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The cuts

I am attaching a short piece on the cuts which I did partly to support the Labour Party campaign in Chelmsford – though the views and accuracy are my responsibility alone.

Public Spending Cuts: Not Needed, but Very Damaging

 

Osborne claims that the cuts are necessary for the future health of the economy.

 

This is not true. They are a choice made by an extreme Government intent on reducing the role of the State in providing essential services and a safety net for those who fall on hard times.

 

Some facts:-

No Need for Austerity

 

  1. Public debt at  about 80% of GDP is not high by historical standards (it was over 200% when the NHS was established, and over 100% for much of our history). If nothing more is done to reduce the deficit, the effects of economic growth and inflation mean that it will fall anyway as a share of a growing economy.

 

  1. Because interest rates are so low (and likely to remain so), the 2.5% of GDP annual cost of servicing the debt is trivial. The Thatcher and Major Governments spent more on debt interest in every year they were in power – but nobody then argued that public spending cuts were needed on the scale currently planned.

 

This is why most economists argue that there is no need for further cuts – and they support the case for maintaining spending. At 43% of GDP, public spending is comparable to the average level in the 1970s. It is slightly above the long term average of 40%, but that is to be expected in a period of sluggish growth when Government needs to maintain spending to boost the economy.

Low Tax and Low Spend means Private Affluence for some –Public Squalor for All

 

Osborne claims he is ‘repairing the roof while the sun shines.’ In fact, the sun is not shining on most of us, and this Government is not repairing anything much at all – as the state of our pot-holed roads and the strains on our health and education services will attest. Private affluence for the few is resting on public squalor for us all.

 

Our World Class NHS is Under Threat

We have public services to be proud of – but they are under threat. As recently as 2014, the Commonwealth Fund rated the UK health care system as the best in the world – based on the quality of care, efficiency, and low cost to patients. We achieve this by spending less than other countries -just 8.5% of our national income on health –compared to 11% in major European countries like France and Germany, and a staggering 16% in the US, which is consistently rated as having the worst health care system in the world.

 

These good results though are threatened by rising costs and an ageing population. If we want to keep our good services, we will need to spend a little more – but the extent of the increased spending required will be less if we maintain our efficient Government funded service free at the point of delivery. Outsourcing of services threatens this – bringing in private providers from the inefficient and expensive US system, and undermining the fundamental features of an NHS which is rightly valued in this country.

 

The Cuts in Mid Essex

 

We can see the results of inadequate public funding in our own home town. One important example is the Mid Essex NHS Trust – which runs Broomfield Hospital. The trust has one of the lowest levels of spending per head of population in the country. In 2012-13, it was £24 mn short of the level that Department of Health guidance says is the minimum necessary to provide a uniform level of service. This is over 4% of total expenditure – and the strains have probably increased since.

 

Given the grossly inadequate funding available, it is not surprising that Broomfield has been rated as requiring improvement in the latest Care Quality Commission report, with urgent and emergency services described as ‘inadequate’. Management and staff will get the blame – but the real culprit is a Government trying to maintain a world class health system on the cheap.

 

Conclusion

The very deep cuts now being enacted by this Government threaten fundamental aspects of our way of life as a caring society that wants and can afford a good standard of public services and amenities. Meanwhile this Government continues to fund Cameron’s vanity projects – preposterously expensive nuclear power from Hinckley Point, new high speed rail links based on questionable economic analysis while the roads are full of potholes, and a nuclear weapons system the purpose of which has yet to be explained other than a desire for Cameron to look more important at conferences.

 

We need to fight the cuts – before the deterioration to our fundamental public sector institutions becomes too extensive to be easily repaired by the next Labour Government.

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Don’t Bomb Syria Protest, Whitehall, November 28th

Quite a good turn-out, Lindsey German claimed Whitehall was filled from end to end, not sure that was quite so but probably more than the last one. The most noticeable feature was the anger at Labour MPs trying to use the war to undermine Corbyn despite his overwhelming mandate from the party – my favourite banner reads ‘If your vote of conscience is a vote for war, then a claim to conscience you have no more.’ (Though I was also rather charmed by the slogan of the delegation from the English Collective of Prostitutes with a banner reading ‘Whores Against Wars’).

A succession of speakers ridiculed the arguments in favour of bombing in withering terms, pointing out the incoherence of Cameron’s case, poring scorn on the claim that there are 70,000 moderate fighters, and pointing out that there are multiple wars going on in Syria and we do not seem to be clear which one we are supporting. The role of Turkey (importing oil from ISIL sources) and Saudi Arabia (still providing some finance, and the source of the ideology through the export of extreme versions of wahabi Islam) came in for particular censure. The most effective speaker was Tariq Ali, though he didn’t do Corbyn any favours by saying he is the most left wing leader Labour has ever had – I dread to think what the press will do with that.

