The long term implications of last week’s budget

Many people have described last week’s budget as against the young and for the pensioners I think this miss's the glaring point that it was for me probably the most class based pro elite budget George Osborne has come to the house of commons with to date. The long term implications for this budget and what it could do to the economy could be wide and quite stark. I do think the grounds are being laid now for the next economic crisis around the globe and the UK will not be able to avoid this so much this time. China which has a huge shadow banking system worth an estimated 50% of GDP is very unstable and that isn’t starting to mention the USA with its huge debt overhang and the euro crisis which on the face of it seems like it has gone away although things are still not right across the single currency. We have seen austerity budget after austerity budget since 20011 from the coalition government and even on George Osborne’s own omission he has failed to eliminate the deficit this parliament which he promised to do. The reason why our loyal opposition is not making more of this you ask? Well they too are wedded to the same financial path of austerity as the Tories and the lib dems. They are all quite literally in this case all in it together. Some may think the recent "recovery" if you can call it that is cause for optimism but I’d be far more cautious personally. "The scars of 2008 remain and the UK economy is in big trouble with austerity and declining living standards here to stay. Below are five things about this year’s budget; a document which outlines a ‘recovery’ based on presumptions that, quite simply, aren’t going to happen 1. Low interest rates are setting the stage for another bubble just like the one that preceded the crisis of 2008. Yesterday Mark Carney, the governor of the Bank of England, criticised the BoE and his predecessor, Mervyn King, when he said that its almost exclusive focus on low inflation meant it had failed to also keep an eye on financial stability. In other words the BoE had no problem stoking bubbles with low interest rates if that meant it also kept a lid on inflation. Interestingly enough Carney also pointed out that “It doesn’t take a genius to see that similar risks exist today”. He noted how risks were brewing because of the current period of of ultra-low interest rates – historically without precedent – saying that this could breed “potential complacency and excessive risk-taking” in financial markets. Sound familiar? Near 0% interest rates are necessary for any growth at all in the UK at the moment but they are also creating similar conditions which led to the last financial crisis. 2. The OBR is plucking numbers from the air on projected productivity gains (again). The economy can grow for a while yet, especially if unemployment falls to 5-6%. Alongside big numbers entering work (and workfare) is however the unresolved (and often ignored) problem of falling productivity. If and when unemployment does fall as low as 5-6% productivity *will have* to increase for growth to continue. The Bank of England expects productivity (output per hour worked) to go up in the next quarter as does the Office for Budget Responsibility. Indeed the OBR is today saying that they anticipate 1.2% productivity growth in 2014 and 2.2% growth the following year. The only problem is that this’ is completely at odds with all the data since 2008 and all of the BoE’s predictions over the same period. Where do those numbers come from? My guess is that it’s a case of the OBR and the Bank of England collectively sitting on their hands and saying ‘productivity has to go up sooner or later, right?’ For more on why productivity matters for any prospective economic ‘growth’ check out the recent video we did for #NovaraTV 3. Its also making ridiculous claims on future wage growth. Sooner or later the Bank of England is going to have to increase interest rates. That will probably happen later this year and if wages are still not keeping up with inflation by then (as has been the case for the last six years), consumer demand - and growth – is likely to take a hit. If wages don’t grow this year and rates go up, even by half a percent, that has huge consequences for the economy. As I recently wrote on the LRB blog: “Late last year the bank reported that average outstanding mortgage debt remains high, at £87,000, and that any rate rise not accompanied by an increase in real wages would cause serious problems. The number of households ‘most at risk of financial distress’ would double to nearly one in six if their mortgage rates went up by 2.5 per cent and their incomes did not improve.” Wages have been in decline for six years. If it stays that way and interest rates begin to inch back towards their historical average (even that of the recent past) the government has big problems. Wage growth is now crucial and without it any increase in interest rates might prove politically difficult. Furthermore the projected increases in household consumption - around 2.5% between 2014-18 – make little sense if interest rates are going to go up even a few percent. 4. … and on exports. The OBR expects export growth of 2.6% in 2014, rising to 4.7% in 2015 and 5.0% in 2016. In 2012 exports of goods and services increased by 1.1% (with imports increasing by 3.1%), while in 2013 that figure was 0.8%. That was in the context of reasonable global growth with the US and the BRIC economies seeing more demand than they probably will after 2015. In spite of that the OBR is projecting increases in UK exports not seen in the last several decades. That is all within a context where one of the UK’s biggest exports - oil – is seeing falling output. The projected numbers on UK exports - averaging around 5% over the period 2014-18 – is utter nonsense and without precedent. Seen alongside falling North Sea output I would argue it is impossible. While industry surveys have been pointing to increased export orders for a while, Samuel Tombs, an economist at Capital Economics, claimed these have been “misleadingly upbeat . . . we would not place too much weight on them”. The OBR is making claims for the next half a decade on the back of confidence surveys and figures for very short period – it’s a bit like when your mate shows you a video of a 12 year old wonder-kid on YouTube saying they are going to be better than Cristiano Ronaldo. 5. …and yeah, on fixed investment. Business investment is still 26% lower than it was in 2008 and while there was a dramatic increase in business investment in the final quarter of 2013 – 8.5% – that was the outlier in the data, not the norm. The OBR is now confidently predicting that kind of growth in business investment not just for the next three months, or even the next year, but all the way through to 2018. Compare that to 0.7% growth in business investment in 2012 or, worse still, the 0.5% contraction in 2013. It’s a bit like saying that your best striker scored a hat-trick in the last match of the season and is therefore going to score 150 goals next year. Clutching at straws doesn’t do it justice. The UK, in spite of a massive currency devaluation in 2008, still has a major trade deficit and if there is any truth in this year’s budget it is the realisation that the UK is not going to become a net exporter any time soon. Alongside that massive trade deficit – and exports of goods fell in the three months to November last year – is a budget deficit of over £100 billion. The Treasury is now saying that that deficit will be eliminated by 2019 with a small surplus being run that year – a ‘return to normal’. This is of course complete nonsense: the UK has only run five budget surpluses since 1980 and that was with the bonanza of North Sea oil and the cash garnered from privatisation of, well, pretty much everything. It doesn’t take a genius to work out that budget surpluses - without outlandish projections of growth, investment and productivity gains – are impossible. Final point. This data states that by 2020 households will be as indebted as they were when the economy tanked it in 2007/08. Less ‘march of the makers’ more march of the mickey-takers." 5 things about this year’s budget came from the excellent Aaron Bastani Over at novara media on residence Fm every Friday afternoons. Always a top listen http://wire.novaramedia.com/2014/03/front-bubble-and-bluff-5-things-about-budget2014/

