You don’t con, Vince

April 1, 2010 — simonashall

It's Yoda from Star Wars - no, not really, it's Vince Cable

Just a few words about Vince Cable. I watched the Chancellor’s debate the other evening and I’m not going to claim that George Osborne wiped the floor because he didn’t.

But given that he was being ganged up on by both Alistair Darling and Vince Cable, I think he came across well enough for me not to be persuaded of the case for him being replaced by Ken Clarke. The party is lucky in Phillip Hammond and Clarke to have two minds with plenty of economic experience to back George Osborne up and Osborne himself is made of far sterner stuff than I believe is immediately apparent.

Darling, on the other hand was an utter bore. His budget speech was more interesting and yes, although he did land a hit on the Conservatives over the NI part-reduction, subsequent events may  be more significant in this regard. He wasn’t nearly commanding enough for the man holding all the aces.

Vince Cable won the debate and that’s easy enough to understand. He was able to stand in the middle and come across as the voice of reason, hopping (albeir deftly) onto the “plague on both your houses” feeling that currently pervades. But did anyone notice a policy in there? At least Darling and Osborne were discussing whether or not an extra 0.5% on NI was a good thing to do – Vince was only bashing the other two. The debate may be politics; but politics isn’t necessarily the debate.

Frankly, anyone could have done what Vince did. And I think underneath it Vince doesn’t have any more in the way of policy than anyone else. Which is less forgiveable because the Lib Dems aren’t constrained by having to say things that will ever come to pass.

Standing in the middle with nothing to lose isn’t difficult (and will no doubt be repeated by Nick Clegg in the leader debates). But sooner or later, the waiverers that the Lib Dems are hoping to attract will catch on.

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Critical Political Economy

March 16, 2010 — admin

Osborne and Clarke could hold the key to election success

It’s been a strange time in national politics during the past three months. There’s no doubt that Charlie Whelan, Alistair Campbell and PM represent the most devastatingly effective political propaganda team in British history. The results of their work are seen in every media outlet, regardless of its official persuasion and sometimes more so, strikingly, in outlets that are not government supporting. There has been a real gusto about the Labour press campaign during the past three months that, had it been waged by the Conservatives, would undoubtedly have “sealed the deal” for DC.

Meanwhile, my reflections on his performance during the same time are probably best left unstated. The PM remains shatteringly unpopular and won’t survive the election either way. He has led us into a recession of drastic proportions and other than the press management outlined above, his government team is utterly hapless and bereft of ideas – as well as the money to enact any meaningful change or reform. There is simply no reason for the Conservatives to be within striking distance of Labour in the polls.

That we are is down to two things. Firstly, people are fed up of waiting to be told what Conservative policy is. They have waited for three years now in the belief that when the time came, DC and his team would be straightforward and clear about how the Conservative Party would seek to re-shape and change Britain in 2010-14. I can see that we have made some attempts, particularly on education policy, to get these messages across. But too often the position on taxation, family values and criminal justice has overshadowed the NHS and education. That’s partly to do with Labour’s art; but it’s also politics and an experienced team like Andy Coulson and Steve Hilton should foresee the tactics of opponents and build these into Conservative planning.

Let’s take for example the Piers Morgan show on the PM, sycophantic and soporific in equal measure though it was. If the DC team thought that a late-night Sunday show with Trevor McDonald would pull in the same crowd either in numbers or demographic, one wonders what kind of analytics they are using. As it happens, there has been some good poll news today (on the front of the Guardian) but I doubt that was much to do with Sir Trevor. And there needs to be a sea-change in Conservative tactics if it’s to stick.

I’m puzzled that the one issue that will decide the election – and the one that the Conservative are traditionally strongest on – is the one issue we seem to be handing to Labour. Gordon Brown has been given licence by his media friends to paint himself as the experienced hand on the economic tiller, which is akin to the Cray twins applying to the magistracy. This PM has no right whatsoever to claim such a thing – he has shown himself as the most politically expedient of Chancellors and PMs.

There is a clear opporunity for contrast here. A Conservative Party that will plan for 2010-18 rather than just for four years, a Conservative Chancellor who will make the tough decisions necessary to secure long-term prosperity, a Conservative Prime Minister who will formulate policy around what we can pay for rather than what we can borrow against and a Treasury team of Ken Clarke, Phillip Hammond and George Osborne that is both more able, more popular and more trustworthy than Mandelson, Byrne and Darling. To my mind, we have the tools – what I don’t understand is why we are not taking the initiative.

It’s a fluid situation – the level of deficit cuts and savings needed will fluctuate with each pronouncement on how recovery is going – or whether we slip back into recession. But the budget presents an opportunity to brush aside what will be a populist, shameless and cycnical piece of propaganda designed to win votes and create difficult questions for the opposition. We have a clear opportunity to make some assumptions, to take a snapshot of the economic climate and to make our own proposals for the British people.

