Austerity? What austerity?

I have never understood Labour's economic criticism of the Coalition. They apparently cut 'too far, too fast' causing the economy to fall into double-dip recession. But they are also now committed to borrow an additional £150bn more than their original forecasts because - apparently - they didn't borrow enough in the first place. Shouldn't Labour be pleased the government is now borrowing more than they were intending under Alastair Darling's original plan? Indeed, given that borrowing now exceeds Labour's plan, it is they and not the Coalition who should be criticised for cutting too far too fast.. this dis-ingenuous argument will go on and on.

The truth is that after two years of so-called austerity and what the left have disgustingly described as  'the Tories final solution' (Polly Toynbee), state spending has been cut by just £8bn - around 1% of GDP according to budget figures. You could not have had a more compassionate and understanding government correcting the monstrous levels of public spending than that.

Champions of Europe..

Congratulations to Chelsea on becoming European champions last night. A magical performance full of grit and determination. They didn't look the better team on the night, and the statistics speak for themselves - 16 corners to Bayern against just one for Chelsea. What made them champions was the unbelievable defence they put up against the might of Munich. Wave after wave of attacks tackled, stopped, blocked and repulsed in one of the most plucky performances of the year. And when it finally came to penalties, Drogba delivered. Wonderful.

The economic future of a generation is being sacrificed by the Euro..

A rigid system that locks down each state's monetary flexibility yet limits fiscal transfers between them can only resolve its internal imbalances through painful adjustment says Cameron in today's speech about the Euro. Labour then criticise him for being patronising and arrogant.

No doubt Labour continue to believe we should be a part of this disastrous economic experiment.

The truth is that on the very night that Coalition talks were taking place in May 2010, the then out-going Chancellor Alistair Darling, phoned George Osborne from a European Finance Minister's meeting to ask if the incoming government would support a bailout for Greece, whose credit had come to an end.

Nothing since has changed. Fully two years on, the same questions are being asked, the same inappropriate solutions being offered. Cameron has been remarkably restrained over that time in commenting on the Eurozone's congenital problems. Nor did we hear from Labour any warnings as to its inherent and flawed contradictions.

Meanwhile the jobs, savings and economic future of a generation of Europeans right across the continent is being sacrificed in the name of a failed economic experiment called the Euro.

Well done Manchester City on a brilliant performance today to become Premiership champions. It was well deserved. I'm just so pleased my gorgeous super hoops stayed up..

The Alternative Queen's speech..

There is a simple technical term for why the Tory party is in its current mess. It’s called.. the 50p tax cut. Look at any graph of the opinion polls and they tell the true story. Up until March the red and blue lines indicating Labour and Tory support bump along broadly in parallel. And after March the blue line falls off a cliff.

It has nothing to do with gay pasties, marriage in a jerry can or Jeremy Hunt sending dodgy emails to Rebekah Brooks's horse. It’s because at a time when the nation was being told – and broadly accepting – that we all had to be in this together, the Chancellor suddenly leaped up and said “Actually forget all that, we’re looking after the toffs; you serfs can go hang.” writes Dan Hodges.

He is of course quite right, and the Conservatives, having lost that trust which took so long to build, will now spend the next three years trying to regain it. How careless. How stupid. How depressingly easy.

So today's queen's speech becomes an important test, not just of the government's competence, but their ability to rebuild that trust with the British electorate. Here then is the alternative program - not from what the Prime Minister has described as the 'noisy ideology' of Conservative Home and the party's right - but from the people who continue to support a Coalition of the willing - a program building upon this government's radical reforms in education, welfare and health, as well as the unfinished strategy to tackle the monstrous economic problems left by Labour.

These measures are aimed fairly at the people, whether in government through Lords reform, or as part of a continuing social revolution aimed at achieving a nation which John Major once described as being 'at ease with itself'.

