Labour MPs would rather clock off early than vote against abolishing 50p

Ed Balls and Labour MPs have spent the whole of last week telling anyone who'd listen that they will vote against any changes to the additional tax rate of 50p.

Last night they had the chance to do just that on the last division of the day:

That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain the following provisions about income tax taking effect in a future year—

(a) provision that for the tax year 2013-14—

(i) the basic rate is 20%,

(ii) the higher rate is 40%, and

(iii) the additional rate is 45%, and

provision about other rates of income tax.

Whilst Labour are spinning this morning that they voted against all provisions in the bill earlier in the evening and they "abstained" from this vote, I understand that Labour MPs (except for the 2 who really believe the rhetoric the party has been putting out and voted no) had actually all gone home for the night.

Clearly clocking off early is more important to them than their principled stand against cutting the 50p rate.

Bootnote:
For anyone saying it was a surprise motion it was clearly on the Budget resolutions paper for last night!

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Why Steve Hilton Leaving matters

Every commentator and their dog is either writing a piece about Steve Hilton at the moment or has already written one. Who he was, what he’s done, what kind of a person he was; comment piece after comment piece is pouring out of laptops everywhere.

I don’t know Steve Hilton, I’ve never met him, I’m not sure I’ve ever even been in the same building,  but I do feel that his leaving is going to leave a hole. Why? Because by all accounts he has a vision, and he’s a man that is all about getting things done andy politics and government is all to short on those kind of people.

Don’t get me wrong, politics is full of very smart, very hard working people, but in the main they’re adrenaline junkies. They thrive on crisis and reacting, they’re about responding to what’s happening now. They get things done, but they’re not

By all accounts Hilton was the opposite, yes his day job was implementation, but he was thinking about the long term. Anyone that knows anything about transformational change, knows it’s not about reacting and responding ,it’s about getting things done that will create the change in time. Looking ahead to the future and importantly  thinking outside the box.

In politics you don't get to do that often, it’s all about the now, about responding to what’s happening to the detriment of long term planning. I came into politics with an aim to think long term, but I spend my life responding, worrying about what’s on the table now not later. I do get to think about the future from time to time (projects like Masters of Nothing and 2020 are the two that come to mind the most) but it’s not nearly often enough.

The other reason that I think Hilton will be sorely missed is his radicalism, it was his detoxification strategy (radical at the time) that drew new people to the Conservative party. People that would never have dreamed about voting Tory before. ConHome may blame this strategy for a lost election, but in my view it was what brought us to Government for the first time in 13 years. Without it we wouldn’t have stood a chance.

And it was many of his policies on things like transparency, open public services, and the post bureaucratic age that got me really inspired about politics. It was some of these ideas, thinking about them, and blogging about them, that ultimately saw me leave the world of business behind to go work for an MP.

Steve leaving Downing Street is a loss, someone always needs to be pushing the envelope, being reigned back, asking the awkward questions, and that was him. That role is important and someone has to fill it in any organisation that really wants to create lasting change.

I really do hope that that commentariat is wrong, and he’ll be back after his sabbatical. We need radical thinking from a doer, not just from big academic brains and  in the meantime we need to find someone to fill the Guru’s shoes (not that he wears them much).

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Quote of the Day

"The belief that you can just sit at home or wait to become a TV star and that work simply lands in your lap, in turn, feeds the pernicious idea that success is not related to effort and work."

- Ian Duncan Smith on work experience - read more

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Defining "efficiency savings"

To most being told to make efficiency savings means you would look at how things work, can you buy things more cost effectively, if you rearrange a process would it take less time and hence less man hours to do. Not so though it seems for NHS managers who apparently believe that making efficiency savings equates to just cutting the amount of work they do.

As reported in the Telegraph today:

"managers, who are already rationing surgery for cataracts, hips, knees and tonsils, say they must restrict treatment as the NHS is under orders to make £20 billion of efficiency savings by 2015."


Restricting treatment isn't making an efficiency saving, it's just doing less. It's like saying the way we'll save money in a manufacturing business is to make less stuff because then we'll spend less on materials and staff.

However it gets worse, even the most die-hard don't touch our NHS, leave it as it is'er will surely question the idea that NHS management and accountability structures don't need an overhaul when they read the findings of the independent Co-operation and Competition panel report. As described by the Telegraph:

"Executives believe the delays mean some people will remove themselves from lists “either by dying or by paying for their own treatment” claims the report"

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Ed's 24 hour u-turn

Yesterday Ed Milliband said:
“I think that BSkyB is a separate issue about the operation of competition law,” (Video below)

Yet at PMQs today he said that the Prime Minister was out of touch with public opinion for saying exactly the same thing. Has public opinion changed so dramatically since yesterday that he had to u-turn? or was it really just for a cheap PMQs hit

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Was public debt really lower in 2008 than in 1997?