Without their confidence on the economy, it will be a struggle for DC to gain a majority in parliament. The upcoming industrial action may play into his hands and he needs to capitalise with a clear understanding and strategy for the economy; these two things may alone prove decisive.

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Not so easy now

January 11, 2010 — admin

Reality bites - Nick Clegg has ditched some of his key promises

Writing in the Grauniad this morning, a smug Michael White claimed that DC’s appearance on the Andrew Marr Show had clarified nothing and that he had not been able to give firm promises on any of his draft manifesto commitments. Well, I can’t deny that DC is avoiding any more cast-iron guarantees but neither can Mr White deny that the reason he is doing so is because of the total and utter ruin to which the government his newspaper supports has brought the economy.

Furthermore, we know that the government is being deliberately obstructive of Conservative attempts to gain access to Treasury information – both to hide the extent of their failure and deny the opposition any advantage they may derive once in government. DC knows that things are bad but he isn’t sure how bad and until he knows he’s not making any promises. Is Mr White saying this isn’t sensible?

The Liberal Democrats have been busy making quite a bit of hay over that situation in the past. But now it turns out that they too have seen the absurdity of promising free elderly care and scrapping tuition fees when the money most obviously isn’t there to fund it. It’s not the first time they’ve decided they want to scrap some of their policies (Mansion Tax, anyone?) but at least Nick Clegg is shelving these because he can’t afford it, rather than because they are rubbish.

As ever with the Lib Dems though, they don’t have to be properly costed because they aren’t ever going to be enacted. But there comes a time when promising the earth just looks silly - even when you don’t necessarily know the details of the costs involved. Such a point has been reached and Nick Clegg is using the opportunity to launch his own austerity regime.

Which just leaves Labour. The Chancellor has promised cuts, the PM used the word once but thinks he got away with it and one half of the Labour party wants class war and investment and the other half wants the middle class vote and a pair of sharp scissors. It is clear that the government is in total disarray not about the economic policy needed – because both spending cuts and tax rises are coming without a doubt – but how to present this to voters.

The Conservatives went for honesty at their conference last year and it went down well at first but started to wobble once the government comms department got hold of it. The Lib Dems tried honesty, the party didn’t fancy it and so they went back to investment but now Nick Clegg has obviously put his foot down for the sake of credibility – as far as it goes, good on him.

But Labour – Labour is a complete and utter shambles with PM, Alistair Darling and Milipede pulling one way and Balls/Cooper the other. Most of the cabinet seem to have given up, obviously completely bemused with the whole situation and the shattering lack of leadership.

They didn’t go into politics for this. Hopefully, they’ll be put out of their misery before too long.

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Debt? Darling can’t budge it

December 10, 2009 — admin
Your exchequer needs you...

Your exchequer needs you...

Looking at all the papers this morning, it seems that they are pretty unanimous in their distaste for the Pre Budget Report announced yesterday. Even the BBC led with a Conservative-slanted headline (the old “denies” trick frames the allegation neatly without defamatory undertones).

Labour has had a long time to think about this PBR. It has brought Alistair Campbell back onside to help Gordon overcome his daemons against DC and it was its own idea to have a PBR in the first place, presumably because simply having a full budget in the spring would have been disastrously downbeat so close to a “presumed” election.

Let’s look at some of the things we got -

  • Moving the tax ceiling for NI increases to £20,000 when the average wage is £22,000
  • Borrowing from 2011′s budget to fund an increase in pensions and benefits
  • An expedient tax on bankers that while morally justified will achieve little
  • Moving more people into the 40% tax rate
  • Freezing on Inheritance tax threshold when a raising was promised
  • A reduction in Bingo duty to favour Labour’s core vote in the north
  • VAT increase to go ahead

Budgets have always been political so I’m not going to complain about that – Ken Clarke reduced income tax in the run-up to the 1997 election. All’s fair in politics and all that. But what this is goes beyond that – Labour’s umpteenth NI fiddle is a tax that is going to make employing people less attractive.

Their borrowing from 2011 to fund pensions and benefits is going to have to be clawed back after the election by whoever wins it. It’s a shameless, reckless action that goes against everything the past 2 years has taught us – just as world leaders meet in Copenhagen in an attempt to stop us borrowing global resources from the future, so Alistair Darling is borrowing money he doesn’t have from a point in time where he doesn’t have it either.

There’s a fair bit in there about bankers and rich people who earn more than £150,000 etc and I’m sure the Conservatives will be arguing that this is taxation against aspiration just as I thought they should in my previous post but one. I don’t oppose progressive taxation in principle but in practise it’s just posturing.

