffered in the 1990s. And, as Ed Miliband argued this week, our world economic leaders need a global plan B for growth.
Yes monetary policy and quantitative easing can help, and progress on banking and trade reform are important, but fiscal policy is now the key. With growth stagnating around the world, every country pressing ahead with deep cuts risks being a catastrophic mistake. As the International Monetary Fund's Christine Lagarde has warned, "slamming on the brakes too quickly will hurt the recovery" – as we have already seen in Britain.
It's time that G7 countries led the way by agreeing revised deficit reduction plans, making them steadier and more balanced to support growth and jobs. Yes, have clear medium-term plans to get deficits down, but have clear plans to avoid a global slump, too.
This time the world must reject the complacent isolationism of the 1930s and follow Keynes's lead. Because, of course, the other distinguishing feature of Keynes was that he believed in global solutions to global problems. And we could do with a bit of that internationalist spirit now from our prime minister and chancellor, who have been noticeably lacking from the global economic debate.
I remember hearing a great story about Keynes making a wartime trip to Washington to meet the US treasury. Apparently, at the first meeting, treasury secretary Morgenthau asked Keynes: "Where is your lawyer?" When Keynes looked puzzled, Morgenthau exclaimed: "Well, who is going to do your thinking for you?"
I sincerely hope George Osborne will soon recant, follow Keynes's lead and take a flight to Washington to make the case for a global plan for growth.
And George, don't take a lawyer; an economist will do.
A Republican-supporting economics professor, with a dog called Keynes, whose other economics hero was Milton Friedman? As I sat in my first Harvard economics lecture, listening to Greg Mankiw introduce himself to his new graduate class, my head was in a spin.
Could he really be a Republican Keynesian? And a Keynesian disciple of Milton Friedman? For a young Brit, just graduated from Oxford, this was revolutionary; what I thought was the conventional economic wisdom was being turned upside down.
Because, as with every other PPE graduate – including my contemporary, David Cameron – I was well-schooled in the ideological economic debates of 1980s Thatcherite Britain. Were you a Keynesian or a monetarist? A follower of Willem Buiter or Friedman? Fiscal activist or PSBR hawk? Would you trade a little more inflation for a little less unemployment? Did you read Bill Keegan in the Observer or Samuel Brittan in the FT?
Of course, the serious economic debate was more sophisticated than that. But the divides were real, and reflected in the political debate. So much so that in Conservative circles the label Keynesian became a dirty word – profligate, irresponsible, statist, inflation-loving, not to be trusted.
And listening this summer to right-of-centre politicians and commentators, I have regularly been transported back to those 1980s myths that were exploded in that first Harvard economics class 23 years ago. Because the old caricatures are back with a vengeance, on both sides of the Atlantic.
We have all seen financial markets crashing as governments have rushed to embrace fiscal austerity. But warn about the risks of deflationary fiscal policy and that makes you a deficit denier. Worry about the dangers of all countries trying to cut deficits at once and you are a deluded Keynesian. Counsel that the world needs a plan for growth as well as deficit reduction and you are an irresponsible Keynesian deficit denier.
Keynes himself must be turning in his grave. For – as that Greg Mankiw class highlighted to me, and has now been fully documented in Lord Skidelsky's biography – the real Keynes was no profligate tax-and-spender. His seminal 1930 Treatise on Money was as hawkish on inflation as Friedman decades later. His attitude to irresponsible wage bargaining in the 1920s was as unforgiving as Thatcher in the
1980s
Central bank independence? I think Keynes would have backed it, though not if Montagu Norman was the governor. The irresponsible and inflationary profligacy of the 1970s Barber boom? He would have abhorred it. But – and this was his great insight – Keynes also knew that economies could occasionally get stuck in a deflationary rut. Although he called it The General Theory, it was actually a special case: when interest rates are so low that they can't be cut any further; when the "animal spirits" of companies and consumers are so depressed that private spending stagnates; when governments crudely cutting spending risks make deficits worse.
