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MSPs have today expressed their “grave concerns” over the likely impact on Scotland’s most vulnerable people as a result of Westminster’s £2.5 billion cut in benefits.

In publishing a report recommending support for the scottish government’s Welfare Provision (Further Provision) (Scotland) Bill which seeks to limit the likely widespread impact of the UK Welfare Reform Act on the poor and vulnerable in Scotland, Labour MSP, Michael McMahon, Convenor of Holyrood’s Welfare Reform Committee argued:

“We heard from witnesses about the bleak picture for those on welfare and the scale of personal impact that is likely to follow the UK reforms. We have grave concerns for the future of Scotland’s most vulnerable people.

“This comes at a time when the Scottish welfare budget is being cut by £2.5 billion. Seeking to limit even some of the negative impacts of reforms is therefore no mean feat.

“Our Committee has provided a forum for the concerns of individuals, service providers and campaign groups, to help to ensure their voice can be heard. It is important in the coming months and years that we are able to use this evidence to address those concerns by influencing forthcoming legislation and its implementation in Scotland.”

Alex Johnstone, the sole Conservative member of the committee however objected to the use of the term “grave concerns”.

• Lib Dems have “ceased to function as a viable party in Scotland” 9 May 2012

• The Tories in Scotland: right message, wrong messengers 26 Mar 2012

• IDS gets it wrong on disability allowance 14 May 2012

Outlining emerging themes that come from consideration of Westminster’s welfare reforms, the committee notes that:

• Changes to the benefits system will “remove lifeline benefits from large numbers of vulnerable people.”

• The means of applying for new benefits is “complex”, requiring greater use of online applications and “stressful capacity assessments” for finding those with long term disabilities as able to work.

• 330,000 people are caught within an appeals system that “overturns two thirds of these assessment results and time taken by medical professionals on the appeals process is impacting on frontline NHS services.”

• There will be a “major impact on the independence of disabled people, and on child poverty and homelessness levels.”

• “The likelihood of individuals and families getting into serious debt, including rent arrears, due to the new arrangements for allocating income support and benefit is increased.”

• As the instigator of the reforms, the Department for Work and Pensions (DWP) “has done limited work to assess the impacts on different groups in society and therefore working out where to target support is not possible.”

Turning its attention to the Scottish government’s legislation to mitigate some of the impact of the reforms, the committee’s report argues:

• The DWP has a responsibility to provide “full and proper advice services to help claimants make the adjustments to the new benefits systems.” The committee notes however that “it would also be appropriate for the Scottish Government to examine whether it requires to support bodies whom claimants are likely to turn to for independent advice and assistance.”

• Significant problems can be anticipated for local authorities and housing associations both in transition and through reduced income and increased costs of borrowing as a result of the decision to consume housing benefit into the new universal credit.

• The DWP should have primary responsibility for undertaking “extensive modelling to understand the impacts of welfare reform in Scotland and the policy responses to it, e.g. in establishing criteria for passported benefits.”

• “The main aim of the Scottish government in implementing the new welfare system should be in so far as is possible to maintain eligibility to passported benefits as they are at present.”

This is yet another blow to Iain Duncan Smith, whose war on genuine claimants knows no bounds.

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Chris Keates is the General Secretary of the NASUWT

Next time someone says that there’s no alternative to the cuts, no money for tackling child poverty or climate change, that we cannot afford to make sure that every child in developing countries goes to school, remind them about the Robin Hood Tax.

The vast wealth locked up in the financial sector, used only for gambling on the stock market or for paying out bonuses that dwarf anything ordinary people see in their wage packets, needs to be put to good use.

And a Robin Hood Tax would be a great way to do it.

Despite their differences over austerity and growth, even two such different political leaders as Germany’s Angela Merkel and the newly elected French Socialist President François Hollande can see the benefit of such a tax.

Unlike our own prime minister – who seems unable to distinguish between the interests of City fat cats and the British people – Chancellor Merkel and President Hollande are resisting the opposition from the financiers of their own financial centres in Frankfurt and Paris.

Next Wednesday, the leaders of the EU will gather in Brussels for an informal summit and a discussion about how to get the European economy growing again. The financial transactions tax (which is what people who attend informal summits call the Robin Hood Tax) will be a key part of the agenda.

And Britain, once again, will be on the sidelines, lecturing the rest of Europe, regardless of the fact we’re back in recession, while despite all its woes, the eurozone isn’t.

