Saturday, 24 April 2010

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Wednesday, 14 April 2010

Two socialists, one bottle

Europe has had an interesting double-act on his hands during the economic crisis, though not a great deal of attention has been paid to it.

On the surface there are many similarities. Britain and Spain both have socialist prime ministers, both of whom were in office well before the crisis struck and both of whom present themselves as the best people for the job of handling the mess they did more than a little to inflame.

Unlike the Greek socialists, both Gordon Brown and José Luis Rodríguez Zapatero are in the difficult position of not being able to blame their predecessors for the almighty mess their countries are in. Zapatero has led his Socialist government 2004 while Brown has effectively held the reigns of the British economy since 1997. No escaping that one then.

But differences between the two become more apparent the further you dig. A feature in Monday's FT explained how "Spain was one of the few countries to run a budget surplus during the good times [and] entered the crisis with a low level of government debt - even now, at more than 55 per cent of GDP, it is 20 percentage points below the eurozone average"

The great difference between the two though comes, alas, from what they are actually willing to do about it. For Zapatero, the crisis gave a cold sobering slap in the face to a government that was riding on an artificially-induced post-euro euphoria. He now openly talks of 'austerity' and 'cuts', admitting that necessity commands he must do the unpopular but right thing.

What is Brown's answer? Mo' spending, mo' spending, mo' spending!

While his iberian counterpart talks frankly and honestly to the Spanish people about the hard times ahead, Brown prefers to hide his head up his own backside while criticising the leader of the opposition for saying the same thing. No wonder Ellie Gellard wanted to get rid.

This behaviour represents two things. Firstly, Labour's inability to engage with voters in an adult manner - why speak honestly when you can dangle debt-funded welfare treats infront of the electorate? Secondly, Brown's infamous inability to make tough decisions.

To his credit, Zapatero has excelled on this front, despite having a great deal to lose. The Spanish general elections are only two years away and, like Labour, the Spanish Socialists rely heavily on the trade unions, who are not going to be happy.

Undeterred, Zapatero told the FT (emphasis added): "We've just taken difficult decisions. Raising VAT, I can tell you that's not something that's been done to get people applauding us. You just have to look at the reaction of public opinion. From here to the elections our policy is going to have to be one of austerity and cost cutting ... There is no other way."

Can you imagine such talk from Brown? No, of course you can't. His claim to be a conviction politician has been exposed as the biggest single lie of his premiership (start as you mean to go on they say...)

Speaking of which, I couldn't help reading Zapatero's austerity plan without thinking of that other great conviction politician Brown facetiously compared himself to. Could this socialist be a Spanish Thatcher in the making?

The prospect is certainly an amusing one, but the evidence is compelling. Zapatero told the FT he plans to raise VAT, confront unions over labour reform, raise productivity, increase flexibility and emasculate the bureaucratic and spendthrift regional governments.

The idea of a Thatcherite socialist might sound something of a bad joke, but Zapatero's steadfast ability to look reality in the face and make tough fiscal decisions shows the only joke in the room to be Gordon Brown.

Another four years of Labour however would not be at all funny.

Friday, 2 April 2010

Even the Blair years showed the benefits for all of low taxes, so why are we going back?

Henry Campbell-Bannerman said in 1903 as Liberal leader of the opposition: "To dispute free trade, after fifty years' experience of it, is like disputing the law of gravitation."

At the time he was railing against the Tories' colonial secretary Joseph Chamberlain calling for protectionist tariffs.

The Conservatives have since learned from their mistakes regarding protectionism - we are now proudly a free-trade and free-market party, carrying the torch of classical Liberalism into the 21st century.

The Liberal Democrats seem to have forgotten these lessons they once so passionately taught us, while Labour seem to be suffering from learning difficulties.

Take for example the 50p tax rate, introduced this month. One financial crisis is all it took for Labour to return to their old unfounded, disproved prejudices regarding taxation.

Geoffrey Howe and Nigel Lawson's incremental reductions in the top rate of tax from 83% in 1979 to 40% in 1988 cemented the growth of the British economy after the Thatcher years (with a minor blip in the early '90s) and greatly increased the wealth of the nation.

Figures published in yesterday's Financial Times from the Institute of Fiscal Studies (IFS) show how this new orthodoxy continued under Blair and, crucially, remained the most effective means of redistributing wealth.

The IFS contrasted Labour's taxation plans in the 1992 election under Neil Kinnock and John Smith with the actual results under Blair and Brown between 1997 and 2010.

As alarming then as it sounds now, Labour planned to impose a 50p tax rate for all earnings above £36,375 - that's still only £56,000 in today's money. Yet by their own figures, the poorest in society could only hope to gain an extra £2 a week.