Of course, there will be naive Keynesians who will think it is always a special case – time to let rip. And that is what gave Keynesianism a bad name. Jim Callaghan was right to tell the Labour party conference in 1976 that you can't just spend your way to full employment. And while you can argue about her methods, Margaret Thatcher was right in 1979 to say it was a priority to get inflation down.
But, as I argued a year ago in my Bloomberg speech, the global economy is sliding into that rare and dangerous "special case" that Keynes identified in the 1930s and Japan suffered in the 1990s. And, as Ed Miliband argued this week, our world economic leaders need a global plan B for growth.
Yes monetary policy and quantitative easing can help, and progress on banking and trade reform are important, but fiscal policy is now the key. With growth stagnating around the world, every country pressing ahead with deep cuts risks being a catastrophic mistake. As the International Monetary Fund's Christine Lagarde has warned, "slamming on the brakes too quickly will hurt the recovery" – as we have already seen in Britain.
It's time that G7 countries led the way by agreeing revised deficit reduction plans, making them steadier and more balanced to support growth and jobs. Yes, have clear medium-term plans to get deficits down, but have clear plans to avoid a global slump, too.
This time the world must reject the complacent isolationism of the 1930s and follow Keynes's lead. Because, of course, the other distinguishing feature of Keynes was that he believed in global solutions to global problems. And we could do with a bit of that internationalist spirit now from our prime minister and chancellor, who have been noticeably lacking from the global economic debate.
I remember hearing a great story about Keynes making a wartime trip to Washington to meet the US treasury. Apparently, at the first meeting, treasury secretary Morgenthau asked Keynes: "Where is your lawyer?" When Keynes looked puzzled, Morgenthau exclaimed: "Well, who is going to do your thinking for you?"
I sincerely hope George Osborne will soon recant, follow Keynes's lead and take a flight to Washington to make the case for a global plan for growth.
And George, don't take a lawyer; an economist will do.
Monday, 5 September 2011
GOVERNMENT SET TO DEVASTATE RAIL SUPPLY CHAIN
On the eve of the crucial Transport Select Committee, that will be considering the procurement of trains in the UK, a new survey has just been published revealing the extent of the devastation that will be caused to supply chain companies if the Government refuses to chase its mind on the Thameslink contract.
The survey, conducted by ‘Survation’ for Unite the Union interviewed 125 companies (primarily their Managing Directors) operating in the UK that supply Siemens and/or Bombardier for train manufacture.
The companies were interviewed about the potential impact to their business of Bombardier losing the Thameslink contract to Siemens. Siemens plan to manufacture the rolling stock in its German factories where as Bombardier pan to build the trains in Derby.
The interviews were conducted between Friday August 26th and Thursday September 1st.
The sample was intended to represent a cross-section of UK businesses involved in supplying services, components and parts to the global train manufacturing industry. Seventeen observations were collected via a web-based invitation survey with the remainder (108) via telephone interviews. The questions were the same for both methods.
Almost half of the suppliers interviewed rely on Bombardier for at least 5% of their sales; while at the other extreme 6% of those interviewed rely almost entirely on Bombardier.
Only 24% of UK Suppliers we interviewed currently supply Siemens, indicating that they are poorly positioned to provide Siemens with future train manufacture. The shortfall in business from the Bombardier plant in Derby not manufacturing Thameslink trains would, in many suppliers’ views, not be supplemented by orders from Siemens.
40.59% of the companies we interviewed - plan to execute job losses. Indeed, some suppliers have already lain off workers. 32% have done so or plan to do so within the next 3 months. Of those expecting job losses 73.7% expect them within the next six months. Despite the government looking to review the UK’s procurement process in the light of recent job losses suffered at Bombardier, the announced 1-year delay to the Crossrail contract is unlikely to help the employment picture as many jobs will already be lost.
When asked “How will they be affected by Bombardier losing the Thameslink contract to Siemens?” responses ranged from “none” to “substantial”, and in some cases complete closure. We found that of the total sample, 19.2% of businesses believed it would have a substantial negative impact on growth and almost a third (32.0%) believed it would have a substantial negative impact on sales.