• Report rebuts “disproportionate, inconsistent and disingenuous” attacks on FTT 13 Mar 2012

• Robin Hood Tax gains momentum – on the continent 3 Jan 2012

• Osborne starts to panic about the chance of a Robin Hood Tax 9 Nov 2011

• On the Financial Transaction Tax, why is Osborne on the side of the one per cent? 2 Nov 2011

• Miliband and Balls need to be more vocal in support of the Robin Hood Tax 17 Oct 2011

It is time we joined the mainstream and started talking seriously about how we can make sure our bloated finance sector pays its fair share; how we can rebalance the economy so our best and brightest students go into careers that make more than money; and how we can fulfil our commitments to education for all in Africa and beyond.

A Robin Hood Tax would be a tiny tax on the vast wealth of our financial sector; by taxing the few, we could do so much more for the many.

For more information, visit www.robinhoodtax.org.uk.

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William Bain MP (Labour, Glasgow North East) is a shadow Scotland Office minister

After the longest Parliamentary session since the Second World War, and a collective battering for the coalition parties at the polls, a relaunch of the government’s economic agenda was expected among the traditional pomp and circumstance of the Queen’s Speech.

If this was the point of the State Opening of Parliament, the Queen might have been saved the trip. David Cameron and Nick Clegg are still not listening.

Voters in Scotland, England and Wales joined millions of others across France, Greece and Germany in recent polls in delivering a collective no to mass unemployment and destruction of living standards.

They have ditched the king of bling Nicolas Sarkozy, the Conservative New Democracy movement in Greece, and the architect of euro-austerity Angela Merkel and the CDU in Germany, handing the party its worst results in North-Rhine Westphalia, the country’s most populous state, since 1945.

The reasons for this are unsurprising. The OECD predicts demand in the eurozone is set to fall by 0.2% this year, at a time when the different policies on jobs and growth being followed by President Obama in the US are leading to an increase in US economic demand of 1.9% in 2012.

Nearly 25 million people in the European Union cannot find a job.

In Greece, even the middle classes are finding it hard to survive given pay cuts of up to 30%, and suicide rates are surging. Austerity literally kills.

Given that ordinary people face the biggest drop in living standards since the 1920s in the longest slump since the Long Recession of the 1870s, the State Opening should have been the moment for a change of course.

Instead it simply confirms that the Liberal Democrats are propping up a radical right-wing administration whose aim is to use the aftermath of the 2008 financial crisis to slash the role of the state in society, further concentrate power in the hands of the wealthy, and use the law and the fear of unemployment to drive down wage levels, and smash rights at work.

Like mediaeval doctors with a single-minded obsession to bleed the patient with leeches whatever the illness, the proponents of austerity believe the answer to self-defeating cuts in public spending leading to a hollowing out of demand is further austerity. In the 1930s, only the outbreak of the Second World War led to different economic policies, but across Europe, the cry for an alternative now is growing louder.

• Krugman: “Keynesians have been completely right, Austerians utterly wrong” 26 Apr 2012

• Some families have only £2 per person per day for food – 5 Mar 2012

• Osborne’s austerity obsession is betraying young people 16 Feb 2012

• George Osborne is the downgraded chancellor of a deflationary government 8 Dec 2011

• Krugman: Coalition is “bleeding” Britain dry 1 Dec 2011

In the UK, the TUC has estimated that 6.3million people are looking for a full-time job, but cannot find one. Real wages for people in the lowest 10% of the income scale are falling twice as fast as those for the highest 10% of earners - the biggest real terms decline since the 1970s - as the overall inflation rate masks big rises in the costs of food and clothing.

The Resolution Foundation showed that by 2020 ordinary people will be no better off than they were in 2001, while the top 1% skyrocket away from the rest of the country in terms of financial clout.

Nearly a third (32%) of adults in the very poorest households are struggling to afford essentials, compared to 18% of those on low to middle incomes and 6% of higher income households.

It is a natural aspiration for many families to want their children to do better than they have - this is the first generation since the 1970s that will do worse than their parents if the Tory-dominated coalition continues unabashed with its campaign of radical redistribution of wealth from poor to rich, stagnant incomes, and continuing slump.

What would an alternative programme for jobs and growth from the left involve now?

Firstly, increase demand by creating jobs, building homes, and increasing the purchasing power of wages. The benefits bill has continued to rise by £10bn given unemployment is rising above 2.6million, and tax revenues have undershot the OBR’s forecasts by a massive £15bn.