Inequality in the UK and the upcoming budget 2014

As the UK government prepares to present an annual budget designed to cut welfare benefits further for the working poor and squeeze real incomes for the average earner, Oxfam reports the country's five richest families now own more wealth than the poorest 20% of the population. In its report, a Tale of Two Britains (mb-a-tale-of-two-britains-inequality-uk-170314-en-1), Oxfam said the poorest 20% in the UK had wealth totalling £28.1bn – an average of just £2,230 each. The latest rich list from Forbes magazine showed that the five top UK entries were the family of the Duke of Westminster, David and Simon Reuben, the Hinduja brothers, the Cadogan family, and Sports Direct retail boss Mike Ashley – between them had property, savings and other assets worth £28.2bn. These are Britain's own top oligarchs (aside from the Russian ones that live in London). Indeed, the 100 wealthiest people in the UK have as much money as the poorest 18 million – 30% of all people. The total wealth of these oligarchs rose £25bn last year to £257bn to surpass the £225bn held by the poorest 30% of British households. And remember household wealth consists of the ownership of a house or flat, pension fund and other possessions like cars. Total household wealth in the UK is £10trn, with the top 10% having £967bn and the bottom 10% just £13bn. The bottom 10% really have no wealth at all except old cars and a few personal possessions. Imagine a room with 100 hundred people. 90 people are so short they can hardly reach the door handle to get out. Another nine people are only high enough to get a drink from the table. But one person is so huge that his or her head hits the ceiling and bursts through it. Such is the scale of inequality and concentration of wealth. Even the top 10% of wealth holders really own only their house that they live in along with maybe a reasonable pension. It's the top 1% or even the top 0.1% who really have wealth in stocks, bonds and commercial property and businesses etc. You see what really matters is not personal wealth but the ownership of the means of production. That gives you power as well as wealth - this is what oligarchs have. What is decisive for capitalism is surplus value (profit, interest and rent), not wage income or spending. Control of that surplus is key. The main feature of the last 100 years of capitalism has not been growing inequality of income. The main feature has been a growing concentration and centralisation of wealth, not income. And it has been in the wealth held in means of production and not just household wealth. What will we see in The chancellors budget tommorrow afternoon ? Well very little to help the poor it goes without saying. I'd predict some more tax cuts including a raising of the tax bands again to £12 k which will be championed by the government in raising the poorest tax thresholds whilst doing nothing to help them with the cost of living. We are also told there will be a extention of the rather fruitless "help to boy" scheme the tories have pushed which has inflated the propety bubbled even more rather than actually helped anyone. This coupled with plans to build a new Garden City in Ebbsfleet in Kent totalling around 15,000 homes is a drop in the ocean to the amount of homes we do need. I am not sure which type of homes these will be but i am sure they wont be cheap and available to all. Now we know from marxist economics that rising inequality is not the cause of economic crisis under capitalism even though inequality cannot and should not be ignored. This is more a consequence of a crisis than a cause of one in the first place. A correlation between rising inequality, slower growth and economic recession does not prove causation. , that instead rising inequality has been a consequence of capitalism trying to avoid slumps from declining profitability by trying to squeeze more out of the workforce in increased surplus value - during the neoliberal era. We can safely say that whatever George Osborne comes up with any rhetoric or fiddling the figures tommorrow we know that inequality will continue to grow under capitalism as it struggles to pull itself out of a crisis one of the deepest for hundreds of years if not ever.

Bashing those on benefits

So the new year of 2014 has started in much the same way 2013 ended with much of the media and politicians scape goating people on benefits. In George Osborne’s Keynote speech the other day where he announced we will see a further 25 billion cuts in the next parliament this will mostly be taken from the welfare budget we are told. Further hammering of the poor the working and non working poor is the order of the day for George Osborne and his Tory mates it would seem. This is no surprise to me but I would just like to reiterate that people on benefits are simply not the problem and were not the cause of the economic crisis. While Tories and labour alike look to search for people to blame rather than focus on the real cause of the crisis we will be forever divided and ruled over if we end up blaming immigrants or those on benefits who are a consequence of the crisis not its cause as such. But it is clear with programmes on TV last night on channel 4 called benefit street trying to paint all on benefits as scroungers on the take and living the high life with LCD TV’s and all sorts of accessories. These people are the exception not the norm. Most people who receive benefits or social security as it should be called are actually in work of some sort. The strivers vs skivers false idea is an all wrong as we well know as you can be in work and benefits at the same time due to such low pay. Housing benefit too for example is no benefit at all in a way it is a landlord subsidy and those in receipt of housing benefit barely see it most of it if not all goes straight into the landlords pocket so the idea it is a great life and you can go on holiday after holiday and spend spend spend is just nonsense. I should not have to do this blog post again but I do as the media are relentless with their propaganda against the poor and those unfortunate to have to receive benefits to get by. We should look at the facts of the situation where those who have frauded the tax payer (another false idea as we all pay tax even if it’s VAT (by 1 billion. When you put in to context which the media never do that the estimated tax evasion by rich multi nationals is thought to be around 120 billion a year you can see why the media are trying to cover for their rich private business mates laughing all the way to the bank. It’s time we exposed the media for what they are apologists for capitalist exploitation and enemies of the poorest in society. We need our own voice. Not necessarily a new party as some on the left shout for all the time as labour mark 2 would not be any better but a voice within an alternative media starting from the bottom up holding all those who claim to speak for us to account if they don’t we should out them as soon as possible. Lastly I wish to extend solidarity to those under attack in words and actions I’ve had my benefits cut this year with my working tax credits its harder for me to get by this year than it was last. Many are suffering in silence. Let’s not allow this.

Payday loan companies capped now lets scrap them entirely !

The government is to introduce a new law to cap the cost of payday loans. The level of the cap, which has not yet been announced, will be decided by the new regulator, the Financial Conduct Authority (FCA). The Treasury says there is "growing evidence" in support of the move, including the effects of a cap already in place in Australia. The cap will be included in the Banking Reform Bill, which is already going through Parliament. Speaking to the BBC, the chancellor, George Osborne, said there would be controls on charges, including arrangement and penalty fees, as well as on interest rates. "It will not just be an interest rate cap," he told the Today programme. "You've got to cap the overall cost of credit." He denied the government had a made a u-turn on the issue, and said he was not pre-judging the outcome of a Competition Commission inquiry into payday lending. "These things can go along in parallel," he said. Some payday lenders have been criticised for charging more than 5,000% annual interest - though the lenders say these loans are meant to be short-term so the annual rate can make charges appear worse than they are. 'Duty on regulator' Australia has an interest rate limit of 4% per month, after a maximum up-front fee of 20%. The FCA has already been given the power to cap the costs of payday loans. It has also proposed a series of measures to clamp down on the industry, including limiting loan roll-overs to just two. Labour leader Ed Miliband has already said his party would cap the cost of payday loans. This is something to be welcomed of course but in my opinion does not go nearly far enough. Payday loan companies are the scurge of the high street in times of austerity pray on the most vunrable. Its time to outlaw them entirely and to scrap them for good.