Firstly a bill which decriminalises, through licensing, the supply of prostitution throughout the UK. No more pimps. No more black economy. No more exploitation. No more abuse. No more murders. Just clean, professionally run brothels, properly licensed by local authorities and contributing to the British economy - a win for the treasury, sex workers and their customers.

Secondly, a bill which decriminalises, through licensing, the supply of heroin throughout the UK. Any heroin addict may register through a GP to be a licensed user and receive clean, clinically measured and unadulterated free supplies daily. No more deaths from overdose, impurities or neglect. A health service that knows each and every addict and is able to offer support, rehabilitation and hope. And most importantly, an end to the desperate daily crimes of burglary, mugging and other theft to line the pockets of illegal and exploitative suppliers.

Thirdly, a bill which transforms prisons into adult educational facilities. We need to ensure that all prisoners are given the opportunity of learning a trade before returning to society, as well as the gift of basic literacy and numeracy guaranteed to any able prisoner with a sentence of two or more years. It is absolutely essential that every prisoner is able to become part of, and contribute towards being a worthwhile member of society.

Fourthly - and right at the heart of an alternative Queen's speech - a bill to reform the House of Lords. But not by extending a further tier of government to our already failing political class. This bill will put ordinary people at the heart of government. We propose to supply 600 citizens to serve in two week periods as members of the House of Lords. There they will vote on proposed legislation from the House of Commons. They will be chosen from the electoral register - in the same way that jurors are selected - one from each constituency, directly reflecting by gender, age, ethnicity and geography every part of our diverse national character.

David Cameron needs to put people first. Not politicians, higher rate taxpayers or special interests. He should be improving the lives of ordinary people.




 

David Aaronovich on the left's hatred for Murdoch..

Those of us who work for The Times know that such exaggeration comes close to outright falsehood. I understand perfectly how this sounds, but I’ll say it anyway: this newspaper is the best run and most collegiate of any media organisation that I’ve worked for, and I’ve worked for a few. Mr Murdoch, therefore, is eminently fit enough to run us. As for TV, Uncle Rupert, as none of us call him, bought a loss-making satellite operation in the 1980s and, against the background of derision and opposition, turned it into BSkyB. He believed in it, invested in it, made the losses and came through. Is he fit to run it? The question is almost ludicrous.

Rupert Murdoch didn’t and doesn’t actually change big policies. Tony Blair — a convinced European — was not swayed by News International’s Europhobe inclinations. And credit, if any is due, for not joining the euro more properly lies with Gordon Brown than with any Sun editor.

Despite that, I myself have no quarrel with the long march of accountability through the various corridors of power, however uncomfortable. I welcome it. But I would prefer it to be led by people who are not associated, as Tom Watson is, with attempting the “rehabilitation of old-style trade union fixing and activist stitch-ups”, as Tony Blair said in his memoirs. Such politics was all, said Mr Blair, “great fun for those who like that of thing”. But the thing is, most of us don’t.

David Aaronovich in the Times. Spot on..

Rights and wrongs..

We've seen the argument before: because Cameron was not right wing enough, he failed to achieve a majority in 2010. Patrick O'Flynn repeats it in today's Express. What they don't tell you is that he achieved the largest swing to the Conservatives since 1931.

Indeed if more right-wing measures were needed to improve the party's polling position, why is it that a reduction in the top rate of tax for all those suffering on over £150,000 per year has resulted in the first real drop in support for the Conservatives since they took over in 2010?

Murdoch is deceiving Leveson..

Rupert Murdoch's contribution to both the British press and, through Sky, the wider broadcasting media has been incalculable.

Indeed the UK enjoys one of the most independent and yet vociferous media in the world, substantially as a result of Murdoch's work.

But it is inconceivable that a man, so deeply involved in the production of stories over the last five decades did not know how such stories were being generated.

On the stand at Leveson this week Rupert Murdoch has not been telling the whole truth.

PMQ's is pure theatre..

