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The Government's current economic policy, which seeks to rein in the deficit by making massive cuts in public expenditure, is justified on the basis that "we're all in it together". As the Financial Times' Saturday edition news item on the opening of a new Louis Vuitton shop in London aptly demonstrates, this is blatantly untrue. The rich are continuing to get richer, and by opting to cut public services for the poor and the middle classes rather than increase taxes on the rich, the Liberal Democrats are conniving in a further transfer of wealth from poor to rich. Like the shoppers at Louis Vuitton, they should hang their heads in shame.
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Nick Cohen in the Observer raises important issues about China's labour rights record, and draws attention to the excellent China Labour Bulletin.
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Nicola Smith
The Secretary of State for Education, Michael Gove, has written to the QCDA to confirm that legislation to close the agency will be introduced in the autumn. His letter sets out which functions of the QCDA’s work will be retained, and which will be cut. In response, the Chairman of the QCDA has stated that his organisation is focusing on the wellbeing of its staff and on completing its ongoing work during the exam season. The Coventry Telegraph has claimed that, when combined with the jobs to be lost at BECTA, 830 jobs will be lost locally.
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Nicola Smith
Around 30% of public expenditure goes directly to private sector companies – and many have been expressing concern about the impact that cuts will have for their businesses. The Guardian has reported that:
The Treasury belt-tightening knocked the shares of a number of support services groups including Capita, the hardest hit, down 2.4% to 780p. Serco was down 2.5p at 603.5p and Compass off 5p at 523p.
The FT have also reported on likely private sector impacts and regional news coverage shows how local communities could be affected: in Blackburn and Darwen 1000 Capita employees are expected to ‘suffer’ and in York traders are ‘dismayed’ at cuts in regional investment.
Specific sectors look set to be badly hit.
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Nicola Smith
The impact that the Home Office cuts will have for the police is becoming clearer, following a statement by Police Minister Nick Herbert. Overall, £125 million will be cut from the police. Cuts reported locally include:
- £2 million of cuts in Humberside
- £3 million of cuts in Lancashire
- £3 million of cuts in South Yorkshire
- £1 million of cuts in Cumbria
- £9 million of cuts in Somerset
Full details for all areas are provided in the Minister’s statement. The Government is ‘confident that savings can be achieved by driving out wasteful spending on support functions’ and that front line police services can be maintained.
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International
UN renews attack on Colombia’s human rights record: can the EU really sign a trade deal?
Owen Tudor
Colombia is the most dangerous country in the world to be a trade unionist, but the Colombian Government denies this. The European Union has been negotiating a trade deal with Colombia for several months, in a move which will be seen as a validation of its ‘improved’ human nights record (sic). But the UN special rapporteur on extrajudicial, summary or arbitrary executions, Philip Alston, has just published a report which shows just how obscenely ill-judged such a move would be.
And this comes on top of staggering revelations that the Colombian secret service has been spying in Belgium, where the EU is of course based. Surely the EU must now listen to European and Latin American trade unionists and Justice for Colombia and abandon this trade treaty, and make sure President Uribe and the rest of the Colombian Government recognise that they will be international pariahs until they stop allowing trade unionists and others to be murdered with impunity?
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Owen Tudor
The decision of President Mutharika of Malawi to pardon Tiwonge Chimbalanga and Steven Monjeza, convicted of gross indecency after celebrating their engagement in December, is a welcome step forward. Hopefully, it was, as he claimed, because he believed it was the right thing to do. That would be better than the other possible explanation, which was that he caved in to pressure from outside Malawi.
Not that I’m against such pressure – the TUC supported the picket outside the Malawian High Commission today, and we were glad to see the British Government make its position clear before and after the pardon (although it would have been better to respect Tiwonge’s transgender status more by not referring to her as “Mr”). But it would be nice to believe that this decision was a turn in the direction of human rights and equality in a world where LGBT communities face oppression, hostility and worse – from Iran to Jamaica, as well as in Africa.
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Adam Lent
The credit rating agency Fitch has just cut Spain’s credit rating from AAA to AA. Have they done this because they think Spain is not getting to grips with its public finances? No. They’ve cut the rating because the Spanish Government’s efforts to reduce their budget deficit through cuts:
will materially reduce the rate of growth of the Spanish economy over the medium term.
This is an important development that blows out of the water claims by European governments, including the UK’s, that cuts are the best way to avoid loss of credibility with the markets. It is a vindication of those who have been pointing out recently that austerity packages will not only damage economic performance but do nothing to calm the markets.
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Brendan has a piece in today's New Statesman, arguing that public spending cuts are coming far too early: "The big prize is to secure wider European co-operation on this crisis. If EU leaders could find the courage to unveil a co-ordinated package with the goal of restimulating the European economy, while also addressing the trade imbalances that have caused so much of this difficulty, then we might avoid the really dark days ahead. … In an ideal world, the British government would be leading this more sensible approach. In reality, it is now determined to make the push in entirely the opposite direction. This means there is a now a heavy burden of obligation on the Labour Party, the unions and wider civil society, along with like-minded organisations across Europe, to do everything in their power to halt the headlong rush into needless austerity."
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Tim Page
It couldn’t have been clearer. The Conservative Party election manifesto – their invitation to us to join the government of Britain – set out the situation in plain language:
“we will take immediate action to cut a net £6 billion of wasteful departmental spending in the financial year 2010/11, with further savings in future years … Former government advisers Sir Peter Gershon and Dr Martin Read have advised us that savings of £12 billion across all departmental spending are possible in-year without affecting the quality of frontline services”.
So voters could put their cross in the Conservative box, safe in the knowledge that only “wasteful spending” would be cut this year, “without affecting the quality of frontline services”.
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Tim Page
I very much respect the detailed analysis prepared by the OECD on international economic issues. However, I’m afraid the Paris-based think-tank has got it so very wrong in its call for UK interest rates to rise by the final quarter of this year, as reported on the Guardian website today.
Incredibly, the OECD is calling for base rates of 3.5% by the end of next year, a move that would strike a major blow to businesses and homeowners.