Category Archives: Job Seekers Allowance

Riots: Always an Economic Cause


The recent riots are not capable of a simplistic explanation and I do not intend to add to any of them. What is lacking in media comment, however, is the absence of any historical perspective and what we are offered is the perpetuation of myths. Britain over the past two  weeks has been far from the nation of dreaming spires, cricket on the green , the clink of teacups and photographs of the Queen in post offices. But it always was at some distance form the idyll. The truth  is also  a long way shorty of the the Tory dream fashioned in the shire counties of everything in its place and a place for everything. If we roam back for the last three hundred years we see evidence of a turbulent Britain colonising approaching forty percent of the world in a misguided desire to further our trade by conquest and -to the pointhe –  a whole series of rebellions and revolts. When closely examined all these revolts have been activated by economics: the price of corn, the loss of earnings, unemployment, social injustice and the corruption and profiteerng of Britains ruling elites.

There is a pervisity in this. The French revolution of 1789 occurred in a country with the highest standard of living among the peasantry in Europe.  Frenc peasants revolted because after basking in the sunlight of a series of good harvests they suddenly experienced a couple of bad one’s. Throw in a little  aristocratic preening and arrogance and you have a Rebellion.

Labour attempted to reform social welfare and largely failed. The Tories have set about it in earnest. Suddenly you have a toxic recipe. High and growing unemployment in many areas, few jobs – and now an attack on benefits. Throw into the mix police corruption, MPs fiddling their expenses and banker’s bonuses, a phony re-launch of the Royal Family and -surprise, surprise – beneath the the sugary confection show so appealing in leafy Oxfordshire and Berksbire you have – revolt, anger, disrespect and  ugly violence. And we are surpised, and taken aback

The aftermath of riots and civil disturnance is always the same: punishment, more discrimination more toffs visiting the riot scenes, and a reluctance to face the obvious. Unless something more is done to tackle youth unemployment and to widen and deepen opportunities in areas discriminated against, there will be more disturbances. The chances of this happening are slim. As we settle into long-term economic depression the inequalites will widen.

We live in an era of tele violence. Seemingly all over the world by the use of social media and a mobile telephone you can get a crowd out on any street anywhere with a minimum of fuss and bother. You don’t need a trade union, you will not find Labour politicians at the head of a procession, and you don’t need to rent a mob. This is the age of the street politican and get youself on the telly. Yes, you – apparently – and almost anyone and anywhere.

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The Use and Abuse of Statistics


There are maxims worth following whenever a politician makes use of statistics. In particular, in whose interest are the statistics prepared and published and are they being interpreted acurately and fairly. Let us consider the thorny issue of the effect on families in Greater London of ceilings and cuts in Housing Benefit. According to Government statistics,  and let us say they are right, there are 17,500 families and some 82,000 people. The London Boroughs speaking collectively are preparing plans for what to do if all these people could not pay higher rents, could not make other provision and were therefore forced to move.

Ask some questions:

1. Would all these tenants be forced to move? No, but no one has bothered to find out. Come on Government,  survey them first and give us the answer. 2. What proportion of these tenants are short stay anyway with agreements running up to 3 years.? Up to 40 percent of landlords, according to the Landlords Association but they would say this wouldn’t they. 3. Up to 30 percent of landlords according to the Landlord’s Association  They don’t tell us by how much. There are other estimates ranging fr0m 30-50 percent some of which come from Tory Councils. They would say this wouldn’t they. 3. Some of these tenants might be given social housing by their Councils. Source Tory Westminster Council. What is the current waiting list? Not given. It must be lengthy, say up to ten years. No chance. 5. Not to worry anyway the Government has put aside £130 million to mitigate hardship. Sounds a lot. Let’s say every family affected was a hardship case. If this was true 17,500 familes  would each get £742 pounds. Enough to pay 2 weeks rent. Whacko.  Lets be fair. Reduce the number forced to move by 20 percent as a result of lower rents that they could afford, and a further 20 percent for their own ingenuity, and ten percent for short term rentals and a willingness to move on. (Statistical point. These percentages are not additive) and we might say that 50 percent of families, 8,750,   will have to leave their homes  and most will go into boarding accommodation on the South Coast. 5.. At what cost? Not known.  Leaving this aside the Government could give the families concerned and the Councils bearing the cost £130 miillion towards the cost of this, that is £1,484. How long would this last? Are there jobs for them in places like Hastings with very high rates of unemployment? I have not seen any figures. Come on you Council’s, tell us.

You might say that the Coalition Government, in the interest of transparent administration should tell us. If Labour MPs were smart enough they could ask the Parliamentary questions that would give us all the answers. Come on you Labour MPs and Labour C0uncillors. Do your job.

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Can Governments Arrest Economic Growth?