Ed Balls keeps banging away that the national debt was smaller before the crisis than they inherited from the Conservatives. The other day Labour List used this graph to illustrate his point.

Damning stuff, except it's two data points, let's look at the whole picture from 1999 to present courtesy of the ONS (It's the graph on the right we're interested in).

So what does this show, it shows that from when they took over and whilst they were following Conservative spending plans, national debt as a percentage of GDP did indeed fall, (aided as well by the sale of 3G mobile phone licences for £22.37bn in 2000, which as Ed Balls said this morning went towards paying off national debt.), but as soon as Labour economic policies kicked in we saw an upward trajectory. By 2008 we were already running a significant structural deficit, then we had the crisis which was an excuse for opening the spending taps even more. 

What's important to remember is that this graph excludes interventions in the banking sector, so the debt didn't go up in 2008 because we bailed out the banks, as the language Balls uses always implies. Trust me you don't even want to see that graph, in April 2011 debt including interventions was 148.9% of GDP.

So next time someone tells you that the debt was lower in 2008 than in 1997, ask them if they know what it was in 2002.

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The truth about ESA and cancer patients

At PMQs today Ed Milliband used all of his questions on a technicality of the Welfare reform bill, basically justifying his opposition to welfare reform. He used a press release from earlier this week from Macmillan Cancer care which states that 3,000 (or 7,000 depending on who wrote it up) cancer patients faced the removal of up to £94 a week's Employment Support Allowance.

As far as I can see it the reality is this.

Claimants for ESA are divided into two groups:
1) those undergoing treatment (the support group);
2) Those deemed able to perform "work-related activities"

For those in the support group there is no time limit for their claims for ESA. If you are a cancer patient undergoing treatment for 2 years, 3 years, or 5 years  then it appears that you are entitled to ESA.

However if you're in the second group and your treatment has ended and you have been assessed (by a medical test) as being able to perform work related activities, to help you to return to full work, then you face means testing of your work related activities ESA after having received it for 12 months. This means that if you have savings over £16,000 or you have a partners with either works more than 24 hours or earns more than £149 a week that you would lose the entirety of your ESA, otherwise you would lose either a portion of it, or nothing at all.

So will cancer "patients" be worse off by £94 a week? I guess it depends what you call a patient.

Update: I also understand that the government ammended the Bill to ensure that individuals awaiting or between courses of chemotherapy will automatically be placed in the support group and retain their indefinite ESA.

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Is it Christmas already?

Ed Balls latest campaign "Britain's Lost Talent" has been launched on Labour's Campaign Engine Room site. It's a blatant attempt to cash in on the success and media interest of Britain's Got Talent, (something that has failed miserably) and even has a showbiz style logo.

Unfortunately someone in the Labour Party's graphic design department seems to think that snowflakes are the same as stars.

Or is it just so bad there are the moment that they're wishing it was Christmas already?

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Exchange of the Day

From last night's NewsNight

Ed Balls: The IMF have consistently backed George Osborne – they still are – but I have to say in the face of the evidence of the last few months.

Jeremy Paxman: So are you saying that 1,200 economists at the IMF are wrong and you, Ed Balls, are right?

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Words of Wisdom from Gordon Brown

I'm doing some research and came across this gem from Gordon Brown's 1999 Pre-budget report

"The economy of 1997 was characterised by rising inflationary pressures; unsustainable consumer spending; a large structural deficit in the public finances with public sector borrowing of 28 billion pounds; indeed, Madam Speaker, Britain was set to repeat the same old cycle of boom and bust."

So in 1999, Gordon Brown claimed he was worried about an economy that was borrowing £28bn pounds a year, even adjusting for inflation since then you'd be talking about roughly £40bn a year. Today we have to borrow that in just over 3 and a half months, yet as he was leaving government he didn't seem at all concerned about it.

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Huhne Prediction

I've been meaning to write this all week just to get it down so I can say, see told you so. (After not blogging on my solution to reducing fuel duty which then ended up in the budget I don't want to miss out again).

My theory is that if Huhne is going to go of his own free will (which is by no means certain based on his behaviour to date) he will go sometime during recess, my first prediction in fact is that he will go today. Why during recess? Well it means he can lie low for a week or so without having to be in the House for votes or if he's not there getting lots of "he's not serving his constituents" comments coming through. Also there are very few MPs around for the lobby to pounce on and get a scathing "It's disgraceful, always knew he was guilty" comments.