A jobs programme now, funded by a tax on bank bonuses, in building 2,500 homes in Scotland as a start would employ 10,000 young people north of the border, and boost the Scottish construction sector which saw a 4.3% drop in output in the first three quarters of 2011.

Cutting taxes for ordinary people by cutting VAT to 17.5%, putting £480 back into household budgets, and reversing tax credit cuts, withdrawals, and freezes, which are penalising the low-paid and part-time workers, a disproportionate number of whom are women.

Second, change the banking system. Bank lending to SMEs has fallen in five successive quarters. Businesses face a short-fall in capital of £190bn over the next decade at a time when £700bn in private sector finance could be put to greater productive use in economic investment.

As the Big Innovation Centre and the IPPR have argued, new thinking in methods of lending, and a new range of state-supported banks, with a UK National Investment Bank, and regional banks based on the German model, would lever in long-term finance to support new industries like the renewables sector, and stimulate the creative sector, retail and manufacturing.

Third, deal with inequality. The top 3% of the population, including top directors in FTSE registered companies, have increased their wealth by half in the last couple of years despite the recession, while 250,000 people in Scotland alone face in-work poverty.

More and more people understand that this wrecks long-term growth. Taking action on top pay, while introducing a living wage, are key. We discovered from the IPPR last week that top FTSE companies could pay a living wage of £7.20 an hour (or £8.30 an hour in London) at an extra cost of less than 1% of wage bills. Stronger collective bargaining has helped cut income inequality in countries such as the Netherlands.

Fourth, Germany should use its economic power to increase demand in the eurozone. A system of eurobonds would help reflate the weaker economies in the eurozone, given a collective budget deficit in the eurozone last year of just 4.1%. After its recent rout, the Merkel government is likely to make some leftwards moves to tempt public sector workers with pay rises ahead of the federal elections in September 2013.

This too would increase overall economic activity by boosting demand for exports from other Eurozone countries.

Keynes said in the 1930s:

“Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”

George Osborne and the European right are embracing a new monetarism inspired by Milton Friedman and the Chicago School of economics from the 1970s to bolster their disastrous austerity policies. Spain has gone from a budget surplus and relatively low debt in 2008 to utter calamity via austerity with over half of young Spaniards out of work.

Imposing austerity in already depressed economies without any credible plans for growth is a monumental error in faith-based economics from Europe’s right. It falls to the British left to develop a convincing and popular alternative to end this unnecessary recession and the social disaster left in its wake.

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As with last month’s release, today’s labour market statistics present good headline numbers that camouflage an underlying picture of weakness.

Unemployment, on the broad International Labour Organization measure, fell by 45,000 on the quarter to 8.2%. This good news was repeated in the narrower (and timelier) claimant count series, where unemployment fell by 13,700 in April. Employment rose by 105,000 on the quarter and the employment rate increased to 70.5%.

However, the increase in employment, and the corresponding fall in unemployment, was entirely driven by part-time work:

• The number of people in full-time work fell by 13,000 whilst the number working part-time increased by 118,000 - over the past year the number of people in full-time work has fallen by 55,000 whilst the number in part-time work has increased by 150,000;

• The number of people working part-time who say they want but can’t find full-time work rose by 73,000 to a record high of 1,418,000 - the number of people working temporary contracts who want a permanent position rose by 14,000 to 616,000;

• More than two million people are now ‘under-employed’ alongside the 2.6 million out of work;

• In other words whilst the labour market is showing signs of stabilising and whilst unemployment is starting fall, the ‘recovery’ is being driven by part-time and often precarious work; and

• Whilst unemployment is falling, under-employment is rising.

• Headline unemployment fall is good news, but underlying picture remains grim 18 Apr 2012

• Latest labour market stats are encouraging, but we should remain cautious 14 Mar 2012

• Employment figures mask the rise in under-employment 15 Feb 2012

• “The PM is wrong: the labour market is very weak” 18 Jan 2012

• Unemployment: Plan A isn’t working 14 Dec 2011

This underlying weakness is feeding through into extremely weak wage growth. Headline unemployment has been falling and employment rising for two months and normally one would expect a tightening labour market to lead to a faster pace of wage growth. In fact the opposite is happening – wage growth has been slowing since July last year.

As Chart 1 makes clear, the large fall in inflation since it peaked in the autumn has not relieved the pressure on real wages.

Chart 1:

Real wage falls slowed towards the end of 2011 but have reaccelerated since January 2012. Continuing falls in real wages will put the recovery at risk.