Workfare the blight of Britain

The Tories plans are for mass workfare in affect lowering the minimum wage to a new level that is below poverty wages. Working for your benefits is the new workhouse I’d say. So many people who are out of work will experience workfare at some point if they cannot find a job. George Osborne's latest idea to be presented at Tory party conference this week which his latest attacks on the poorest in society and the unemployed. His latest idea is to force everyone who is looking for a job to attend the job centre every day in a working week to sign on. This is similar to a punishment for not having a job. Anyone can lose their job through all sorts of reasons and could turn from a hard worker to being on the doll at the turn of the day. Workfare is horrible and very degrading for anyone having to work for your benefits becomes working for low pay not seen for a long long while. Workfare could be the new low pay society in this country where labour costs are driven down to a new level. This is all in order to make the UK competitive again on the world market apparently the global race for capital to become profitable once again. Take the Tories latest idea that the unemployed which are all stereotyped to be lazy work shy scroungers of course are to pick litter for their benefits. Those out working will maybe think oh good they shouldn’t be getting something for nothing as George Osborne would most probably agree. Yet cleaning litter is already someone’s job. Not a very well paid one granted but by paying someone’s benefits to pick litter is taking someone’s job further division even more. Can you start to see yet where this is all going? It is clear to me that workfare on a mass scale will likely become the norm if capital in Britain gets its way. Fighting back is a must but so many are on the verge and finding getting by incredibly hard as it is. The threat of losing their benefits which are at a low level is something many do not wish to go through with so does end up going along with it. I think this is where solidarity must come in. Those of us who are in jobs should in my view be looking to set up hardship funds for those who are possibly looking to boycott workfare to help out those who will lose their benefits as a result. I am not sure how this could work but this is certainly something I think could help if we are going to look to take on workfare with mass action. Making people aware of what workfare is and who is still involved in the scheme is key. The actions taken by boycott workfare for example calling out companies and charities involved in the scheme is a good way of targeting them but clearly bigger action is needed to really take it on. Another question is will we see workfare workers in the public sector such as the fire service, police etc? Could we see this? It’s possible I guess with the help of the private sector no doubt. This is the route we are heading unless we do something about it. This post is simply highlighting my fears and thoughts of workfare and where we are heading. I would be interested and happy to cover anyone who has been on workfare and their stories keeping your identity hidden if you so wish.

London Olympics, a year on, legacy? What legacy?

It is a year since the opening of the London Olympics. As protests rage in Brazil against the profiteering and corruption revealed in the preparations for the 2014 World Cup and the 2016 Olympics the question is raised, what exactly was the legacy of the London games? Neil Cafferky, first published in Socialism Today, magazine of the Socialist Party (CWI England & Wales) Judged purely as a sporting event, the London Olympics can be seen as a success for the organisers. However, the enormous scale of the games – in terms of their cost to the host nation and their commercial, cultural and political impact across the globe – means they cannot be assessed simply in sporting terms. The question of the games’ wider legacy has particular importance in Britain. Enormous amounts of money were spent by the state (£6.71bn according to latest figures) at a time when public services are being cut or privatised, working conditions are worsening and pay is stagnating. Given the costs of hosting the Olympics it is reasonable to ask why governments are willing to embark on such a project in the first place. From the perspective of the capitalist class and its representatives in government, broadly speaking there are three potentially positive outcomes from hosting the games: domestic and international prestige, advertising the host city as an international business centre, and urban regeneration (or turning poor areas of a city into profit-making ones). Hosting the Olympic Games carries with it a great deal of international prestige. In the case of Seoul (1988) and Beijing (2008), they were used to advertise those countries’ emergence as modern industrial powers. This political dimension leads some on the left to dismiss mass sporting events as ‘bread and circuses’, a distraction from the problems of everyday life. Although this is true to some extent there is a limit to how much sport can paper over the fault lines in society. Nothing illustrates this more clearly than the London Olympics themselves. It is questionable whether the Con-Dem coalition received any political boost from the games at all. Only a few weeks after the closing ceremony of the summer Olympics, chancellor George Osborne was booed by the crowd at the Paralympic Games in the same stadium! The Con-Dem coalition’s cruel persecution of disabled people on benefits, as well as the general unpopularity of his government’s austerity policies, undoubtedly played a part in this. For the rest of 2012 and well into 2013 the opinion poll ratings of the coalition partners have been in decline. While the direct political impact of the games has been minimal there is a broader ideological purpose that hosting the Olympics serves. There are striking parallels between the way the games are funded and organised and the right-wing vision of how public services should be provided. In both cases the bulk of the funding comes from the public purse. The delivery of those services, however, is farmed out to private-sector providers who cream off a considerable profit as a result. The farce that was the G4S security operation will be grimly familiar to any public-sector worker with experience of companies like Capita. The unprofitable and unglamorous part of the work, of course, is placed in the hands of unpaid volunteers. This is not to criticise those who volunteered their time to assist, and who played a crucial role in the games’ success. But there are similarities between this method of keeping the expense of the Olympics down and David Cameron’s talk of ‘the big society’, where charities fill the gaps in public services left by underfunding and privatisation. In the commercial sphere, the legacy of the games is mixed, to say the least. On the plus side, are the new jobs and increased commercial activity generated by the new Westfield shopping centre in Stratford. The direct economic impact of the games so far, however, has been disappointing given the huge outlay of sums involved. According to the Evening Standard, “688 jobs would be created in the first year [of the Olympics] rising to 1,061 after the third year and contributing £260 million to the London economy”. (14 January 2013) The proposed regeneration of housing in the area is presented as a chance to improve an impoverished part of London. The London Legacy Development Corporation has received £640 million for 160 acres of land zoned for 6,500 houses. (Evening Standard, 14 September 2012) The involvement of property developers means that it is unlikely that the new homes will be affordable for existing residents in Newham. Instead of regeneration that benefits working-class people, particularly locals, it seems more likely that the Olympics will simply accelerate the trend where inner-city London is gentrified and working-class people are driven out to surrounding suburbs. A study by the University of East London on the economics of hosting the games found that the private-sector led regeneration under the mantle of the games was likely to result in widening inequality and disruption of working-class communities in the area. Another, frequently touted legacy of the Olympics is that the example of sporting excellence will inspire a generation of young people to take part in sports. For those who excel there will be modern infrastructure to help them reach the top. The reality is more complicated. A recent study by Sport England quoted in the Independent (14 June 2013) found that, although numbers participating in sport had gone up by 1.4 million since 2005 (when London won the bid for the Olympics), participation in sport had actually declined since the Olympics themselves. There are a number of factors that may explain this. The report cites the unusually cold and wet weather since the Olympics, for example. But cuts to the public sector are also a factor. Many local sports facilities that are the starting rung for children in sport are funded by local councils. They are often the first in line for council cuts. In Sheffield, the Don Valley Stadium, where Olympic heptathlon champion, Jessica Ennis, began her participation in athletics, is to be demolished. The council has blamed shortage of funding for its decision to close the stadium. A similar process is under way in schools where playing fields are sold off to bridge funding shortfalls. Cuts in education are also leading to a shortage in specialist physical education teachers. The UK Sport and Youth Trust reported: “We have seen a rise in the number of youngsters wanting to get involved in sport after the Olympics but we do not have the specialist PE teachers in primary schools. There is a lot of enthusiasm but not the know-how to provide the right kind of opportunities. We have inspired a generation but can we convert it into participation?” This question goes to the heart of the matter. Bearing in mind the relentless cuts in public services and children’s playing fields, longer school and working hours, etc, the avenues to participation in sport are being systematically closed to most working people by the logic of increasing austerity and unbridled capitalism. To compound the problem, capitalism sets up a false division between sport as elite performance and sport as leisure and play. The former is a multibillion-dollar business that monopolises vast amounts of funds from governments and the private sector. Sport as leisure is either left entirely in the hands of the private sector in the form of gyms and commercial facilities or is dependent on charities as publicly funded facilities are cut. A socialist society would treat access to sport in the same way as it would treat access to healthcare and education: an essential public service vital to the development of the individual and the wellbeing of society. With wealth controlled by working people, wasteful spending on advertising and sponsorship could be used to ensure communities have access to the best sporting facilities, free at the point of use. Proper funding for PE teachers in every school could ensure that talent is spotted early and developed. Sharing out the enormous wealth generated by a modern economy among all workers would allow the working week to be significantly reduced, allowing greater access to sport and recreation for all ages. The removal of the dead hand of profits would see achievement in team and individual sports that would far exceed anything seen under capitalism. That would be a real sporting legacy.

