Wednesday, 28 September 2011

Ed the unread

So, one of the big ideas of this Labour leadership is to use regulation and the tax regime to distinguish between the good and bad businesses.  It may initially sound good but the obvious question is, 'How?'

Private Equity companies do not go into their business to take out the capital and then sell off an ailing business - that would be suicidal.  They would make no money ... and so the business model would not work.  To think that the people involved would intend to act in that manner is absurd ... that businesses make wrong decisions is a feature of business.  The management of Southern Cross made foolish and mistaken decisions - they were lauded and praised - but with hindsight proved disastrous for them and their customers.  How to you choose which is good and bad in advance ... if I knew, I would be very rich indeed.  Politicians who think that they can use the regulatory or tax regime to choose in advance are delusional ...

This morning, I listened to Ed Miliband defending his ideas on Today (Radio 4) ... to be honest, he failed completely to answer the question, 'How?'  His idea appeared to be, simplistically, that busineses that invest are good, businesses that merely take money out are bad - but his essential problem is that it sounds like an ignorant argument made by a rather ill informed and inexperienced teenager rather than the proposal of a serious politician.

I suspect that it was cynical too - made to appeal to prejudice and ignorance rather than based on a coherent idea or ideology.  The truth is that the use of capital is what enables people to be employed in businesses and industries around the UK - it also enables investment in ideas out of which the employment of the future will arise.

We now have the most complex tax system that we have had in my adult life - possibly the most complex system anywhere in the world.  Much of that complexity arose from the Labour's obsession with rules and the idea that rules and regulations could improve the lives of people.  They created the complexity and we now live with it and its consequences.  The problem for Labour is that it is the very complexity that is used by the very rich to reduce their tax liability - avoidance.  They are the principal beneficiaries of the complexity brought in by Labour in government over the last 13 years.  It is no coincidence that, while Labour supported those ideas, they received considerable support from the very businesses that Ed Miliband now appears to decry. 

I believe this part of Ed Miliband's speech to be nonsense - almost laughable nonsense.  As a consequence, the speech was absurd.  Cute, populist, but absurd.

Friday, 16 September 2011

Finding the right (or is it the correct) centre?

I have just read 2 interesting articles - one on Labour Uncut by Peter Watt (see here) and another in the Times by Philip Collins (see here, although you will need to pay to see this one).

These are interesting in that they attempt to describe what makes potential Government's electable.  Peter Watt refers to the need to talk about electorate's needs, Philip Collins refers to the need to talk to the electorate's ambitions.

The problem for politicians, it seems to me, is that they are often framed by what others say about them.  For the Conservatives, after Theresa May's famous speech, this was partly in the term 'the nasty party'.  The party had spent so much of its time being described by its opponents as nasty that it had even come to accept that epithet itself. 

Next we come to Polly Toynbee's assertion (apparently supported by research), that more intelligent people tend to be more socialist in their outlook.  But at the same time, many simply see the Socialist agenda as one that tends to be corrupted by the needs and ambitions of those that command it - and thus both rapidly corruptable and corrupted.

Despite a healthy poll lead before the election was called, Neil Kinnock did not win the election in 1992 - John Major did.  Personally, taking into account what others have said about that election as well as my own experiences, I believe that it was the perceived essential decency of John Major and, by comparison, the suspicions of Labour's intent and Neil Kinnock's abilities (whether true or not) that changed the position by the time of the election itself.

When 1997 came along, the perceptions had changed.  The Conservatives had become divided and uncontrolled, it had had a torrid time with corruption allegations against individuals and charges that it was both incompetent and nasty as well - while Labour had undergone what was perceived as the 'revolution' to 'New Labour'.  Tony Blair appeared to represent the aspirations of the electorate and appeared to have a vision of what he wanted to do to make things 'better'. 

After David Cameron was elected leader of the Conservatives, perceptions began to swing again; but not by enough to overcome the electoral mountain that was required.  While Gordon Brown and his Government had clearly lost their way, suspicions remained about the motives and intentions of Conservatives.

As a party we tried, almost to oblivion, the theory that we were not clear enough or right-wing enough in the 1997, 2001 and 2005 elections.   That simply did not work ... and neither should we expect it to.  It is by appealing to people's sense that we can change things 'for the better' that we can succeed.  If we merely read the music rather than interpret it in the most appealing manner for the electorate we shall not break through in 2015 (or earlier, if the Coalition falls apart) ... and we will again be dependent on coaltion or, worse, we shall not be in Government at all.

Moving forward will require a constant effort to demonstrate that we are the decent people that I believe that we are and that we have an idea of where we want to go, and more importantly, how we are going to get there.  That means that we will have to confront and confound our opponent's portrayals of us - and that includes our Coalition Partners.  We are, I believe, decent people, whose intentions are to improve the lot of the electorate through pragmatic rather than fixed ideological means.  The essential pragmatism is a strength, but unless we can persude people that there are policies as well as pragmatism, it can also be a weakness.

Monday, 15 August 2011

David Starkey - Newsnight - 'Ratner moment'?



