Bullshit budget

 As a well-brought-up choirboy I learnt  to avoid vulgar language, so was a little bit discombobulated to read the Guardian's headline "Chancellor to strike bullshit note  in budget" last Wednesday morning.  A second glance revealed that it was actually a "bullish" note, but I'm pretty convinced the first reading wasn't far wrong..

By skilful presentation Rishi Sunak  has managed to present himself as competent and "nice" to Tories and much of the press, but some of his earlier key decisions have been deeply flawed. 

 To finance  our social care services by a hike in the rates of national Insurance contritions was to choose  the least suitable tax.  NICs are tax on a "good", (employment) whereas we should be switching taxes to "bads" (pollution, congestion, fossil fuels . . .).  and it is regressive (takes more of the incomes of the poor than of the rich: takes nothing from the comfortably retired such as myself.)  His stamp duty "holiday" on houses actually fuelled house price inflation: fine for those of us who already own our houses, tough on those saving up to buy one).  "His "Eat out to help out" scheme with its donation of £10 taxpayers' money to those who could already afford  to "eat out" probably helped spread the virus

So economically and socially his previous decisions have been inept, to put it mildly.

However, his presentation skills are without equal.

For a full seven days before the budget we were deluged with "gobbets" (cf Allan Bennet and the "History Boys) of "good news."  Extra spending for this, that and the other assured us that the days of austerity are over, and ensured that the provider of all this largess remained in the headlines.

The budget itself contains several obvious howlers.

The reduction in air passenger duty for internal (short haul) flights is bizarre, especially coming the week before the Cop26 summit. Surely if we are to reduce CO2 emissions short haul flights should be, if not banned, made prohibitively expensive.  

For similar reasons the continued  freeze on petrol duty is another  example of cowardice (though so cravenly populist is our politics that Labour can hardly criticise, since Gordon Brown started it.)

The meddling with the alcohol duties  is another silly crowd-pleaser, reminiscent of "Eat out to help out."  The 3p off a pint of beer, but not until next April when it is likely to have been eroded by inflation, is hardly likely to affect either the coffers or our habits.

 Most serious in its immediate effect, or lack of one, is the discontinuance of the £20 "uplift" in universal credit, especially for those unable to work, who fail to benefit  from the "taper" which reduces the marginal "tax" rate to those in work but  entitled to receive the benefit because their pay is so low from 63% to 55%.  (The marginal tax rate for those earning a decent salary is 20%, bigger money 40% or 45\%.  So much for levelling up.)

There is a case for arguing that it is no function of the state to subside employers by "topping up" the salaries of low paid workers.  Rather the employers should be forced to pay a genuine" living wage."  This is the argument the government is using for stopping the immigration of EU citizens prepared to work for lower wages in in our care homes, orchards and fruit and vegetable fields and thus transforming Britain into the high wage high skilled economy.  Similar reasoning could have been used to reduce the £20 top-up by, say 10% a year, this giving recipients both in and unable to work time to adjust (though what compensatory measure those unable to work could make is not clear.)

Now we wait to hear how the gobbets of largess are in fact insufficient for purpose.  The "special premium" for the care system will mostly go to the NHS to make up for the inadequacies resulting  from the systemic real cuts since 2010.  The bung for the bankers is about double that to provide for the catch-up lessons pupils have missed during the pandemic.  Local government has lost about 40% for its funding since 2010.  An extra 3% for three years will hardly repair the damage.

But Sunak has achieved his objective: he's the darling of the Tories and favourite to succeed Johnson.  After the soaking the press have given him, the media caravan will move on to Cop 26 and whatever other crisis is round the conner, COVID  having now been successfully relegated to normalcy (apart from for  those still  dying from it.)

COP26: two dodges

 For those who don't know, (and I didn't until I looked it up on Google earlier this week) COP stands for Conference of the Parties, and the "Parties" are the countries that signed the United Nations Framework Convention on Climate Change (UNFCCC) way back in 1994.  COP26 is Parties' 26th annual conference.

Although I acknowledge that, along with, arguably ahead of, world poverty and the erosion of  Liberal Democracy, the climate crisis is one of the biggest problems the world faces today, I don't claim any in-depth knowledge of the issues involved.  I acknowledge that if we are to avert disaster we need  a serious modification of our lifestyles, from the trivial eating less meat to flying less, banning barbecues  and hot tubs,  insulating our houses properly, planting more trees and getting our energy from non-polluting renewable resources.

However, here are two dodges  to watch out for when COP26 meets in Glasgow in a few days..

ISDSs

These are Investor-State Dispute Settlement courts.  They meet in secret and there is no appeal against their decisions.  They enable a company with investments in a country to sue the government of that country if the government makes a decision which appears to affect the company's income or future prospects.