I used to deliver a lecture with the title, ‘Can Governments Arrest Economic Growth.’ My considered answer was, yes, if they tried hard enough. The gist of the argument was that, ‘all things considered’ (the usual cop out) entrepreneurs and the rest of us were determined to improve our lot by hard work, skill and imagination, and that hampered as we  were by government meddling and poor policy making, we usually succeeded. That is where we are now. We should expect the UK economy to bounce back from a depression given the fiscal and monetary stimulous it has been given. Left alone, so to speak, we would come out of it and resume our normal growth.

What is different this time is twofold: we have a huge budget deficit which the Coalition is determined to eliminate in four years and a concious decision to run back public service for ideological reasons. What we all need is economic growth and ‘full employment’ and an end to deficit reduction delusions. The Labour stimulous has given us an inflation rate which will not come down and  there can be no more fiscal encouragement or quantity easing. Zilch and minus zilch for incomes per head for price increases will outscore the growth in wages, unemployment will rise as the VAT increase comes in  January,  and Boy George will be in trouble. He will not admit it. He dare not.

I had hoped, delusionist that I am, that we would then  have a change of Government. I do not believe this now. I do not expect the Coalition will change course, the Lib Dems will not rebel in sufficient numbers, and the Tories will maintain most of their support  amomg eectors as the  the country endures bleak times (there is something masochistic in the British psyche). And so we shall muddle on hoping for the best. It will be said that the British lose every battle but the last. So Boy George will cling to the mast, violently sick, together with the rest of the crew, but buoyed to the last with the conviction that the storm will blow itself out and the ship will find a harbour.

Well it might. It is possible but I plead unlikely. No one in their last mind would want George to fail for we would all go down with the ship. What do we do then as the crew is washed overboard? Best to do whatever there is to be done sooner rather than later you might conclude. Mutinies sometimes succeed but not often. As our Dave might say, if you want to have a mutiny, have a plan. Can someone help me. What, please is the Plan?

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Elasticity of Demand


Everyone is an economist these days and many of these new pundits have never read an economics text book. Alan Johnson is not the first to admit it and rumour has it that James Callaghan was sent  on a course at Nuffield College. Of course, some of their advisers  have read something along the lines of economics . So it was a relief to me to  tune in to a debate in the House of Lords on the proposed rise in tuition fees and hear economic terms being used.

An issue discussed was would an increase in tuition fees reduce the number of people applying for a university place particularly the ‘deserving poor’. The Coalition argues that when Labour did it applicants dropped for a short time and then the rise resumed. Well as any economist knows whether it rises or falls  depends on the elasticity of demand for university courses and their supply in the past and in the future. It is possible to calulate the numbers for the earlier period and make some reasonable forecasts now when the determinants of demand have changed. Has any one done that? if so please speak up. Obviously when Labour did it the demand for university places was rising and their provision expanded to meet this demand. The total number of applicants were on that part of the demand curve that was rising quickly.  The potential supply of students is not infinite and we would expect the rise in the percentage of the population going to a university to level off within its limits. Of course there is the issue of rising population and overseas students. No one said that forecasting was simple?

Then there is the issue of rents in London  the elasticity of demand for the properties occupied by 17, 500 hapless Housing Benefit families. What we might wonder are the demand  and supply curves for this accommodation in London. There is no doubt the population of London has been growing fast and the demand for rented accommodation has been rising. What is the percentage of these 17,500 homes to the total number of such properties in the whole of London by segment? Let’s guess. Pretty small I hear you say. And what is the demand for them? Well, you might say,  getting into the swing, the curve must be rather steep. After all who can get a mortgage these days? Atta boy you are getting the idea. What we need to predict are the growth rated in family establishments and the need and aspirations of people to settle in London. Look, you can stop at this point. I think you get the drift of this. What I am saying is that when you are seeking to change Housing  Benefit it is reasonable to predict the consequences and not make up fairy tales.

I am a prodigious borrower of books from my local library most of which comes from the British Library at £3.50 a book. My librarian tells me that the charge is to rise to £10 a book which is the real cost of the British Library lending it. I consult these books rather than read every word in them. At the British Library there is no limit to the number of books I can borrow in a day. Let us assume I work in the British Library on ten books free of charge which is quite usual for me. I can get there by train for £25. I resolve not to borrow these books  through my local library. It is a matter of elasticity of demand you see. Anyone know what it is? At the end of the year some accounting Wally will argue that there is no local demand and the Council should withdraw the facility.  And so on.

What is my gripe? The illiteracy of many people, and especailly, the politicians who debate these important public issues.