By contrast, since 1997 the poorest two deciles of society have seen their incomes rise by more than 10%. For the richest, their incomes have shrunk by around the same amount.

To dispute low taxation then, after thirty years' experience of it, is like disputing the shape of the earth.

But the first economic crisis Labour have had to deal with since the one they created in the '70s has exposed them for the flat-earthists they are. They simply cannot learn from their mistakes or, it seems, their successes.

As a small aside, the Financial Times claimed on the same page that levels of disposable income have greatly declined under Labour. According to the report,

The slowdown in household income has come as the population has increased fairly rapidly, but also as wages and salaries have been stagnant in spite of big rises in profits at companies.

Could this slowdown be a consequence of the minimum wage? After all, if firms have to pay their employees more, they are going to employ less of them. This increases unemployment (and with it, benefit payments) while those who are in work are heaped with greater and greater responsibilities - most likely less productively because of the stress they are under.

Businesses, refusing to see their profits shrink, come under pressure to compensate for this through further firing, slave-driving and generally treating their staff badly, perpetuating the cycle.

The minimum wage may go up every year, but it would not surprise me if the £5.80 received today is worth less in real terms than the £3 workers would have received before 1997.

Sunday, 28 March 2010

No, this isn't 1979, but it is close

I recently came across a left-wing Twitter post which criticised the deliberate association of today's strikes with those of the infamous 1978/79 'winter of discontent.' To be sure, it's an entirely fair point - there were some 29 million working days lost to industrial action in 1979, with only 760,000 in 2008. We can hardly complain.

Unpopular as the BA strike is, it's highly unlikely this election will be fought on the issue of the unions as it was before Margaret Thatcher's landmark victory. That said, while the scale of the issue is far smaller than it was 30 years ago, the old trends are still visible.

Again we are seeing militant unions conspiring to damage and defeat a democratically-elected government (does that include Gordon Brown?) it disagrees with. Friday's Financial Times speculated that the timing of the RMT and TSSA's Easter rail strikes (in which only a fifth of services will run) was calculated to 'maximise the political embarrassment to the government' by beginning on April 6 - the day the election is expected to be called. Hardly uncharacteristic for the openly-Communist general secretary of the RMT, Bob Crow.

One of the great themes of the 1979 election and indeed the 1984/85 miners' strike was the undemocratic nature of the unions. Five years earlier Edward Heath fought, and lost, the 1974 general election on the question of 'who governs?' - such was the union stranglehold on the workings of government.

Surely the most enduring legacy of Margaret Thatcher's premiership is this has not been an issue for almost a quarter of a century. The principles of Parliamentary supremacy, the 'open-shop' and democratic ballots for strikes have been firmly established.

But it would be foolish to think that these issues have gone away for good. The planned rail strikes threaten to leave only a fifth of services running up and down the country on the basis of a 54% vote for industrial action. Given the overtly political timing of the strike, it does call into question the authority of the unions to take such a measure.

I am sure I am not alone in saying that unions ought to be exclusively economic organisations - that their very existence as political bodies challenges the legitimacy of Parliament and the democracy we have worked so hard to develop and - uniquely in Europe - keep over the centuries.

So while party funding is still a hot topic in Westminster, it is worth asking whether it is desirable or even morally just to have one of the leading parties in British politics bankrolled to the tune of 92% by a handful of trade union bosses - whose representativeness and own coffers are highly dubious.

Francis Maude made the point two years ago that union members are generally not given a choice over whether they wish to pay the 'political levy' to the Labour party and while only half of their members tend to vote Labour, it is not unusual for the unions to claim that 100% had coughed up.

This is a highly undemocratic situation comparable to the 'pocket boroughs' of the eighteenth century. The political levy is essentially a life-support machine for Labour no matter how unpopular they become, made worse still because of the backhanded way in which it is collected.

It is conceivable that, were it not for union funding, the party would have been permanently annihilated as a political force in 1983 under a wave of Tory and Alliance votes. The SDP-Liberal Alliance did, after all, collect more than 25% of votes cast in that election.

While I doubt the Liberal Democrats are exactly popular with readers of this blog, I challenge anyone to argue that they could be less disastrous for this country than Labour have been in the last 70 years.

After all, Lord Harris did say in 1990 that Thatcherism was 'more or less common ground between Conservatives and Liberals in the nineteenth century.' And whatever else you may think of them, at least the Lib Dems take civil liberties seriously.