Whilst the headline figures today are obviously to be welcomed it would be a mistake to hail a successful recovery in the labour market. As long as real wages are falling living standards will remain under pressure. A recovery driven by part-time work and accompanied by falling living standards won’t feel like a recovery to most people.

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Tory Backbencher Philip Davies doesn’t like aid. He doesn’t like it when it’s given to countries he thinks are too rich, like India, or, it appears, when they are too poor, like many African states.

At a panel discussion hosted by Save the Children, sitting alongside speakers Lord Ashdown, Baroness Kinnock and  ConservativeHome editor Tim Montgomerie, Davies said:

“According to the OECD, the UK has given $75bn in international aid since 1960, but how has Africa improved? I haven’t seen any radical change in this time.”

Audience members were left baffled by the Shipley MP’s comments, after information given to panellists and everyone else in the room outlined evidence supporting the difference aid does indeed make.

• The cruelty of Philip Davies 17 Jun 2011

• Davies’s remarks are a much needed wake-up call; discrimination is alive and well 17 Jun 2011

• Tory MP Philip Davies: Disabled should work for less than minimum wage 17 Jun 2011

Recent UN-sponsored research, ‘Progress in child well-being: building on what works’, reveals:

• 12,000 fewer children under five die every day than in 1990;

• From 1999 to 2009 an additional 56 million children enrolled in primary school and the number of out-of-school primary-age children decreased by 38 million;

• 131 countries now have over 90% immunisation coverage for diphtheria, tetanus and major preventable childhood diseases such as measles, compared to just 63 countries in 1990.

As Figure 2 shows, findings from the UN Inter-Agency Group on Child Mortality Estimation (UNIAGCME) show a significant drop in under-five mortality rate since 1990.

Figure 2:

A parliamentary briefing on aid makes its impact clear:

There is plenty of evidence that international aid, including UK aid, is making a huge difference…

• Saving lives – In the financial year 2009/10, UK aid ensured that 15 million people had enough food to eat and provided over 1.5million people with clean water (see the Small Change Big Difference report);

• Creating the conditions for economic growth – In the financial year 2009/10 the UK’s aid helped to build or upgrade 1,500km of roads (see the Aid Works report);

• Securing peace and strengthening good governance – the UK’s extensive security and development assistance to Sierra Leone over the last decade has helped to end its civil war, stabilise and rebuild the country and helped the country’s economy to grow by 5% in each of the last two years (see DFID Annual Report 2011 Vol 1).

Philip Davies’s views on international aid are no secret – but are unfounded accusations really the way to get people on your side?

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The UK is back in recession. According to preliminary data from the Office for National Statistics (ONS), real GDP declined by 0.2 per cent in the first quarter of 2012, having declined by 0.3 per cent in the final quarter of 2011.

Economists define a recession as two consecutive quarters of falling GDP. These preliminary data may be revised.

Some economists have pointed out that the decline in GDP is at odds with other evidence about the economy, in particular stronger retail sales and a pick-up in business confidence. They think, when the ONS has more information, we will eventually find the economy avoided recession.

Whether or not we are in recession, the bigger picture shows economic activity in the UK is very weak. Real GDP has fallen in four of the last six quarters and has increased by just 0.4 per cent since the coalition government took office in the second quarter of 2010.

This is a result of a number of factors, some of which – global energy prices for example – are outside the control of the government. But there is little doubt the government’s austerity measures have contributed to the slowdown.

Here is a scorecard of different economic indicators over recent months:

Commentary:

Analysis of previous recessions – across a number of advanced economies – has shown those that follow the bursting of debt and asset bubbles tend to be deeper and to last longer than other recessions. The same analysis shows recoveries following this type of recession tend to be slower and more faltering that other recoveries.

The current UK experience is adding more evidence in support of this conclusion.

The recession of 2008-9 was the deepest since the 1920s (matching the depth of the 1930s recession) and the recovery following it is turning out to be the slowest for at least 100 years. Putting aside whether or not the economy is back in recession, output was still more than 4 per cent lower in the first quarter of 2012 than it was at its peak four years earlier.

The Office for Budget Responsibility thinks it will not exceed this peak until some time in 2014.