Is there really genuine support for the Tories welfare plans?

We hear in the news that there is mass support for the changes or as it should be being reported cuts to welfare and benefits by the Tories but is this really the case? Controlling the media and the news so what people see and red is a very powerful tool but I am not convince the support for these changes is really there. Much like with the issue over immigration I do think we have to admit there are some genuine concerns about people who do play the system and as socialist we must start from where people are. We must take on the Tories and even labours arguments that our welfare state is bloated as it is not at all its not too expensive. It certainly needs changes i.e. making wages liveable and a living wage capping rents and building new affordable social housing would bring down the housing benifitbill but for now it is something we should look to defend. As I tried to answer in a blogpost a few weeks back we must look to answer workers fears on benefits as with immigration looking to counter the Tories propaganda with our own of clear hard hitting facts. We are in danger of the debate being lost with the right in the ascendancy claiming big examples of people on benefits living a life of riley the reality is simply very different. With 9 out of 10 people on housing benefit in work these could hardly be called scroungers they are simply receiving the money to help pay ridiculously expensive rents in this country. Besides much of what is given on housing benefits goes straight into the pockets of greedy landlords in the private sector. Red Pepper has done some great research and tried to smash many of the benefit myths being put about to distort the issues. Welfare reform is almost inevitably contentious. Answering the question of who should receive how much financial support relies on often competing conceptions of fairness, with rival views about who needs, and who deserves, our help, not to mention the most just and efficient way of providing it. These issues are worth debating – but the current debate is being conducted on shoddy terms. Myths and stereotypes abound. These serve not only to unfairly stigmatise claimants, but to obscure the questions we might want to answer about how best the state can provide support to people who need it. Myth: There is a major problem of ‘families where generations have never worked’ Reality: The academics Paul Gregg and Lindsay MacMillan looked at the Labour Force Survey, the large-scale survey of households from which we get most of our statistics about who’s in work. In households with two or more generations of working age, there were only 0.3 per cent where neither generation had ever worked. In a third of these, the member of the younger generation had been out of work for less than a year. When they looked at longer-term data, they found that only 1 per cent of sons in the families they tracked had never worked by the time they were 29. What’s more, while sons whose fathers had experienced unemployment were more likely to be unemployed, this only applied where there were few jobs in the local labour market. So ‘inter-generational worklessness’ is much more likely to be explained by a lack of jobs than a lack of a ‘work ethic’. Myth: Most benefits spending goes to unemployed people of working age Reality: The largest element of social security expenditure (42 per cent) goes to pensioners. Housing benefit accounts for 20 per cent per cent (and about one fifth of these claimants are in work); 15 per cent goes on children, through child benefit and child tax credit; 8 per cent on disability living allowance, which helps disabled people (both in and out of work) with extra costs; 4 per cent on employment and support allowance to those who cannot work due to sickness or disability; 4 per cent on income support, mainly for single parents, carers and some disabled people; 3 per cent on jobseeker’s allowance; and 2 per cent on carer’s allowance and maternity pay, leaving 3 per cent on other benefits. Myth: Benefit fraud is high and increasing Reality: The latest Department for Work and Pensions estimates show that in 2011/12 just 0.7 per cent of benefit expenditure was overpaid due to fraud, including a 2.8 per cent fraud rate for jobseeker’s allowance and a mere 0.3 per cent for incapacity benefits. Even if we put together fraud with ‘customer error’ – people who are not entitled to benefits but not deliberately defrauding the state – the rate of false claims is 3.4 per cent for JSA and 1.2 per cent for incapacity benefit. The claim that benefit fraud is increasing is similarly false. Because there have been changes in how fraud has been calculated over time, we have to look at combined fraud and ‘customer error’ for JSA and income support. This declined from 9.4 per cent to 4.8 per cent of spending from 1997/98 to 2004/05, and has since stayed roughly flat. Myth: Couples on benefits are better off if they split up Reality: This one has recently been comprehensively disproved by research from the Joseph Rowntree Foundation, who concluded: ‘The simplest question that can be asked in testing the couple penalty is: does the benefits system provide a different proportion of a family’s daily living needs if they live together and if they live apart? The clear answer from the calculations in this paper is no. The benefits system provides very similar living standards to families living together and apart.’ Research in 2009 for the Department for Work and Pensions looked at whether different benefit systems had any impact on people’s decisions about whether to stay together or not. They concluded that ‘on balance, the reviewed literature shows that there is no consistent and robust evidence to support claims that the welfare system has a significant impact upon family structure’. Myth: The welfare bill has ballooned out of control Reality: The government has repeatedly claimed that welfare expenditure grew unsustainably under Labour. In fact, total expenditure on welfare was 11.6 per cent of GDP in 1996/97; under Labour it averaged 10.7 per cent up to the crash. Afterwards benefits for children and working age adults rose from an average 4.9 per cent of GDP up to 2007/08 to 6 per cent. This is what you would expect during a recession. Myth: Most benefit claims are long term Reality: The government persistently frames benefit claimants as ‘languishing in dependency’. So how much of the benefit caseload is long-term? It depends whether you count people at a single point in time or look at people moving on and off benefits over a period. The numbers paint a completely different picture. For example, in 2008, some 75 per cent of incapacity benefit claimants had been receiving the benefit for more than five years, and only 13 per cent for less than one year. But over the period 2003–8, only 37 per cent were long-term while 38 per cent were on benefit for less than a year. So if you count claimants at just one point in time, as government tends to do, you will overestimate how much of the caseload is long-term – and underestimate how many people move on and off benefits over time. Myth: Social security benefits are too generous Reality: Out of work benefit levels fall well below income standards based on detailed research into what ordinary people think should go into a minimum household budget. Research by the Joseph Rowntree Foundation found that while pensioners do in fact receive 100 per cent of what people think they need, a single adult of working age receives 40 per cent of the weekly minimum income standard and a couple with two children receives 62 per cent of the weekly minimum. Myth: Most people who claim disability benefits could be working Reality: There are two main kinds of disability benefits: disability living allowance (to cover the extra costs of disability) and employment and support allowance (income replacement for those not in employment). The most basic misunderstanding is that the latter is only for people who are ‘completely incapable of work’. The welfare reformer Sidney Webb commented in 1914 – in the midst of one of many previous panics about ‘true disability’ – that the only people who could do no work at all were ‘literally unconscious or asleep’. The question is whether suitable jobs exist, and whether these people would be able to get them. Once we understand this, three problems face us. First, just because we’re living longer doesn’t mean we’re in better health; improved medical care means that many people born with impairments or suffering traumatic injuries are able to live longer. Second, jobs are in some ways worse than in the early 1990s: people have to work harder and have less control over their job, which makes it more difficult for people with health problems to stay in work. And while we now have anti-discrimination legislation, this only forces employers to make ‘reasonable’ adjustments; the evidence not only suggests these are often limited, but that employers are less willing to employ disabled people as a result. Finally, many of the people claiming incapacity benefits are people with low employability in areas of few jobs. These are the very employers that are less likely to make adjustments. Some people end up in a situation where they are not fit enough to do the jobs they can get, but can’t get the jobs they can do. Completely incapable of work? Not necessarily. Penalised for their disability by a labour market that has no place for them? Definitely.

