Desperation Politics

Brain donor of the week - Diane Hill who sustained 40% burns when attempting to decant petrol from one container to another in her own kitchen with the gas cooker alight.

Opportunist of the week - The man who wants to be our Chancellor of the Exchequer giving an interview and actually trying to blame Francis Maude for the injuries sustained by the woman.

Pathetic news organisation of the week - The channels which actually half ran with that story for a few hours. (Are you independent news organisations or the PR department of the Labour Party? Make you mind up).

Knobs of the week - John Mann MP, Karl Harris MP and Lord Toby Harris (all Labour) who called for Francis Maude to resign on the strength of this news story.

Interpreting By-Elections

Much arrant nonsense is always talked about by-elections, both before and after. Today was no exception. So I thought I’d give you…drum roll please…Melvin’s Top 10 By-Election Tips.

Tip 1 - In reality, by-elections are simply a referendum in one constituency on how the punters there are feeling about the Government on that given day. Thus, most by-elections are protest votes.

Tip 2 - By-elections therefore tell you bugger all about (a) the Government’s real (un)popularity, b) the Opposition’s real (un)popularity or (c) public opinion on any one issue.

Tip 3 - Melvin’s ‘rule of thumb’ is that sitting Governments usually get a kicking, the Opposition usually prospers and occasionally a small bunch of one issue loonies surprises everyone.

Tip 4 - If the Government candidate does well, however, then that is probably significant.

Tip 5 - If the Opposition’s candidate doesn’t do well, then this is also probably significant.

Tip 6 - If a loony third candidate does well, this usually means fuck all and normal order is resumed at the next General Election, with said loony disappearing into obscurity.

Tip 7 - If it is a safe seat, then most other main parties don’t spend much time, money or resources on it.

Tip 8 - The party which wins, claims “this is an historic victory which will change the mould of politics for all time”. It doesn’t.

Tip 9 - All parties try to use the result to damage the other parties, even if their own result is woeful eg “Well, David, we didn’t do as well as we had hoped (swing against of 90%, they lost their deposit and their candidate committed suicide at the count) but really the story of the night is that this is a truly terrible result for the x party”.

Tip 10 - Any truly meaningful impact of the result is always completely lost on the media.

So how did last night’s Galloway spectacular measure up, then?

Tories - Did badly, as expected. Not really a shocker for a Government in the middle of an austerity programme.

Lib Dems - Ditto.

Respect - Typical, horrible Galloway campaign playing to the young disaffected Muslim vote. He has one card and he plays it well. He will make some amusing speeches but will be an irrelevance.

Labour - What a shocker. They were either complacent or incompetent or both. Their once brilliant election machine is history. Too much time is being spent right now arguing internally about who should be sitting on which deck chair while the very unhappy good ship Titanic further embeds itself in the iceberg. Bad, bad news for Millipede Minor. If he can’t win a by-election in a half-decent Labour seat right now, after a truly horrible week for the Tories, even loyalists must be wondering when to wield the knife. Expect manoeuvres in this weekend’s press from the Blairites and Millipede Major.

Nightmare on Ken Street

Sometimes politicians do dumb things. Sometimes politicians make mistakes. But it’s not often a politician seems to have a complete death wish. Welcome to the mad mad world of Ken. Some examples from the last few weeks:

Ken caught lying.

Ken caught insulting Jews.

Ken caught insulting gays.

Ken keeps promoting his over close relationship to London Islamists.

Ken defends taking Ahmadinejad’s money.

Ken avoids taxes.

Ken’s behaviour driving his own supporters away here and here and here.

Ken becoming an embarrassment to his fellow Lefties.

And all this in the last few weeks, the weeks before the London Mayoral elections. You could not make this up. This is the sort of list of events that if it was in a film we would all sit in the cinema saying: This is so unrealistic. It would never happen. No one is that stupid.

Prediction: Boris will win handsomely. Ken will never again be supported by the Labour Party nationally.

Everything You Need to Know About Labour and the 50p Top Rate of Income Tax

(Apols - Blogging's been light. Been a bit of an ill and flopsy mopsy bunny rabbit).

