The "Progressive Majority" Delusion

The noisy progressives in our public life are forever claiming there is a “progressive majority” in Britain. If it was not for Murdoch, the City and the editor of the Daily Mail they would lead us into the social democratic utopia that the people so desire. That is basically the underlying worldview of many at the BBC, Guardian editorial meetings and the young wonks in the think-tanks around Ed Miliband. Tony Blair understood that this was a delusion which electorally crippled the Labour Party and the somewhat flakier LibDems. He fashioned a left-of-centre platform which addressed the real concerns of voters.

The British people are sceptical about “progressives”, their language and their disconnection from the reality of  their lives. The “progressive” idea that switching to the Alternative Vote was important to ordinary people, who are not on the whole interested in politics, was delusional. There is no untapped progressive majority outside the media and political elites.

It is one thing to be youthful and idealistically progressive, believing if only we cared and shared everything would be alright. When you become a taxpayer, parent or home owner you are mugged by reality. Caring and sharing with your family becomes your priority, that is human nature. The amount of your salary that goes to HMRC, the fear of crime, a desire for better schools for your children and the cost of petrol become more important priorities. Guido speaks to Labour Party supporters who think that Ed Miliband is overly influenced by “progressive” voices, his support for switching to the Alternative Vote shows that in truth Ed Miliband is himself a “progressive”. Voters are not.

Rendevous with Destiny: Cameron Turns Hawkish

The debate on the pages of ConservativeHome and the Tory broadsheets as to whether or not Cameron inclined towards the Neo-Conservative world view (in the way that Gove, Fox and Osborne are said to) appears to have been settled with the commencement of the challenge to Gadaffi. The Neo-Cons over at the Speccie are thrilled and have produced this:

Guido is a pragmatic libertarian, wary of wars which always seem to increase the power of the state and diminish the treasury. On the other hand instinctively whenever Guido sees a dark-glasses-wearing socialist military dictator he wants him over-thrown. Neo-Cons argue that if you believe the free world’s liberal democracy is a morally superior form of civilisation than it is our manifest destiny to assist those who yearn for those same freedoms.

Blair called it “liberal interventionism”, his heir Cameron prefers to call it “muscular liberalism”. In any event his speech in Perth yesterday takes a Neo-Con line claiming that Britain is acting because of:

… the moral duty to step in when a dictator starts killing his own people. Not just the belief that a movement towards more open and democratic government in the Arab world will be good for the entire world.

But the clear and hard-headed understanding that a stable Libya, free from Colonel Gaddafi’s brutality, is in Britain’s long-term interests too.

This is where our ideals and our interests come together… in the cause of justice and freedom for the safety of our nation and the security of our world.

It is an attractive argument. In an interdependent world with weapons of mass destruction the libertarian ideal of “splendid isolation” may be more dangerous in the long run…

The Guardian: Uncut and Full of Cant

On Saturday morning The Guardian decided to give UK Uncut a front page boost.  The protestors managed to shut down three dozen of the 1,720 branches of Barclays bank. Surprised they found any branches to occupy given Saturday opening hours.

The gist of the shabby story was Barclays bankers are evil tax dodgers. The evidence was a hatchet job with the paper making the spurious claim that Barclay’s only paid 1% tax on their £11.6 billion profits. In arriving at a profit before tax figure of £11.6 billion, The Guardian has added the profit from the ongoing business (£4.5 billion) to profits from a disposed business (£726 million) and the gain made on disposal of that business (£6.3 billion) to reach a total of £11.6 billion.

What they chose to ignore however was the total tax take Barclay’s had to pay; payroll taxes, bank levy, non-recoverable VAT, employers NI, SDRT and so on. Over the weekend Tim Worstall and the FCA Blog tore chunks out of the piece:

The article compares the cash paid to HMRC in respect of UK corporation tax in 2009 (£113 million) to the profits generated by the consolidated Barclays group worldwide in 2009. In the UK, tax is paid in arrears, so 2009 taxes would relate to widespread 2008 losses, not 2009 profits.

Multinational companies such as Barclays pay tax in a number of jurisdictions. Generally speaking Barclays only pays UK corporation tax on profits it generated in the UK.  Anything earned outside the UK doesn’t get taxed here. So it’s a howler to compare the UK corporation tax payment to the global consolidated profit. Most of those profits were taxed where they were made.