Businesses holding one or both of these opinions (a substantially negative impact on growth or sales) could be found nationwide, from Abadare to Witney (See A-Z impact tables in the linked document). While the greatest number of impacted companies were found in Derby – (the UK’s rail production hub) – Birmingham, Nottingham and Chesterfield were ranked highly in the survey in terms of the number of businesses facing job losses. Only one respondent believed Bombardier’s loss of contract to Siemens would have a positive impact.
Overall, Small-Medium sized Enterprises (SMEs) will likely see the largest impact on their businesses if Bombardier loses the Thameslink contract. They face higher job losses as a proportion of their business and they are likely to execute job losses in a shorter period. Almost two thirds (65.6%) of SMEs we interviewed do not currently supply Siemens, compared to the survey average of 53.6%.
Damian Lyons Lowe, from ‘Survation’ said: “Our previous survey work relating to Bombardier looked at the striking local political impact in Derby of the government decision to award preferred bidder status to Siemens over Bombardier. This survey has shown there will also be a meaningful impact on jobs and growth nationally, particularly to small and medium sized companies”.
The Government must be persuaded to stop the act of economic vandalism because of the impact on unemployment and economic growth.
The survey, conducted by ‘Survation’ for Unite the Union interviewed 125 companies (primarily their Managing Directors) operating in the UK that supply Siemens and/or Bombardier for train manufacture.
The companies were interviewed about the potential impact to their business of Bombardier losing the Thameslink contract to Siemens. Siemens plan to manufacture the rolling stock in its German factories where as Bombardier pan to build the trains in Derby.
The interviews were conducted between Friday August 26th and Thursday September 1st.
The sample was intended to represent a cross-section of UK businesses involved in supplying services, components and parts to the global train manufacturing industry. Seventeen observations were collected via a web-based invitation survey with the remainder (108) via telephone interviews. The questions were the same for both methods.
Almost half of the suppliers interviewed rely on Bombardier for at least 5% of their sales; while at the other extreme 6% of those interviewed rely almost entirely on Bombardier.
Only 24% of UK Suppliers we interviewed currently supply Siemens, indicating that they are poorly positioned to provide Siemens with future train manufacture. The shortfall in business from the Bombardier plant in Derby not manufacturing Thameslink trains would, in many suppliers’ views, not be supplemented by orders from Siemens.
40.59% of the companies we interviewed - plan to execute job losses. Indeed, some suppliers have already lain off workers. 32% have done so or plan to do so within the next 3 months. Of those expecting job losses 73.7% expect them within the next six months. Despite the government looking to review the UK’s procurement process in the light of recent job losses suffered at Bombardier, the announced 1-year delay to the Crossrail contract is unlikely to help the employment picture as many jobs will already be lost.
When asked “How will they be affected by Bombardier losing the Thameslink contract to Siemens?” responses ranged from “none” to “substantial”, and in some cases complete closure. We found that of the total sample, 19.2% of businesses believed it would have a substantial negative impact on growth and almost a third (32.0%) believed it would have a substantial negative impact on sales.
Businesses holding one or both of these opinions (a substantially negative impact on growth or sales) could be found nationwide, from Abadare to Witney (See A-Z impact tables in the linked document). While the greatest number of impacted companies were found in Derby – (the UK’s rail production hub) – Birmingham, Nottingham and Chesterfield were ranked highly in the survey in terms of the number of businesses facing job losses. Only one respondent believed Bombardier’s loss of contract to Siemens would have a positive impact.
Overall, Small-Medium sized Enterprises (SMEs) will likely see the largest impact on their businesses if Bombardier loses the Thameslink contract. They face higher job losses as a proportion of their business and they are likely to execute job losses in a shorter period. Almost two thirds (65.6%) of SMEs we interviewed do not currently supply Siemens, compared to the survey average of 53.6%.
Damian Lyons Lowe, from ‘Survation’ said: “Our previous survey work relating to Bombardier looked at the striking local political impact in Derby of the government decision to award preferred bidder status to Siemens over Bombardier. This survey has shown there will also be a meaningful impact on jobs and growth nationally, particularly to small and medium sized companies”.
The Government must be persuaded to stop the act of economic vandalism because of the impact on unemployment and economic growth.
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