I’ve been a bit out of circulation since yesterday evening because of work travel, so maybe someone else has already done this. But maybe not. Most of the media reports I’ve seen on George Osborne’s speech yesterday at the Tory party conference have centred on his laughable scheme to have employees swap their employment rights for shares in their employer’s company. I’ll take a look at why it’s ridiculous too, but first I want to take a look at the other things he said and what they say about him.
My mother used to love reciting the old saying, ‘Whenever you point a finger at anyone else, you’re pointing three back at yourself’. Of course, that that was a form of finger-pointing never seemed to occur to her – but that doesn’t mean it isn’t often true!
So, let’s take a look at Osborne’s speech in some detail (though I’m sure there’ll be too much ammunition to use everything!) and see what it said about him and his party. It won’t be comprehensive – because it’s been a long day, I’m tired, and frankly there’s just too much to choose from. But a look at a representative selection will tell us more than enough. I’ll start with an absolute belter:
“Three years later, my message remains the same: We’re not going to get through this as a country if we set one group against another, if we divide, denounce and demonise.”
I was open-mouthed as I heard him say this. As I’ve written on many occasions, demonisation is a reflex so ingrained into the Tories’ tactics that it can legitimately be described as a fetish, as every policy is accompanied by an attempt to set the rest of us against whoever is the latest target group. The Tories’ ability to win support from anyone is based on demonising some other group.
That would have been bad enough. But just a few lines later in his speech, Osborne – clearly a genuine stranger to the concepts of irony and of self-awareness – proceeded to demonise:
“Where is the fairness, we ask, for the shift-worker, leaving home in the dark hours of the early morning, who looks up at the closed blinds of their next door neighbour sleeping off a life on benefits? When we say we’re all in this together, we speak for that worker. We speak for all those who want to work hard and get on.”
Apparently, characterising everyone on benefits as scroungers who enjoy a cushy life and a nice lie-in, and as those who don’t want to work hard or get on, isn’t demonising them. Well, not if you’re a Tory hypocrite who inherited his money and has never done a proper job, anyway.
Memory like a sieve?
Mocking Ed Miliband’s performance last week in delivering a speech of over an hour without notes, Osborne said:
“And what was the biggest memory lapse of all: he forgot to say the three things that the British people want to hear from the Labour Party. “We’re sorry.” “We spent too much.” “We won’t do it again.”“
Poor old George. He’d clearly forgotten to remember that the UK economy was growing until the banking crisis, and then growing again after the bailout until the coalition took over. He’d also forgotten – apparently – that the Tories under David Cameron applauded the bailout of the banks – and had been championing even less regulation of the banks than what allowed the crisis to happen in the first place. The crisis that caused the deficit and massively increased the debt – and not ‘overspending’ on health, welfare and public services as Dave and Georgie claim these days.
A mind is a terrible thing to waste – but apparently Osborne’s is pretty wasted.
Tax raises no money?!
“And we’ve achieved that while getting rid of a cripplingly uncompetitive 50p rate that raised no money and cost jobs. It is a completely phoney conception of fairness that you stick with a tax rate you know raises no money.”
Well, according to Conservative contributors to the post-budget Commons debate in March, the 50% tax rate raised at least £100m in extra revenues. And the figure was only that low because – again according to Conservatives – rich people used a tax dodge to reduce their tax, with “£16 billion of income deliberately shifted into a previous tax year“. But that means that the next year, when they could no longer shift income to a year with a lower tax rate, the 50% top tax rate (instead of 45%) would raise 5% of £16 billion: an additional £800 million per year.
And remember, those figures are from the mouths of Tory politicians, who have a vested interest in playing down the impact of reducing the top rate of tax. Even by their ‘conservative’ figures, having a top rate of 50% instead of 45% raises almost a billion pounds of extra revenue.
George Osborne calls that ‘no money’. I guess between Tory toffs with inherited wealth, it doesn’t amount to much.
Worse than we feared
To excuse his and his party’s complete inability to return the economy to growth or even to reduce the deficit, and to excuse the supposed ‘need’ for more cuts, Osborne said “Now, we face more hard choices this autumn. The truth is that the damage done by the debts and the banking crisis was worse than we feared.”
I’ll just refer you to the point mentioned above: Cameron, Osborne and the Tories approved the banking bailout and, before the crisis, wanted even less regulation of the banking sector. Trust the Tories with the economy? I wouldn’t trust them to tell me the right time.
How can we justify..?
George clearly thought he’d struck a catchphrase. 3 times he repeated ‘How can we justify..?‘ – and three times he succeeded in condemning his own and his party’s hypocrisy and culpability:
“Because it’s not just about the money – it comes back to fairness and enterprise.
For how can we justify the incomes of those out of work rising faster than the incomes of those in work?“
The incomes of ‘those in work’ have been rising much more slowly than inflation, George. How do you justify that? How does adding to weak demand by lowering benefits help those in work? Who decided to freeze the incomes of public sector workers? Was it the Tories, by any chance? Aren’t public sector workers ‘those in work’, too? And aren’t most benefit claimants – housing benefit, for example – also ‘those in work‘, George? Or are you having another memory lapse?
