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Wednesday, September 14, 2011 

Irresponsibility is subjective (obviously).

For a moment during prime minister's questions, it looked as though Ed Miliband had finally managed to make George Osborne angry. David Cameron, in contrast to his chancellor, can seemingly do anger on command: he finds it especially easy when Labour has accused the Tories of planning something nefarious, a low his party has always declined to sink to. Osborne instead naturally smirks or remains aloof, like in his own Bullingdon group photo: today, just for an instant, fire flashed in Osborne's eyes as Miliband went on the attack over the "disappointing" unemployment figures. Then, just as quickly, he settled back into his seat.

Whichever sore point it was that Miliband so briefly touched upon, he needs to find it much more often. Osborne has after all never been so exposed: the 80,000 rise in unemployment in the 3 months to July appears to show the private sector's ability to absorb those losing their jobs as a result of cuts to the public sector drawing to a close. It still created 41,000 jobs, but this was nowhere near enough to cope with the staggering 110,000 former public sector workers who found themselves out of employment. Moreover, the number of vacancies, which has long stood around the 500,000 mark, is now also swiftly falling. The argument from Osborne and the government has consistently been that the private sector, suitably freed up by slashing regulation and the creation of enterprise zones, among other policies, would deliver the jobs that those then set free from the confines of government employment could walk into. This could of course be a temporary blip; more likely though is that is just the beginning of things to come. The service sector, hardly helped by the riots, is in retrenchment: this winter could yet see another round of big names going into receivership. Manufacturing has also fallen back, spooked by the Euro crisis, while America also stagnates.

Due to how the coalition's very reason for existing is to reduce the deficit, the rise in unemployment is but the latest spectre of the dreaded double dip recession which could yet deal it a death blow. Week by week, the blaming of New Labour for everything rings hollower and hollower. True as it is that under Alistair Darling's plan for halving the deficit by 2015 there would still have been major job losses, they would have not been on the scale seen over the last three months. For a government which has put work of any variety on a pedestal, and which is steaming ahead with its welfare reform programme, a scheme which seems to have been set-up with the goal of dumping ever larger numbers of those formerly on incapacity benefit onto the less generous jobseeker's allowance, it's remarkable that it seems so blasé about how its policies are having the exact opposite effect to the one it intends.

Indeed, you can't help but be instructed by the other two major economic debates of the week: just how long the fig leaf of the 50p rate of tax on those earning over £150,000 a year will stay in place, and the Vickers report on the ring-fencing of the banks' investment arms from their retail operations. The Institute for Fiscal Studies has suggested the 50p rate may not be raising any revenue, but as Chris argues the bringing in of revenue should not be the only consideration before abolishing it, especially if there is no better targeted replacement in the offing. Meanwhile, the very institutions which got us into this mess in the first place have had their D-Day delayed until 2019, and the squeals of protests which had been expected have been so muted that it's impossible to reach a conclusion other than they are secretly delighted by the tame proposals of the commission.

The government's policies on both issues ought to be enough to rile those who are only now beginning to really feel the effect of the cuts, yet as so often before rather than aiming their ire at those above them those struck out at first are the ones below. When even the BBC joins in with programmes like Saints and Scroungers, the dichotomy as subtle as a brick, originally shown during the evening but then shifted to the morning when those "scrounging" will be the only ones likely to be watching it's apparent that the sympathy for those who can't find work because there simply aren't enough jobs to go round is running out. The TUC's latest data on unemployment blackspots shows that in Hackney there are 11,081 claimants and just 487 vacancies. Three other areas in London hit by rioting have similarly high ratios of claimants to vacancies (although the top three are all in Scotland), more than hinting that some having lost all hope felt they had nothing left to lose. The opening of palaces to materialism like Westfield only exacerbates the sense of alienation, of being excluded from a society which holds endless consumption as its highest plane of self-fulfilment.

The government does at least fear it's losing support, even if it clearly hasn't got the first idea on how to properly arrest the decline. It is it must be said being helped by a Labour party which is still intent on shafting itself: last week Ed Miliband simply couldn't raise the economy at prime minister's questions as Alistair Darling's book would have been quoted back at him in all the responses. With the unions now quite rightly balloting for strike action over pensions, he's caught in a similar bind: polls suggested the public were marginally in favour of the teachers' action earlier in the year, but whether support will extend to what could be the largest single walkout in decades is far more difficult to predict. The government wants a showdown with the unions, desperate for something else to blame, and which can be lapped up by an otherwise increasingly pouty right-wing media; Miliband wants as few reminders as possible that he owes the unions for his position. Get the tone right, and the unions will demure over a politician in not supporting strike shock; get it wrong, as he did on Tuesday, even if it was only marginally, and he looks a traitor.

Having built his reputation around being the UK being a "rock of stability", Osborne and the coalition are left now with little else to do but let the private sector rip, such would be the consequences of delaying the cuts or returning to a stimulus programme. The "reforms" to the planning laws, which have managed to unite the Torygraph and George Monbiot in opposition, are but the most obvious example of what this government is against and in favour of: opposed to rebuilding schools and infrastructure, yet content to see more construction on the greenbelt; unabashed at the decline of high streets, but happy to see out of town retail parks flourish. Some might suggest such an approach is irresponsible; that though it seems is an adjective reserved only for those without the foresight and strength of this coalition's convictions.

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