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Mr Glib and Housing Benefit


‘Good morning. Terry isn’t it. Good morning to you. What’s the subject today? An interview on the effects of Housing Benefit on the poor of London it say’s here. Look, do you mind running this through with me before you record anything. I’m starting a bit cold with this one.’ ‘A sort of dress rehearsal,you mean. That sort of thing. OK. Let’s start. According to the London Borough’s these proposed Housing Benefit ceilings will make over 17, 000 families, some 85,000 families homeless. Do you agree?’ ‘ We don’t know do we. Some of these people will raise their game and pay the higher rent. A lot of concealment of true financial resources  goes on. They might take in lodgers, share with other families. Why not for a W in your post code?’ ‘ Well assuming that is out of order for most of them what then?’ ‘ Number 1. Sorry I’m reading this stuff. We have this social fund for special cases. This might buy some of them some weeks grace. Time to move home somewhere in the sticks.  No.2 They can join the Council housing lists for  a place, if they qualify. There is social housing in London you know. If they qualify they will get a place as something becomes available.’ ‘ Do you know the average waiting time for social housing in London?’ ‘No I don’t but I have a feeling that you are goling to tell me.’ ‘ Fifteen years. Goodness, there’s a thing. 3. They can negotiate with their landlord to get the rent down. These landlords take advantage. They put up the rent if they know the Local Authority is going to pay it. There is little evidence of that. Some people estimate that there are ten people seeking every rental in the London area.’ ‘ Is that right. I shall make a note of that. 4. What’s so hot about London anyway. Go North where rentals are lower. I did.’  ‘ Come off it Minister, the taxpayer pays the the rent for you.’ ‘ Come to think of it, that’s true. Special cases make bad law. Don’t you think? 5. Look. We are not unfeeling people you know. Housing Benefits have to be reformed. The whole system is costing us too much. People are resourceful. No one waits for the axe. They take some decisive action to save themselves.’

‘OK Minister, lets bring this to a rational conclusion. You maintain that not all these 17,000 families will lose their homes. How many will, do you think and what will become of them?’ ‘I can’t say. No one can. Perhaps a few thousand families.’ ‘ Now we’re getting somewhere. Say ten thousand, that is fourty thousand peope shipped into boarding houses and at the public’s cost. Is that it?’ ‘ Well, I’ll be honest with you. It might be the outcome.’

‘Thank you Minister.’ ‘ How do you think it went. I could argue another case you know. Come to think of it I could argue the opposite.’ ‘ Well, Nick. I think that might be wise. Your shout, of course.’

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Do it Yourself Policing!


NB This post comes with a health warning. No one without a sense of humour should read it.

What I do from time to time is to talk to you about the real purposes of the Coalition. Of course, it is common ground among all political parties that urgent and difficult decisions need to be taken to reduce the financial deficit. That difficult burden is placed on the Coalition. However, our adminstration offers the British public something different: we really are serious about diminishing the role of Government and shifting power  to you the people. When some fuddy-duddy objects it is quite clear that they are misguided: public service union officials trying to hold on to their membership and their jobs; pressure groups with odd objectives, well-meaning but misguided; and of course politicians nervous that fair representation will lose them their jobs. You know the kind of thing. They simply don’t get it.

Let’s consider policing. The Police Federation has suggested that expenditure cuts will cause a big loss in the numbers of policemen and that after 4 years there will be 60,000 fewer. I’ll be frank with you. In my judgement the loss will be greater. Would this be a disaster? No. Not if we do the right things.

As you know, I am a Revolutionary and  something of an expert on Russian history. (Stop laughing, please, at the back). Our dreadful political and economic disasters are akin to those confronting first Lenin and the Stalin. They were confronted with   similar circumstances. Power lay with the State.  The police served a narrow bourgeois interest and were resistant  to change. What did Lenin do? Well, he was a pioneer of the Big Society. He called upon volunteers and instituted the creation of Druzhinicks (Volunteer Guards). Companies were obliged to volunteer people for Guard Duties. A vast body of men and women were issued with uniforms, arm bands and a whistle  and they patrolled the streets.  (More laughter). It was a holiday with pay spent in the fresh air. Of course, like Community Policemen today, they had no powers of arrest and when confronted with really difficult situations had to call the police. But it worked there and then. People confronted established power and made it subject to their will.

We have a plan. (we usually do). Let us replace these policemen with volunteers. These men and women could be recruited from two sources of manpower: first the growing number of unemployed and secondly the release of short stay prisoners from prisons onto this form of Community Service. (Even more laughter). Of course, there will be objections. Those on Job Seekers Allowance and Disability Allowance  might object. They must be told ‘get serious’. If you want some of our money you must earn it! It is certainly possible to patrol in a wheelchair when accompanied by an able bodied person. Some objections might be raised by the media and the general public to the use of delinquents. But who better to catch a thief than a former villain. Remember they will be in uniforms. A good uniform can help the process of rehabilitation and change personal behaviour.

Of course there are expenses here but just think of the savings: no new prisons, the release of 20,000 short stay prisoners and up to 100,000 high paid policemen made redundant. What is the cost of 120,000 whistles compared to these savings? And the benefits to 100,000 of a life in the open air and the handing back of responsibility for policing to communities will have enormous advsantages.

The Big Society worked for Lenin and several generations of Soviet citizens, so why not for you, and for us. Those who want to try out a whistle can get one as they go out. (Laughter and the blowing of whistles?)

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