Iain Martin berates Cameron for a feisty performance at PMQ's telling him to calm down - he could not be more wrong. This is the greatest piece of political theatre in the world - although I'm told the Australian version is even more gauche.

Knowing that Ed Miliband had several open goals with which to score today, Cameron was at his most combative. And what a sight to behold - pithy, succinct and devastating. Miliband never had a chance, resorting as ever to the whiny 'I'm suppose to ask the questions' routine which sounded truly pathetic.

Miliband should learn; this is what real Prime Ministers are made of.

Hypothecating charity..

Such a good blog from Dan Hodges on the capping of charitable donations that can be off-set against tax by higher rate taxpayers, which follows on from Polly Toynbee's piece in this mornings Guardian. And just how many times have you heard me say I agree with Polly? the truth is, I can't remember the last time. Still, however misguided these two commentators are politically, they are dead right on this one. Everyone should pay their full due in taxes. Charitable donations come after tax, not before..

Hodges on Livingston..

Dan Hodges, a Labour supporter, blogging about Ken Livingston: Maybe I am being indulgent. Perhaps we all are, those of us who are finally turning round and saying “sorry Ken, enough is enough.”

But on balance I don’t think so. I think the truly indulgent people are those who cry at their own campaign videos. Who take to the streets against Labour candidates when it suits them, and then demand loyalty from others when it doesn’t. Who use a political party as a vehicle for their own political ambitions, then abandon it when they realise it isn’t going to get them where they want to go.

Ken Livingstone has been indulged and indulged and indulged. Next month the indulgence will finally stop. The voters of London will see to that. Ouch.

#election92

Spent most of the morning between Twitter and the BBC Parliament channel re-living the 1992 General election in a twelve-hour, twenty-year anniversary special broadcast of John Major's famous victory.

Besides the strange haircuts and ridiculously over-sized glasses which made '92 one of the worst years for opticians, it was how wrong the left-dominated media were in their disasterous predictions which resonated the loudest. Little change at the BBC and the now CEO of YouGov, Peter Kelner, looking close to tears as political reality became clear with a fourth successive defeat of his beloved Labour party.

I remember the events on that night vividly and have never trusted his predictions - nor those of his polling organisation - since.

Daley's contradictions..

Really sloppy piece from Janet Daley in the Sunday Telegraph highlighting contradictions in Coalition policies. Usually one of the best writers, she argues that Cameron contradicts himself by supporting both gay marriage & ethnic minorities (who are all apparently homophobic and bigoted) and then goes on to suggest that any taxes on high value property would be disastrous for aspiration because people living in these £2m+ homes are cash poor and would have to move. Just like Sunday Telegraph columnist Janet Daley. Personal prosperity (sometimes called “existing wealth”) goes from being a desirable outcome of economic life to a form of original sin to be penalised into extinction she argues. Well despite the sizeable earnings of a Telegraph columnist, she should understand that anyone who owns a property in excess of £2m is wealthy and needs to contribute more than someone living in a property one tenth of that value. That indeed is fairness. Particularly if they are non-doms paying little or no tax from earnings.

I certainly don't think we need a new mansion tax as Vince Cable is advocating. But a complete revaluation of council tax bands with extensions up to and beyond £2m we most certainly do.

Republican dream ticket..

I really havn't been interested in the Republican primaries in the US, but one commentator last week suggested that Mitt Romney appeals to white collar workers, whilst evangelist Ric Santorum to blue collar. The problem for republicans was the lack of candidates that appealed to both. So why not put them together? Sounds like the dream ticket to me...

Why a tax on wealth would be fairer..

At the other end of my street and just around the corner lies a different world. A world of multi-millionaires. We see their spotless Range Rovers whisk demanding children in and out of school. We see houses so huge they need staff to maintain them. We see homes boarded up for more than half the year whilst they 'winter' in the Alps or 'summer' at some other exotic location - as if doing so were as normal as a hairdressing appointment to you and me. We live in a different world.

