Archive for the ‘Terrible Tories’ Category

Cameron’s other budget speech lie

March 9, 2013 1 comment

The big news of the day for econo-geeks is the letter from the Head of the Office of Budget Responsibility to Cameron, rebuking him for his false assertions over the impact of austerity on growth.

In the longer term, though, I don’t think will be the most signficant lie in Cameron’s speech. I think this will be:

This deficit didn’t suddenly appear purely as a result of the global financial crisis. It was driven by persistent, reckless and completely unaffordable government spending and borrowing over many years.  By 2008, we already had a structural deficit of more than 7 per cent – the biggest in the G7.

No source is given for this 7% assertion, but as far as I can tell* it comes from the 2012 IFS Green Budget which says:

Our estimates, based on the OBR’s latest official forecasts, suggest that the apparent ‘hole’ in the UK’s public finances that has opened up since the March 2008 Budget – that is, the additional structural borrowing that is now forecast to persist in the medium term, over and above what was forecast in the March 2008 Budget – equates to 7.5% of national income (or £114 billion in today’s terms) (p.51).

This does not, of course, say what Cameron appears to be claiming.  In fact, we get the actual estimated structural deficit figures for 2007/08 further down the same page:

In 2007–08, total PSNB stood at 2.4% of national income. Since, at the time, the Treasury thought that the UK economy was operating slightly above its productive potential, underlying structural borrowing was estimated to be a slightly higher 2.6% of national income. The larger output gap** now estimated by the OBR implies that structural borrowing in 2007–08 in fact stood at around 3.5% of national income [my emphasis].

The reason I think this apparent lie is more important than the one about the austerity effect is that it looks like it’s going to be the main one used to beat Labour with.  As the next election approaches the Conservatives will realise they are unable to defend their own record on the economy, and will need to rely on the “mess Labour left us in” narrative which served them well early on.

The general ‘worst in the G7′ structural deficit accusation is not entirely new – it dates back at least to the ’emergency budget’ in 2010 ( see p.8, although no figure is given there, just a reference to an OECD report, in which I’ve been unable to find the assertion backed up).   However, it has not been used again until recently, and this firming up of a (false) figure appears to be a conscious attempt to resurrect it.  Further, the 7% figure is important because it allows the Conervatives to claim it is the highest since the war, whereas in fact the IFS report makes clear that it was higher twice under the Major government:

A structural deficit of 3.5% of national income in 2007–08 would have been the highest level since 1995–96 (when it stood at 3.8% of national income) but still far below its previous peak of 5.5% of national income in 1992–93.

In any event, I expect to see the 7% structural deficit line to be trotted out regularly by the Tories, including by Cameron at PMQs, over the coming months. I hope Labour will be alert enough to call them out on the spot, referring to the actual figures set out in the IFS report.

* I suspect the 7% figure comes from here because it was trailed at the weekend (possibly by mistake) in a tweet from the Conservatives’ press office:

Terrible banking was cause of banking crisis. Before that happened, the UK under Labour, was running deficit of over 5% of GDP.

When challenged on this statement, which is clearly untrue, the following clarification was given:

@citizenandreas check the Most recent IFS report on structural deficit when banking crisis hit.

** It’s also worth pointing out that measuring the output gap is a very unexact science.  The figures used in the IFS report are based on OBR work, which in turn depends on a wide variety of source information to try to calculate “the difference between the current level of activity in the economy and the potential level it could sustain while keeping inflation stable in the long term”.  These sources include , for example, British Chamber of Commerce surveys of recruitment difficulties in firms.  While the OBR report says that the historical analyses “appear to give a plausible representation of UK business cycle history and remain close to the range of alternative estimates”, it also notes that “[a]ny output gap estimate remains uncertain, even when it relates to the past. Similarly the estimates presented in this paper are subject to significant uncertainty and remain work-in-progress.”  With these caveats, the OBR report finds that a structural deficit of 3.5% in 2008, pre-crisis, compared with the 2.6% on which the Treasury was basing its projections.

Could Cameron land us with two referenda by mistake?

January 23, 2013 1 comment

In my main post on Cameron’s EU debacle earlier, I noted how the European Union Act 2011, pushed through by Cameron as a way of deflecting attention from his failure to live up to his “cast iron” guarantee on a referendum, is likely to come back to haunt him.