On the negative it's relatively quiet political news wise during recess, but I still think if he's going through his choice it will be before Parliament returns.

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Obama's failure to endorse government's economic plan isn't good news for the left

There is much crowing from the left that Obama has failed to endorse the Coalition's plans to reduce the deficit by saying lines such as "Our different countries will need to take different paths". However perhaps they should consider that he may not be willing to support our plans because they aren't as quick as his, rather than the other way around.

As the Spectator has shown in this graph, the "Obama plan" sees public spending reduced by a larger percentage in 1 year than we're doing over an entire Parliament.

So why has he been saying this different paths line? Well either
1) He wants to ensure that the Republicans can't accuse him of wanting to go back on what he has already agreed (i.e. not cut as quickly) or;
2) The Coalition (who surely had sight of his speeches and remarks beforehand) didn't want to embolden those on the right who are saying we should be going much quicker than we are, or do any damage to the public's view that we want to go quicker.

Either way, his comments certainly don't endorse the Labour Tax and spend approach, if anything it says the opposite.

Update:
I've just seen the transcript of the joint press conference where Obama says:

"And obviously the nature and role of the public sector in the United Kingdom is different than it has been in the United States.  The pressures that each country are under from world capital markets are different.  The nature of the debt and deficits are different.  And as a consequence, the sequencing or pace may end up being different."

The role and nature of the public sector in the US is that it provides much less to it's citizens than ours, therefore they can cut quicker than we can here, is my reading of that.

Interestingly the PM said:

"But each country is different, but when I look across now and see what the U.S. and the UK are currently contemplating for the future, it’s actually relatively similar program in terms of trying to get on top of our deficits and make sure that debt is falling as a share of GDP...."

"...So as he said, we may take slightly different paths but we want to end up in the same place."

So there's that different paths line again, clearly an agreed line between them.

Update 2:
From the transcript of Obama's speech in Westminster:

"Having come through a terrible recession, our challenge today is to meet these obligations while ensuring that we’re not consumed with a level of debt that could sap the strength and vitality from our economies. That will require difficult choices and different paths for both of our countries."

Also notice his focus on debt, which is a major issue in the US, unlike our debate here on the deficit.

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Plan A working - Unemployment Falls

Unemployment is down by 36,000, it's not a huge amount but it's down none the less. The total number of people in employment rose to 29.24m which isn't bad compared to a pre-recession peak in May 2008 of 29.56m. Youth unemployment is still 20% but that is a fall from last quarter.

Overall Labour will argue that it's too slow and that the increase in jobseekers claimants (up by 12,400) shows that we are spending more money on benefits than would be spent if we just continued increasing public sector employment (That's my prediction for an attack question at PMQs today).  However some of those will be people moving off disability benefits after being reassessed and found fit to work and the overall trajectory is positive.

Basically Plan A is working, so Ed Balls couldn't be more wrong with his constant "we need a Plan B"  message.

Bootnote:
Picture stolen from Guido, it was just too good.

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Why Huhne might resign today

Rumours are circulating on Twitter that Chris Huhne is going to announce his resignation at 4:45 today.

There's a few reasons why he might go:

1) No one has yet discovered the smoking gun on the rumours / claims that he got someone else to take speeding points to avoid a driving ban. He can therefore resign now claiming it's over something else (My guess is wicked Tories and their wicked and alleged "rich kids get uni places plan") and get the heat off his back before anyone can find it.

2) His ministerial pension rights apparently kick in today.

3) It's become clear that it won't be easy to get David Laws back into the government, let alone into the Cabinet, so there's little chance Huhne can just be replaced easily with a right winger in the form of David Laws.

Of course at the same time, Huhne is supposed to be at the 2nd reading of the energy bill then (although Guido was claiming that he'll be hiding out at Privy Council instead) and this rumour did start from a journalist on twitter, who has now rolled it back and didn't have that many followers, so was he just aiming to get a few more?

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Stratford Election Results

Final tally from last night.

Conservatives: Gained 4, lost 2, overall result +2

Independents: Gained 1, overall result +1

Lib Dem: Gained 1, lost 4, overall result -3

A good result for local Conservatives last night. Neville Beamer increased his majority to
Roughly 700 in Stratford itself and Lynda Organ won by over 500 votes also in a Stratford ward, both results showing Conservatives have regained the trust of the town's electorate.

