A Future That Works

A Future That Works
NO2aTory/Liberal coalition - Vote with your feet for an alternative to a neo-liberal economy and neo-conservative state Yes2aLeftFront and a Red/Green Left Alliance

Monday, 25 July 2011

Britain needs an Alternative Economic & Political Strategy

The indications are that the growth forecast for 2011 will be downgraded consumer confidence fallen, manufacturing has hit a two-year low, the service sector has contracted, retail sales are struggling and the trade deficit is getting wider. We see wages stagnant, higher food and energy prices, cuts to tax credits along with reduced working hours all squeezing living standards for those in work, never mind those made unemployed.

The Office for Budget Responsibility needs a growth figure of 1.7% for 2011. More likely George Osborne will be looking at figures of around 0.7%. This would mean that the Osborne had been over optimistic and that his growth forecasts have been constantly higher than the reality. Although technically Britain may not be in a ‘‘double dip recession’’ it would be in its third consecutive quarter of recession.


  1. GDP figures show Britain will miss economic growth targets

    Will Straw, associate director of Institute for Public Policy Research, estimates the UK will grow by just 1.2% this year.

    The eagerly awaited preliminary GDP estimate for April to June showed the economy growing by 0.2%, rather than contracting. Although this was better than some of the gloomier forecasts, it is still slower than the 0.5% growth seen in the first quarter, which came after a 0.5% decline in the fourth quarter of last year. City economists and think tanks warned that the Office for Budget Responsibility would have to revise down its 1.7% growth forecast for this year.

    The weak growth is fuelling fears that Britain could lose its AAA credit rating unless the economy picks up sharply in the third quarter.

    Chancellor of the Exchequer George Osborne says ‘‘the positive news is that the British economy is continuing to grow and is creating jobs…..and it is positive news too that at a time of real international instability we are a safe haven in the storm. Our economy is stable at this time because this government has taken the difficult decisions to get to grips with Britain's debts. Abandoning that now, as some argue we should, would only risk British jobs and growth’’.

    Shadow Chancellor Ed Balls says in contrast that the figures were ‘‘deeply worrying’’ and a sign that the economy is flat lining ‘‘When there is a hurricane you do not rip the foundations out of your own house. That is exactly what George Osborne has done’’.

    General Secretary of Unite the union Len McCluskey says ‘‘With every passing month, it is becoming clearer and clearer that the government's monetarist and fiscal policies are not delivering the level of growth necessary for the British economy to recover. It is complacent of ministers to blame global economic problems for the bad figures. What we need to remember is that Britain stayed out the Eurozone to give it more freedom of economic action many of the problems we face are home grown and can be laid directly at the door of George Osborne’’.

  2. The Right’s prescription of more of the same ignores the evidence


  3. Britain and the EU needs an alternative - austerity is not working

    Economic growth slows to 0.2% between April and June according to the Office for National Statistics and the year on year growth rate for Britain is 0.7%. Liberal Business Secretary Vince Cable rejects Labour's call for a plan B, saying ‘‘The Government has made it very clear that we have got a very determined plan which we are sticking to eliminate the structural deficit over the period of the parliament’’.

  4. Join the union movement and be part of the alternative




  5. Len McCluskey is calling for a rescue package which includes:

    Boosting manufacturing capacity - starting by reversing the Bombardier decision and giving the train carriage contract to the Derby plant, coupled with an urgent review of government procurement policy

    Reforming the taxation system, so that the rich and City elite pay more

    Closing the tax avoidance loopholes that are costing the Exchequer billions in lost revenue

    Ordering the banks, especially those owned by the taxpayer, to relax their lending policies to help industry obtain money to generate new jobs

    Creating a Strategic Investment Bank

    Radically rethinking the budget deficit strategy that is hitting public services and the NHS and slashing the public-sector workforce

    Scrapping the private finance initiatives (PFIs) which are adding enormously to the bill for new hospitals, schools and libraries

  6. Pension warning amid market turmoil

    People nearing retirement were facing increased uncertainty today amid the stock market turmoil that has wiped trillions off global share prices.

    Eight million Britons have their pension fund invested in money purchase or defined contribution schemes where the size of an annual pension is usually linked to how stock markets perform.

    The FTSE 100 has fallen by more than 10% in a week, directly affecting many such schemes.

    Laith Khalaf, pensions manager at Hargreaves Lansdown, said: "Those close to retirement have greater cause for concern, though they may have been sheltered to some extent by de-risking their pension investments."

    The problem for these people has been made more difficult by Britain's emergence as a safe haven for overseas bond investors in the recent upheaval.

    That has sent yields on UK government bonds, or gilts, to their lowest level in decades, which has hit the rates available on the annuities that people buy with their pension pots to provide an income for life when they retire.

    Insurers use the interest rate paid on gilts to set annuity rates and after the fall in ten-year interest rates to 2.69% last week, a number of major providers such as Prudential, Legal & General (L&G) and LV= reduced them.

    Annuity rates have already dropped by about 15% over the past three years, which has seen the annual average payout for a typical annuity fall from £6,770 to about £5,788 now, but Mr Khalaf says further falls may occur if interest rates on UK gilts continue to decline.

    Last week, L&G reduced the typical annual income for a 65-year old man with £100,000 in a pension pot to £5,500 from £5,900.

    For people paying into final salary schemes, which pay a percentage of final salary on retirement, it is the pensions provider, usually the employer, that will have to absorb the falls in the stock market.

    The burden of final salary schemes on employers has resulted in many schemes closing over the past ten years, with only about a fifth of such schemes still open to new members compared to four-fifths a decade ago.