It occurs to me that one part of his speech illustrates this cock-up perfectly.  Cameron asks:

And I would ask: when the competitiveness of the single market is so important, why is there an environment council, a transport council, an education council but not a single market council?

So Cameron apparently wants an addiitional institution within the EU to coordinate single market policy.  I’m not sure why, but let’s take him at his word.

Now, the function of the transport council, which he refers to by way of comparison, is set out at Articles 90 to 96 of the Treaty on the Functioning of the European Union.  Similarly, if a single market were to be established as a result Cameron’s negotiating brilliance, it would also require inclusion within a revised TFEU if it were to have legitimacy

But the European Union Act 2011 makes ot very clear that a change to TFEU which entails “the extension of the competence of the EU in relation to cooridnation of economic and employment policies” (sec 4 (f) will require a referendum for its ratification.

So if Cameron were successful in negotiating a new Single Market coordination function, AND if legislation were introduced for an in/out referendum, we’d be stuck, by law, with two referenda, potentially weeks apart.

Categories: Law, Terrible Tories

Cameron opens the way for a triple Labour victory

January 23, 2013 Leave a comment

Update 3.30pm 23/01/2013: Miliband’s seemingly  statement that he doesn’t want an in/out referendum, this lunchtime at PMQs, merely highlights the need for the tactic advocated here: that whether Labour want it or not, Cameron’s earlier spineless legislation (European Union Act 2011) means that, if any progress is made to develop European treaties as set out below,  a referendum is a legal requirement.

So Cameron has promised a in/out referendum on membership of the European Union sometime in 2017.   Far from being “a pretty effective trap for Labour” (@philipoltermann), this should open the door for Labour both to confirm victory in the 2014 European elections, the 2015 general election, and then help change the European Union for the better via the in/out referendum.  A Labour triple whammy, courtesy of Cameron.  Sounds great?  Read on……

Let us assume, for a start, that Cameron follows through on the promise to draft referendum legislation before 2015, with a view to its enactment after the general election.  This, some pundits will say, is the main trap, because the Tories will be able to challenge Labour to a manifesto commitment on its enactment, claiming victory if it commits, claiming Labour is denying the people a voice if it doesn’t.

This, though, ignores the European Union Act 2011, enacted by Cameron as a panic measure to deflect from his early “cast-iron” commitment to referendum.  While the press have made the Act out to be a safeguard against powers being handed over to Europe without a referendum, section 4 of the Act covers a wide range of European treaty changes which, if agreed at intergovernmental level, will, by law, have to be presented to the British people in a referendum.  some of the changes requiring referendum have nothing to do with transfer of powers  Yet Cameron has today told us that he supports treaty change before an in/out referendum, in the context of his argument that such an in/out referendum needs to be delayed until the EU has got its house in order:

I agree too with what President Barroso and others have said. At some stage in the next few years the EU will need to agree on Treaty change to make the changes needed for the long term future of the Euro and to entrench the diverse, competitive, democratically accountable Europe that we seek. I believe the best way to do this will be in a new Treaty so I add my voice to those who are already calling for this.

Remarkably then, Cameron may find himself either having to use his veto on what he may consider to be good treaty changes, or being required, through a law made of his own spinelessness, calling a treaty-change referendum before an in/out referendum.

So far, so good.  Labour can simply argue that it is compelled by Cameron’s weakness on Europe to enact the draft legislation so as the avoid a farcical situation whereby a treaty-change referendum required under law becomes an in/out referendum by proxy, with a no vote on treaty change meaning a further vote becomes inevitable.

As I’ve set out earlier, a referendum on membership is, in any event, not a bad thing for Labour (on this I agree with Will Straw from IPPR).  The tactical battle won via Cameron’s own incompetence, Labour becomes free to engage with European partners post-2015 on the development of a social democratic alternative/revision to the Lisbon Treaty, and to flag up this pre-general election, and pre-2014 Euro elections, in a way which more clearly distinguishes it from the Tories on Europe than it has managed to date.  Francois Hollande will still be in office in 2015/6, Merkel may be in a weaker position to negotiate, and Spain, Italy, Portugal, Denmark and others have a more than 50% chance, I’d say, of having governments with whom Labour can do business on the development of a centre-left treaty to replace/modify Lisbon.  It is on the basis of a clearly better-for-the-people Treaty that Labour would then call the in/out referendum.

