Friday 30 April 2010

Gordon Brown's "bigot" Gaffe.

There are at least thee lessons which can be learned from Gordon Brown's much pubicised "gaffe" earlier this week.

  1. The fact that elections increasingly focus on the performances and personalities of the leaders places them under almost intolerable strain. The only comparable situation I can think of is that of military commanders in battles of movement. I am not surprised that, under these circumstances, Mr Brown should have made an unguarded comment. It would be interesting to know what unguarded comments the other leaders have made, without the misfortune of having them broadcast through a live microphone.The Prime Ministerial debates have exacerbated this situation. In this election we have heard little of the other leading politicians in any of the parties (who can name five from each, never mind the 25 or so who would constitute a cabinet?) and the candidates in the constituencies have become mere ciphers. To adapt a phrase: "The exposure of the party leaders has increased, is increasing and ought to be diminished." Debates between the spokespersons of the parties on all major areas (see post, Party Leaders' Debate, 14th April) would help to spread the load and give us a better understanding not only of the different policies but also the strengths of the rival teams.
  2. Mr Brown's unguarded comments give us further evidence, if such were needed, that these "casual" encounters with "ordinary" voters are not casual and ordinary at all, but carefully staged, or at least, that is the attempt. The incident adds fuel to the view that all politicians are dishonest spinners. More open honesty might reap dividends.
  3. Since the days of Enoch Powell, and probably before, the subject of immigration has never been properly and openly discussed. This is because the politicians are frightened of upsetting those floating voters in a handful of key marginal seats who, under our flawed system, decide elections. It is interesting that in last night's debate none of the three leaders put the case for immigration: all the emphasis was who would best curb it or, in Nick Clegg's case, cope with it. Similarly, the arguments for Europe, for higher taxes to create a decent society, for a more enlightened and effective method of dealing with criminals, are never put. The first past the post electoral system enables the tabloids to set the political agenda. STV could change that and lead to a more grown up debate.

Thursday 29 April 2010

Hanging in the Balance

I find it irritating that both the media and parties persist in using the negative term "hung" rather than the positive term "balanced" to describe a parliament in which no party has an over-all majority. The term "hung" in this context is borrowed from the USA where it is used to describe a jury unable to come to a conclusion. There is every reason to suppose that a parliament which more accurately reflects the balance of opinion in the country will come to better decisions than one which is able to impose the view of a minority on a reluctant majority. The Iraq War was just one such a decision: the Poll Tax another. By contrast our government in the Second World War was a coalition which was perfectly capable of both uniting the country and bringing matters to a successful conclusion.

The Lib-Lab Pact of the late 70s was not a coalition, since no member of the Liberal Party joined the government, but an agreement to support a minority government. The 70s were not the most successful time in British politics, but it is worth remembering that, during the periods of "majority" government either the rate of unemployment fell only when inflation rose, or if inflation was curbed unemployment soared, passing the symbolic half million mark whilst Michael Foot was the responsible minister. Only during the period of the Lib-Lab pact did both fall together.

Today the Conservatives are trying to frighten us with the argument that unless we do our patriotic duty and give them a majority we shall lose our triple A rating and our economy will go into further free-fall. A letter in yesterday's Guardian ( from Alistair Peck, 28/04/10) points out that this is "so much hyperbole" since "... there are 16 AAA rated country economies: 12 use proportional representation, 10 also have coalition governments."

A letter on the previous day from Hugo Radice, concludes:

"Why ... do our financial, business, political and media elites swallow the Tory-city line? Because the success of the government's bailout of the banks threatens the dominant neo-liberal view
that markets are better than states at managing our economy. Their scaremongering over the debt...(is) designed to ensure a speedy return to business as usual for free-market capitalism."

My sentiments exactly.

Wednesday 28 April 2010

The Solution that Dare Not Speak its Name

Tomorrow night's leaders'' debate will focus on the economy, and will presumably concentrate on the allegedly "huge" public deficit, the cuts in public services allegedly necessary to to put it right, and how soon these cuts should be implemented.