How sad.  It's not just that I disagree with David Starkey, it's that he has exposed himself to ridicule - which began whilst he was on air.  He was wrong.  So uncomfortable was I, I turned it off.

If we treat criminal behaviour as if it is a feature of a particular racial group, we ignore the progress that we have made in terms of treating people as individuals - a failure of which tends to be the result of what I believe to be an overly restrictive view of 'others' and 'difference'.

What is clear is that the recent riots in London (and elsewhere) were different - they did not appear to come from political needs; rather they appeared to come from criminal conduct and fed upon a sense of invincibility that comes from what has been described as the 'madness of crowds'.  It was the senseless violence, the looting of goods that no one 'needs' (even if we aspire to have them or something like them), and the anarchic highs that depresses me most.  The reason is that I don't think that there is any simple answer - and equating this to irresponsible bankers or MPs seeking to claim more in expenses than they are entitled to (leaving to one side the criminal conduct of some MPs for a moment) is simply daft. 

That there are criminal elements in our society is not a revelation.  We only have to read our papers and news feeds to know this occurs here and elsewhere.  The failure of the Police to respond adequately and soon enough resulted in large numbers of people appearing to act out of base instinct.  Moral direction, distinguishing between right and wrong and a sense of belonging to a community all but disappeared for those that took part.  Some instantly regretted their actions - and they should be commended for that - but it is clear that we all have some thinking to do.

Tuesday, 2 August 2011

Silly season - mark 2

George Monbiot writes an article that starts with some wonderful polemic nonsense. 

"There are two ways of cutting a deficit: raising taxes or reducing spending. Raising taxes means taking money from the rich. Cutting spending means taking money from the poor. Not in all cases of course: some taxation is regressive; some state spending takes money from ordinary citizens and gives it to banks, arms companies, oil barons and farmers. But in most cases the state transfers wealth from rich to poor, while tax cuts shift it from poor to rich."

If you can bother to read the rest of the Monbiot's article, you can find it here.

The problems with that first paragraph include: -

That there are many more ways to cut a deficit and the extremes he proposes are at opposite ends of the spectrum - most sensible commentators would advocate a mix of both; but no, Monbiot chooses the extremes.

Raising taxes does not, on the whole, mean taking money from the Rich; however you may define the 'Rich' which, of course, is a debate in itself.  On the whole, if you wish to raise significant sums of money, you will need to tax everyone who can afford it - and that means many people who are not rich.  As I have repeatedly explained, the amount you could raise by confiscating the assets and income over a certain threshhold would not raise very large amounts of capital.  This inescapable fact seems to escape many, particularly those whose agendas differ from my own.

Cutting taxes does not mean taking money from the poor, either.  It can mean you reduce benefits, which would reduce such incomes, but it can also be acheived by rising economic growth (something that sadly appears to be lacking at the moment), but it can also be achieved by increasing efficiencies and reducing unnecessary expenditure that costs more than the benefits that are produced.

The absurdity of speakimg about bankers, arms companies, oil barons and farmers in the same derogatory manner merely exposes Monboit's own prejudices.  Anyone who meets the average small holder and farmer from the hills and mountains of mid Wales will tell you that these are people who have, on the whole, struggled to make ends meet and who cannot be, in any sensble world, lumped in with the excesses of some parts of other worlds and industries.  In addition, not all who work for the Banks have been at fault - do you really imagine that the vast majority of the RBS employees were in some way invovled in the excesses that led to the collapse of that bank?

As to the last sentence; state spending includes public goods - which involve no transfer of money from the rich to the poor, merely expenditure on things, such as Defence, hospitals, roads and other infrastructure, from which we all benefit.  That the benefits bill in the UK has become too high appears to be something that both the main political parties agree - that it needs reform is common ground.

Polemic is a wonderful tool; but in this article, Monboit merely exposes his own prejudices and priorities rather than providing an illuminating and thoughtful commentary on the deal done by the US political parties.

Monday, 1 August 2011

The silly season in spades!

In what must be the most stupid idea yet to come from a 'serious' politicial thinktank, Compass are proposing that there be a 'Jury' to police other bodies from MPs to Banks to the press 'in the public interest' - see here.

Notwithstanding that the Citizens' Jury has echoes of some of the worst excesses of the French Revolution, what on earth do these people think Parliament is for?  The fact they believe that many of our MPs are not working adequately, does not mean that these MPs are not part of the Council of the Country; effectively a representative jury elected for the purpose.  Why on earth do they believe that an appointed body of 1,000 would be or do any better?  At least Parliament is democratic - and that is, to quote another, 'the least worst system of Govenment'.

Of course, what this elite really wants is a body that they dominate - to remove and reduce the opposition to their statist and interevenionist instincts.  There does not appear to be, in my view, some individual and single cosy elite; rather there are numerous cosy elites that have different and differing agendas, perspectives and motives.  The fact that this idea has surfaced, as opposed to being squashed as being the anti-democratic nonsense that it truly is, is indicative of the fact that this elite is rather small, self-satisfied and too cosy by half!