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by Euro Reporter
2014-10-01 09:09:45
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Britain goes to war against Isil

Britain is poised to join the war against Isil after Parliament overwhelmingly backed air strikes targeting the terrorists in Iraq. David Cameron said there was a “strong case” for extending the air strikes into Syria. He warned that the war against the “psychopathic” Islamic State in Iraq and the Levant (Isil) was likely to last for “years”. During an emergency session of Parliament on Friday, Conservative, Liberal Democrat and Labour MPs largely united as they voted 524 to 43 in favour of joining military action in Iraq. However, the Labour MP Rushanara Ali, a Muslim and shadow education minister, resigned from the party’s front bench in protest at Ed Miliband’s support for the Government. Several leading Tories also refused to support the action and abstained from the vote including John Redwood, who said he found “it difficult to believe UK military intervention can make much difference” and Jesse Norman, who was sacked from the No 10 policy board over the Syria vote last year. He warned that the vote would weaken the ability of MPs to scrutinise the intervention.

David Davis, another Tory backbencher, also abstained after questioning the “strategic objective”. The air strikes were supported by the Archbishop of Canterbury, who said the West must offer a “vision of hope” to counter Isil’s “endless darkness”. The imminent military action is expected to target British jihadis who have gone to fight in northern Iraq. The FBI said earlier this week it had identified Jihadi John, the British terrorist who has been filmed apparently beheading Western hostages. Last night, six RAF Tornados based in Cyprus were poised to strike targets in Iraq within hours. The military intervention marks the third war in Iraq involving British personnel in the past 25 years. Hundreds of British troops are also likely to go to Iraq in non-combat roles to coordinate the air strikes and train local forces. Britain is now on high alert for revenge attacks after a series of arrests over the past two days. Counter-terrorist police yesterday arrested two men on the M6 near Rugby. Opening the debate in Parliament, Mr Cameron called on MPs to support the destruction of the “network of death”. He insisted that Isil had “already declared war on us and there is no walk-on-by option”. Michael Fallon, the Defence Secretary, said the mission was unlikely to be a repetition of the “shock and awe” campaign in the 2003 Iraq war.

The Prime Minister said: “‘Is there a threat to the British people? The answer is yes. Isil has already murdered one British hostage and has threatened to murder two more. “Isil is a terrorist organisation unlike those we have dealt with before. The brutality is staggering — beheadings, crucifixions, gouging out of eyes, use of rape as a weapon. All those things belong to the Dark Ages. This is about psychopathic terrorists who are trying to kill us. Like it or not they have already declared war on us.” Mr Cameron said Isil posed a direct threat to Britain, citing six plots linked to the terrorist group which had been foiled across Europe. Isil is holding at least two British hostages who have been paraded in videos released on social media. Philip Hammond, the Foreign Secretary, said the lives of British hostages were already at “extreme risk” from Isil. He insisted that the decision to back air strikes would not increase the jeopardy they were in. “The honest answer is that they were already at extreme risk,” he said. “We know this is an organisation we cannot reason with, that shows no compassion, no mercy. “I don’t believe the hostages will be at any more risk as a result of this decision than they were yesterday. “I’m afraid, because of the nature of the organisation we are dealing with, the hostages are in extreme danger.” Mr Cameron indicated that he was in favour of broadening the scope of the air strikes to target jihadis in Syria.

He told MPs that while he hoped to build a “consensus” on the issue he was prepared to intervene without going to Parliament for a vote if it would avert a “human catastrophe”. Labour has refused to support action in Syria without a UN mandate. Parliament voted last year to prevent British military action against President Bashar al-Assad. The Prime Minister said there was no “legal barrier” to stop Britain joining American air strikes in Syria. He said he was prepared to act without a vote in Parliament if there was an imminent “humanitarian catastrophe”. He said: “I do believe there is a strong case for us to do more in Syria. But I did not want to bring a motion to the House today which there wasn’t consensus for.” Downing Street has emphasised that the mobility of Isil and its ability to regroup in Syria means air strikes are likely to be more sporadic. Mr Cameron said: “The point I have been making in the last few days is, in my view, when we are not talking about being invited in by a democratic state, it would be better — I put it no higher than that — it would be better to seek a UN security council resolution. “Why? This is the highest multilateral institution in the world and therefore it would be better to seek authorisation.” Mr Cameron was openly challenged by his MPs and peers from all sides of the House over the issue. Peter Hain, a former Labour Cabinet minister, described Syria as the “elephant in the room”.