Anyway, Labour had 13 years to increase the top rate of tax from 40p to 50p. They did nothing for 12 years and 11 months.

As they were about to be voted out of office, they increased the rate to 50p as a political gesture, simply to screw the Tories around.

At Budget time, they wanked on and on about how it shouldn’t have been reduced and how they would reverse it.

But last night they abstained on the vote on that clause in the House.

As ever, lying duplicitous political bastards.

Hypocrisy and stupidity

Hypocrisy and stupidity are the two things I always have a problem with about Lefty logic. We have a wonderful example of both of these playing out before us right now in Labour’s current behaviour, attacking tax cuts which will boost desperately needed economic growth whilst defending Ken Livingstone’s personal tax avoidance scheme.

Hypocrisy

Lefties, you can’t slag off and smear those who ‘tax plan’ so they pay the least they need to pay and then do the same yourselves. Ken has banged on and on about how the rich are evil for paying the least tax they need to pay whilst doing exactly that himself, by setting up a service company to channel all his earnings through, thus paying 20% Corporation Tax rather than 50% Additional Rate Income Tax.

The Millipede is compounding that hypocrisy by endorsing Ken, trying to pretend that’s Ken’s tax avoidance is not the same thing at all as other people’s tax avoidance - there appears to be acceptable tax avoidance (by Lefties) and evil tax avoidance (by Righties).

If it looks like a duck, walks like a duck and quacks like a duck, then it’s a duck. After a few weeks trying to pretend otherwise, Ken actually fessed up yesterday on LBC:



(Great clip - Ken says (a) yes, he avoided tax, (b) it's the logical thing to do for any human being and (c) if you pay the least tax you need to pay you can then use your saved income to create economic growth. He has completely backtracked on years of his Lefty bollocks in one interview).

And it’s also clear that The Millipede and Mrs Yvette Cooper’s latest anti-Coalition PR strategy for next week’s budget is the well-worn ‘tax cuts for the rich’ slogan the Left always falls back on. This perennial favourite taps into the old class war/politics of envy that is still alive and well. Lefties always fan the flames of class discontent to help themselves spread smears about the Right.

Stupidity

When you then deconstruct the Left’s tax arguments, they are utterly stupid and completely self-defeating.

Are we actually suggesting that companies (and individuals for that matter) should volunteer to pay more tax than they need to? This in turn depresses their profits which mean they can afford less expansion, less investment, less employment creation and less pay for their staff? Only a swivel-eyed mad ‘big government’ Lefty would even bother arguing this point. It’s loony, faux logic I would expect from the ‘bruvvers’ on the Left of the trade union movement not national politicians promoting themselves as potential leaders of our economy.

And as I previously explained and predicted here, (a) the only tax cuts that actually deliver growth are Corporation Tax, Capital Gains Tax and the top rate income taxes, which my previous post pointed out the OECD also agreed with and (b) the Left always tries to smear these as tax cuts for the rich.

As ever, the Left plays politics not economics, rather like Gordy’s 50p tax rate which has actually cost the Government income not increased its income. It’s the old ‘fact versus ideology’ conundrum which the Left gets on the wrong side of every time.

Council Homes for Life

In advance of the Budget, fascinating pieces of information are dribbling out through Government leaks - presumably placed leaks - concerning rich Council house tenants, see here and here.

Apparently, 25% of Council tenants (720,000 of them) earn more than the national average wage - £26k. Even more amazingly, there are 15,000 Council tenants that earn over £80,000 and 6000 of those earn over £100,000. Apparently, Labour MPs, union leaders, academics, senior public sector and NHS staff etc are on the list. At the same time, 1.8 million people are on Council waiting lists.

Un-fucking-believable.

You and I are paying for people in the top 10% of earners to live in taxpayer-subsidised housing. Franks Dobson’s comment shows this dislocation from reality:

“Market rents in our area are phenomenal. I wouldn’t be able to afford it.”

And I cannot afford to live there either, Frank, so guess what? I don’t live there and I don’t expect people earning £20k to pay for me to live there either. Join the reality based community, Frank.