What would a revised, social democratic Lisbon Treaty look like?  Space/time does not permit a full exposition here, but I think six things should be top of the list, reflecting how different a social democratic Europe post-2019 (ie. after the 2019 Euro elections and a leftist majority might look):

1) The treaty should establish the primacy of the European Parliament as decision-making agenda-setting body, with the European Commission removed from its role as one of the three key bodies involved in the current co-decision making process, and developed into a ‘neutral’ civil service operating under democratic command.

This will set Labour and its fellow European parties aside from the Tories, who under Cameron have stated clearly (see PMQs in early January, and repeated again today) that the sole legitimate democratic voice in Europe is the intergovernmental European Council of heads of state, currently presided over by van Rompuy.  Labour should argue that the Parliament, as long as it reforms its election system away from the current regional list system towards one where each MEP represents  distinct constituency, is now the body with the expertise (and Commission support) and legitimacy that is needed to govern the European Union, albeit with due reference to intergovernmental institutions (not just the European Council but also the strangely similarly named Council of the European Union).

This is not just the right thing to do, as it brings into play the importance of parties working across Europe to establish a majority and then coherent policy within the Parliament; it is also tactically useful, because it allows Labour to go into the 2014 European elections on the basis that the Tories and UKIP are actually just putting up ‘gravy-train’ candidates to be members of an institution they don’t even believe in, while Labour candidates actually want to get some work done.

2) The new treaty should create the legal conditions in which the frankly absurd Stability and Growth Pact and the accompanying ‘six-pack’ directive, are subsequently abolished.  These directives are the ones which effectively outlaw Keynesianism by imposing ludicrous constraints on surplus/deficit spending.   The treaty should then set out an alternative framework under which member states are required to use their spending power to maintain and enhance levels of social security, employment and income equality.  Whether this should include numerical targets and some form of sanction for non-compliance, mirroring the surplus/deficit targets/sanctions set out under a neoliberal EU, is open to debate (currently I would favour such).

3) In keeping with this significant change in emphasis to the EU’s role and the legitimacy of the European Parliament, the new treaty should reverse the decision under Lisbon to remove democratic control of the European Central Bank from the Parliament.

4) The treaty should enhance the existing, but ignored provision in Lisbon, to vary single market conditions on a temporary basis so as to allow for a form of artificial devaluation in countries running behind the EU’s economic leaders in terms of citizen incomes in a way which promotes convergence without the self-defeating austerity measures currently being used for that task.  EU structural funds should be used to make this happen.

5) Reform of the Common Agricultural Policy in a way which a) gears subsidy to low wealth producers rather than to richer landowners who are able to use the income-based mechanism to rake in the cash; b) creates both long-term sustainability/reliability of supply, in a time of adverse climate change, and affordability i.e. the CAP should effectively become part of universal welfare provision around decent food.

6)  The restatement of the principle of free movement of labour, but with protection  from exploitation enhanced by the enactment of something similar to the UK’s Public Services (Social Value) Act 2012, but broadened to encompass existing EU procurement law and to cover multi-nationals.

If the Labour leadership gets its collective head round both the short-term tactics of using Cameron’s own reckless 2011 legislation against him, and then starts setting out its distinctive view of a new social democratic EU shaped by it and its fellow leftist parties, it stands to win the 2014 euros, then the general election against Cameron and then (best of all) a referendum Yes against a Tory party led in 2015 by Gove, or a Gove acolyte, which is campaigning for No vote.

Of course, if Labour doesn’t do that, I guess Philip Oltermann may be right…..

Is this the next stage of the NHS privatisation plan?

January 14, 2013 Leave a comment

The online social enterprise community – of which I may now well be an honorary member – has had some debate about the importance or otherwise of the Secretary of State for Health’s recent definition, for the first time in English law, of what it is to be a social enterprise, which I covered here, and originally here.

David at Beanbags and Bullshit gives links and a good overview of the debate, which boils down to different views on whether the definition set out in the new Healthwatch regulations will come to act as precedent, replicated in other legislation and  in broader NHS (and other departmental) policy, or whether it’s strictly focused on the very narrow, and relatively unimportant issue (given their lack of real power) of who will get to run Local Healthwatches.