• Economic update – April 2012: Coalition failures put Britain in the slow lane 17 Apr 2012

• Economic update – March 2012: External events key to any recovery 12 Mar 2012

• Economic Update – February 2012: Double dipped 7 Feb 2012

• Economic update – January 2012: Outlook not all bad 9 Jan 2012

• Economic update, December 2011 – UK teeters on brink of recession 5 Dec 2011

It is not that the economic news is all bad: business confidence has been higher this year than in the second half of 2011; retail sales were much better than expected in March and the latest figures show a fall in unemployment over the last three months for the first time in nine months.

But for every positive indicator, there is another negative one: consumer confidence is at very low levels; manufacturing output fell more than expected in February; and full-time employment is still falling.

Inflation is also proving sticky. The big hope for 2012 was that a sharp fall in inflation would increase households’ spending power, leading to a boost in consumer spending and stronger output growth. But inflation unexpectedly increased in March and prices have risen about 2 per cent faster than earnings over the last year. As a result, any recovery in spending is likely to be weak or short-lived.

At best, 2012 looks like being another year of disappointing growth.

GDP declined by 0.2% in the first quarter:

Preliminary figures show real GDP contracted by 0.2% in the first quarter of 2012. These figures may be revised, but if they are not, the UK is back in recession (on the technical definition of two consecutive quarters of declining GDP).

The main weakness in the economy was in construction, where output fell by 3.0% in the first quarter, but industrial output was also down by 0.4%. Furthermore, the increase of 0.1% in service sector output was attributable wholly to the government sector. See Figure 1.

Figure 1:

Employment is increasing – but only for part-time workers:

Employment in the latest three months, to February 2012, was 53,000 higher than in the previous three months (though it was still down 57,000 compared to a year earlier).

The number of part-time workers was up 80,000 in the latest three months, while full-time working fell by 27,000. Not all of this increase in part-time working is voluntary. There are now 1.40 million people who say they are working part-time because they cannot find full-time employment – the highest number since records began in 1992.

Unemployment has fallen:

On the Labour Force Survey (LFS) measure, unemployment fell by 35,000 over the latest quarter. As a result, unemployment in the three months to February was down to 2.65 million, or 8.3% of the labour force. However, long-term unemployment increased by 26,000 to 883,000 – its highest level since 1996.

The claimant count measure of unemployment increased by 3,600 in March and has now gone up for 13 consecutive months; here, too, there has been a fall recently in short-term unemployment and an increase in long-term unemployment.

Retail sales volumes surge:

The volume of retail sales increased by 1.8% in March – and the value of sales was up by the same amount. In part, this can be explained by panic buying of petrol towards the end of the month and by good weather, which led to earlier than usual purchases of spring clothing.

But the underlying trend in sales also looks to have improved in recent months, despite the continued squeeze on household finances. It may be that households are spending less on services so they can spend more on goods, or that they are cutting their savings.

Consumer confidence remains low:

Consumer confidence in April remained at a historically very low level. In recent months, people’s worries about the future – both for the economy and for their own personal financial situation – appear to have increased.

Manufacturing output trend remains flat:

Manufacturing output was down 1.0% in February and down 1.4% over the last year. Monthly data on output have become erratic and – unless there is more evidence of weakness in the next few months – it still seems likely the underlying trend is flat, as it has been for more than a year now. See Figure 2.

Figure 2:

Business survey confidence dropped in April:

The CIPS purchasing managers’ survey shows confidence in the manufacturing sector fell back in April (from a ten-month high) but is still at a level previously consistent with modest expansion in output. The construction indicator also fell slightly between March and April but is still consistent with healthy growth.

The service sector indicator also fell, to its lowest level for five months, but points to growth at a reasonably healthy pace.

Price inflation up to 3.5%:

There was a surprise increase in consumer price inflation in March, up from 3.4% to 3.5% (though inflation fell from 3.7% to 3.6% on the retail price measure). This was largely due to food prices.

Inflation is widely expected to fall during 2012 – not least by the Bank of England – but so far progress has been slower than expected. Inflation in the UK has proved rather stickier than in several other major advanced economies, with measures announced in the budget adding 0.2% to inflation from April.

Earnings inflation remains below 2%:

Inflation pressures cannot be blamed on higher wages. Average earnings increased by just 1.1% in the year to the three months ending in February and regular earnings were only up 1.6% over the same period.

Earnings growth in the public sector is the lowest since records began in 2001. Combined with the stickiness of price inflation, this means household spending power is still being squeezed.

Export growth has stopped:

Export volumes (excluding oil and erratic items) were unchanged in the year to the three months ending in February.

