Cutting The Jobs Tax

MONDAY, MARCH 29, 2010

Cutting The Jobs Tax

A Big Blue Tick

Well done George.

As we blogged here, Labour's planned double-dose increase in the jobs tax is one of the most economically destructive measures even these clowns have managed to cook up. Work by Policy Exchange suggests it could cost up to half a million jobs.

And as we attempt to crawl out of the deep jobless recessionary pit Labour has dug for us, George's promise to rescind at least part of the increase in National Insurance Contributions is what we would describe as common sense economics. 

Not that you'd have gleaned that from most of today's media coverage (the irreplaceable Jeff Randall aside). The BBC and C4 News both took the Labour line that George is spending money he doesn't have. Notwithstanding that the £5.6bn pa cost is fully funded by a £6bn cut in Departmental Expenditure Limits (DELs).

They variously commented either that George should put all his savings into cutting the deficit, or that increasing the jobs tax is somehow less destructive of jobs than cutting public spending - ie the traditional socialist view - or that the spending cuts can't be achieved by efficiency savings. 

Normally of course, we too are highly sceptical about any government's ability to achieve efficiency savings. But in this case, George is concentrating his efforts onprocurement spending (ie the £200bn pa HMG spends on outside suppliers), and that is the one area where the public sector has had some success in the past.

And even if he fails to achieve the promised procurement savings, in the context of £700bn pa public expenditure, a £6bn cut is hardly swingeing. As we blogged here, Darling's budget left us with public spending set to increase by 2% in real terms next year. All George's announced cuts have done is to halve that increase to 1%. 

So a Big Tick for George. And some clear blue tax water. Excellent.

*****

No time for further reflections just now - got to do some homework. Tomorrow I'm attending a discussion on what we should do about the banks, featuring John McFall (retiring chair of the Treasury Select Committee), St Vince, and various other notables. Homework comprises today's Treasury Committee report, which turns out to be a mind-crushing 250 pages. We will report back.

SUNDAY, MARCH 28, 2010

Frankly, We Get The Government We Deserve

Millie Senior was on yesterday, attempting to explain why anyone with more than two brain cells to rub together could possibly believe Labour's new pledge card (Ollie Cromwell's excellent version above). And all he could come up with was "frankly". As in "frankly, these pledges are frankly pledges to which we frankly pledge ourselves". 

But shouldn't they be running on their record? Given that they've been in power for 13 years, and all.

"Well, frankly, our record is something we can be frankly proud of." 

Oh yes? 

As you will recall, the last time they dropped a steaming great pat of their pledges on us was in the 2005 election. And their Number One Pledge then was "Your family better off". Since when, GDP per head has fallen by 2%. 

So why aren't the Tories 20 points ahead? Just why are we still taking Millie's hopeless corrupt exhausted has-beens seriously? 

You really can't avoid the conclusion that it's Tory failure. Failure to seal the deal, get the message across, put the ball in the net - whichever cliche you prefer. But more fundamentally, and more worryingly, still nobody seems quite sure what the deal/message/ball actually is. What does it look like?

Yesterday Cam had another go at explaining. He certainly delivered a good bash at Labour - Mrs T was on her feet cheering in front of the Big Telly - and he reiterated his three familiar headings - mend our broken economy, mend our broken society, and mend our broken politics. But after that it started to go a bit fuzzy. 

The clearest and most compelling bit by far was where he covered the Gove schools plan - "busting open the state monopoly in providing schools" (see this blog). A real plan for delivering improvement via choice and competition, and areal break from more of the same under Labour. So hurrah for that.

But when it came to say taxes, or the NHS, or welfare reform, it all sounded pretty much like biz as is. Everybody talks about reforming taxes to help small businesses; everybody talks about undying commitment to a somehow more efficient NHS; and everybody talks about cracking down on benefits scroungers. In other words, to the first approximation, it won't make a blind difference whether we have Cam or Brown at No 10. 

In fairness, there are a couple of other key policy differences between the Tories and Labour, but, unless I missed it, Cam never mentioned them. Like for examplethe Oz style cap on non-EU immigration, which is Tory policy, and which polling suggests is a clear vote winner (Labour is only offering an uncapped points system). Unfortunately, Cam's morbid fear of nastiness prevented him even acknowledging it. 

 Which brings us to the excellent Janet's piece in today's Sunday Telegraph. She says that the Tories should stop being so scared of spelling out their true vision, which is one BOM readers will immediately recognise:

• Big government is hopeless at running anything - it wastes huge amounts of our cash, drags down our prosperity, and ends up deploying Stalinist methods to enforce its will;
• Decentralisation and personal responsibility deliver much better results in terms of overall efficiency;
• Contrary to socialist mythology, decentralisation and personal responsibility can also deliver much better results in terms of fairness - remembering that fairness does not have to mean Marxist equality of outcome

And Janet puts her finger on the nub of the issue:

"This is normally the point in the argument when the Tory spokesman loses his nerve. Unable to assent to anything that would repudiate "fairness", the party retreats on to Labour's ground instead of standing its own. What it could be saying is, "Let's look at how successful Labour's approach has been. Has central government, with all its determination to deliver social equality, actually reduced deprivation and increased opportunity for the poor?" No, it hasn't – and the figures exist to prove it. Inequalities of educational achievement, health outcomes and earnings have not diminished under Labour. 

So maybe the overweening, overspending, over-intrusive state isn't the answer. Perhaps, contrary to paternalistic, Left-wing myth, it is poorer communities that would benefit most from local self-determination. Perhaps deprivation is as much linked to passivity, defeatism and despair as it is to material poverty, and giving people more responsibility and power over their own lives would enable them to see a future for themselves that was not hopeless."

Spot on Janet.

There is a real argument to be mounted here - that despite all the expense and the waste, Labour's big government approach has failed utterly to deliver the fairness they themselves promised. And by undermining personal responsibility, it's made the situation of Britain's underclass ten times worse. 

Once or twice in the past, Cam has summoned up the nerve to move onto this territory, and it really hit the target (eg see this blog including the vid). 

But there's no denying it requires nerve. With much of the news intermediated by the BBC, anything that even hints at removing state support from the so-called disadvantaged can so easily be spun into that tried and tested nasty narrative.

Which is the very point currently preoccupying the Major. According to him and his brainy friend Herr Doktor Professor Kuntz, 13 years of Labour misrule have left Britain emasculated not only economically, but also politically.

The state has wormed its way into all aspects of our lives. 25 million voters are now directly dependent on the state for all or part of their incomes (see here) - that's over half the electorate. Our political establishment have been bought wholesale with lavish troughing rights and Zils. And the left's state subsidised media hegemony feeds the people an unbroken diet of Big Government propaganda, making it impossible for dissenting voices to get a fair hearing. We are therefore consigned to live under the yoke of state socialism for ever.

Unless, that is, we act to throw off that yoke. The Major has lately been trying to persuade me to join what he calls his "balloon group". He tells me that he and a band of like-minded patriots are preparing for the day when said balloon goes up."We get the government we deserve, Tyler, and it's no good just sitting around hoping for the best. The time has come for those of us who care deeply for the future of this once great nation to act."

He refuses to tell me what "acting" might entail, but I do know he's been in touch with the regiment, as in "you know, The Regiment". 

Talk about the 70s. Back then, we had a weak Labour government way out of its depth amid a massive economic and social crisis. And back then, patriotic majors set up balloon groups, mercilessly (albeit amusingly) mocked by the BBC:

Fortunately, back in the 1970s we were eventually rescued. Rescued by a strong Tory leader prepared to lay it on the line, and to tackle the real issues however nasty the BBC said she was.