Back to 1979 though, there are further parallels. The recent collapse in the Tory lead over Labour has led to expectations that May will produce a hung parliament. Ignoring the fact that political betters seem to disagree, it is worth looking at the polls in the run up to the May 3, 1979.

In the BBC's 'Decision '79' election coverage, David Dimbleby opens with the following statement;

Tonight we might still be reporting a walkover for the Conservatives and Mrs Thatcher, but the polls narrowed a good deal as [the campaign] went on. It may be that we see a straight Tory victory but it is possible we could find the Tories not winning the 318 seats they need if they are automatically to form the next government. There's even an outside chance, depending on how the smaller parties do, perhaps of Mr Callaghan remaining in Downing Street, perhaps even as leader of a coalition ... There was a lead at the very beginning for the Tories of over 20%, then at one point a very slight Labour lead.

As it happened, Margaret Thatcher won the election comfortably with a majority of 43. The rest, as we know, is history. She went on to win every future election she fought, with  landslide majorities of 144 and 102.

The lesson is, don't be too disheartened (or encouraged - Kinnock) by pre-election polls. They quite often mean nothing.

While we're on the subject of elections though, David Cameron has himself admitted that the party requires a swing larger than any in any election since 1931 to win a workable majority in May.

Well, let's take a look at that election. Stanley Baldwin led the Conservatives to a blistering 324 seat majority, while a discredited and divided Labour lost no less than 255 of their MPs. This was, by the way, in the middle of the greatest financial crisis the world had ever seen - sound familiar?

Sunday, 14 March 2010

Europe's balkanisation has already begun

'The sick man of Europe' is a term that has been used to describe, among others, the late Ottoman Empire and Britain in the 1970s (incidentally during Labour's last tenure of government).

I would say this term is no longer relevant - Europe is itself the sick man. In the last six months we have seen strikes and riots rock the continent as the EU's rigid economic system struggles to cope with the financial crisis; we have seen a quangocrat and a 'low grade bank clerk' elected by nobody to represent us; and democracy trampled on in another Brussels power-grab.

We have to ask ourselves how much longer we wish to share membership of an organisation which has, on one extreme, a socialist government that has handled its finances so poorly that it is on the verge of bankruptcy; and on the other a corrupt billionaire plutocrat who, apart from owning large swathes of his country's media, has made himself essentially immune from prosecution while conniving with his equally repulsive counterpart and friend in Moscow to persecute the family of Alexander Litvinenko.

Thankfully David Cameron, Václav Claus and Michał Kamiński already asked themselves this question, taking the courageous decision to form the European Conservatives & Reformists Group.

It would be interesting to see how bad things really have to get before any of these men wholeheartedly put their weight behind outright secession.

In the case of Italy the 'European pattern' is disturbingly familiar. The Prime Minister can now legitimately claim he is too busy to attend court hearings in which he is being prosecuted, making him effectively above the law. This is remarkable because the Italian legislature actually handed him this immunity on a plate.

The parallel with the Roman Senate sycophantically ceding more and more of its power to the caesars is disturbing, but accurate. As President, the Communist Giorgio Napolitano ought to step in, but has so far done nothing. Those monarchists who claim the Queen would refuse to ratify any undemocratic or unconstitutional legislation would do well to learn from this - Napolitano's role is essentially the same and just as toothless.

Berlusconi's flagrant abuse of his position highlights the weakness of the European Union but also its own superficial commitment to democracy. A body which forced the Irish to reconsider their decision on the Lisbon Treaty is unlikely to make its voice heard over the collapse of the rule of law in Italy. The concept has simply never gained any currency in Europe.

Though, harrowing as Italy's situation is (Tatiana Litvinenko's "I thought Europe had 100% rule of law" ought to be invoked at every session of the European Parliament), it is Greece that runs the risk of seriously destabilising the continent. The question over whether to bail out the country with taxpayers' money has already caused conflict between member states and resentment among their electorates.

Of all publications, it was the Independent that ran a piece on why the euro was to blame for the strikes that exploded over Greece and Europe earlier this year. The following paragraph, a stinging indictment of the single currency, is worth printing here in full (my emphasis);

During the relatively benign economic conditions that marked the first decade of the euro, fast growing economies such as Spain were able to enjoy the advantages of currency union, such as low interest rates, but allowed their prices and costs to gradually rise, leaving their economies uncompetitive by comparison with nations such as Germany. Traditionally, that cumulative build-up of cost and price differences would be dealt with by devaluation of the currency, but membership of the euro removes that flexibility. Thus Ireland, Greece , Spain and others are undergoing what economists euphemistically call "internal devaluation", slashing wages and costs and, if necessary, allowing unemployment to climb to record highs. The problem raised by the Nobel prize-winning economist Joseph Stiglitz among others, is that those deflationary polices threaten to shrink their economies even more, triggering an even more urgent budget crisis as tax revenues collapse and unemployment payments rise.