For an analysis which shows that the public finances are by no means in the parlous state that all the parties and most of the commentators seem to think, please see my post "The Economic 'Crisis' " of 8th April. It is also worth mentioning that the present is not a bad time to have a larger than normal public debt, as abnormally low interest rates make it less expensive to service.

The abandonment of the "like for like" replacement of Trident, the compulsory National Identity Card and expensive and ineffective national data-base schemes will obviously achieve welcome economies, but most cuts in public services will adversely affect those most dependent on the state, the poor and the vulnerable. Like, I suspect, most people, I have little faith in the idea that economies can be achieved by "efficiency savings" which do not affect front line services.

What speaks volumes about the parlous state , not of our economy but of our politics, is that no party has the courage to propose the alternative method of cutting current borrowing: that of raising taxes. The standard rate of income tax is 20% and it seems to be assumed that civilisation as we know it will end at any thought of its being raised. But as recently as the 19880s the rate was 25% and life seemed to trundle along quite comfortably for the overwhelming majority.

The adverse effects of the recession have fallen disproportionately on a minority of the population. Most of us are still comfortably off, and some with large mortgages have gained considerably as a result of low rates of interest. It is shameful that no party has the courage to say that, rather than cutting public services, the well heeled should, once the recovery is assured, be asked to pay a little more.

It is infantile to pretend that we can have Scandinavian levels of public services with American levels of tax. Someone should have the courage to say so

Monday 26 April 2010

To tactical vote, or not to tactical vote, that is the question.

On his retirement as Liberal Leader David Steel talked of the part luck had played in his career. As a young MP he had won a high place in the ballot for private members' bills, and his subsequent Abortion Act made him nationally known. That was good luck.

Then in 1983 the Liberal/Social Democrat Alliance almost, but not quite, pushed Labour into third place. With over 13 million votes there was no doubt that Mrs Thatcher and the Conservatives were the winners, but the Alliance's 7 781 000 were very close to Labour's 8 457 000. That, said Steel, was bad luck. Had the two figures been reversed than the indignation produced by the gross unfairness of the result (Labour took 209 seats against the Alliance's paltry 23) would not have evaporated so quickly, and a reform of the voting system would have been irresistible. Politics could have been transformed a quarter of a century ago.

The question many Liberal Democrat supporters must decide in this election is whether to vote tactically to keep out the Tories, adamantly opposed to any sort of electoral reform, or to remain true to their principles and vote Liberal Democrat. I believe the later course is the right one. The three major parties are so close that, whoever wins, in terms of either seats or votes, will have no democratic legitimacy to form a government alone. If the Liberal Democrats can push either of the other parties into third place then, this time, the case for real proportional representation, using STV rather than the unproportional AV, really will be irresistible.

So every Liberal Democrat vote is vital, whether or not it results in the election of an MP.

Sunday 25 April 2010

Another sudden conversion to the nanny state

Last night Sir Richard Branson was reported as demanding compensation from the British government or the EU for the losses his Virgin airline has experienced during the ban on flights. His justification for the claim is that the authorities were over cautious in banning all flights for five whole days.

Clearly these authorities are in the same position as social workers: damned if they do and damned if they don't. If flying had been permitted earlier and a plane had crashed there would have been outrage (and demands for compensation from the relatives of victims.) As an occasional air traveler I feel over-caution is absolutely appropriate.

The economic justification for profits is that entrepreneurs such as Sir Richard take risks.
When they are right they are amply rewarded. Sometimes things go wrong and there are losses. However unfortunate and unpredictable the cause, that's the name of the game.

As with bankers, airline owners cannot expect to reap the rewards of their enterprise in the good times and expect sudden conversions to the nanny state to be acceptable when things go wrong.

Saturday 24 April 2010

St George's Day

Yesterday lots of people were displaying the St George's Cross in one form or another. I wonder what they felt they were celebrating?