The P Word

Why are the words profit and healthcare so repugnant for Lefties?

Or profit and education?

Seems bizarre. The most profitable healthcare organisations - private hospitals - are the places that the vast majority of the British population would like to visit if they were ill. And the most profitable education establishments - private schools - are the education establishments that deliver the best education outcomes.

Those of us in the reality based community will never get our head around the Left’s visceral dislike of capitalism. That’s the problem with Lefty ideology. Gets in the way of the facts.

Why the US Economy Grows Faster Than Ours?

Ah, those ‘green shoots’. Early indications are that, putting aside Eurozone meltdown which has been delayed not slayed by the latest bailout of Greece, things are perhaps beginning to turn around for Boy George. Forecasters are being more positive, inflation is coming down as promised and the FTSE has been on an upward trend. We’re not out of the woods by any stretch. There will be more ups and downs for sure. But the strategic trend is that one by one, key long term indicators are looking decidedly better.

Mr Yvette Cooper will of course doom and gloom away because he has to. That’s what Oppositions do. But despite these long term indicators looking better, growth is still anaemic and may well technically show us in recession shortly. God, that ‘growth’ thing is hard to come by! Meanwhile, with way more debt - the next big problem for the global economy after the Presidential election is over - the good old US of A is doing growth much better than us and always seems to. Why so?

Now, before all you Lefties out there say it’s because Obama’s stimulus is working better than Boy George’s ‘too far, too fast’ austerity - which isn’t true by the way - let’s look at why the US always does growth better than us.

First, let’s get the easy answer to the question out of the way. The US economy is big. Almost as big as the 27 countries that make up the EU. So who would bet against that enormous engine of an economy; once it's motoring, it powers along. Check.

Then we get to the second answer, which is tricky because no UK government can do anything about it. The USA has a very 'can do' business culture. Now that's a very glib statement but having recently worked for an American company for six years I can vouch for the fact that Americans have the absolute opposite attitude to us on all matters business. We see all the problems, take refuge in lawyers ironing out all the wrinkles before we do anything and then behave cautiously thereafter. Call it British ‘reserve’. Americans only see opportunity, don’t worry about the downside and charge at every deal foregoing heavy lawyering safe in the knowledge that they’ll sue each other to death if the downside arrives. Call it ‘pioneering spirit’. Now that’s just a cultural difference. Bugger all anyone can do about it.

But number three on the list is something our Government can tackle with the right political resolve: the dead hand of employment law. (Calm down, Lefties, calm down). You see, for Lefties, suggesting that we reduce employment rights is the most heinous right wing Tory sin second only to saying we should reorganise the NHS.

But here’s the rub: higher unemployment and slower private sector growth is the price for all those employment rights we have. Here’s why…

When I worked for my Americans, I was always mesmerised by how keen they were to recruit more staff. Before the income was in place, they were off recruiting more staff. Conversely, when the shit looked like it was going to hit the fan, they just ‘let people go’. And US staff were much more sanguine about being ‘let go’. Running the European operation, I always resisted my part of their empire taking on staff until we were drowning in income and then held off redundancies until we really had no alternative when the income went down.

As the only European and non-American at the top of the company, it took a while for me to spot this and for the penny to drop.

You see all US staff are employed ‘at will’. And I mean all staff, from the CEO downwards. They have virtually no employment rights. No notice periods. No verbal warnings. No written warnings. No industrial tribunals. No such thing as redundancy. (The redundancy word does not exist in American English in the way we use it. In fact, my Americans used to laugh and joke about redundancy - ‘Melvin, what’s that thing you guys have over there called? Ha, ha, ha!’ And if I wanted to give a room full of Americans hysterics, I would then explain ‘gardening leave’).

So US companies can hire and fire with ease. And do. Which means that when businesses grow, they grow fast and load up on staff. Good for growth. By contrast, we Brits are really cautious, putting off the cost of hiring and employing new staff with all the attendant long term cost of getting rid of them until we really, really have to.

So Lefties, don’t compare US fast growth with UK and wider European slow growth, and realise that all your much treasured employment rights have a cost. More power to Steve Hilton and his agenda for starting to attack this.