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BBC Bias: Syria, Trident, and the UK Defiit, Today programme, 9th November

Syria As usual, the bellicose BBC gives time to a retired US general to make the case for us joining the bombing of Syria, but at least some of the holes in the argument were exposed. He admitted that bombing alone can’t do anything but needed to be accompanied by building up Syrian ground forces. The BBC did not challenge the general with the evidence that US efforts to build up secular resistance to ISIS have been a total failure. Very few of those trained by the US are still active, and the weapons have mostly ended up being used by the bits of the resistance that the US doesn’t support – i.e. those Shia rebels associated with Iran or with Hezbollah, or forces supporting Assad. Today also had a report from a BBC reporter in the field with forces that the US does support with airstrikes. It became clear that this force is dominated by Kurdish fighters: though nominally in alliance with some Christian and Islamic fighters the reporter said that the Kurds were not passing on any of the weapons they were being supplied with to non-Kurds, and relations between the groups were getting more difficult as they move out of areas with Kurdish population (only 10% of the population of Syria). So we are being invited to essentially support a Kurdish force with aspirations for Kurdish independence which have implications for the stability of Turkey and the whole region, and which has no prospect of success beyond the small part of the country where Kurds are the majority. Not a strong argument for us to participate.

Trident Today discussed Corbyn’s complaint that chief of defence staff had strayed into politics when he implied that Corbyn’s stated unwillingness to press the nuclear button would worry him if the Labour leader were in power. The BBC did briefly interview Kate Hudson of CND and included an extract of what Jeremy actually said, but as usual they of course gave most time to the views of a retired old military buffer – this time Admiral West, a former head of the defence staff. The surreal nature of any discussion of nuclear deterrence never ceases to amaze me.If others would press the button, who would they be trying to deter? Clearly not terrorists or ISIS, unless you are willing to countenance slaughtering far more innocents than combatants, in a way that would be counter-productive because the threat is ideologically based rather than territorial. Russia? There are some regional issues but no threat to our territorial integrity. There might be some niggles over violation of airspace but the existence of nuclear weapons just makes these solvable problems a lot more dangerous. There is no existential threat to the UK from Russia, they need the West and know they are too weak to challenge US hegemony, though it is politically useful for Putin to indulge himself in posturing. China? Too far away to threaten our territory or existence, they are an economic competitor and a useful counterweight to the US, but hardly a threat to us. Rogue states with a bomb or two? It is difficult to think of any reason why any of them would choose to attack us with nuclear weapons rather than their neighbours. The real reason for having Trident is as an enormous and ludicrous cod piece, trying to convince the rest of the world that our willy is larger than it actually is and thereby justifying our presence as a permanent member of the security council. Of course, the Trident cod piece isn’t really independent anyway, since it is impossible to think of circumstances where we would use it independently of the US, which makes our macho posturing even more absurd, the skinny little kid hiding behind the playground bully.

The Deficit The main news quoted Osborne’s exaggerated claims about the need for a surplus to deal with the deficit. As usual, BBC themselves gave no context – no stats on the size of the deficit or the debt relative to historic levels. Fortunately they did include a later interview with Paul Johnson of the Institute of Fiscal Studies, who pointed out that a public debt of 80% of GDP isn’t large by historical standards, and will probably fall as a percentage of GDP anyway if economic growth returns to historic levels. (Broadly speaking, a deficit of the current level of about 4% of GDP will add 4% to the national debt each year, but the nominal GDP should grow faster than this because long-term economic growth rate is over 2% per year and the inflation target is about 2%, so debt as a share of GDP should fall over time even without a surplus. This is not just theory but is what happened throughout most of the post war period, without us running a surplus). The point that was not made was that the chance of us returning to a faster rate of economic growth is being damaged by the cuts themselves. Johnson is himself something of a fiscal conservative, and the absence of any comment from the Labour opposition indicates the very narrow and rather right-wing fulcrum around which BBC seeks balance.

I watched a bit of Al Jazeera afterwards – great coverage of the Burma elections with lots of context and stats that were missing from BBC coverage, followed by a discussion of the pro-Israel lobby in the US with pro and anti commentators given time to make their points and the audience left to reach it’s own conclusions. This is an issue BBC seems to be too scared to even take on. What a contrast, and not to the BBC’s advantage.

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BBC: Belicose, Biased, Complacent – and far too dominant

A letter from David Elstein in the most recent London Review of Books quotes official Offcom data showing that the average adult UK citizen gets over 60% of their news from the BBC. This is a consequence of BBC dominance of TV and radio news, their strong (and free access) presence on line, and the steep decline of print news media. As Epstein points out, if any commercial organisation commanded a 60% share of news consumption, there would be a national outcry and calls for it to be broken up.