In 2002 (under Gordon Brown, Chuka), the UK government introduced the substantial shareholdings exemption, a corporation tax exemption for UK businesses disposing of a substantial shareholding in a part of their business. The idea was that businesses should be able to restructure their businesses without having to worry about chargeable gains implications. Barclays are heavily criticised by The Guardian for using it.  The last time that Guido saw this being used was by the, err, Guardian Media Group to save themselves some £60 million of taxes in 2008:

“In 2008 GMG sold half of Auto Trader publisher Trader Media Group and made an exceptional (one-off) profit of more than £300 million. No tax was payable on the return from that sale because under UK law GMG qualified for SSE”

In 2008 The Guardian made £302 million in profits and paid no corporation taxes. The CEO, Carolyn McCall, was paid an £827,000 package. Yet we don’t see the UK Uncut crowd kicking up a stink about The Guardian’s tax structures or their fat cat pay and bonuses.

Over the weekend the Guardian editor Alan Rusbridger (half-a-million a year since you asked) tweeted about Barclay’s offshore holding corporations. Guardian Media Group holds hundreds of millions in assets in a Caymans Island domiciled offshore corporation.

Guido put it to the GMG press office that GMG has £223.8 million invested in an overseas/offshore hedge fund managed by Cambridge Associates which trades currency derivatives. They don’t deny it and have declined to confirm the fund’s structure for tax purposes.

Guardian readers seem to be under the illusion that it is owned by a not-for-profit charity. The Scott Trust was wound up in October 2008 and the Guardian is a for-profit-privately-owned media business, the well paid directors of which confirm in their annual accounts that they operate tax strategies in line with their fiduciary duty to the shareholders – just like any other business.

The old Scott Trust was set up in 1936 to avoid inheritance taxes and wound up in 2008 so that GMG could cynically exploit the SSE capital gains tax shelter to pay 0% in corporation taxes on their £302 million in profits that year. GMG claim that it was about modernising the holding structure, in fact it was a disingenuous cover for corporate venality.

For three quarters of a century the The Guardian has been shirking taxes, Guido has no problem with them acting in their shareholders’ best interests. The hypocritical cant from them however about others doing the same is beyond contemptible…

Big Society v Big Government

In the Indy this morning the left-wing columnist Steve Richards identifies the key truth about the ideological under-pinning of the heavily under attack Big Society programme which seems to have escaped most of his allies on the left. When Cameron said “There is such a thing as society, but it is not the same as the state” it wasn’t a rejection of Margaret Thatcher’s famous dictum, it was a restatement of what she said:

“I think we’ve been through a period where too many people have been given to understand that if they have a problem, it’s the government’s job to cope with it. ‘I have a problem, I’ll get a grant.’ ‘I’m homeless, the government must house me.’ They’re casting their problem on society. And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour.”

That he set the chattering classes into paroxysms of delight over a Tory leader’s supposed rejection of Thatcherism shows that on the whole, with a few exceptions like Jon Cruddas, most of the left don’t understand right-of-centre thinking because they hold a mental caricature of centre-right and right-wing ideology in their minds, attributing malice to their opponents. The Big Society is about displacing Big Government as the key actor in society, so when the left-wing quangocracy, unions and their media allies complain that charities are losing their taxpayer subsidy and this undercuts the Big Society agenda, they misunderstand completely. A charity that relies in the main part on taxes is no more a charity than a prostitute is your girlfriend. Since Edmund Burke conservatives have wanted Little Platoons to take the lead in civil society. If David Miliband’s Movement for Change had actually set about being the change rather than just (as his brother Ed wants) campaigning for Bigger Government, it too would have been one of Burke’s “Little Platoons”. Radical whigs and liberals have always wanted to disperse power away from first the monarch and in modern times from the state. The Big Society agenda is not about the state delivering through para-statal bodies, it is about society delivering for itself. Ask not what your government can do for you, but what you can do for society…

Expect the Prime Minister to very soon deliver a speech reaffirming his Big Society agenda, when you are right, you cannot be too radical. The speech will have a touch of a mea culpa, though it will not be a retreat, it will be a call-to-arms at the start of the Big Society revolution unlike Blair’s late recognition in 2005 that “Every time I’ve ever introduced a reform in government, I wish in retrospect I had gone further.” Expect more squeals from those still advocating Big Government solutions…

The Logic in Balls Denying Reality

The appointment of Ed Balls as shadow chancellor means that deficit denial becomes the central economic policy of the Labour Party. In essence both the Eds intend to argue that it was the banking crisis and only the banking crisis that caused the deficit. In taking this policy direction they repudiate the more sensible realistic policy followed by the last Labour Chancellor, Alistair Darling.