Some years ago, in response to a demand from Gordon Brown that immigrants should adopt "British values" someone with a foreign-sounding name wrote to the Guardian saying:

"Yes, certainly. Which British values would you like us to adopt? The highest teenage pregnancy rate in Europe; putting our elderly relatives in homes and forgetting about them; rampaging around the continent boozed up on lager and vomiting in the gutters at football internationals? "

Since St George is the patron saint of England I'll concentrate on the alleged English values which were propagated by the novels of such writers as Percy F Westerman and W E Johns which, along with the weekly Wizard and Hotspur, formed the unelevated reading of my boyhood: honesty, modesty and fair play.

  • Honesty: "My word is my bond" was (is it still?) the motto of the Stock Exchange and was supposed to apply to all the "clean limbed English."
  • Modesty: all English boys (and girls?) were all supposed to be self effacing, self deprecating, but of course highly competent in an understated way.
  • Fair Play: epitomised by cricket but a virtue which applied to all aspects of life.
Senior civil servants being "economical with the truth," extravagant gestures whenever a footballer scores a goal, and the Tories' disproportionate expenditure in elections compared to the other parties all illustrate that there's not a lot of these values about nowadays.

I shouldn't mind a day put aside to revive them, and should be interested in any additional worthwhile values others might like to add.

Friday 23 April 2010

Again, you pays your money...

Last night I had to watch the leaders' debate at the house of a friend, as I do not have Murdoch's Sky system. At the end of the debate both of us agreed that Nick Clegg had again done well, but not, this time outstandingly so, that Gordon Brown had greatly improved his performance and David Cameron remained unconvincing.

At the end of the debate the result of an instant YouGov/Sun pole was flashed on the screen and, to our surprise, declared Cameron the clear winner. This "news" remained on the screen. We waited for the results of other polls, but none came

Clearly the Murdoch media provide you with the "news" the Murdoch organisation want you to hear. Once again thank goodness for the BBC and more balanced news.

If there were no other issue is the election, the fact that the Tories are in hock to the Murdoch organisation and are committed to cutting back the BBC at his behest is the reason for keeping them out.

Thursday 22 April 2010

No referendums please, we're British

Until the 1970s the British regarded the referendum as an alien concept used by authoritarian foreigners to gain a spurious legitimacy. In this land of enlightened parliamentary democracy referendums had, I believe,been used only twice, each time at local level, for English local authorities to decide whether or not the cinemas should be allowed to open on Sundays, and ditto for the pubs in Wales. Then along came Tony Benn and his agitation on Europe and the British decided by 2 to 1 that we should remain a member of the EU.

Today all three parties are either promising or seeking to avoid referendums, notably on whether or not to join the Euro, change the the electoral system or remain in the European Union.

Referendums are an unsuitable for making these decisions for the following reasons:

  • they do not decide issues "once and for all." Whoever loses continues to pester for another referendum until they obtain the result they want (as we see on the issue of membership of the EU)
  • it is almost impossible to phrase a neutral question. "Do you think that Britain should remain in the European Union?" and "Do you think that Britain should leave the European Union" are both more likely to get positive rather than negative responses
  • it is difficult to ensure fair and equal funding and publicity for all sides of the question. Those disgruntled by the 1975 decision on Europe have a legitimate grievance on this score
  • the electorate are highly likely to vote on some issue other than the question asked; usually to take a swipe against the government (eg France on the EU Constitution and Ireland on their first referendum on the Lisbon Treaty)
  • some issues, such as the nature of the electoral system, are too complex to be reduced to a "Yes/No" answer, or even a series of options.
  • referendums are more often than not chosen by governments when they want to shirk the responsibility for making a decision.
In a parliamentary system we choose our MPs to use their judgment on our behalf. Let them get on with it.

It can be argued, however, that MPs cannot be trusted to decide how they should be elected, since they will choose the system that best suits their own interest. Hence MPs elected by" first past the post" will naturally prefer that system.

In that case, the decision on the electoral system should be made by a Citizens' Convention

Wednesday 21 April 2010

Churchill you are not.