During a six and a half hour debate, a string of Tory MPs urged Mr Cameron to act in Syria. Ken Clarke, the former Tory Cabinet minister, declared that the division between Syria and Iraq was “artificial”. In the House of Lords, the former head of the Armed Forces, Lord Dannatt, said air strikes on Iraq would deal with only “half the problem”. He said: “If our enemy does not recognise borders but we do, we are constraining our response.” The Archbishop of Canterbury told peers: “The action proposed today is right. We must demonstrate that there is a positive vision far greater and more compelling than the evil of Isil.” The most furious intervention was made by George Galloway, the Respect MP, who said bombing Iraq would lead to more intervention. He was accused of making a disgraceful intervention after claiming that Iraqis had been “quiescent” in the rise of Isil.


George Osborne’s vision for Britain is stuck in the dark ages

“Choose jobs. Choose enterprise. Choose security. Choose life. Choose good health. I choose something else…” The cryogenically frozen, reactivated cadaver that now masquerades as the chancellor chose Trainspotting as the inspiration for the payoff to his final conference speech before the election. Rapid weight loss, waxy complexion, vacant eyes, a smile that doesn’t connect to his facial expression. Some might also suspect George Osborne of method reading. The economy might still be a bit ropey but it’s now in much better shape than its minder. As the chancellor’s speech went on, David Cameron started nodding off in the audience, his eyelids fighting to stay open, though less in solidarity with his next-door neighbour’s state of ill-being and more because there were large sections that didn’t much apply to him. A freeze on jobseeker’s allowance. Whatever. A freeze on tax credits. Whatever. A freeze on universal credit, child benefit, income support … get on with it. The prime minister looked far more animated at the announcement that pension tax would be abolished. Here was a policy that really meant something to the country’s hard-working well-off like him.

“I choose the future,” said Osborne, uncomfortably aware that more and more of his audience now much prefer the look of the Ukip past. He too, though, appeared ambivalent about the way he was facing. Much of his inspiration was rooted in the Industrial Revolution. He’d looked into the minds of James Watt, Matthew Boulton and William Murdoch and realised that if they were still alive they would all be thinking exactly the same way as him. Just as well Osborne wasn’t alive when they were or we might still be in the dark ages. The head-swivelling didn’t stop there. Having spent the best part of 10 minutes boasting about the achievements of his forecasts being at least £50bn off track and having increased the deficit in the first five months of the year, Osborne declared: “I don’t stand here marvelling at how much we have done.” Those in the conference hall would have much rather he had continued to do just that for the next half hour. Osborne has always been too spectral and aloof a presence for the Tories to love him and as he outlined his plans, it began to dawn on them they had been right to be wary. If the message from the Labour conference had been that Miliband was on the side of incompetence, the message from Osborne was the Tories would be fighting the election as the party of hard bastards.

This wasn’t quite the happy-go-lucky free money and electoral bribes the perms and striped shirts had anticipated, but Osborne did find some support from an unlikely quarter. Deirdre Kelly – aka White Dee off TV’s Benefits Street – had earlier told a fringe event she would be in favour of benefits claimants being forced to have a card to prevent them from spending the money on fags and booze. Not that she had ever done that, mind. Her kids had always come first. Osborne’s face would have flushed to an off-white at that; as would the physiog of his ghostly enforcer-in-chief, Iain Duncan Smith, who was at that very moment putting the finishing touches to the design of just such a card that he would be announcing in the afternoon. Should Scrounger be just in bold or SCROUNGER in caps and bold? Never let it be said IDS is afraid to make the big decisions. Sadly for both Osborne and IDS, Dee also said she would probably vote Ukip. Dee had chosen the past. Osborne left the stage to a Fleetwood Mac song from 1977. He, too, seemed to find the past irresistible.