I couldn't have put it better myself. Though perhaps more ominous was: "The democratic strains in nations that had been ruled, well within living memory, by fascist leaders or the military are growing."

It appears that the Federalists have learnt nothing from the Balkan conflict. The horrors of war and genocide in the former Yugoslavia ought to have taught the world, and especially Europe, that forcing people even as ethnically similar as the South Slavs into one political entity serves only to exasperate the differences between them.

It is one of those bizarre twists of history that a people who fought so bloodily to tear the Yugoslav union apart should be striving so hard to join a new one in from Brussels. The Yugoslav wars have shown us that multiethnic unions without dictatorial lynchpins like Tito make nationalism and ethnic conflict more, not less, likely.

So it is with great sadness that I receive the Liberal MEP and former Belgian Prime Minister Guy Verhofstadt's announcement that "The ultimate consequences of identity politics are the gas chambers of Auschwitz" (thanks to Dan Hannan for drawing attention to this). More still to hear that this Nazi analogy is frequently thrown at eurosceptics in Brussels.

The sad thing is the Federalists really cannot see what they are doing. In binding nations with very different economies into a single currency with single interest rates they are manufacturing financial collapse and industrial unrest - fertile soil for for nationalism and extremism to grow.

Worse still, their efforts to redress the problem are fermenting resentment between member states and their electors - who they have already shown their contempt for by their shameful dismissal of Lisbon referendums.

I know I will be mocked for predicting the EU causing the next European war and honestly, I pray that I'm wrong. But Britons should bear in mind that where, in the past, we have always had the option of staying out of such conflicts, we are now directly involved. Right at the heart of Europe, as Tony Blair used to say.

Thursday, 4 March 2010

'Health and safety gone mad?' No, just a fatal lack of faith

This morning I was quite irritatingly refused entry to a First bus in Sheffield on account of my carrying a medium black Americano from Caffè Ritazza. Despite the cup having a cover that was almost préservatif in its covering, I was not allowed to enter the vehicle. The driver, very apologetic, threw his hands into the air pleading ’sorry, it’s health and safety!’ while directing my eyes to a helpful no-food-and-drink logo.

It was a minor inconvenience and looking back I should have known better, so I will refrain from using such cliches as ‘hell in a handcart’ and ‘nanny state’ (though this didn’t stop my friends from teasing me with them on Facebook) – I still managed to get to college on time, after all.

But what stuck with me after as I sat back down in the bus shelter to a little more Vampire Weekend (which incidentally is very relaxing) was the resigned sense of powerlessness I observed from the bus driver. That look of frustration as he had to bypass his own common sense for the sake of this increasingly sentient monolith of instruction.

Health and safety, innit? It’s telling, in my view, that the term in itself is often enough to explain why these events occur. It’s almost personified. ‘It’s health and safety.’ Read that back – it doesn’t even make sense. Who is this health and safety?

Now, at this point I would accept your scorn – going off on one about a slightly delayed bus journey is just silly. It would say more about myself and my frame of mind than what I’m attempting to write about if that was, indeed what I was writing about.

But that is not what I’m writing about. In fact the ‘cult of health safety’ is not what I’m writing about either. What I am, in fact, writing about about is this peculiar distrust of common sense that seems to have crept up in the last decade or so. About that fundamental lack of faith in people and their abilities which James Purnell recently criticised his own party for a fortnight ago.

The pitiful irony is that such slavish and unthinking subservience to health and safety rules and regulations – which exist to protect us – actually puts lives in danger. In outlawing discretion and personal judgement it puts otherwise responsible adults into the mental framework of children. In situations where peoples’ lives are on the line, this becomes deadly.

A chilling example of just this occurred in Ayreshire, Scotland in 2008; the inquest of which was reported in The Times yesterday.

Alison Hume, who had fallen down a 60ft mine shaft, was left there for four hours after emergency services arrived because health and safety rules specified that the lifting gear used to lower a firefighter down to her was to be used only by firefighters.

As such, a mountain rescue team were called to get her out. A paramedic who volunteered to treat her was also prevented from being lowered in. In the end she died of a heart attack as the mountain rescue team brought to the surface – six hours after falling down the shaft.

This should not have happened. Christopher Rooney, the first senior firefighter on the scene, told the inquest that ‘on the basis of the manpower and equipment available’ it would have been possible for the firefighters to bring Ms Hume to the surface themselves, without having to wait for the mountain rescue team.