Exports to Europe fell by 4% – with the weakness concentrated in recent months – suggesting the eurozone crisis is now having an effect on the UK economy, though not on a scale that can fully explain the return to recession; exports to the rest of the world were up 3%.

Government borrowing down on the year:

Public sector net borrowing (excluding financial interventions) was £126 billion in the 2011-12 financial year, down from £137 billion in 2010-11. This was in line with recent OBR forecasts but higher than the £116 billion target set in the June 2010 budget. See Figure 3.

Figure 3:

Interest rates remain at 0.5%; QE at £325 billion:

The Monetary Policy Committee left interest rates at 0.5% in April and the scale of quantitative easing (QE) at £325 billion. There is now only one member voting for an increase in QE as the committee trade off the need to boost growth in the economy and the slowness of the fall in inflation.

Sterling stronger:

Sterling rose against the euro and the US dollar during April. The increase against the euro can be explained by the eurozone’s persistent problems; the increase against the US dollar is harder to understand.

The UK equity market ended the month a little lower, for the second month in a row.

The 10-year UK government bond yield was little changed at close to 2.25%.

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Not content with taking money off cancer patients and disabled children – and making disabled people’s lives a misery generally – it emerged today the Tory-led coalition have plans to attack the benefits of blind people as well.

The proposals have prompted outrage from disgruntled Lib Dems, who are ramping up the pressure on Nick Clegg to stand up to David Cameron and George Osborne and speak out and defend some of the most vulnerable in society from the Tory thirst for “efficiency” aka austerity.

This morning’s Independent reports:

Government plans which could reduce state benefits paid to thousands of blind people have sparked a revolt by Liberal Democrat MPs in the latest sign of tension inside the coalition over cuts.

The Liberal Democrat rebels are demanding a U-turn after it emerged that many blind or partially-sighted people who currently receive disability living allowance (DLA) of up to £120 a week could lose out when it is replaced by a new personal independence payment (PIP) from next April.

Although Nick Clegg is defending the government’s plans, he is under intense pressure from his MPs to lobby for changes before the new system is implemented….

Critics of the shake-up claim that the points system under which DLA claimants will be reassessed is biased against the blind because it puts too much emphasis on tasks such as the ability to walk and not enough on the special needs of those who cannot see.

Lib Dem backbencher Mike Hancock MP is one of the most strident in his opposition, telling the Indy the plans are worse than anything that happened “in the worst days of the Thatcher government” and that he didn’t get into politics “to punish people who cannot help themselves”.

Of the real life impact on blind people of the proposed cuts, the Royal National Institute for the Blind’s Steve Winyard pointed out:

“Everyday tasks which sighted people take for granted cost people with sight-loss extra money – for example paying for assistance with cleaning and ironing. Other blind or partially sighted people may require food-labelling systems to ensure they don’t eat out-of-date food. These costs are ongoing.”

• IDS’s continuing spin war against people with disabilities: part 47 14 May 2012

• The government’s replacement for DLA is not fit for purpose 18 Jan 2012

• Will the government take away money from disabled people on a hunch? 17 Jan 2012

The points system on which the reformed benefit works focuses on whether claimants can walk, not whether they can see, with costs incurred by blind and partially sighted people being disregarded.

The needs of blind people are very clearly not being met, yet their concerns, as with those of terminally ill cancer patients, disabled children and all manner of individuals hit by the government’s cruellest cuts, continue to be ignored.

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The Guardian carried a disturbing report yesterday claiming 85 young men in Derry have been shot in punishment attacks over the past year by the vigilante group Republican Action Against Drugs (RAAD).

It also reports up to 200 men have been forced to flee the city in fear of such attacks, quoting Derry-based writer John Lindsay who has written about the issue.

He says that:

“On average there are about four young men being forced out of the city by RAAD and other vigilante groups per week.

“They are going to places as diverse as Belfast, Armagh, Dublin and of course England, anywhere where they have friends or relatives to flee to. And they are told if they don’t leave they will be shot or even killed.”

Such attacks are an echo of a past where groups like the Provisional IRA kept control of republican communities through summary ‘justice’ for what were invariably called “anti-social activities” such as joy-riding, theft and drug dealing.

But for all their obvious brutality, punishment attacks – which ranged from beatings to knee-cappings – found a measure of support in these tightly-knit communities. This is reflected by the startling news that some of these latest punishments have been by appointment, with family members accompanying the victims to their fate.