To date, my own position on this has been simply “I don’t know”.  On the one hand, it has been difficult to work out how exactly this new definition might be used as a lever for privatisation of NHS services.   On the other, it’s  a puzzle as to why the Department of Health would go to so much trouble expanding the usual conception of social enterprise to include private firms as long as they don’t take out more than 50% from profits in any one financial year, unless there was some kind of plan to expand its use beyond the financially unimportant Healthwatch scheme.

However, the news emerging about Monitor’s Fair playing Field recommendation, that private health firms should become exempt from corporation tax on their NHS profits, has me leaning a little towards the latter interpretation, namely that the Healthwatch regulations form part of some devilishly clever scheme.

I find it difficult to believe that Osborne will find it politically feasible to stand up at the next budget and announce this new tax break in the face of a popular swell against tax avoidance, however much it might be sold on the grounds that Any Qualified Provider private firms currently suffer from unfavourable cost terms when compared with the NHS itself.  That would surely be too risky as a confirmation of whose side the Tories are on.

But if the tax break is dressed up as an incentive for social enterprise, tapping into the government fairly well developed narrative on the virtues of mutualism and pointing to existing ex-NHS staff mutuals as an example, but conveniently leaving out the detail of how social enteprises are legally defined nowadays, Osborne,  Hunt and the private health lobbyists may well feel its worth a go as part of the pre-election scorched earth strategy.

Or maybe that’s a conspiracy theory too far. I still don’t know.

If I’m right, you heard it here first.  If I’m not, then it’s simply the usual omnishambles, ok?


ps.  I ‘m thinking of doing a Freedom of Information request on the consultation responses and meetings which fed into the Healthwatch regulations, to try to ascertain to what extent the private health lobbyists were at work.  Has anyone else reading this done one, or are they interested in doing so?

How new is the new nastiness?

December 17, 2012 Leave a comment

How new is the Tories’ new nastiness?   Quite new, it would appear:

Geroge Osborne, 2011 Autumn Statement:

I also want to protect those who are not able to work because of their disabilities and those, who through no fault of their own, have lost jobs and are trying to find work.

Tory attack ad, Dec 2012:

Who do you think this goverment should be giving more support to? Hardworking families……Or people who won’t work?

Categories: Terrible Tories

The privatisation of democratic scrutiny: the strange case of Lancashire Healthwatch

June 29, 2012 10 comments

The Lancashire Evening Telegraph reports (i.e. copies and pastes a press release) :

A NEW organisation to improve health and social services in Lancashire has been unveiled.

Lancashire County Council has joined forces with Parkwood Healthcare to form a new health watchdog called HealthWatch Lancashire.

Parkwood specialises in providing staff, including nurses, care assistants and project workers, to the NHS, private and voluntary organisations.

From April 2013, the new organisation will replace the current Lancashire Local Involvement Network (LINk) as an independent watchdog, listening to local people’s concerns and ensuring the best services for them.

In dryer terms, Parkwood Healthcare has won the contract from the County Council to run Lancashire Healthwatch (see No.5 in May 2012 Cabinet minutes), pursuant to the Health and Social Care Act 2012.  

Clause 183, para 2.2 of that Act requires the following in respect of such a contract:

The arrangements must be made with a body corporate which—

(a) is a social enterprise, and

(b) satisfies such criteria as may be prescribed by regulations made by the Secretary of State

This makes the award of the contract look very odd.  I have checked out Parkwood Healthcare on the Companies House site and it is a Private Company Limited by Shares.  As such, it is surely outwith the normal definition of a social enterprise. 

So have the County Council acted illegally in awarding the Healthwatch contract to Parkwood Healthcare?  

Well, maybe, or maybe not.  The Health and Social Care Act, courtesy of a late amendment in the Lords (unchallenged by any member of any party), provides a definition of what itmeans by ‘social enterprise’ (Clause 183 para 7):

For the purposes of this section, a body is a social enterprise if—

(a) a person might reasonably consider that it acts for the benefit of the community in England, and

(b) it satisfies such criteria as may be prescribed by regulations made by the Secretary of State.

Now, I’m a pretty good at ‘reasoning’, even if I say so myself,  but I don’t consider that Parkwood Healthcare ‘acts for the benefit of the community in England’, precisely because the organisation’s legal status is not one normally associated with social enterpise. 