It also flies in the face of statements made by Tony Blair in his memoirs and as recently as last Friday at Davos. Since Balls isn’t an idiot we have to ask ourselves: why is he trying to deny reality? Does he think the voters can be convinced that overspending wasn’t a problem until the banking crisis? Here he is telling Andy Marr there was no structural deficit under Labour:

Clearly both the Eds think they can blame it on the bankers, popular understanding of the deficit is hazy. The huge one-off costs of bailing out the banks and the constant government-debt-bloating-deficit are confused in the popular consciousness. Even the debt and the deficit are confused in many people’s minds. Whenever Ed Miliband is cornered on spending or taxes he reaches for the banker bogeyman – tax them more and it will sort everything out. None of this adds up to anyone with any financial literacy, which unfortunately is a minority of voters, the majority of voters do blame and detest the bankers.

For this argument to make sense of course requires Ed Balls to deny that there is, or ever was, a structural deficit that had to be tackled. Which is exactly what he did on the Marr show today.

Denying the deficit and blaming the government’s debt crisis on the bankers is an attempt to absolve Brown, Balls and the Labour Party of the blame. It thus allows Balls to claim that, since there is no structural deficit, the cuts are unnecessary and ideological. Which is exactly what he does.

The problem for Balls is that the public senses innately that the government under Brown’s chancellorship and premiership was overspending. If Osborne can keep that national memory alive over the next three years the public will forgive him doing what is necessary. If they forget, or prefer to believe Ed Balls’ claim that cuts are not really necessary, they will blame the government for the coming hardships. The deficit blame game will have to be played until the next election.

Downing Street Vacancy : Television Image Maker Wanted

Guido has always been a news junkie, taking it in from all directions; online rolling news, radio, television news channels and the papers, hell even Twitter nowadays. When Guido was a paperboy he read every paper from the Sun to the FT, which must have annoyed the customers wanting their paper before the morning commute. As media pundits go Guido is as qualified as anyone can be after 30 years of news consumption and analysis. What that experience has taught Guido is that one thing is for sure: television is the medium that matters.

It may not matter to the chattering class, but it does influence the voters more than they do. Most voters don’t read the Guardian, they don’t read the Indy, Times or Telegraph either. They watch television, which is why more people voted for the winner of X-factor than the government.


One of the central ideas that inspired the creation of this blog was the “Guidoisation of politics” by which is meant more than just the trivialisation of politics, it alludes to the conveying of ideological messages in simple images and terms. It is also about the personalisation of politics via the character of politicians. Character matters to most voters more than ideology. Gordon Brown’s character weighed against him with voters more than his economic policies. His character was revealed on television to more people, more effectively than Andrew Rawnsley or Tom Bower could ever dream of doing. Tony Blair and Peter Mandelson were masterful televisual image makers – remember them deliberately delaying the acceptance speech that May morning in 1997 until a shaft of sunlight broke through into the Royal Festival Hall – “A new dawn has broken, has it not?” Brilliant imagery.

Roger Ailes is famous as the boss of Fox News, the news channel with the most viewers in America, making it the most profitable news channel in the world, more profitable than all the other US news channels combined. It has so much political influence that Obama’s strategists reckon it costs them 3% at the polls. Roger Ailes cut his teeth as a young TV producer who Richard Nixon hired after he told him to his face “The camera doesn’t like you”, Nixon replied “It’s a shame a man has to use gimmicks like this to get elected”, the young Ailes retorted “Television is not a gimmick, and if you think it is, you’ll lose again.” In a televised democracy, television decides elections, it really is that simple.