The Left's Tax Problem They Dare Not Mention

I have a friend. He was a non-dom. When NuLab started taxing non-doms, he simply moved abroard. He now lives in Italy and is enjoying the sun. That policy worked well then.

I have another friend who’s a Top 1% type. When the 50% tax rate came in, he believed that it was unreasonable for him to be forced to hand over so much of his very hard-earned income (a marginal rate of 61%, ie he got to keep only 39%) so he re-structured. And now he’s only paying 32.5% tax. So, in fact, less than the 40% he was paying before NuLab’s 50% tax rate was introduced. Yup, that policy’s really helping things.

And therein lies the problem with taxing the rich. They either just fuck off abroad or they restructure themselves so they pay less, whatever the rules. That is just reality and nothing’s going to change it, a fact that our Lefty social engineers in Parliament can never seem to get their heads around.

So what is the Left’s tax problem then?

The problem is not that the rich are paying too little. As demonstrated in my post on Sunday, they are paying considerably more than perhaps they really ought to.

Nor is the problem that the rich are evading tax. HMRC are onto that 24/7.

No, the real problem is that there is a huge, national tax evasion operation in progress. And who is carrying out this enormous scam on honest law abiding taxpayers?

Those who work in cash.

A massive number of people at the lower end of the tax pile ‘do it for cash’. Taxi drivers, hairdressers, cleaners, plumbers, electricians, decorators, garage mechanics, builders - you name it. They all ‘do it for cash’. And many of us merrily help them. As we saw from HMRC’s data in my Sunday post, there’s many, many millions of these people and thus a large chunk of HMRC’s potential revenue never actually makes it into the tax system in the first place.

Now I’m not suggesting that we, as a nation, are evading tax on anything like the scale that Greece or other tax basket cases do. But millions of Brits are at it. And the amount they don’t declare utterly dwarfs the amount not making it to HMRC by that very small number of rich people who are legally minimising their tax bill or illegally evading it. Those HMRC stats just put things into perspective.

Now you never hear the Left moaning on about that, do you? Nope. All they want to talk about is how the rich need to pay more tax.

I say again: the main problem I have with the Left is that so much of its rhetoric is anchored in populist, mythical ideology rather than cold, hard and rather inconvenient facts.

Growth Taxes

March’s budget is important. All budgets are important but this one is more important than usual. Why so?

Well in truth, this is the last budget that will deliver any tangible and demonstrable change during the lifetime of this Coalition with a General Election now fixed for May 2015. And, moreover, with UK plc stuck in economic neutral, this next budget desperately needs to stimulate some growth.

Question - So what can a Government do to stimulate growth?

Answer - Tax cuts.

Thus the debate around tax cuts is going to get louder and louder week by week. But within the Coalition’s economic plan to pay down our huge national deficit ASAP, is there any room for tax cuts? My guess is that there is. What Chancellor does not plan to leave himself room for some popular tax cuts in the run up to a General Election? So with no growth, maybe Boy George will have to deploy that little bit of slack he has up his sleeve earlier than he had planned. But, which taxes create growth?

The Lib Dems have nailed their colours to the mast: reduced personal tax allowances. They want to take anyone earning less than £10k out of the tax system funded by…you guessed it…taxing the rich more, mainly via their loony mansion tax. In the long term, this is a laudable aim - I suggested something similar way before the 2010 General Election - and of course in the short term, very populist. And it seems ‘fair’, which is the new lexicon. But, and here’s the problem, it will not stimulate growth. Because those for whom this makes the most difference - those on fixed low incomes, typically the economically challenged and the old - haven’t got much to spend.

Mr Yvette Cooper, desperate to suggest something populist to raise their sinking ship, has Labour calling for several possible different cuts: VAT down to 15%, or income tax down by 3%, all on a temporary basis, or the Lib Dem personal allowance option again. All unfunded. Just borrow more. To hell with it. Fuck the consequences. Think we’ve all experienced Mr Balls’ economic prowess before haven’t we? But, again, there’s a teency weency problem. None of them deliver growth, because the cautious just save more and the incautious just splurge their extra cash on ‘stuff’, and almost all ‘stuff’ is made abroad and imported. So we would mostly be stimulating China’s economy, not ours to any great extent.