If the BBC was a genuinely impartial reporter of the news (assuming such a thing to be even possible) then perhaps this would not matter, but it is clear that the BBC has a very narrowly defined idea of the political spectrum within which it tries to be impartial – roughly extending from the current right-wing conservative Government to the Blairite right of the labour party. They seem complacently unaware of their own bias, happily referring to Jeremy Corbyn as ‘extreme’ and ‘left-wing’, but never applying the description ‘right wing’ or ‘extreme’ to the policies of the current Government -despite their stated determination to cut public spending to 35% of GDP, a level not seen since the birth of the welfare state. This abandonment of the postwar political consensus by the current Conservative Government is in my view far more extreme than anything proposed by the current labour leadership, which has espoused domestic policies that were mainstream before Mrs Thatcher ended the tradition of ‘one nation’ Toryism.

The shoddy and complacent nature of BBC journalism is illustrated by another article in the LRB. Patrick Cockburn gives a detailed account of the state of the war in Syria. He makes a number of key points:-

I. The only effective opposition to ISIS in Syria is from the Assad Government, Shia militias and their Iranian allies, and the Kurds. The only one of these groups with which the US feels able to work is the Kurds, but they are only 10% of the population and only effective in a small part of the country – and US support for the nationalist ambitions of the Kurds is not without risk given the implications for the stability of Turkey.

ii. There is no such thing as a moderate Sunni opposition, and efforts to create one have been wholly ineffective.

iii.With no ground forces to support outside the areas where the Kurds have been engaged, the US bombing campaign has been entirely ineffective as a response to ISIS – though it has caused enormous destruction and killed a lot of people. Some fifty analysts working for US central command protested about official distortions of what was happening on the battlefield, aimed at trying to present a more positive picture.

Cockburn comments that ‘Britain is wrestling with the prospect of joining the US-led air campaign, without noticing that it has already failed in it’s purpose.’ He says that some even in Washington are beginning to think that the Russian approach may have some merit, because the Syrian army remains the most effective force opposing ISIS.

Anyone relying entirely on the BBC for news and analysis of the Syrian conflict would have little notion of these complexities. BBC reporting that I have seen has been obsessed with the politics of whether or not the UK Government has the political will to join the US in bombing Syria, with little or no discussion of what such bombing would achieve. They have not taken on the mission to explain the messy regional politics of Sunni and Shia rivalry. They have been highly critical of Russian involvement and support for Assad, but have not been prepared to give any real attention to asking what alternatives might stand a chance of working.

This is one example of a BBC coverage of foreign affairs that is as narrow as their coverage of domestic politics, with news priorities and perspectives reflecting a US-centric view of the World. There are times when I almost wonder if the CIA have infiltrated the BBC as a more trusted and therefore more effective alternative to Voice of America. I suspect though that the explanation is just laziness and complacency. The BBC seems to have more journalists and more contacts in the US than elsewhere, which is why the list of usual suspects called on for ‘expert’ opinions seems to be dominated by American voices.

I have searched in vain for any balanced account of events in the Ukraine, in the Middle East, or in the South China sea. The perspective of those opposed to the US in these disputes is almost entirely lacking. It is dangerous that our dominant source of news shows little interest in understanding and explaining the perspectives of countries in dispute with the US, preferring instead the knee-jerk assumption that our US allies must be in the right. There is an alternative narrative that perceives the US as no less the aggressor than those with whom it is in dispute, and that perspective needs to be understood if we are not to stumble into further conflicts.

Perhaps the BBC was always this bad – though my memories suggest otherwise – but, even if it was, it matters a lot more now that they have become so dominant. I am not sure how to adjust it without risking a US style corporate dominance of news media, but it ought not to be beyond us to find a way to combine public interest broadcasting with deeper analysis, and a greater diversity of voices and views, than are reflected by the current monolithic BBC

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Mick Foster: economist, drummer, and would-be author

Thanks for visiting my site. I am an economist with more years of experience than I care to admit to, most of it in overseas development, though I have also worked as Chief Economist in the UK Home Office, and had a brief stint in the Cabinet Office. The site contains:-

i. My research and consultancy work on economic development – most of this is available on researchgate.net, but not everyone has access to that.

ii. Discussion of policy issues that interest me, trying to push back against the avalanche of lies and distortions that seem increasingly to taint our politics and our media coverage.

iii. Some of my fiction writing while I figure out how best to get it either published or self-published. Short stories under the heading ‘Lives in Development’ can be seen here https://mickfoster.blog/wp-content/uploads/2015/10/lives-in-development.pdf

iv.  I will also have a theme for the various bands and music events I am involved in, with a few links to where our music can be heard.