And since you’re in forgetful mode, George, you might also have forgotten that if you want work to pay, legislating for a living wage would be a far better place to start than cutting benefits.
“How can we justify giving flats to young people who have never worked, when working people twice their age are still living with their parents because they can’t afford their first home?”
Are people living at home only because they can’t afford to buy, George? Isn’t it also because they can’t afford to rent? Which party has decided to worsen that situation by capping housing benefit instead of capping rent charged by greedy landlords, George? And which party has just announced plans to let house-builders opt out of affordable housing provisions in planning permissions, George? That surely won’t help those poor people and their poor parents, will it? It can’t possibly be the Tory party, can it? How could you justify that?
“How can we justify a system where people in work have to consider the full financial costs of having another child, whilst those who are out of work don’t?“
Er, George? Don’t we need more young people to counteract the ageing of our population? Don’t we offer child benefit and family tax credit to encourage people to have children by making it easier to afford? And if you weren’t freezing wages, cutting support and sucking demand out of the economy, wouldn’t more working people be able to afford more easily to have more children?
Borrow more to borrow less?
“[Labour’s] curious suggestion is that by borrowing more we would borrow less. In fact, in good times and bad, in boom and bust, their answer is always to spend and borrow more. They think there is such a thing as a free lunch. They think that extra borrowing could pay for spending, or indeed tax cuts, in an attempt to put money in the pockets of consumers.“
George. Georgie. You’re the Chancellor. We’re entitled to expect a bit of nous from you. A bit of common sense. Well, maybe not from you. But from anyone actually qualified to do the job. And anyone qualified to do the job would know that you can’t possibly reduce the deficit by sucking cash and confidence out of the economy – so that everyone fears more and spends less. That means less income for retailers, service providers, pretty much any type of business. It means more people out of work, accelerating the vicious circle of more fear and less spending. If that happened, you’d see things like double-dip recession and downward revisions of the UK’s economic outlook.
Oops. Poor George.
It’s the economy, stupid
“Our published plans already require us to find £16 billion of further savings.”
Poor George. If you’re in a hole, the first step toward a solution is to stop digging. Your measures so far have turned an economy that was back to growth under Labour at the last election into one that has already suffered a double-dip recession – just as many predicted based on those plans. You’ve depressed our economy so far that even the ultra-neoliberal IMF thinks you’re overdoing it – and it’s just plain common sense that if there’s no demand because people are scared about their job security and income, then it doesn’t matter how low you make corporation tax or how cheap it is to borrow. No demand = no growth. And cutting another £16bn from spending by definition means even more money sucked out of circulation – and that means even less confidence and even less demand. And those things mean longer, deeper recession.
Stop digging, George. For all our sakes.
I’m going to stop soon. I haven’t covered anywhere near everything, but I’m tired and you might be getting tired too. It’s depressing reading. But at the beginning of this post I promised I’d tell you why George’s ‘shares for employment rights‘ idea is idiocy. Off the top of my head, just some of the reasons are:
Osborne’s plan is to offer shares in their employer’s business to workers who will sacrifice George, when you announced this lunacy, you thanked Adrian Beecroft. But Beecroft’s stated rationale for his idea to reduce employment rights was to help new, small businesses. You even said so yourself:
“I want to thank Adrian Beecroft for the work he has done in this area. This idea is particularly suited to new businesses starting up; and small and medium sized firms.”
Your idea is for businesses to give employees shares worth between £2,000-£50,000 in return for surrendering rights regarding unfair dismissal, redundancy, flexible working, time off for training and maternity.
Don’t you realise that the vast majority of small businesses are set up with minimal share capital? Can you really imagine a new, small employer giving shares in his/her company away to employees that are worth – perhaps individually and almost certainly cumulatively among all employees – enough to take a major share of profits and dividends, and quite possibly even a controlling stake in his/her company? No, neither can I. Did you actually stop and do the sums, George?
The value of investments can go down as well as up
This warning has to be given by law on any literature relating to investments. Shares can lose value just as easily as gain it. Any employee prepared to give up protection against unfair dismissal, or to maternity leave, or to a redundancy payment, in return for something that might be worth nothing tomorrow, would have to be an idiot. And despite what you might think, George, most working people aren’t idiots.
Besides, what would happen if a share-owning employee was sacked unfairly? Would s/he lose entitlement to those shares? If not, the new, small entrepreneur you claim to love so much could easily find himself facing a load of very pissed-off, shareholding ex-employees out to get revenge?
And wouldn’t depriving women of maternity rights under any circumstance be discriminatory by definition? Definitely a breach of the human rights act, I’d imagine. Oh yes – you hate that too. And you Tories are by no means averse to measures that disproportionately affect women..
These measures would be terrible for employees, and terrible for new, small or medium employers. Oh, and big businesses hate them too.
It’s late and I’m going to go to bed. If you had any sense, George, you’d do the same and stay there until well after the next election.
And you’d definitely unclench that pointing hand. As my mum would tell you if she were still around, you’re just making yourself look even worse..