So again, what tax cuts promote growth?

Well, there’s the problem. History has shown us again and again that it’s the tax cuts unpopular with the Left and painted by them as tax cuts for the rich that actually stimulate growth: corporation tax, CGT, and top rate income taxes. (Afternote - And the OECD agrees with me!)

Tricky one for the Boy George.

Tax Facts for Lefties

I am so bored of the Left’s endless rhetoric on taxing the rich. The latest incarnation of what used to be called ‘class war’ has now morphed into a ‘war on bankers’. It’s always the same thing: they want the rich to pay more, pay for all their well-intentioned but distorting social engineering, pay more for ‘their’ voters. And all this is often dressed up as ‘the rich need to pay their fair share’. So, my Lefty friends, a few inconvenient facts:

First, let’s define rich.

Remember the Millipede’s rambling statements about the ‘squeezed middle’ some time ago on Radio 4’s Today programme which, when challenged, he couldn’t actually define. Well, it’s actually pretty simple. According to HMRC, the median income in the UK right now is £26k. Thus the ‘squeezed middle’ must be either side of that line, no? Let’s say, for sake of argument, £5k either side of that line ie £21-31k. Seems reasonable, no?

Well ‘rich’ in relation to our now newly defined ‘squeezed middle’ is probably a little less rich than many of you were thinking. So let’s subdivide all those earning more than £31k into three groups: the ‘affluent’, the ‘very rich’ and the intergalatically, global ‘super rich’. Turns out, the bean counters at HMRC have already sort of done this for us through the income tax personal allowance system. The ‘affluent’ pay Higher Rate above £35k and the ‘very rich’ pay Additional Rate above £150k. Let’s not really worry about the ‘super rich’ who buy houses for tens of millions, all have yachts and float from tax regime to tax regime. In the big picture, there’s
an absolutely insignificant number of these guys, they are highly mobile and stay well ahead of any tax system in any case and so are simply uncatchable. Waste of time trying really.

Why did the Millipede have such a problem then? Ah, well, it’s because all the NuLab Islington set straddle that ‘very rich’ line. It’s a bit embarrassing for them. (The High Priestess of this set, Polly Tithead, is of course off the fucking ‘very rich’ scale!)

Second, how many ‘affluent’ and ‘very rich’ are there?

Very easy this one, because the Government tells us every year. The latest stats are here. In summary:

Total population - 62.3 million
All income taxpayers - 29.9 million - 47.9%
Basic Rate taxpayers (ie average) - 24.9 million - 39.9%
Higher Rate taxpayers (ie ‘affluent’) - 3.7 million - 5.9%
Additional Rate taxpayers (ie ‘very rich’) - 0.3 million - 0.5%

Hmmm. Awkward facts for you Lefties there, no? The reality is that the ‘affluent’ earn as little as £35k (ie they are teachers and policemen, not oligarchs) and that we in fact have a really teeny tiny number of ‘very rich’ whom, even if you taxed at 99%, would generate nothing more than a small rounding error in HMRC’s annual tax collection numbers because the tax pyramid has this large base of Basic Rate taxpayers and a tiny pinnacle of Higher and Additional Rate taxpayers.

Third, so how much do the ‘affluent’ and ‘very rich’ currently pay for?

Fact - The top 25% of earners pay almost 75% of all income tax.
Fact - The top 1% of earners pay over 25% of all income tax.

HMRC’s 2011 numbers are here.

Ooops. More awkward facts for you, Lefties. Seems the ‘affluent’ and the ‘very rich’ are actually paying way more than their fair share already. So, the facts rather get in the way of that ‘tax the rich more’ rhetoric.

And this is the problem I have with so many of the Left's arguments: much of its rhetoric is anchored in populist, mythical ideology rather than cold, hard fact.

Where's Labour Headed?