This sounds bewildering; however, it is perhaps not as surprising as it sounds. Republican groups long served as a militia police force given the reluctance of Catholics to complain to what they saw as the sectarian Royal Ulster Constabulary.

This time around the motivation of groups like RAAD is different – more overtly political – and they are mainly comprised of disillusioned republicans who reject Sinn Fein’s political direction and see the party “selling out” cherished beliefs. They are seeking to build a powerbase within these staunch republican communities, often under the nose of Sinn Fein.

• Osborne’s cuts having “damaging effect” on Northern Ireland peace process 10 Nov 2011

• Derry bomb: McGuinness condemns “neanderthals” in visit to Tory conf. 5 Oct 2010

• Warning that dissidents are raising tensions in Northern Ireland 4 Aug 2010

• Derry to be first British culture capital 16 Jul 2010

• Northern Ireland decommissioning – progress but not the end 9 Feb 2010

But as Henry McDonald’s piece in the Guardian suggests, not all RAAD members are easily dismissed as The Usual Suspects.

Some are:

“…ex-Provisional IRA members who back the peace process but take-up the gun against members of their own communities accused of anti-social activities.”

This shows the flank of mainstream republicanism remains fluid, with the enduring risk of losing members to dissident groups. The existence of such groups is a deliberate provocation to mainstream republican leaders.

Hence the unequivocal reaction from Northern Ireland’s deputy first minister Martin McGuinness. The former IRA commander in Derry senses an attack on his personal authority in his own political backyard.

He yesterday labelled RAAD “the new oppressors of the people of Derry”, saying:

“I think it is quite obvious the community is beginning to rise up against this [punishment beatings] and as a result of that it is quite clear that RAAD are about to make the biggest mistake of their lives. They are about to bite off more than they can chew because if the community in Derry turns against you then you are going absolutely nowhere.

“And I think they (RAAD) do need to be going somewhere and they need to be going to prison. And I would hope as a result of the rise in opposition to the activities of RAAD that people will come forward to give all the information they have about this group.”

McGuinness famously commanded an IRA campaign in the city that resulted in Derry looking “as though it had been bombed from the air”. For him to be so emphatic against former comrades underlines how resolute he now is in upholding the exclusively political direction at the heart of modern republicanism.

Derry is, of course, set to become the UK’s first Capital of Culture next year. Welcome though the accolade is, it does little to diminish the city’s appalling legacy of social and economic problems. For instance, the Foyle constituency (which is centred on Derry) has the sixth highest unemployment rate in the UK, running at 8.3 per cent – nearly double what is was five years ago – affecting all age groups.

More broadly, the lingering presence of paramilitary justice and groups like RAAD reflects the reality that the material benefits of peace have not filtered down to the sections of Northern Irish society who have known only hardship. Hence the symbolic dissident bomb attack on the Capital of Culture team’s offices last October.

This bleak episode should not detract from what has been achieved, but instead serve as a warning that the road to peace and prosperity in Northern Ireland is a long and uncertain one.

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The government has stripped A4e of its welfare-to-work contract following fraud and corruption allegations and a series of arrests.

The BBC reports:

The government has ended a contract with welfare-to-work company A4e after deciding that continuing would be “too great a risk”, it has said.

Employment minister Chris Grayling said the Mandatory Work Activity contract to help up to 1,000 jobless people in south-east England find work would end.

The firm is the subject of two police investigations into allegations of fraud relating to government schemes. An eighth employee of A4e was arrested on Monday. Seven other people are on bail until dates in late May, June and July.

Grayling explained:

“While the team found no evidence of fraud, it identified significant weaknesses in A4e’s internal controls on the Mandatory Work Activity contract in the South East.

“The documentation supporting payments was seriously inadequate, and in a small number the claim was erroneous. There was also a high incidence of non-compliance with other relevant guidance (including A4e’s own processes).

“The process established prior to March fell significantly short of our expectations. As a result, the department has concluded that continuing with this contract presents too great a risk and we have terminated the Mandatory Work Activity contract with A4e for the South East.”

• Charity survey slams the shambolic failure of A4e 1 May 2012

• New report reveals “devastating evidence of systemic fraud within A4e” 22 Mar 2012

• The document A4E doesn’t want you to see 5 Mar 2012

• A4e: Corruption, fraud and the £200m failure to help the unemployed 2 Mar 2012

• A4e’s fall from grace has been in the pipeline for two years 2 Mar 2012

In March, a leaked internal document revealed “systematic failure to mitigate risk in relation to fraud and irregularity”, warning the management’s knowledge of whether its controls against fraud were working were “minimal”, and showing A4e staff “claiming for putting people into jobs which did not exist, jobs which did not qualify for payment and fabricating paperwork”.