Also a fantastic result for Danny Kendal in Wellesbourne winning by 300 votes to unseat a Lib Dem and a close win for first time Candidate Johnathan Gullis in Shipston, with a margin of just 16 votes, also unseating a Lib Dem councillor.

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Why vote no to AV today

AV is unfair
With First Past the Post, everybody gets one vote. But under AV, supporters of extreme parties like the BNP would get their vote counted many times, while people who vote for one of the mainstream candidates would only get their vote counted once.

AV doesn't work
Rather than the candidate who receives the most votes winning the election, the person who finishes third could be declared the winner.

AV is expensive
Calculating the results is a long, complicated process, which would cost the taxpayer millions. It can take days to figure out exactly who has won. The estimated cost of AV over £250 million. The cost of AV has been estimated to be £250 million by the NO to AV campaign.

AV is obscure and unpopular
Only three countries in the world use AV for their elections: Fiji, Australia, and Papua New Guinea. And in Australia, 6 out of 10 voters want to get rid of it.

AV would lead to more Hung Parliaments
Hung parliaments could become commonplace with more haggling and horsetrading between politicians. AV makes hung parliaments far more likely. While hung parliaments can bring parties together in the national interest, as it did last May, the expectation of a hung parliament -- if it becomes the norm rather than exception -- would make Party manifestos irrelevant and cause more horsetrading between politicians, both before and after elections

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First past the post favours ....

As we enter the final week before the AV referendum the campaign is hotting up and the Sunday papers are full of politicians telling us how to vote.

In the Observer Lib Dem Chris Huhne has joined forces with one of the minority Labour supporters of AV, John Denham, to call for an anti-tory alliance to remove first past the post which he claims has favoured Conservatives.

Firstly it appears that the Yes campaign has dropped all pretence of real arguments in favour of Mandelson’s argument of vote Yes to defeat the wicked Tories. The new non tribal politics is clearly winning inside the Yes camp.

But the main thing about this argument is that first past the post favours the Conservatives. His reasoning, only twice in the last 110 years (1900 and 1931) has a Conservative government had an absolute majority of 50%. His argument appears to be that if we added together the Lib Dem and Labour vote then they would have had a 50% majority. His argument is therefore that all Lib Dem voters are anti Tory, which of course isn’t true, and if you follow it through then clearly the solution is that Labour and the Lib Dems should merge and become one party, job done.

Looking at the figures of General Election results also destroys his argument. Since 1900 there have been 13 Conservative governments (including the current coalition), 12 Labour Governments and 4 Liberal governments, so how exactly has it favoured the Conservative Party?

Of course in reality First Past the Post currently favours the Labour Party, mainly due to the current constituency boundaries (which is why they’re being changed). That’s why even though the Conservatives got a large national swing last May they still didn’t win an overall majority. In reality the Labour party (a progressive majority?) won a landslide election in 1997 and then two more majorities before being kicked out (although not in any way by a landslide) last year, and technically they could have stayed in power with the Lib Dems.

So given recent history do you really think that First Past the Post favours the Conservatives? And who do you think AV favours?

Update:
I see everyone’s favourite Vince Cable wrote basically the same thing in the Guardian yesterday. I do feel sorry for Clegg who I believe is more centre right than centre left, and is stuck with a coalition in his own party, the left side of which is abusing the AV referendum to try to enforce their dominance.

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Keynes Vs Hayek Round 2

This is an absolute must watch for anyone confused over top down versus bottom up (or Keynes vs Hayek).

Favourite lines from my side (Mr Hayek):
"Wow, one data point and you're jumping for joy"

"Real growth means production, what people demand, that's entrepreneurship not your central plan"

"The question I ponder is who plans for whome. Do you plan for yourself or leave it to you, I want plans by the many not by the few"

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Rebalancing the economy

Just wanted to quickly share this little tidbit that the Spectator pointed out from CitiBank showing how the government really is managing to rebalance the economy towards exports and private sector investment. Whilst the two Eds (Ball and Milliband), and of course Gordon Brown believe that the only way out of a recession is public sector spending Osborne and Team and proving that it doesn't have to be the case.

Update:

The ONS has just released the Q1 GDP growth figures (0.5% growth), however the underlying figures show that the rebalancing of the economy is working. Manufacturing up 1.1%, Services up 0.9% and production up 0.4%.

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AV Sports Day

It's been a while but with the AV campaign hotting up I expect to be blogging a bit more in the coming 2 weeks or so.

The posts might even be more than just posting a new No to AV ad, like this one:

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