Comparing Nick Clegg, at this stage in his career, to Churchill, is clearly rather silly, and probably not very helpful to the Liberal Democrat cause. However there is a very real sense that "the fate of the nation" depends on Clegg's performance in tomorrow's debate. If he flops, or just comes out even, there is a real danger that the Liberal Democrat bubble may burst and we shall be back to politics as before with no real change in sight.

In terms of reforming and re-invigorating politics a Labour win will merely mean a referendum on AV, a second rate electoral system which is neither proportional nor gets rid of safe seats. A Tory win will mean no change at all, with continued partisan minority rule and continued scope for corruption.

However, if Nick Clegg can repeat his triumph there is a real possibility that the Liberal Democrat surge will continue and, whatever result the present flawed electoral system produces in seats, a vote equal to or greater than that of the other parties will enable the Liberal Democrats to insist on the Rolls Royce of electoral systems, the single transferable vote, which gives the maximum voter choice, the maximum of proportionality while maintaining the link with constituencies, abolishes the safe seat and thus will genuinely transform our politics.

Fortunately, as Jackie Ashley kindly pointed out in Mondays Guardian (19/04/10) in a debate mainly devoted to foreign affairs, the Liberal Democrats have a strong hand to play:

  • being right on Iraq;
  • opposition to the unquestioning "like for like" replacement of Trident;
  • consistent support for positive engagement in the EU: perhaps not the most popular of policies at the moment, but one that can shine compared with New Labour's "shame-faced and half hearted" record on this issue, and the "inconsistencies and unanswered questions in Conservative policy."
It may not compare with Dunkirk, but the mould-breaking moment may at last be in sight. Fingers crossed for Nick Clegg.

Tuesday 20 April 2010

On the doorstep

Politicians of all parties interviewed by the media are prone to tell of the vital political messages they are receiving "on the doorstep." My own experiences on the doorstep are very different. The vast majority of people are "out." A few, once they realise what you are, don't answer the door. The overwhelming majority, when asked for their vote, are :"Still thinking about it"; "Haven't made our minds up yet"; or "Will think about it." A disturbing number say they're not interested and in any case haven't time to discuss it.

Maybe my technique is wrong, but I find it is difficult to develop a serious conversation, even with those who invite discussion with the accusation that"You're all the same."

I find this very dispiriting. You would think that people would be delighted to participate, even at a minor level, in this great national debate, and be pleased the parties' representatives had called on them to seek their views and support . It is a salutary reminder that not all the population is glued to the Radio 4 news, Newsnight and the politics pages of the broadsheets.

I suspect that those politicians who claim to garner such valuable insights "on the doorsteps" are merely mouthing what they'd like to hear.

Monday 19 April 2010

That coalition

Naturally there is much discussion as to what the Liberal Democrats will do if there is a balanced parliament. (Why do both the press and parties, including the Liberal Democrats, persist in using the negative term "hung" rather than "balanced" which is both more accurate and has positive connotations?)

An item on the Radio 4 "Broadcasting House" programme on Sunday morning vividly illuminated the nature of the already existing coalition in British politics. The item was a short clip of Nick Clegg attempting to take his turn in a Commons Prime Minister's Questions, against a background of oafish barracking from both sides of the House. Apparently this is not a "one off" incident but a regular feature, with both the Labour and Conservative parties combining to unsettle, ridicule, silence the legitimate representative of a substantial portion of democratic opinion. "Get off our patch," they are both saying. "This is our territory and there's no room for you, regardless of how many votes you have."

There is nothing new in this. In the early 80s I was coordinator of the Liberal campaign in the election for the West Yorkshire County Council. At the count it turned out to be a bad night for the Tories, with many of their seats falling to Labour. "You must be very disappointed," I said to my opposite number in the Conservative party. "Not at all," she replied. "It will be our turn next."