Britain's budget deficit Simply red

When the current British government took office, chancellor George Osborne said in his first Budget that he aimed to "have debt falling and a balanced structual budget deficit by the end of this Parliament". With eight months to go before the election, the ONS announced yesterday that public sector borrowing in the first six months of the current financial year was £45.4 billion ($74.2 billion); higher than the deficit for the same period in the previous year. This seems particularly surprising, given the recovery in the economy*. And it raises some questions about whether there may be structural reasons why the deficit is much harder to close than before. The weakness, according to the Office for Budget Responsibility, is in part down to income tax receipts which are 0.8% lower year-on-year. Two factors may be at work; at the start of the 2013-14 tax year, the top rate of tax was cut from 50% to 45%. That undoubtedly caused some high-earners to shift their income from 2012-13 to the 2013-14 tax year. That boosted income tax receipts in the early month of last year, and has slowed the annual change now. Secondly, a lot of the new jobs being created are part-time or low-paid. Those who earn less than £10,000 do not pay income tax at all. 

So what about the cuts? Clearly, there have been big squeezes in certain areas, such as funding to local councils. The problem for the government is that it has to run fast to stand still. Here are the figures from the ONS for the first half of the year. Even with ultra-low interest rates, the interest cost in the first half of 2014 was £24 billion, compared with £14 billion in the first half of 2009, the year before the goverment took office. Social benefits have risen from £79 billion to £95 billion over the same period. Take those numbers out of the totals for current expenditure and "other spending" has risen from £186 billion to £210 billion over the same period, a 12.9% nominal increase. Inflation has risen 15.1% over the last five years, so that it is a cut in real terms. But it is tough going. Total current expenditure in the first half of the year was £330 billion, compared with £279 billion in H12009. For a full year comparison, 2013 current expenditure was £637 billion, compared with £562 billion in 2009. The big cut, of course, has been in net investment which was £32 billion in the first half of 2009 and was only £18 billion in the first half of this year. The full year numbers were £55 billion in 2009-10 and £31 billion in 2013-14 (just £26 billion in 2011-2012). In Keynesian terms, this is the wrong thing to cut since capital spending is the most likely to have a multiplier effect on the economy.

Total tax receipts in the first half of the year were £302 billion, compared with £308 billion in H12013, £284 billion in H1 2012, £276 billion in H1 2011, £263 billion in H12010, and £246 billion in H12009. So on the first half figures alone, taxes are up £56 billion and current expenditure is up £51 billion over the last five years. Running to stand still, as I say. So perhaps there is a fundamental problem. On the tax side, our more unequal society has resulted in a large proportion of revenues coming from a small number of taxayers, both individual and corporate. The top 1% of taxpayers paid 28% of all income tax in 2013-14. The return on bank equity has fallen and this has kept the lid on bonuses; a good thing, most people may think, but bad for the taxman. Push the rate up too high and many of these people may go elsewhere; the banks they work for are largely foreign. The rest of the workforce is barely seeing any real wage growth. The net effect is that, while employment is up 5% over the last four years, income tax receipts have fallen 4% in real terms. Meanwhile the government is slashing corporate tax rates to try to attract business to the country.

On the spending side, there is a limit to how much the goverment can squeeze. A commitment to preserve NHS spending in real terms has done little to protect the goverment from attacks on this issue by Labour, whose leader pledged to add £2.5 billion to health spending in his conference speech; pensioners have also been ring-fenced with their incomes being linked to inflation. It is easy to imagine that the deficit will not close by the end of the next Parliament either. No doubt the Chancellor is very happy that the Bank of England owns £375 billion of gilts and currently hands back the interest to the government. Imagine what the finances would like without this help.


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