Budget 2013 more austerity to come fightback needed!

As George Osborne got up today in the commons and declared Britain is open for business few believed him Tories cheered as well they might the rich is doing well in this crisis. As for everyone else it’s more austerity for us and it will go on longer than planned too. With no end of cuts and misery in sight the budget this year had very little for working people to get excited about. A cancelling of a fuel duty escalation and a cut of 1p off beer will do little to raise spirits in Britain today. The squeeze on living standards is set to continue into the next parliament whoever is in power be that Tories or labour with a lib dem mob by their side or not. The BBC reports that most government departments will face a cut of 2% of their spending over the next two years, amounting to about £2.5 billion. These cuts follow spending reductions of 3% for the next two years announced in last December's Autumn Statement. Even by Osborne's own standards the cuts aren't working. Deficit reduction has been a key aim but borrowing is expected to go up this year. 56 months after the start of the first recession in 2008, the UK economy is now more than 3% smaller. Grim outlook Roger Bootle, head of research body Capital Economics, said: "In my 30-odd years of analysing budgets, I have never known a situation as grim as this." But it's not just grim in terms of economic outlook - the outlook for people's living standards is appalling and getting worse. While hundreds of bankers are piling up million-pound bonuses new figures suggest the average worker will lose around £6,000 by 2014 as a result of wages failing to keep pace with rising prices. The Lib Dems have argued that they are softening the blows by campaigning for rises in the personal tax allowance, while supporting austerity in the main. TUC research shows that by 2015 low-paid workers will be losing up to four times more a year from the government's 2010 increase in VAT than they will gain from the raising of the personal tax allowance to £10,000. At the same time a further cut to corporation tax is predicted. This would follow a previous cut worth £3 billion a year by 2014. No wonder 'them and us' rage is boiling as low-paid and unemployed workers face the bedroom tax, council tax hikes, pay freezes and a host of other methods of immiseration. There have been attempts to sugar the pill, bringing the cap on social care costs down and introducing them earlier. But this is a pittance compared to what is being taken from us. Childcare vouchers worth up to £1,200 sound tempting but only families where no parent earns less than £10,000 will be eligible for the new cash. So this represents a further blow to the low-paid and those who are unable to find work or full-time work. Wednesday's jobs figures are predicted to show a slight improvement in the unemployment figures but this will not represent the end of the crisis of joblessness. A number of Labour and other pro-big business economic commentators have called for 'measures for growth' but none call for an end to cuts. But there is an alternative The news of the Cyprus savings theft brought shock and horror to workers across Europe. Here was a government planning to blatantly dip into workers' savings to bail out the banking system brought low by massive greed and profiteering. Instead, the owners of the financial institutions and big business should pay for the crisis that is of their own making. A socialist government could, for example, reverse the decades of corporation tax cuts and impose a 50% tax levy on big business's hoarded billions. The banking system should be nationalised under democratic popular control. Only on this basis would it be possible to get rid of the spivs and speculators, lined up behind the Chancellor, who are holding working class people to ransom. A genuinely nationalised banking sector would be run for the benefit of the majority, rather than for the super-rich. Those struggling to pay their mortgage could have it converted to an affordable rent; small businesses could get cheap loans, and public works such as a massive house-building programme could be cheaply financed. The need to build a mass party of working people which stands for this demand as part of a broader socialist programme has never been clearer. Socialist Party news and analysis Axe the bedroom With extracts taken from http://www.socialistparty.org.uk/issue/757/16364/20-03-2013/another-dooh-nibor-budget-stealing-from-the-poor-to-give-to-the-rich