    Mr Khalaf says more final salary schemes will come under pressure if stock markets continue to decline.


  7. George Osborne cuts growth forecast but the Tory/Liberal Coalition government will sticks to ‘plan A’ for economy

    Chancellor of the Exchequer George Osborne says that the government will stick to its hard-line deficit reduction strategy despite lower economic growth for the British economy at Lloyd's of London where he said ‘‘We warned repeatedly that the recovery would be choppy and we set in train a plan that was comprehensive and clear in its vision, but also flexible enough to withstand shocks along the way….The plan we have set out is designed in tough times for tough times. It is the rock of stability upon which any sustainable recovery depends and we will hold to it’’

    The British economy which has grown by just 0.2% over the last there quarters up to June and will continue to be sluggishly in 2012. Christine Lagarde, the managing director of the International Monetary Fund and Robert Zoellick, the president of the World Bank, have warned of the dangers of governments cutting deficits too quickly, but George Osborne insist that the Tory/Liberal coalition strategy was the correct strategy.

    Labour Shadow Chancellor Ed Balls says ‘‘It's time George Osborne got out of his denial and admitted that Britain now faces a growth crisis and he should listen to the head of the IMF and one of the largest investment funds in the world who have warned that cutting too far and too fast risks economic recovery. Without strong growth and more people in work it will be harder to get the deficit down. That's why we urgently need leadership from the chancellor on the world stage to agree a global plan for growth and a more balanced deficit plan here in Britain’’.

  8. 10 things the Blairites just don't get...
    (Andrew Murray, Morning Star October 2011)

    Ed Miliband appeared to upset the new Labour diehards with his Labour conference speech and its implicit critique of the misjudgements - to use the kindest word - of the Blair-Brown years.

    Their reaction underlines just how out of kilter the Blairites are with the times - not The Times, they always stayed aligned with that.

  9. Here is a basic guide to the top 10 things they just don't get about politics in 2011.

  10. 1 Their model is broken.

    New Labour embraced the gung-ho capitalism of the 1990s and early 21st century known as neoliberalism. It crashed and burned in 2008, leaving in ruins - along with much else - the theory that you could just tax the financial services lightly to fund better public services.

    No Blairite has come up with anything worthwhile to say about what went wrong, nor about what we should do next, except to ape the government austerity agenda. Nothing as much as this fixes new Labour as a phenomenon of the past.

  11. 2 The "centre ground" is not a static spot.

    It was in one place in 1945, somewhere else in 1979. In 1997 the "centre ground" was closer to where Margaret Thatcher left it, although nowhere near as close as Tony Blair believed.

    In 2014 it will be much further away - sceptical about markets and supportive of state intervention, more anxious about inequality than high taxation. And it will be angry - definitely not intensely relaxed about the filthy rich any more.

  12. 3 People value security and stability as much as aspiration.

    Aspiration is boom-time talk, if it means an obsession with getting ever richer.

    Today people hope for a steady job, decent housing and stable communities more than they want a second foreign holiday.

  13. 4 Labour's lost voters are mostly working class.

    Blair and Brown saw Labour's electorate shrink by five million between 1997 and 2010. Some 80 per cent of that was under Blair, and 80 per cent was also working class.

    An exclusive focus on middle-class votes, of the sort advocated by Progress, presents no plausible way back to office.

    Reconnecting with the "core vote" is the only way to a Labour majority.

  14. 5 Blair is so over.

    It's a good thing his name was booed at the Liverpool conference. It shows Labour won't make the mistake of the post-1990 Tories of being in thrall to a departed charismatic leader.

    The man himself is now an embarrassment - rejected by the Palestinians, baptising Murdoch's offspring and obsessed with using his No 10-era contacts for self-enrichment. Time to move on.

  15. 6 Iraq is not forgotten.

    It can be forgiven - by British voters anyway, Iraqis would be another matter - but only if there is a genuine apology.

    Too many Blairites are still tongue-tied about their embrace of neoconservatism.

    Don't underestimate the betrayal felt by many Labour and Lib Dem voters on this issue. They will move on when there is a real sense that Labour has.

    No more pandering to US presidents, no more ignoring the United Nations, no more lying to the public. We're not there yet.

  16. 7 "Choice" is not always what people want above all.

    Fine for an evening watching TV. They would rather rest assured that the taxes they pay mean that the nearest school offers a decent education and that the NHS will be there for them when needed, than in shopping around for the most basic public services.
    And they don't trust the private sector to deliver - that's experience now, not ideology. The pragmatically inclined may care to note.

  17. 8 Business support is not essential to winning elections.

    At best, the CBI, the British Bankers Association, the Institute of Directors, the Chamber of Commerce and the rest are just another self-serving special interest wanting to put more money in their members' pockets.

    Economic credibility may be important, but you don't get it from being blessed by the folk whose fingerprints are all over the crash and still won't own up to it.

    Harold Wilson was too smart to seek an endorsement from the Gnomes of Zurich.

  18. 9 Murdoch-loving was a big mistake.

    Maybe some Blairites do get that now, several years too late. But they miss the broader point - it is crawling to the Establishment in all its forms that gets you into trouble.

    New Labour prostrated itself before every institution of power that it found - the White House, the City, Murdoch, BP, the arms industry. People vote Labour to impose an agenda on those power centres, not to just write down everything they want and put it into law.

  19. 10 No, the model is really broken.

    Every political assumption engraved on Blair's heart has been falsified by the events of the last few years. New Labour equals war and slump for millions of voters.

  20. Any Plan B Miliband can come up with has to be an improvement, not to mention a good deal more popular.



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