Here's just one example.

A British company called Rockhopper has been exploring the Adriatic coast of Italy in search of oil.  As part of its commitment to averting the climate crisis (and to preserve the beauty of the coast) the Italian government has banned all oil exploration within 20km of the coast.  Rockhopper is suing the government for $350m, seven times what it has actually spent so far on exploration, but an estimate of its lost profits.

ISDS  "trials" should be made open, and ISDS rules modified, in  some cases overturned, in view of the pending global crisis.

Dodgy Accounting.

At an earlier COP the (wealthy) OECD countries (mainly responsible for the current crisis) promised the Global South umpteen billions to enable them to achieve the more sustainable growth which would not add to further carbon emissions and pollution.  This was meant to be new and additional money, but, in the UK at least, has often been simply a transfer from the exiting Aid Budget (even before it was slashed from 0.7% to 0.5% of GDP by the Johnson government.

 Further and better particulars of the above, and other dodges, can be found from Global Justice Now. 

There are hints that there many be examples of similar dodgy accounting in Mr Sunak's budget next week

Covid infection rates: a league table

 This league table is taken from a graphic in the Guardian on 12th October 2021.

It show the "case rate per million people , past fortnight , compiled by Johns Hopkins University, USA (European countries only)

Lithuania             9 289

Romania             8 155 

UK                       6 667

Turkey                 4 480

Croatia                4 324

Ireland                3 351

Ukraine              3 521

Greece               2 754  

Austria               2 667

Belgium             1 962

Germany           1 305

Norway              1 101

France                  862

Sweden                833

Portugal               798

Italy                      632

Poland                 485

Spain                   470

 

There's nothing much "world beating" about the UK's position.  I wonder why?  We are after all still one of the most vaccinated populations, although our 66% has now been overtaken by seven other European countries.

 The accompanying article suggests that: "this may be because most most Western European countries  retained distancing and other Covid related  restrictions  when they opened up during the summer, while England decided to drop almost all its measures."

 I notice  that only a minority in shops and on trains and buses now wear masks, and social distancing seems to be a thing of the past.

 Maybe our "gung-ho" government  issues an uncertain sound, and we act accordingly.

 

 

 

     

Let's hear it for the (s)Tories

In a couple of recent articles journalist and historian Andy Becket has pointed out that not only do the Tories have a greater proportion of the media  prepared to tell their stories, they also tell them better.  The catchy summary of the current story is "Build back better."  Before that was "Get Brexit done." Not too long ago (was it Mrs May's premiership?) we had a "Long-term economic plan."

Not only are their stories made memorable by a three-word summary, the are also not averse to bending the truth more than a little in their telling.  When our children embellish their tales too far away from reality we tell them to "stop telling stories."  I suggest  we should think of the Conservatives not just as the Tories but as the (s)Tories.  

Here are some recent examples.

A few days ago on the Radio 4 "Today" programme Rishi Sunak claimed that our  economy was benefiting the workers no end because, among other things,  the (s)Tories had introduced the living wage.  Well, "Yes," but then "No."

The  National Minimum Wage was actually introduced as one of the first acts of the New Labour government in 1998.  All the (s)Tories have done is renamed it the Living Wage.  Currently it is £8.91 per hour for an adult aged 23+.  The actual Living Wage, as calculated by the Living Wage Foundation, is £9.50 per hour.

I picked up a similar sleight of hand on BBC Radio 4's "More or Less " programme yesterday morning.  The (s)Tories claim that 88% of our population is now vaccinated and this is world beating, among the highest in the world.  But our 88% is actually of the adult population whereas most international comparisons take the entire population as a base.  So although we may have got off to a "world beating " start we have so far vaccinated only 66% of the entire population.  Many other countries have now overtaken us.

The (s)Tories also boast that we are "the fastest growing economy in the G7."  So we are, but largely becasue we fell furthest off the cliff at the beginning of the pandemic, and so have more leeway to make up.

A theme that has pervaded the (s)Tories' conference is that the "supply chain" shortages which currently plague the economy are all the fault of businessmen for  failing to prepare.  As the Chair of our Local Liberal Democrat Party puts it, "They have failed to prepare for difficulties they were told were not going to happen."  As Sir Keir Starmer pointed out in his own conference speech (see previous post,) "attributing  blame to someone else" is one of Prime Minister Johnson's routine approaches.

There is something bizarre about the (s)Tories, who have spent the whole of my lifetime (and probably longer) battling to keep wages down, U-turning to demand that  business pay higher wages along with investing more in order to move to a high wage, high skilled, high productivity economy.  