Solidarity with PCS members this budget day

This Wednesday we will see up to a quarter of a million PCS members taking strike action The following is a piece by John McInally, Public and Commercial Services union (PCS) vice president, personal capacity PCS members are preparing to launch our union's national industrial action campaign with a one-day strike on Budget Day, 20 March, when Chancellor Osborne will be announcing more cuts in the civil service and also on workers generally. PCS members are aware of the scale of the attacks - job cuts, pay freezes, attacks on terms and conditions and trade union facilities, all of this to prepare the way for the mass privatisation of the civil service. Our campaign will be effective and sustainable with the aim of causing maximum disruption to the employer to get them around the negotiating table. It's unreasonable that they're not prepared to sit down and discuss the issues with us, preferring instead to press ahead with these unwarranted attacks. PCS members are prepared to struggle and the government is wrong if it thinks it can attack us without determined resistance. There will be a one-day strike on 20 March and a further half-day strike on 5 April which marks the end of the 2012/13 tax year - this walkout will begin a week of tax justice campaigning to highlight the £120 billion tax 'gap'. Added impetus for the dispute will come from the announcement that all 281 tax enquiry offices in the country could close under new plans by the government, including 13 to be closed this year in the North of England. Also, from 1 April, PCS members will have extra pension contributions imposed on them, while from the same date, millionaires are being given a tax cut. Fighting austerity On 20 March there will be rallies in cities up and down the country, where there will be speakers from other trade unions and campaign groups like Disabled People Against the Cuts and Black Triangle. We want to make sure people know that yes, it's a strike against the attacks on our terms and conditions, our pay etc but it is also a strike against austerity and the failed programme of the government. PCS particularly welcomes other unions' involvement. For example we welcome the strike of Unite and PCS members in the Homes and Communities Agency who have coordinated their strike for budget day. As our general secretary Mark Serwotka told the pre-budget TUC rally: "We hope our strike action is successful but we're quite clear, our union is right to take action, but we all know if more of us take action together we have a better chance of winning ... "On 26 June George Osborne will do another significant thing. He will announce his comprehensive spending review which will confirm the butchery of public spending for the next three years. What a brilliant day that would be - that while he announces cuts in parliament - to see as many people as we can taking industrial action together, demonstrating together and protesting together. If we build that movement then we can turn our aspirations into reality." Weekly meetings Starting off as a one-day strike on 20 March and an overtime ban from 21 March, the union's national disputes committee will meet weekly. We will be calling further action at short notice. We will implement work-to-rules throughout government departments. We will keep up the pressure on the employer until they are prepared to talk to us. We will also be making sure that government ministers and senior managers get a warm PCS reception when they come to visit civil service offices. For example on 13 March at a Ministry of Justice building in London, Cabinet Office minister Frances Maude didn't go through the front door. He was driven around the back in his Jag with the blacked-out windows because there were 40 PCS members demonstrating outside. He's going to have to get used to that because we're going to keep it up until he talks to us. The union's departmental groups are looking at what action to call as well. There will be days of action with themes like equality, welfare, taxation and so on. We're determined to keep the pressure up until the government is prepared to talk to us. Over the course of the past six months we've managed to win concessions in disputes within departmental groups. The slogan: "Campaigning works, action gets results" is true. We'll be making sure that we build the action until they're prepared to talk to us. ________________________________________ PCS national strike Wednesday 20 March 2013 Rallies: Barnsley: 10am-1.30pm, Peel Square, Pitt St Birmingham: 12.30pm, Conservatoire, off Chamberlain Square, for strikers in Birmingham, Shropshire, Dudley, Worcester, Coventry. Bradford: 12pm, Memorial Gardens Bristol: 12.30pm, Tony Benn House (Unite building), BS1 6AY. Cardiff: 12.30pm - Temple of Peace, King Edward VII Avenue, CF10 3AP. Huddersfield - 12.30pm - Market Cross, Market Place Leeds: noon, Victoria Gardens, outside the art gallery Leicester: 11.30am, 89 Humberstone Gate, city centre, LE1 1WB Lincoln: noon, Speakers' Corner, Lincoln High Street Liverpool: 11am, Liner Hotel, Lord Nelson Street, Liverpool London: 12-2pm, Old Palace Yard (opposite parliament), SW1P 3JY Manchester: 11.30am, Piccadilly Gardens, Manchester Newcastle: 12.30pm, Grey's Monument Nottingham: 12.30pm, Market Square, for all strikers in Derbyshire and Nottinghamshire. Plymouth: 12.30pm, Guild Hall, Copthorne Hotel, Armada Way, PL1 2AD Preston: 11am, Flag Market, Market Square Stoke: 11am, Albion Square, Hanley - assemble at the cenotaph near the town hall, opposite Radio Stoke, for all strikers in Staffordshire and Stoke

Triple an austeri austerity austerity!