Barely anyone will pay any more tax than they do now and a good many will leave the country altogether, thereby reducing the tax take.

Many socialists insist that the country would be better without them. That is a petulant view that fails to understand this recession is not just the bankers’ fault; it is pretty much everyone’s fault. If you have borrowed on the value of your house, if you took advantage of cheap credit or if you drove demand on a product so its price increased and people had to borrow to purchase it, you played a part in the recession. I know I did.

The point is that blaming it all on the bankers is a government smokescreen to cover up its own failure properly regulating what was going on. Bankers are to blame, yes, but they are not by any means the only ones.

Nor in this budget is there any evidence that Alistair Darling has a clue where he will cut services in order to pay off our debt. My feeling is that he has given up on that one and is just going to leave it to the Conservatives to sort out. But it’s more important than that.

Our economy won’t be able to grow, our services won’t improve and we won’t see government action while this massive, crushing debt is hanging over us. From £1,000 per taxpayer in 2003-4, it’s now £6,000 per taxpayer today. The shackling effect of debt will spell the end of our economic pre-eminence unless we tackle it as soon as we can.

Thousands of families from all backgrounds have been forced into this during the past two years. Shocked into action and thoughts of savings, they have realised that in order to build reserves and invest properly (rather than through PFI-like schemes), they have to pay off their debts before they save. So they’ve cut their costs to do that.

The government’s idea is to keep spending in order that their income might increase and that money be used to pay off debt. But all the time that debt is increasing and any new income goes straight on trying to keep yourself straight and level.

Yes, there will be short-term pain for long-term gain from DC. But Labour’s Carry On Spending narrative is no comedy – it is a dangerous tactic that could lead to irreparable harm.

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If only they’d learn

November 17, 2009 — admin
Michael Gove understands strategy rather than splurge

Michael Gove understands strategy rather than splurge

…That throwing money at a problem doesn’t solve it unless you have the correct strategy to resolve the core issues. For Labour, far too many times the distinction between resources and strategy has not been made and extra resources has been the strategy. In the NHS, we’ve seen so much money wasted because it hasn’t been spent to address a problem, only to grab a headline.

Now Ed Balls wants an extra £2.6bn to help keep education funding on parity and protect it from cuts. It’s a typical, cynical example of the above. Yes, I’m all for money being spent on education. I believe strongly that there is a direct link between quality of education and later quality of life – I want to see people have the opportunity to become exactly whatever they want to be because that generates a happy and cohesive society. I can’t think of anywhere better to spend £2.6bn than in education.

But there’s a couple of points here. If education is, as Tony Blair claimed, at the heart of the New Labour agenda, why on earth wasn’t this “extra” £2.6bn factored into the spending plans? It is completely irresponsible for Ed Balls to go cap in hand and try to bounce the Treasury into exceeding their budgeted spending. As a former Treasury advisor, you’d think that Balls might know that. It’s not something that appears to have escaped Alistair Darling’s notice.

And second is that there is absolutely no evidence that if Ed Balls got his way the £2.6bn would make any difference to the state of education in this country. I believe that the government’s spending in education has been wasteful and misdirected and that the experience given to young people could be improved without new money and even with less. Once again, Balls is after the headline, he’s after the political quick-fix – trying to pin the Conservatives down over matching his commitment – and it’s the mark of a government on its way out.

Maybe there are questions over whether the same money can be spent on education in the short-term future – particularly if you include all the off-balance sheet PFI spending that the government is less keen to boast about. What I do know is that the public favours spending cuts over tax rises to plug this Labour government’s disastrous financial legacy and Michael Gove’s education spending will be targetted at addressing issues, improving standards and not just at picking up coverage on the front page of the FT.

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Policy exchange, Darling?

November 16, 2009 — admin

I spotted this earlier on in The Telegraph, taking a brief break from its one decent scoop of the decade. Back in April, the Treasury apparently levvied a £30,000 standard charge on all non-domiciles, regardless of income in exchange for not paying income or capital gains tax.

How interesting. I seem to recall this policy from somewhere else, namely here (read down page), George Osborne’s brilliant party conference announcement in 2007 on Inheritance Tax, which confused the PM enough for him to bottle a November general election he would probably have won.

At the time, Alistair Darling said the £25,000 levy “would raise only a fraction of [the money] needed and said Mr Osborne had inflated the number of non-domicile people.”

“Yet again, this is an example of where the Tories are making promises on tax which they can’t afford to pay for. He is making a promise he hasn’t got the money to pay for. If you do that, you create the very instability which is the last thing the economy needs and people in this country would pay for that.”

Clearly, it wasn’t such a bad idea after all. At least in Mr Darling’s mind.

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