Well, they have not only been in charge for the past 11 years, but indeed for the majority of the time since 1945. So why haven't we got there yet? 

 Economists have been calling for higher investment and better training for the whole of that period, yet entrepreneurs have been reluctant to train workers lest a rival organisation poaches then, and investors have preferred, and the government has done little to discourage them, to invest in "paper" (to make a  "kill," usually short term, on the Stock Exchange) rather than long term  in the real, or physical economy.

 The government is right to say that we need to progress to higher skills and be at the "cutting edge" of the products that the world  wants tomorrow rather than what it wanted yesterday. But that is in the long run when, as Keynes famously pointed out, "we are all dead."  

 In the short run we haven't enough HGV drivers, fruit and vegetable pickers, pig butchers, poultry killers, doctors, nursers and care workers, to name but some.  Prices are rising, and real incomes are falling, especially for those dependent on the £20 temporary boost to Universal Credit and those NHS and Local Government workers subject to a below inflation wage freeze.

In the coming winter lots of people will be cold, some will be hungry, some will die unnecessarily.  The government has a duty to protect us.  For this we need serious politicians, not just showmen and stories.

 

 

Sir Keir Starmer's speech.

 Having not much else to do I listened to Sir Keir Starmer's speech to the Labour Party Conference this lunchtime.  In my view it did what I assume the Party would hope: establish him as a competent, confident, capable leader with a credible background to enable  him relate to ordinary people.  It was short on oratorical skills, with wooden and repetitive gestures and little uncontrived humour, but a stark contrast to the buffoonery we now expect from the prime minister.

Bons mots

The government's routine method neatly summed up as:

Ignore a problem:

Blame someone else;

Come up with a half-baked solution.

His background in the CPS.

Far too much emphasis, in my  view, on punishing criminals rather than just catching and reforming them,  but I suppose he has to use his experience to enable Labour to reclaim the ownership of Lora Norda from the Tories.

However, a nice side swipe at Mr Johnson when he highlighted "service" as " a reminder that the job is bigger than your own career."

Education

Labour under his leadership is going to give this a high priority (along with gentle   allusion to Tony Blair).  Our young are to be equipped for  - "work."  

I find this disturbing. Yes the parent's want their kids to get qualifications which will enable them to earn high salaries, and  that is probably the chief motivation of most children as well. But we educators have wider aims, for our pupils to learn to enjoy learning, to discover a passion, to learn how  how to relate to others and be happy, to want to serve and to achieve their potential. . 

 True, he included the opportunity for every child to learn a musical instrument.  I wish that had been available in my time.  Sadly, he also insisted  everyone should participate in a competitive sport.  That was available in my time and I could well have done without it.

Labour  

He is proud to be the leader of  "a party whose name is Labour, the  party for working people."  I suppose that was included to please the Conference, and indeed it did, but I think it is a mistake.  Surely he also wants to be the representative of those who don't "work": the children and students, the retired, and those who for one reason or another can't.   

And I suspect most of those who do "work" no longer all define themselves a "labourers".  It's very unlikely that the directors , proprietors, managers and "rentiers" do.  Probably not eve Deliveroo cyclists, van  drivers and burger flippers.

Poor old Labour, representing only one section of society, that only in the economic dimension, and an outdated conception of it.

Twice if not three times he summed up his philosophy as: 

"Work, care, equality, security"  

No mention of Liberty: freedom to do and be whatever you like provide it does not interfere with   the freedom of others.

So he's not a Liberal, but we could work with him

Tory nakedness exposed

Apart from an ingrained belief that "our sort" are born to rule and thus have the right to rule, and that periods of rule by anyone else are a aberration, the Tory Party are traditionally "policy lite." Polices current at any given time are easily abandoned if the then state of democracy (these days via  Focus groups?) signals that their right to rule may be endangered.

The circumstances generated by Brexit and the COVID pandemic have brutally exposed the inadequacies of the beliefs that have dominated the Tories since the Thatcher days, namely:

• the activities of the state in the economy should be as small as possible.  Ideally the state should limit itself to defence, foreign policy, domestic law and order (especially in relation to contracts) and the maintenance  of a stable currency . . .;
•  . . . so that  taxation levels will  be at the lowest possible level;
• market forces will, left to themselves  allocate economic resource to the optimum distribution Hence regulation should be kept to the minimum.  If an enterprise is inefficient (possibly because it is producing something the market no longer wants, or is using an outdated technique ) it will go bankrupt and will be replaced by a more efficient  and relevant enterprise;
• the private sector is inherently more efficient that the public sector, however well intentioned the latter sector might be.  Profit is the ultimate measure of efficiency.
  