No matter what we are told of a plan B plans for growth the underlying fact remains that for us the 99% it is austerity all the way now this is the new norm some have said. For the Tories they have over seen a huge transfer of wealth from the poorest in society to the rich. Austerity for the ruling class is working. Some smaller capitalists have gone out of business but to them this is the free market that is the rules of the market if you cant drive your workers wages down quickly enough you will become uncompetitive the rule goes. The rules of the market are brutal and its cut throat economics where the fittest and the toughest survive. Workers rights what workers rights they are a block on profits to the boss’s so no wonder they are under attack. Economic commentators debate the likelihood of a triple-dip recession but the reality is that there has been no real return to growth. Prolonged stagnation - 'bumping along the bottom' - is the best scenario on offer. Moody's long-anticipated downgrading of the British government's credit rating will form the backdrop to this year's budget. It is a graphic illustration that - as we warned - Con-Dem austerity has made the economic crisis worse. Not that we have faith in Moody's or the other capitalist ratings agencies - these are the same companies that happily gave the sub-prime mortgage companies an AAA rating! But the Con-Dems worship at the altar of the finance markets. From day one this government has justified austerity by the necessity of keeping the Credit Ratings Agencies happy. The rest of us can go to hell in a handcart. Before the 2010 general election Osborne made maintaining Britain's AAA credit rating one of eight benchmarks by which to judge whether a Conservative government is delivering. The wheels are coming off the Con-Dem coalition - it could fall at any time, particularly if faced with a mass movement of the working class. Osborne will continue to attempt to blame the previous government and the economic disaster in the eurozone but in reality he and his cuts-coalition have no solutions - other than making us suffer and that is the key to understanding this. It’s never been about paying off our debts getting the deficit down austerity is code for transferring huge wealth to the rich. Privatisation on a mass scale always the policies of the right wing are now seen as easier to get away with due to the crisis of capitalism we are living through. They are able to justify these privatisations as part of the need to get the deficit down this could not be further from the case. All of this is creating burning anger among the working class - but also wide sections of the middle class - as our living standards plummet. As the Bank of England's chief economist, Spencer Dale, noted: "The harsh but inescapable reality is that households and families are worse off - much worse off." But while most of us tighten our belts a few households and families are gorging on a feast of riches. The Sunday Times rich list reached record highs in 2012. The combined wealth of Britain's richest 1,000 people swelled by almost 5% to £414 billion, reaching the highest amount ever recorded by the 24-year old survey. The TUC is currently considering submissions from the unions on the question of a general strike. The latest episode in the crisis makes it clearer than ever - the TUC must urgently set the date for a 24-hour general strike against austerity. This would be the most effective way of channelling the burning anger into a movement capable of kicking out this hated government. While a tiny minority increase their wealth at the expense of the majority, for the rest of us there is no end in sight to the economic crisis. Britain only maintained its AAA rating for as long as it did because, to the world's financial markets, sterling appeared a safer bet than the eurozone. But sterling has been falling since the start of 2013. In other words in the last months the financiers have felt that Britain was a riskier prospect than the euro, despite there being more than 50% youth unemployment and profound political instability in a whole swathe of the eurozone. There are no safe havens for world capitalism. British capitalism, and therefore the working class, faces a bleak future. Five years into the economic crisis, UK gross domestic product (GDP) is still 12-15% below the pre-crisis trend. It's been estimated that one in six high street shops is lying empty, with 20 stores closing every day. Such is the lack of jobs that 1,700 people applied for eight 'Barista' jobs at one Costa Coffee branch. Osborne is under pressure from sections of the capitalist class to increase state investment in infrastructure, and he may make some proposals in the budget. Even if this is the case, Osborne has made it clear that this will be combined with continued austerity for the majority. New Labour is deriding Osborne for the economic crisis and calling for a change of direction, a 'Plan B', but has no real alternative. Writing in the Independent (25 February 2013), Owen Jones hopefully declared that: "Labour does have the outlines of an alternative". Jones quotes Ed Balls when he stood for the Labour leadership and asked Labour Party members to imagine if the 1945 Labour government had "decided that the first priority was to reduce the debts built up in the war, there would be no NHS, no rebuilt railways and housing, no welfare state." Jones, however, is forced to mournfully comment: "if only he [Ed Balls] had stuck unrelentingly to this script." The labour movement needs its own mass party - which the Trade Unionist and Socialist Coalition TUSC, is working to lay the foundations for - campaigning for a 'Plan S' for socialism. What would such a programme include? Take one issue - the growing housing crisis. Homelessness has increased by 26% over the last two years and is set to increase further. While housing benefit is cut, the cost of housing is rocketing. House prices have gone up 40 times since 1971 whereas prices in general have gone up tenfold. One in 12 families is now on waiting lists for social housing, the complete absence of which, combined with deregulation, is allowing private sector landlords to increase rents. The private rented sector has increased by 86% in three years. Rents have risen by an average of 37% since 2007. Younger people are faced with a future of shared accommodation, living with their parents, or sofa-surfing, with some ending up sleeping on the streets. Even the right-wing IEA think-tank drew the conclusion that a mass house-building programme could almost halve the £21 billion that is spent on housing benefits and mortgage relief. However, their means to achieve this end was to get rid of even the current minimal planning regulation in order to allow the construction companies to chuck up jerry-built substandard housing. A socialist solution would be to implement a mass council house-building programme - creating high-quality, affordable, secure, environmentally-friendly housing - for all those who need it. This would solve the housing crisis and provide secure, well-paid work for the many tens of thousands of unemployed construction workers. Such a policy would not only stop at housing but also be used to build the schools, hospitals, libraries, care homes and other necessary facilities and utilities to service the population. How can such a policy be paid for? We favour massively increasing taxes on the super-rich. However, this can lead to the capitalists taking production abroad, as the hysterical reaction of a section of the French capitalists to François Hollande's puny taxation proposals indicate. Attempts to secure even minimal reforms, never mind a substantial reformist programme to change the lives of working people, come up against the inherent limits of capitalism, the system based upon production for profit and not social need. Does this mean we should retreat? No! But it poses the need to go further with the demand for nationalisation, under democratic workers' control and management, of the banks and the summits of the financial system together with the big monopolies that dominate the great majority of the economy. Compensation could be paid to those capable of proving their need for it. Among other measures a socialist programme would also require control of all foreign trade, through democratic nationalisation of all incomings and outgoings, in order to prevent sabotage as big business will attempt to move its resources abroad. In short, in place of Osborne's 'plan A' we do not need a minimalist 'plan B', but a bold 'plan S' for socialism. With extracts from this weeks editorial of the socialist http://www.socialistparty.org.uk/issue/754/16222/27-02-2013/austerity-anger-action

Britain to loose its prestigious triple a credit rating, austerity has failed

As we learn today that Britain is to loose its prestigious triple A credit rating this can only be reported as a humiliating turn of events for the chancellor George Osborne. Osborne banked his whole economic policy on maintaining this triple a credit rating now it looks to be crumbling under his nose surely it leaves the Tories and their economic plans in tatters and the coalition in a huge crisis. Moody's credit rating Cut 'shows UK economic policy failure' On Friday, Moody's became the first agency to cut the UK from its highest AAA rating to Aa1. In announcing the ratings cut, Moody's cited the "challenges that subdued medium-term growth prospects pose to the government's fiscal consolidation programme, which will now extend well into the next parliament". It added that the UK's huge debts were unlikely to reverse until 2016. This is a huge condemnation of the Tories economic policy for ministers like Danny Alexander to shrug it off like credit rating agencies do not matter is laughable as it was only last year they were all talking up how proud they were to still have their credit rating at a maximum status. It seems that just like the polls you support them when they support your policy and reject them as nonsense when they appear to be speaking against you. But this could be hugely serious for Britain from a capitalist perspective with borrowing bound to be more expensive for the government on the bond market now it’s lost its prestigious credit rating. However the Tories wish to dress this up it is a failure of mamouth proportions even on their own standards. Only a socialist solution to the crisis will solve the underlying issues. No tweaking of the capitalist system now will solve the under lying issues this is not a cyclical crisis which we can just recover from this is a fundamental crisis of capitalism and only a system change to a democratic planned socialist system will do. Its time to ramp up the pressure on this gov by continuing to build for a 24 hour general strike and force them out whilst building TUSC a working class socialist alternative to the madness of the market.