And among those mansions lies one which, at the moment, is covered in scaffolding. Where once there was a garden, a deep concrete hole with four feet of rain water now stands. The builders tell me it is the foundations for the new swimming pool being built in the basement.

We live in a different world and what makes that world so different, is that we pay taxes. You see, officially, a wife and her daughter live in this house. No husband, because he lives in Monaco. Except at weekends. Then he lives in London with his wife and daughter, flying back to manage a hedge fund for the working week. That way, he pays no income tax in this country. Only council tax and VAT. In fact, his staff will pay more tax than their multi-millionaire employer. Nice that. The tax he should be paying is being spent on a swimmimg pool. Just for him.

And on that council tax - the one tax that they do pay in this country - because the highest band starts at £320,000 (a rather modest price for a house in an inner London borough) and despite the fact that we live in a modest basement flat, we both of us pay the same amount in council tax. How fair is that.

Patients first..

According to PoliticalScrapbook.net even cabinet secretary Sir Jeremy Heywood - David Cameron's most senior civil servant - now wants him to scrap the Health Bill. And his reason? This new top-down reorganisation will take away whitehall's (top down) control of the health service. Yep, that's right. The biggest vested interest of them all - the civil service - wants the bill scrapped because it takes away their powers to control the health service and puts it into the hands of those the health service is supposed to serve - patients. You could not make this stuff up. People simply wouldn't believe you.

Patients First...

Writing in the New Statesman blog, Rafael Behr admits the real truth surrounding Labour's unprincipled opposition to the Coalition's NHS reforms in one sentence - Another way of putting this might be that market forces are tolerable when Labour allows them to operate in a carefully controlled environment, but destructive and corrosive when unleashed by Tories and Lib Dems. That sentence sums up the opposition. Its not about patients. Its not even about policy. Just visceral hatred of anything proposed by the Conservatives. But the real shame - and no doubt Ed Miliband calculates these things to carefully advantage his union paymasters - is that once again, Labour is on the side of vested interests, against the interests of patients for whom the health service should be run.

I can understand why professional trade unions like the BMA and the royal colleges will always resist change believing, quite wrongly, that they alone know how a health service should be run. They fought every reform through Blair's New Labour years, as well as the original creation of the NHS back in 1947.

But a political party which claims to represent the people? Surely not. Labour is now the only major party clinging desperately to the past. Preferring instead to support the bureaucratic processes and vested interests who want no reform. It is deeply shameful of Ed Miliband - the most left wing leader since Michael Foot - to deny ordinary people a National Health Service driven by patients - their needs, their choices, their health.



 

The Scottish people are too important for this...

It may be protocol to have polite discussions with Alex Salmond on the timing and question for a Scottish referendum, but who are we kidding on this one? The longer things can be stretched out and the more obfuscation by the SNP, the bigger Scotland's would-be Prime Minister looks. Its the sort of game that Salmond plays well. He's been at it for years.

But as soon as you start to examine the implications for an independent Scotland - from bailed out Icelandic Scottish banks to which currency the Scottish people would like to have no control over - it becomes very clear that Salmond does not speak for the Scottish people. 

The reality is that independence would make Alex Salmond, Scotland's first Prime Minister. An ambition he has held for a very long time. And that is what this is all about. This man will sell his own country in order to achieve his personal ambition.

The British government should bring forward this referendum to May 2012 - just three months time - with a simple in/out question and have done with it. Independence is too important an issue for the Scottish people to be sacrificed on the alter of Alex Salmond's ego.

Patients first...

Imagine how our banking system would look if it were run for the customer. Modernist glass and beach wood waiting rooms fitted with plush, comfortable chairs before your Relationship Manager ushers you in to a private room for a consultation where their undivided attention addresses your financial health.