So why was Ms Hume – a mother of two – allowed to die? For the sake of a human life, would it really have been such a crime for the firefighters to use their discretion, their responsibility, their common sense and heroism to break the rules and bring her up themselves?

Dominic Lawson once wrote that when all conduct is made enforceable, the ability for people to behave a certain way purely out of moral choice and conscience is removed. The net effect of this is that otherwise reprehensible behaviour becomes defensible with the get-out ‘it was within the rules’.

Lawson was speaking about MP’s expenses at the time, but the same principle applies. Though in this instance something far more precious was lost and, unlike taxpayer’s money, it can never to be replaced.

Friday, 26 February 2010

The left will always have a selective open mind

Picture the scene. A Labour education minister smugly glides into a special press conference, knowing they're about to release something big. The room buzzes with a frustrated energy. Pens scratch nervously against their pads in anticipation. The minister produces his paper and with tender glee proceeds to revolutionise on the spot our whole perception of how our children should be educated.

We should take a few lessons from Buddha, he says. Teaching our children to meditate would give them the power of clear, focused thoughts and inner quiet. He adds that we should utilise what we know of psychology - letting children know why they feel the way they do gives them the opportunity to control it when needed. All this would help them become more confidant, responsible and creative adults.

Surely liberals, teachers and arts folks would go mental for this wouldn't they? It's a crying shame no party has ever considered it.

Except the thing is they have. Unfortunately it was proposed by Michael Gove, the Conservatives' education spokesman, meaning that the left have blindly torn it to pieces like the nest of vipers they are.

Now I admit to being no regular reader of the Independent. But I was shocked and appalled by the close-mindedness of the paper's columnists last week. I had always viewed the Independent as a 'progressive' paper (for better or worse), yet here were it's chief writers ridiculing what may be the most progressive proposals for our education system in half a century. And all because they came from the wrong party. Worse still, they proposed nothing more than business as usual.

The lesson from this is clear: if the Cameroons are serious about these radical policies then they should stick to them and implement them with vigour. However, if these spangly education and co-operative plans are a ploy to woo left-leaning voters and institutions then they are making a mistake.

Such a half-hearted commitment to what are essentially high-risk strategies would cause them to be implemented in a cackhanded way for people who never supported them in the first place. It would be a disaster.

The interesting thing is that the Conservatives are taking up policies that have traditionally been the preserve of 'libertarian socialists' of the far left. People like Noam Chomsky and the hoards of 'Black Block' marchers that gather in Trafalgar Square every May Day. For make no mistake - it is the statist Labourites and left 'liberals' that are the 'small-c' conservatives here.

It is not as though this is without precedent. There was an attempt in the 1830s to forge an alliance between 'paternalist' Tories and Radicals - two diametrically opposed factions - to protect the poor from what they saw as the wholesale exploitation by the newly-enfranchised bourgeois Liberals.

It was not a success primarily because the Whig government of the time - keen to keep power after so long out of office - implemented workplace regulation of their own. But the opportunity was there. In 1975, Tony Benn and Enoch Powell shared a platform for the 'no' vote in the referendum over the Common Market.

And while the Conservatives have been trying on Tony Benn's clothes, former Work & Pensions Secretary James Purnell revealed some of his own libertarian sympathies in The Times last week by criticising Labour's statism and calling on politicians to 'trust the people' - a longstanding Tory slogan.

One passage was particularly striking, in which Purnell could seriously have been reading from a Cameroon pamphlet: "People can be disempowered if society discriminates against them, if the market impoverishes them and if the State bullies them. The State can help them to be powerful in respect of all three. But we have other tools than the State."

'There is such a thing as society, it's just not the same thing as the State' - can you tell the difference?

He goes on to ape another well-established Tory attack: "Some of the critique of choice on the Left has been distrust of the people, dressed up as a fear of inequality. Saying we can’t have choice in schools because only the middle classes would use it betrays contempt for our voters."

Purnell's article ought to interest Conservatives because it highlights some of the common ground between 'libertarian socialists' like himself and free-market libertarians such as Dan Hannan. It identifies clearly our shared belief in liberty and peoples' right to organise themselves as they see fit.

Whether left or right, we should be working together in fighting against the statist 'small-c' conservatives such as those in the Cabinet and in papers like the Independent. Against those who would prefer to cling to the crumbling, failed system of their political friends than embrace the progressive policies of their enemies.

Tony Benn said not too long ago that issues unite people, whereas ideologies divide them. With the spectre of a hung parliament looming, we would do well to follow such advice.