Happy fracking Christmas

This Christmas fracking is back on the menu. The profiteering exercise of extracting shail gas from rocks is back and ready to rake in profit for the capitalists. Fracking in Britain was suspended after earthquakes were caused around Blackpool by fracking operations, but the moratorium soon ends. In the US, a 5.7 magnitude earthquake occurred in Oklahoma, while a Geological Survey report concludes that: most, "if not all of the earthquakes [in the USA] since August 2001 have been triggered by the deep injection of wastewater" in fracking. 60% of Britain's countryside could potentially be exploited for shale gas as Osborne looks to Texas - which produces more CO2 emissions than all but the top six countries in the world. Texas has 48,000 jobs relying on fracking. Osborne intends to water down Britain's commitments to cutting emissions and threatens renewable energy programmes, which, if properly pursued, would create as many jobs as fracking does in the USA, while saving the environment rather than wrecking it. Eight million gallons of water and carcinogenic chemicals are used to frack a well, then disposed of deep in the earth, where they contaminate groundwater and poison the surroundings. Methane released into groundwater by fracking rises through fissures and water wells where it can be ignited at the tap. US reports claim over 1,000 documented cases of water contamination next to areas of gas drilling as well as cases of "sensory, respiratory, and neurological damage due to ingested contaminated water." David Kennedy, who heads the statutory body advising the government on meeting its carbon reduction goals, severely criticised Osborne's announcement, saying the dash for gas through fracking, "would not be sensible, or compatible with meeting carbon budgets and the 2050 target" and would damage investment in renewable. The UK target is to cut emissions by 80% by 2050, compared with 1990 levels. David Cameron consequently vetoed Kennedy's appointment to a post heading the Department of Energy and Climate Change. Osborne's government puts energy company profits before the welfare of the planet. This is the cheapest way for gas companies to find energy. It’s time to end the lie that the con-dems are the greenest government yet it’s time to end this all for profit motive and end the rule of this illegitimate government who have no mandate to govern even less to tear up our environment for their friends pockets. with extracts tkane from the excellent article in this weeks socialist on fracking by pete mason.

The day of regressive budgets hitting ordinary people hard

So today it was budget day in the UK and over in Ireland. News and comments are still filtering through and I haven’t read them all in full and will probably depress myself if I did so but what is clear is that these budgets are austerity budgets designed to further the pain on ordinary people the working and middle class’s All this is to pay for a crisis not of our making, this is as I’ve stated many many times now is a crisis of capitalism and no wonder George Osborne has missed his deficit targets as he is increasing the deficit rather than looking to cut it. What he is cutting though is the fabric of our society, all we’ve ever fought for our welfare state, our NHS you name it it is all up for grabs under this government. Below is how the BBC saw the main points from the budget. As we can see there are increases in areas but this will be offset by bigger cuts elsewhere such as local government, NHS, welfare and major benefits. All the measures like housing fall way short of what we need and the idea of teachers pay linked to performance is a joke. FUEL The 3p-a-litre increase in fuel duty, planned for next January, is cancelled ECONOMIC GROWTH Predicted to be -0.1% in 2012, down from 0.8% predicted in the Budget Forecasts for next few years are: 1.2% in 2013, 2% in 2014, 2.3% 2015, 2.7% in 2016 and 2.8% in 2017 BENEFITS AND PENSIONS Most working-age benefits to rise by 1% for each of next three years From 2014-15 lifetime pension relief allowance to fall from £1.5m to £1.25m - annual allowance cut from £50,000 to £40,000 Basic state pension to rise by 2.5% next year to £110.15 a week Child benefit to rise by 1% for two years from April 2014 Local housing allowance rates to rise in line with existing policy next April but increases in the following two years capped at 1% Changes to welfare to save £3.7bn by 2015/16 TAXES AND ALLOWANCES Basic income tax threshold to be raised by £235 more than previously announced next year, to £9,440 Threshold for 40% rate of income tax to rise by 1% in 2014 and 2015, from £41,450 to £41,865 and then £42,285 Main rate of corporation tax to be cut by extra 1% to 21% from April 2014 Temporary doubling of small business rate relief scheme to be extended by further year to April 2014 Inheritance tax threshold to be increased by 1% next year Bank levy rate to be increased to 0.130% next year. £5bn over six years expected from treaty with Switzerland to deal with undisclosed bank accounts HM Revenue and Customs budget will not be cut ISA contribution limit to be raised to £11,520 from next April Prosecutions for tax evasions up 80% - with anti-abuse rule to come in next year No new tax on property value No net rise in taxes in Autumn Statement GOVERNMENT BORROWING Point at which debt predicted to begin falling delayed by a year to 2016/17 Deficit forecast to fall this year, as is cash borrowing Deficit to fall from 7.9% to 6.9% of GDP this year, and to continue falling to 1.6% by 2017/18 Borrowing forecast to fall from £108bn this year to £31bn in 2017/18 £33bn saving to be made on interest debt payment predicted two years ago Deficit fallen by a quarter in last two years Bradford and Bingley and Northern Rock Asset Management brought on to balance sheet, adding £70bn to national debt GOVERNMENT SPENDING Period of austerity to be extended by another year to 2017/18 Departments to reduce spending by 1% next year and 2% year after Local government budgets to be cut by 2% in 2014 Government spending as share of GDP predicted to fall from 48% in 2009/10 to 39.5% in 2017/18 Spending review to take place in first half of next year JOBS AND TRAINING Unemployment expected to peak at 8.3%, lower than the previous prediction of 8.7% Employment set to rise in each year of the parliament Since general election, 1.2 million jobs created in the private sector TRANSPORT Extra £1bn to roads, including upgrading A1, A30, and M25 £1bn loan to extend London's Northern Line to Battersea EDUCATION AND FAMILIES £1bn to improve good schools and build 100 new free schools and academies £270m for further education colleges Teachers' pay to be linked to performance INFRASTRUCTURE Ultra-fast broadband expansion in 12 cities: Brighton and Hove, Cambridge, Coventry, Derby, Oxford, Portsmouth, Salford, York, Newport, Aberdeen, Perth and Derry-Londonderry £600m for scientific research Annual infrastructure investment now £33bn £1bn extra capital for Business Bank Gas Strategy to include consultation on incentives for shale gas HOUSING Funding to assist building of up to 120,000 homes OVERSEAS AID Promise to spend 0.7% on development to be honoured next year, but not exceeded