But rather than being paid for selling you more and expensive products, the opposite is true. After several years of in-depth training on the full range of financial products, they have a professional duty to ensure that any advice they give is demonstrably in the interests of the customer. Not the bank. A world where complaints are taken so seriously, that a Relationship Manager could be struck off by their professional body and serious fines imposed on the bank if incompetent practise were found.

Furthermore, that Manager is responsible for reappraising and reviewing any financial commitments at every stage of your life. Indeed, were any new commitment required - a smaller mortgage for instance - your Manager would not only explain and gain your consent, they would negotiate the terms with the lender, set up the contract and once up and running, review the commitment at regular intervals, mindful that better deals may well be switched into at any time. Wouldn't that be wonderful?

Well that is exactly what the Coalition's Health and Social Care bill is all about. Putting the patient first. And just like the scene above, when GPs are given commissioning powers, they'll manage the care of their patients, knowing exactly what is best for them, right through to a successful outcome and beyond. How terrifying is that?

Mary Ann Sieghart on the greatest policy blunder of the second half of the 20th century...

The European people have yet to fully understand the real incompetence behind the Euro project. But a good starting point is this excellent piece from Mary Ann Sieghart in the Independent. She concludes with the words, millions of European citizens are now paying (the) price in unemployment, crashing living standards and a desperate future for their children. Someone must be held responsible for the predictable catastrophe caused by this grand idea. Mitterrand is now dead; at the very least, Kohl and his fellow architects should be disgraced.

The Limits of Welfare

'A welfare state that works is one that encourages independence. That was Beveridge's insight and a test that the welfare state now fails' concludes the leader in the Times this morning.

Opponents to Iain Duncan Smith's proposed £26,000 welfare cap (equivalent to a gross salary of around £35,000) 'are simply a plea to retain a welfare system which has long since slipped clear of the intentions of it's founders.'

The opposition of the bishops comes in for particular criticism having 'managed to avoid both economic reality and popular opinion at the same time. At a time of severe pressure on the public finances, the country is not engaged in a morality play but, even if it were, the bishops have got the morality call wrong.' Ouch.

Explaining Labour's 'U-turn'...

Danny Finkelstein points out in today's Times that Ed Miliband's new economic policy is to continue to oppose the cuts as 'too far and too fast', but to accept that Labour will not reverse them. To which many will ask what is the point of opposing the management of the deficit if it cannot offer the alternative? Especially since it has argued and voted against each and every measure to manage the deficit created by Labour?

Does Labour accept that it spent too much before the financial crash of 2007? No. Does Labour accept that it spent too much after the crash? No. Does Labour accept that the Coalition's plans to reduce borrowing over the lifetime of this parliament were correct? No. So what exactly is it saying? Two things. Firstly, the Labour party want to increase borrowing in order to cut borrowing. Secondly, they are against the Coalition cuts, but at the same time accept them. Clear? Not really.

So let me explain it to you in a different way.

The Conservative party knows that the Euro is a disaster. They have known this since the Euro's earliest conception, and clearly and repeatedly argued why the Euro was ill-conceived and how it's destruction would come about. The European political class of course, was not listening. They are still not listening. But rather than continue to oppose it with every breathe, Cameron and Osborne have chosen to move on. For the last twenty months they have supported Eurozone members - despite the carping from Sarkozy - by urging them to integrate further and more quickly into one federal country, knowing that only in those circumstances will the Euro as a currency become viable.

The Conservatives fully realise the implications of such a move by the seventeen Eurozone nations, effectively becoming one country. They also know that Britain would never give up its sovereignty in such circumstances. Yet they suggest that the Eurozone do something that they themselves find totally abhorent.

You may call this dishonest, disengenuous or even unprincipled. It is all of these things. And it is exactly what Labour is now attempting in its economic policy.

Referenda questions...

A couple of thoughts on the Scottish referendum.

Firstly, this referendum so changes the game throughout the union that it must be put to every voter no matter where they live. It must be a fully national referendum providing a definitive answer to a profound question.