As it happened there wasn't a "next time" as Mrs Thatcher didn't like the result either and so abolished the Council, along with the GLC. However, the story illustrates the complacency engendered by two party politics, and the desperate coalition between Labour and the Conservatives, in the parliamentary bear garden and hundreds of other instances, to keep the political arena reserved for themselves and obstruct any one else, be they Liberal Democrat, Green , UKIP or whatever, from entering the field.

We shan't be able to stop the interviewers from badgering Nick Clegg as to what he will do in the event of a balanced parliament, but would they please ask the other two parties:
a) about the existing coalition and
b) since they both "agree with Nick" to such a great extent, which parts of Liberal Democrat policy they are prepared to adopt to gain our support?

Sunday 18 April 2010

Bring 'em on!

Predictably Nick Clegg's success in he first leaders'' debate means that the knives are to be turned on the Liberal Democrats and our policies. According to yesterday's Guardian "Some Conservatives are pressing Cameron to expose Clegg's support for an earned amnesty for illegal immigrants, (and) his willingness to keep anyone given a sentence of less than six months out of jail..."

Well, "Bring 'em on!" as I believe President Reagan (or was it Bush?) said. The first policy is the mark of a civilised society and the second is common sense, since "Prison is an expensive way of making bad people worse." (It was a Troy, I can't remember which, who said that.)

For good measure, why not add giving prisoners the vote? That should really set the cat among the pigeons, but if candidates had to canvass prisoners for votes that would ensure that the appallingly uncivilsed and counter-productive conditions in some of our prisons received attention.

I hope Nick Clegg and our campaign leaders have the courage to stick to our guns on these and other human rights issues. They are the mark of a mature society at "ease with itself" (John Major) . We must not let the Daily Mail set our agenda.

Saturday 17 April 2010

You pays your money...

The newspaper reaction to the Leaders' Debate can be summed up by Alexander Pope's couplet in his Essay on Criticism:

'Tis with our judgment as our watches, none
Go just alike, but each believes his own.

So the Sun and the Mail thought Cameron had come out on top, the Mirror Gordon Brown and the dear old Guardian Clegg. The Sun's verdict on Cameron is doubly worrying (even trebly worrying, if there is such a word) in that, although their own opinion poll showed Clegg the "winner" by a huge margin, they managed not to mention him in most of their reportage, and, of course, were Murdoch still supporting Labour, there is no doubt that Brown would have been declared the victor.

So we all of us (including me as a Guardian reader going right back to the days when it was the Manchester Guardian and you got it a day late if you lived in London) rely on our newspapers to re-enforce our prejudices.

Thank goodness then for the BBC, which can still be relied upon for relatively unbiased news and views. And if there were no other issues, here is the reason for not voting for the Conservatives. It would be naive to suppose that Murdoch's change of heart has not been gained by a Tory promise to chip away at the BBC and add further power to the Murdoch empire, thus further diminishing the quality of our democracy.

Friday 16 April 2010

Paying for care for the elderly

Well done Nick Clegg!

Let's hope he hasn't peaked too soon. I am a veteran of the February 1974 campaign when, incredible as it may seem now, the weekend before the poll there was serious talk of we Liberals winning the election outright, Jeremy Thorpe becoming Prime Minister and discussion as to who would be in a Liberal cabinet (I had my eye on the Overseas Development post). Alas our support melted away in the next few days and so 36 years later we still wait for Elysium.

The one thing all three leaders are agreed on is that elderly people should not be forced to sell their houses in order to pay for personal care. I cannot personally see the logic of this, so if this blog ever achieves any readers I'd be glad to engage in arguments which may enlighten me.

The appreciation in the value of houses over the last half century has happened without any effort on the part of the owners. Hence this is unearned wealth. If the sole surviving owner owner needs personal care why shouldn't the house be sold to help pay for it? I see no reason why taxpayers should fund the care while the unearned wealth is preserved for children or other beneficiaries to inherit. This seems to me to be particularly unjust where the house falls into the Vince Cable "Mansion" bracket, and where the offspring are probably already well-heeled.

I understand the difficulty of separating personal from medical care, and agree that, under he principles of the NHS, medical care should be free , but the separation can and should be attempted in site of the inevitable anomalies that will arise.