Chair of the House of Commons Public Accounts Committee Margaret Hodge described it as “devastating evidence of systemic fraud within A4e”, with BBC Newsnight’s Paul Mason pointing out:

“The report surveyed just the work of the top 20 recruiters so these are people highly successful in placing unemployed people in jobs and therefore earning money for A4e.

“Now, the report said eight per cent of the claims surveyed were either potentially fraudulent or irregular, a further nine per cent were risky, 14 were uncheckable, often because the employer could not be contacted or indeed found, and as a result, only 70 per cent of all the claims could be verified.”

Earlier that month, A4e tried to block Left Foot Forward from publishing an internal document (pdf) that appeared to indicate poor performance on behalf of the welfare-to work company, which has won more than £200 million in contracts with the Department of Work and Pensions.

We reported that the document (pdf) showed:

…the job entry rate, i.e. the proportion of individuals A4e is responsible for at some level, manages to find a job for, is 8.4 per cent overall and 9.7 per cent if ‘specialists’ – those partners dealing with difficult cases – are excluded.

Meanwhile, the percentage of those who secure a job managing to hold on to that job for 26 weeks, appears to be denoted by the Outcome/Potential Outcome collumn, which has a total of 1.9%, including and excluding difficult cases. If this is the right reading of the table, then it represents a dramatic undershooting of the Department for Work and Pensions’ own targets.

As can be seen from this National Audit Office report (pdf) published in January 2012, the DWP expects 36 per cent of those referred to companies such as A4e to be secured a job for at least 26 weeks (page 4), and 28 per cent of those not on the Work programme to reach this milestone on their own (page 22).

For daring to publish the truth the disgraced firm threatened us:

“We won’t hesitate to take the strongest legal action should you publish this data or make any of the inferences set out.”

Today, they’ve begun to receive their just desserts, with porridge to follow.

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Last night’s Panorama showed how giant multinationals, like Glaxo SmithKline are using overseas subsidiaries to avoid paying millions in pounds in tax.

Watch how they do it:

And instead of clamping down on it, Chancellor Osborne is relaxing the rules to make the shifty manoeuvre easier to perform. The pre-existing rules also protected the tax payable by British companies in developing countries.

As ActionAid’s Chris Jordan wrote on Left Foot Forward:

Changes to obscure sounding ‘Controlled Foreign Company (CFC) rules’ - debated in Parliament this week - could give the green light for Barclays and other large British multinationals to increase their use of tax havens like the Cayman Islands to dodge their taxes in the developing world.

Despite the rhetoric about cracking down on “morally repugnant” tax avoidance, George Osborne seems happy to turn a blind eye where poor countries are concerned; while the IMF, OECD, UN and World Bank all recommend an impact assessment - to highlight where the greatest damage will be done – so far the Treasury refuses to do so.

In evidence submitted to Parliament’s Treasury select committee last year, Barclays said the “majority” of its Cayman Islands companies were:

“…managed and controlled in the UK and are therefore subject to tax in the UK… under the UK CFC legislation.”

It is likely some of these tax haven companies that are currently covered by the CFC (anti-tax haven) rules will be exempted after the changes. ActionAid estimates developing countries could lose £4 billion a year if these changes make it onto the statue book.

• Osborne, Barclays, the Cayman Islands and tax avoidance 17 Apr 2012

• The real Mitchell tax scandal is DFID’s failure to stand up to Osborne 29 Mar 2012

• The Treasury dodges the question on its new tax loophole for multinationals 7 Mar 2012

• The Osborne tax get-out turns aid for the poorest into a subsidy for multinationals 6 Mar 2012

• Slasher Osborne accused of £1.6m tax avoidance 18 Oct 2010

The British taxpayer is losing out twice – uncollected taxes from megacorporations have to be picked up by ordinary citizens, and by taking money out of developing countries’ treasuries, they remain reliant on aid – including that from the UK.

As Graham Black of the Association of Revenue and Customs: told Panorama:

“What my members see every day is that some large businesses are managing to avoid their fair share of taxes which means everyone else has to pay more too. That doesn’t seem fair.

“[The Government's tax changes are] rather like you legalise murder and then you say your crime rate is falling.”