And secondly the question of Devo-max should be put, but not as an alternative - a stepping stone to independence - as Salmond would wish.

The principal question - independence, yes or no - is the important one. But a choice between devo-max or the current level of devolution should be put to those who vote against independence as a secondary question. That way it is not posed as an alternative to independence, but fully recognised as an important choice of degree to those who support the union.

Same old Fitch

Sarkozy may have been downgraded from triple A on Friday, but one ratings agency, Fitch, was notable by it's absence. Both the wonderfully Dickensian sounding Standard & Poors, and Moody's confirmed France's reduction to AA+ principally, I would venture, because it's banks have lent around €480 billion to southern Europe. The equivalent sum from UK banks being around €80 billion.

These of course are the same ratings agencies which spectacularly failed to signal the worst banking crisis in recent history.

And the reason why Fitch failed to follow suit? No doubt some astute financial analysis the others had missed. Indeed, so enamoured was the company by France, it went on to confirmed that it wouldn't change Sarkozy's triple-A rating, come rain or shine. The reason? It's main shareholder is French.

The Scottish people don't deserve Mr Salmond...

So finally, having firstly accused the British government of interfering in Scottish affairs - as if Scotland were not a part of the United Kingdom - Alex Salmond and the SNP opt for the 700th anniversary of Bannockburn as their chosen date for the forthcoming referendum on Scottish independence. No emotion there then. Just hard-headed scottish pragmatism.

The first question he needs to answer is which currency Mr Salmond would choose for Scotland - the pound, the euro or the deep-fried Mars bar. If the answer is the pound, would the English let it keep sterling? What a delicious irony awaits there. And as recent events in euroland have shown, monetary union without political union is a nightmare.

Then there's the question of EU membership. For many years the SNP beguiled the Scottish people with the prospect of joining what Salmond liked to call the 'arc of prosperity' - a string of financially prosperous islands across the Atlantic seaboard of Europe: Iceland, Scotland and Ireland. Oh dear. Only Scotland it would seem survived that illusion. Principally because its banks were bailed out by the British taxpayer - something not available to the other two nations. Because of course, they were independent.

'Independence within Europe' was another of Mr Salmond's worthy slogans. Except that as a new member of the European Union the Scots would have to commit to joining the Euro, even if it were to be some way into the future - the EU does not have euro and non-euro members, just euro and pre-euro. Another interesting position for Mr Salmond to have to justify to the Scottish people. Not to mention Scotland's financial committments to the euro bailout fund which would automatically ensue from their membership. But the other side of the coin would also be true. How warmly do you imagine would Germany welcome into the eurozone another small country which spends considerably more than half its GDP in public spending? And this one doesn't even have the sunshine...

Then there is the small matter of the Royal Bank of Scotland which managed to go bust in the most spectacular way through its irresponsible lending policies and inept management. Either Mr Salmond could take responsibility for repaying the £40 billion that mostly English taxpayers have put into it or it could remain the property of the British taxpayer.

There is also of course, the national debt. The Institute of Economic Affairs has calculated that if an independent Scotland assumed its share of national debt dictated by its proportion of public spending then it would start life £110 billion in the red. The question which follows is, would Scotland then still have a triple A rating in the financial markets? Not likely.

Of course, according to the SNP there is £1 trillion in black gold beneath the waters of the North Sea. But UK oil revenues are highly volatile - last year they were £6.5 billion, this year £13 billion. And with the ending of the Barnett Formula, through which Scotland receives a £10 billion annual subsidy from English taxpayers - and which funds many of Mr Salmond's most popular programs, from free university education to free care for the elderly - it will need to make up the shortfall.

All that is quite an ask of any politician. But I am constantly assured by the media that Mr Salmond's judgement and ability is up to it. I just wonder, given the extraordinarily inept judgement that he has shown in the past, whether the Scottish people deserve such folly.