Two measures which would alleviate the injustice of unearned wealth would be the removal of the exemption from capital gains tax from a principal private residence, and effective inheritance taxes. Liberals used to have a policy that inheritance taxes should be on the recipients rather than the estate, with exemptions on small bequests so as to encourage the dispersal of wealth. Do we still?

Thursday 15 April 2010

Party Leaders' Debate

It is a sad reflection on the state of our democracy that the mis-named "Prime-Ministerial" Debate which is to take place tonight is the lead item on this morning's BBC Radio 4 News. "What," as Tony Benn might say, "about all the issues?"

Hardly any commentators have pointed out that these debates are a retrograde step and pose a serious danger to our democracy. Here's why:

  • they place too much emphasis on the "personality" of the leaders. Would Clement Attlee have accepted an invitation to a TV debate with Churchill had the facility been available, and if he had, would he have won?
  • there is a possibility that a silly slip or a clever quip could turn the whole election, which should be about the issues;
  • our system of government is not presidential, but parliamentary, with an executive lead by a cabinet and not a president. The dangers of presidential leadership without the checks and balances of separation of powers and a written constitution (as in the USA) are well illustrated by Mrs Thatcher's arrogance, which gave us the poll tax, and Tony Blair's "sofa style" leadership, which lead to the illegal and highly damaging war in Iraq;
  • the emphasis on the Leader rather than the cabinet is making the job of prime Minister impossible and will undoubtedly lead to future errors and incompetences.
What are needed to revive our democracy are reforms which strengthen both parliament and the cabinet. In parliamentary terms that means measures to increase parliament's powers of scrutiny and weaken the authority of the whips. At cabinet level we need to move to shared leadership. The "Chancellor's" debate was a step in the right direction (though I'd have preferred to see them sitting down and discussing rather than standing upright like Easter Island statues).

Why not a series of debates with party spokespersons, in turn, discussing education, defence, home affairs, the environment etc., perhaps culminating in one leaders' "free for all"? That would put the emphasis where it ought to be and the leaders' positions into perspective.

Wednesday 14 April 2010

Liberal Democrat Damp Squib

The Liberal Democrat campaign has so far been something of a damp squib, I suspect because those organising it are too much immersed in what passes for politics and the "Westminster Bubble" and too little in the thoughts, feelings and aspirations of those of us outside it.

In February Liberal Democrat News published a letter from me which claimed that "what passes for politics at Prime Minister's questions and similar encounters is a huge turn-off for the ordinary voter." and made the following three suggestions for the Campaign:

  • no ill thought out gimmicks
  • patient exposition of our tried and tested policies
  • gentle but firm exposure of the hypocrisies of the other two main parties
Clearly those who are organising our campaign either don't read Liberal Democrat News, or they have discounted this advice. We have had, to give but two examples, a ludicrous attempt to re-create a "Tory Tax Bombshell" scare with Nick Clegg looking foolish in front to a blown up picture of a bomb claiming that the Tories will raise VAT to 20% (which they may very well do, given half the chance, but how does he know?), and that if either of the other two parties wield the "cuts" axe with an over-all majority there may be "Greek style" riots in the streets. Again that may very well be true, but how does he know, and is scaremongering and perhaps even the implicit approval of illegal action the way to win votes?

We Liberal Democrats have a good story to tell, of policies for which we've campaigned for decades rather than discovered in a last-minute conversion:
  • genuine proportional representation by STV;
  • protection of civil liberties through opposition to prolonged detention without trial and the imposition of compulsory identity cards;
  • fairer taxation and a switch to greener taxes;
  • reform and support of international institutions and opposition to the illegal invasion of Iraq;
  • a defence policy geared to current circumstances and the discontinuation of Trident;
  • empowerment of people at the lowest possible level by devolution to the nations and regions and to local government.

And what, might I ask, has happened to our constant advocacy of support for and positive engagement in the European Union.

