Thursday 19 August 2010

101 Days

Most of yesterday's comments on the first 100 Days of the coalition concentrated on the severity or the cuts and the chemistry between the coalition members. The mistake Liberal Democrats in government are making is that, in the interests of that chemistry, they are defending all that the coalition does. Whilst, as the junior partner, they cannot over-rule the mistaken policies undertaken by the majority, rather than giving acquiescence, which appears dishonest and damages Liberal Democrat credibly, they should concentrate on presenting to the public those achievements and aspirations for which they were elected. These are considerable.

In the field of constitutional reform the achievements are massive. We have a fixed term parliament - an end to hundreds of years of unfairness where one of the runners is in charge of the starting gun. There is to be a referendum on electoral reform which, if passed, will enable electors to vote for the candidate they most favour without letting in the candidate they want to stop: another massive step forward which will greatly reduce if not eliminate the need for negative voting. There is, at last, to be a completely or mainly elected second chamber, and it's to be chosen by a proportional voting system.

The need for these basic reforms in a society that claims to be modern and democratic has been evident for a least a century, but neither of the other two parties has done much about them. Now, with Liberal Democrats in government they are likely to happen.

In the area of civil liberties Labour's proposal for compulsory identity cards has been abandoned, the Human Rights Act is to be retained and the wings of the surveillance society are being clipped. In the law and order area so beloved of Conservatives and Labour in the past the Daily Mail agenda appears to have been abandoned and a more rational and reforming approach to the punishment and rehabilitation of wrong-doers adopted.

We have a long way to go in achieving a fair society but the raising of the income tax threshold and the introduction of the pupil premium are steps in the right direction.

It is arguable that constitutional reform and the preservation of civil liberties are, in the long run, more important than the mishandling of the economic situation. Of course I'm aware of Keynes's famous acknowledgment that "in the long run, we're all dead," and I regret the distress that premature cuts are likely to cause the bottom twenty per cent of our society, and Liberal Democrats in government should be pressing to ameliorate such harm. But a reform of the system, rather than panic measures to avert an immediate alleged crisis, are what Liberal Democrats should see as our ultimate goal. This is a difficult priory to "sell" to the public, but we must try.

Friday 13 August 2010

Cameronian cuts cursed - official!

Yet another article from the Financial Times, Future generations will curse us for cutting in a slump, this time by the distinguished economist Robert Skidelsky and former Treasury official Michael Kennedy, argues the folly of the government's slash and burn economic policy. Liberal Democrats should be dissociating themselves as far as politically possible from this barely hidden agenda of ideologically motivated cuts.

Wednesday 11 August 2010

Two vigorous campaigns?

Regular readers, if there are any, will have noticed that there haven't been many posts recently. This is because I'm very much occupied in having holidays (walking in Wales, enjoying sunshine in Margate and walking in France) and, with another ex-teacher of economics, writing the answers to the questions in an economics text-book. Thus when not away on holiday my head is reeling with such concepts as profit maiximisation and matching Marginal Social Costs and Marginal Social Benefits.

However an item on the 6 o'clock news on Radio 4 yesterday compels me to abandon these frivolities for a while and come back to blogspot.

David Cameron has announced a vigorous campaign to reduce benefit fraud. He claims that this deprives the Treasury of over £5bn each year. However," experts" claim that most of this is the result of error and maladministration and only £1bn is due to actual fraud. Nevertheless, £1bn is a lot of money and we must applaud a campaign try to reduce if not eliminate it and bring the culprits to justice..

However, the same news item pointed out that the Treasury loses £15bn per year on tax evasion. Yes, tax evasion, not avoidance. The government actually encourages tax avoidance for what it sees as good causes such as personal savings by such schemes as ISAS and and charities through Gift Aid, and many of us take advantage of these. But tax avoidance, like benefit fraud, is illegal.

As a deficit minimising as opposed to profit maiximising government, economic logic dictates that the government should now put 15 times more effort into tracking down and reducing if not eliminating this tax evasion and bringing to the culprits to justice (which, in my view, should involve community service rather than a seat in the House of Lords.)

I look forward to it.