Further, we don’t know what criteria may be prescribed in the secondary regulations, because those regulations are still a matter for consultation; indeed those consultations appear to have a particular focus on what ‘social enterprise’ is to be taken to mean (see Issue 1 in these slides).

So in summary, we have a (Conservative) County Council apparently offering a ‘social enterprise-only’ contract to what is clearly a private firm, but which might just arguably be considered a social enterprise under Andrew Lansley’s new regulations.  Except that they haven’t been issued yet.

Further, the contract has been awarded to a Lancashire-registered firm which, at least judging by the website section on the nursing agency part of its business,  may have a financial interest in delivering some of the services that it is now being contracted to scrutinise*.

At the very least, I think Lancashire County Council needs to be asked a few questions about this**, including whether it has made provision in the contract with Parkwood Healthcare for its termination/withdrawal, in the event that the secondary legislation makes such a contract unlawful.


* We should be clear that this is not entirely new. According to its accounts, Parkwood Healthcare already has contracts to “act as the host for voluntary organisations to meet and influence service provision” in Lewisham, Harrow and Greenwich, while also offering nursing agency services in the London area.  

These contracts come under the previous government’s Local Involvement Networks (LINk) legislation, but the difference is that in these cases their ‘hosting’ services have been subject to a degree of accountability from those members that make up the Local Involvement Network itself (cf. the Lancashire LINk board structure, for example). Under the new Healthwatch provisions there appear to be no such safeguards, with LINks simply abolished in favour of Local Healthwatch arrangements. 

** I should stress, not least so as to avoid any risk of legal action, that I am in no way suggesting that Parkwood Healthcare has acted improperly in tendering for the Lancashire Healthwatch contract.  It is the Council’s actions that I question.



Victory for TCF as Michael Gove forced to lie slightly less than before

June 24, 2012 5 comments

Gove’s statement to parliament on the ‘O level’ leak contained this justification:

The sad truth is that, if we look at the objective measure of how we have done over the past 15 years, we find that on international league tables our schools fell in reading from 523 to 494 points, in maths from 529 to 492 and in science from 528 to 514.

Gove is referring to the Programme for International Student Assessment (PISA) study, and the data he provides is correct.

This is interesting for two reasons.

1) This time around Gove relies on the raw score changes rather than on the international league tables which have been the focus of misinformation, dating right back to 2010, since when he and his department have relied heavily this false data to set out their case for education ‘reform’. 

The dodgy league table data has been used repeatedly in the last week by Tories and their supporters, including Liz Truss MP, Toby Young (repeatedly on telly, I understand), Phillip Blond and Stephen Robinson so it is a surprise to see a sudden change of tack by Gove himself.

The change suggests strongly that he and his DfE team, complicit in the lies that have been so consistently peddled, have recognised that the game is up, and that they can no longer get away with it.  This amounts to a victory for TCF and for others who have sought to bring the DfE’s disgraceful manipulations to public attention.

2)   Nevertheless, Gove can’t bring himself to stop the lying completely.  While it’s good that he’s abandoned the totally invalid claims about slippage in comparison to other countries, he continues to suggest a downward trend on UK scores which simply does not stand up to serious analysis.  

As I’ve noted several times, no proper trend analysis between 2000 and 2009 is possible because the 2000 sample was not large enough to be statistically robust.

Moreover, the 2000 and 2003 tests were conducted some months earlier in school year 11 (Nov/Dec) than the 2006/2009 (March-May) as an exception in the international study (because they get in the way of GCSE preparations).  As John Jerrim of the Institute of Education has noted, this makes a pretty obvious difference:

[I]t is important to understand that between November/December and March‐May of year 11 is likely to be a period when children add substantially to their knowledge of the PISA subjects as it is when pupils are working towards important national exams. Consequently, one should expect the year 11 pupils in the PISA 2000/2003 cohort to out‐perform their peer taking the test in 2006/2009 due to the extra five months they have had at school….. This would in turn suggest an overestimation of the decline in PISA maths scores over time.

Look at it the other way round.  If scores in 2006/2009 had not been lower in 2009 than they were in 2000, a valid question might have been what the hell teachers and students learn during most of year 11.


So bizarrely, we’re left with a situation where Gove has been forced to lie a little bit less than he has done so far, but where he’s so dependent on the use of the PISA tables to defend his crackpot scheme that he’s still forced to mislead the House of Commons.



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