In the campaign to achieve Brexit, an additional  principle has been adopted, that of British Exceptionalism: a belief that our history, and particularly victory in two World Wars, demonstrates that  we are a very special people and, released from entanglements with others, and especially  our neighbours on the continent,  our future can be as independent and glorious as was our past (as taught to us in history lessons and emphasised by the popular press.)

Since  Brexit and the onset of the pandemic the flaws in these beliefs have  been brutally exposed..  

Measures to counteract the pandemic, especially the provision of furlough payments to those employed in business ordered to stop operating, are expensive and have to be paid for.  Since the Thatcher days the  proportion  of GDP taken in tax has been squeezed down to 33% and it is not enough. Tax rises are inevitable.  Tory apologists will try to argue that this is the result of exceptional, even "unprecedented" circumstances.  But what the pandemic has exposed is that our health service already had insufficient spare capacity to deal with it.  That is why our number of deaths per million (currently 2 028) is one of the highest in Europe, almost double that of Germany (1 119)

We are in a similar situation regarding gas reserves: these too are among the lowest in Europe, so we shall  probably suffer the highest price rises..

Somewhat to the surprise of most of us, we rely on a fertilizer plant to provide enough CO2 to kill the Christmas turkeys and put the fizz in the kids' pop   The market has not provided for this either and the government has had to subsidise and American owned fertilizer plant and persuade it to resume operations  to remedy this situation.  (if you don't understand the connection neither do I.  Nor can I see why it should be regarded as a national emergency: let the kids drink water and prolong the active life of the turkeys for another year.)

The government's latest embarrassing turnround, allowing visas for foreign HGV drivers and poultry workers after weeks of saying it wouldn't, is just the latest example of the private sector not having prepared, and that soar-away Global Britain, all alone and capable of anything without the help of anyone, is just a silly fantasy.

Sadly instead of taking the opportunity to kick several balls into this open goal the Labour Party is devoting its conference to a bitter battle over its internal rules. 

The joy of tax

 Since the government announced last week that it would fund its (alleged) reform of social care with an increase of 1.25% on National Insurance Contributions, (NICs) there has been much discussion in the media as to whether or not this is the most appropriate tax. 

The informed consensus seems to be that it isn't.  Today's Guardian cartoon by Ben Jennings puts it neatly: "Tax the workers to help the asset rich."

However, having got that pretty well right, why do the Guardian, and other "left-of-centre" sources persist in using the negative term "burden" when describing taxation? Recent culprits have included both Polly Toynbee (on-line 10th September) and Phillip Inman  (print edition, same day.)

Perhaps the time is not yet ripe for my own preferred description, "privilege,"  but I am jolly glad that, even in retirement, my income is sufficient to be taxed.  I'd have been overjoyed  had my income as a teacher ever been high enough to make me liable to the higher rates (though the standard rate throughout most of my working life was around 33%, something  we're persuaded to believe is beyond  the realms of possibility today)

When I lived in France for the best part of a year as part of my attempts to brush up on their language I was impressed by the quality of their public realm: beautifully-maintained  roads, lovely parks, village gardens with working fountains, a health service with spare capacity, were all very evident advantages).  Of course, they pay more in tax than we in the UK, but they get good value for money.

For current (2019) comparisons the percentages of GDP taken in tax   from selected countries are as follows:

France:        45%

Germany:    39%

OECD ave    34%

UK:                33%

US:                24%

Source:  https://ifs.org.uk/taxlab/key-questions/how-do-uk-tax-revenues-compare-internationally

You get what you pay for.

An oft-quoted dictum of Ralph Waldo Emerson, himself quoting a committee appointed by the governor of Vermont in the US in 1852, goes:

Taxation is the price which we pay for civilization, for our social, civil and political institutions, for the security of life and property, and without which, we must resort to the law of force.

 I believe we British are hoodwinked by the Tory-dominated press to view taxation as something bad, unpleasant and wasteful (much as they hoodwinked over a third of us us into regarding the EU in much the same way.)  In fact, I think that without such distorting propaganda most people are not all that worried about taxation, one way or the other.  We regard it as just one of the things that is there, like pimples in adolescence and arthritis in old age.

 I can't say I worked any less hard as a teacher becasue of taxation, and I suspect the same can be said of most other jobs.  In fact I probably worked harder, or at least longer, buy supplementing my "take home pay" with classes at night school and some examination marking.

 So why does the (moderately) left wing press do the Tories work for them and lazily adopt this negative terminology?  It they can't stomach "privilege " of "joy" surely they can adopt a more neutral terms:  just "incidence", or "tax take," would do nicely.