So please, Nick Clegg, spokespersons and PPCs, sing out strongly form our positive song-sheet and leave the gimmick and petty bickering to the other two.

Monday 12 April 2010

A Tory Own Goal?

I rather hope that David Cameron's proposal last week that senior public service salaries should be capped at no more that 20 times that lowest paid in the orgainisation will prove an "own goal."

First, it is clearly ill thought out. Although some senior public servants, particularly local authority and hospital trust chief executives, have broken the public service ethic by demanding, or at least receiving, excessive salaries, if the "lowest paid" in their organisation is paid the minimum wage (presently £5.80 an hour, which works out at £12 064 per annum for a 40 hour week,) there are actually very few public service "fat cats" earning 20 times more than this: £241 280 per year. In addition, it is probably silly to base the multiplication factor on the lowest paid member, who could be a part-timer or someone under 18 earning less than the adult minimum wage. It would be more sensible to place the cap on the average earnings of the lowest paid 10% in the organisation.

The real value of the proposal is that it draws attention to the obscene multiples of the lowest paid with which the fat cats in the private sector reward themselves. I was astonished to read a few weeks ago that the number or bankers receiving over £500 000 a year "runs into thousands." I suppose the Tories will argue that such levels of remuneration are necessary to attract executives of international calibre, and that if such "top talent" is not permitted these rewards it will go abroad. Well, let them go. But as Polly Toynbee has repeatedly pointed out, most top executives in British companies are actually "home grown" and there is no great demand for them internationally. Clearly what is sauce for the public sector goose should be sauce for the private sector gander.

What we should now be debating is what is a reasonable range of incomes in a civilised and cohesive society. Plato thought it was a factor of four (though whether he included the slaves in this is not clear.) I believe a factor of 10 is quite sufficient to reward additional hard work and enterprise. So if we adopt the Green Party's proposal of a "citizen's income," set that around £10 000 a year, then there is no need for anyone to be earning over £100 0000 a year. That should be ample for everyone's needs and quite a lot of greed as well.

Unless and until a government has the courage to adopt such a cap in both the public and private sectors, a recent useful proposal for PLCs is that all annual accounts should be required to publish the factor by which the remuneration of the each senior executive exceeds that of the lowest paid 10%. This may not shame them into reasonableness, but will at least keep the issue alive and alert voting shareholders to the issue.

Thursday 8 April 2010

The Economic "Crisis"

All three major political parties seem to accept that there is a crisis in the public finances, and that this must be tackled by "savage cuts." The truth is that, there is no crisis. The debt to GDP ratio is a modest 61%. Throughout the 1990s the "Qualifying Rate" for joining the Euro was no more than 60%, so, even after bailing out the banks we are still close to what is thought to be reasonable. By contrast Greece (120%), Japan (107%) Italy (102%), the US (69%) and Spain (66%) are deeper in debt and France and Germany (57%) are slightly less indebted than we. (figures from a graphic in the Guardian, 14/12/09)

It is true that the level of current borrowing is high (about 12% of GDP compared with a preferred maximum of 3%,) but those who are not quite so deeply in debt can afford to borrow more. The idea that this level of borrowing will endanger our AAA rating is dismissed as "scaremongering" by no less an authority that David Blanchflower, the member of the Monetary Policy Committee that got it right.

So why all this talk about "savage cuts" which will harm the weaker members of society. it is particularly galling that the "savage cuts" phrase is associated with th Liberal Democrats, heirs of the party of both Keynes and Beveridge. What Nick Clegg and Vince Cable should be advocating is continued public spending to "pump prime" us out of the recession. There is plenty of scope with the investment necessary to bring about a green energy revolution, bringing our transport network up to date and, if we can't think of anything better, burying the pylon lines..

Instead all parties seem to have fallen for the Tory con that the public finances in a parlous state: a ploy which enables them to indulge almost unopposed in their mania for cutting back the public services which are important for most of us and essential for the weaker members of society.

And if politicians are so worried about the state of the public finances, why isn't there much more talk about higher taxes from those who can afford to pay?