A few days ago, I pointed out that the Left has lost its way. It seems that other leading Labour Party supporters have also come to that view as well, see here. The killer quote:

“The Labour party stands for its leader and his interests first. Then it stands for its MPs and securing their jobs as best as possible. It stands for the union general secretaries (but not their members) just enough to keep them affiliated. After that it stands for swing voters in marginal seats and the media proprietors who can influence them. After that, if we’re lucky, we get to do something for the people for whom the party was created.”

For this to be written, openly and publically, by a very well known Labour Party supporter in one of the leading and most read Labour blogs shows the intellectual chaos in which the Left finds itself.

No wonder Millipede D and his outriders are coming out of the woodwork so obviously so far in adavance of Millipede E's future General Election loss.

More Balls From Balls

Rather than listen to the spin, why not read Moody’s statement in full here.

The killer central argument is this:

“The primary driver underlying Moody's decision to change the outlook on the UK's Aaa rating to negative is the weaker macroeconomic environment, which will challenge the government's efforts to place its debt burden on a downward trajectory over the coming years. These challenges, reflecting the combined effect of a commodity price driven hit to real incomes, the confidence shock from the euro area and a reassessment of the lasting effects of the financial crisis on potential output, were already evident in the government's Autumn Statement…. The second and interrelated driver of Moody's decision to change the UK's rating outlook to negative is the fact that the weaker environment is also, in part, a by-product of the ongoing crisis in the euro area. Although the UK is outside the euro area, the crisis is affecting the UK through three channels: trade, the financial sector and consumer and investor confidence.”

So, how’s that economic policy working out for you, Mr Balls?

The Left Has Lost Its Way

So the rail unions, in their latest Olympic ransom, have voted against a £500 bribe…sorry…‘offer’ for each member to stay working during the Olympics. Bizarre. In any other walk of life this would be called extortion. I am not being paid more to work during the Olympics, are you?

And this has made me muse back to a recent theory that has been banging around my head for a while:

The Left has completely lost its way.

Why so? Well when the workers were rising up against the aristocracy/mill owners/industrialists, I got their point. Working practices were evil. Humans were being treated in many cases as little more than slaves. Any right thinking man should have demanded change. And for the last 100 years or so, change is what we got. We now have, amongst many changes for the better: human rights, employment legislation, healthcare free at the point of delivery, paid holiday, maternity and paternity rights, state pensions blah, blah, blah. Hard fought for. And mostly, but not exclusively, it was the Left that led the way.

So my mind now turns to last year’s TUC conference. I remember when many thousands of trade unionists annually descended on a seaside town to rail against the Government of the day. What that had become by 2011 was a relatively modest meeting held in TUC headquarters in London by a whole load of be-suited middle England, middle income, middle aged men and women arguing about how fat their massively subsidised and unaffordable pensions should be. How times have changed.

In reality, all the big battles have been long won and so they were left looking for ridiculous fights over pension terms.

And we see this played out again and again. Only last week, did we not witness the forces of the Left screaming loudly that reducing benefits down to the equivalent of a £34k pre-tax salary (ie within the top 25% of incomes in this country) was apparently tantamount to brutal oppression of the poor? And did we not witness The Millipede tying his party in knots by trying to ride the ‘benefits horse’ in two different directions?

The Left has won all its major battles and has lost its ‘raison d’etre’. Time for a re-think.

Hester-gate - The Impact

Labour forcing a vote on Hester’s bonus in the next Opposition debate. Pathetic populist bullshit or what? But, with this announcement, it became inevitable that Hester could not therefore take his bonus.

The impacts:

1. Hester is now the worst paid bank CEO in Europe and will be poached within weeks/months for a job paying him 4 times as much.

2. This will now become an annual blood sport for RBS CEOs.

3. We will struggle to find a good enough candidate to fill his shoes.

4. This silliness will have zero impact on other banks.

5. As ever, the 'politics of jealousy' caravan will rumble on.

And They're Off...

Now if this isn't a first whiff of grapeshot in the race for the title post GB then I'm a banana: Alan Johnson calls for voting reform.

Standby for Harman, Straw, Milliband et al to all start spinning their platform shortly.