It is a given that the coalition is about to enter a period of unpopularity, to win the next election the economy firstly has to come good or be coming good by 2014, that is a pre-condition. Secondly they have to get the credit for the economy coming good as well. Television will help most voters decide who gets the credit, not broadsheet editorial writers. Cameron and Clegg are better television performers than Miliband, if they want to exploit that they should hire a director of communications who understands televisual imagery. The media grid planning can be done by Downing Street drones a plenty and Osborne has a good grip on political strategy. Television requires a certain genius. If they want to win over the voters they need a political maestro equivalent to Simon Cowell or Roger Ailes. If they think that television is just a gimmick…

Feck Off Euro-Socialists

Euro-Socialist and Green MEPs have tabled a motion calling on Ireland to double corporate tax rates as part of a quid pro quo for a bail-out. Not a single Irish MEP has supported the motion. Ireland should just tell them to “feck off”…

Douglas Carswell is right, Ireland should decouple and default. Coupling the Celtic Tiger to the euro was a disaster, it was inevitable that when economic cycles were asynchronous the big core EU countries would set interest rates to suit themselves. The ECB kept rates too low for Ireland’s over-boiling property market, which predictably bubbled over. Exactly as Euro-sceptics from Farage to Redwood predicted would eventually happen.

The Irish property crash has destroyed the banks, none more so than Anglo-Irish Bank, a bank run by corrupt allies of the governing Fianna Fáil party. The state guarantees proffered in the panic of 2008 to Irish banks gave them the backing of the state’s ‘AAA’ credit rating. Those guarantees have now sunk the state’s credit rating.

A World Bank report from back in May 2009What Went Wrong in Ireland? written by Patrick Honohan, Professor of International Financial Economics at Trinity College Dublin, put the blame squarely on joining the euro and having the wrong interest rates:

…the underlying cause of the problem was … too much mortgage lending (financed by heavy foreign borrowing by the banks) into an unsustainable housing price and construction boom. The boom seemed credible to enough borrowers given sharply lower interest rates with adoption of the euro … it was Economic and Monetary Union (EMU) entry that really started the housing price surge by sharply lowering nominal and real interest rates, thereby lifting equilibrium asset prices…

Honohan isn’t some obscure professor, since writing that report Honahan has been made the new governor of the Irish Central Bank. Left-wing British commentators like the Fabian’s Sunder Katawala, the Indy’s Ben Chu and even Polly Toynbee are trying to blame Ireland’s woes on low tax rates and free market reforms. No serious Irish economist attributes Ireland’s crisis to low tax rates. The reason Polly, Sunder and Chu want to present that argument is to stick it to those of us on the right who praised Ireland’s supply-side economic policy reforms, which is why they point the finger at the likes of George Osborne, Dan Hannan, John Redwood and Nigel Farage. It is intellectually dishonest of them to cite derisively the British right’s praise for Ireland’s successful free market micro-economic reforms and ignore warnings from the same about the macro-economic systemic risk of joining the euro. That is exactly what the left-wing commentariat is trying to do.

The micro-economic reforms that led to the Celtic Tiger pre-date Ireland entering the euro and were designed to improve the supply-side potential of the economy, make markets and industries operate more efficiently and thereby contribute to a faster rate of growth of real national output. Low taxes and freer markets achieved that objective – incidentally many of those reforms were championed in the 80s and 90s by the Progressive Democrats – the party of which Guido was a member. After joining the euro in 2000 Ireland had negative real interest rates, sparking an out of control property bubble.

German economic advisers from Frankfurt have been in the Irish finance ministry and central bank for nigh-on a year. Last month the ECB in Frankfurt mandated the Irish government to pay off European holders of Irish bank bonds – the European bail-out of Ireland is really a bail-out of European lenders to Irish banks. In joining the euro Ireland’s economic sovereignty was surrendered by Fianna Fáil with the support of almost the entire political class, consequently the next generation of Irish taxpayers have had their future mortgaged. Guido could cry for what the europhiles have done to his country…

"Progressive" Government is Not the Way to Progress

During the detoxification phase of the Cameron Project to get the Conservative Party re-elected they re-branded themselves as “progressive”, which is the opposite of conservative. It disarmed critics at the cost of ideological coherence.

All parties now say they are committed to welfare reform, even Red Ed says he agrees with IDS that it should always pay more to work rather than stay at home on welfare. Yet whenever a practical reform to this end is advanced a chorus goes up from the left-wing think tanks, Labour politicians, the Guardian and the BBC that it is not “progressive”. Guido does not seriously dispute the methodology or accuracy of the IFS analysis of the Spending Review, no doubt the bottom decile will be marginally worse off in proportion to other population deciles as a result of the Spending Review. Guido questions how we can move forward without, in aggregate, the lowest decile losing out.

The lowest income decile in this country is comprised largely of welfare transfer recipients, these people receive money largely from the working poor and the squeezed middle, quite simply that decile’s welfare payments come from the taxes of the rest of us. The only way that reforms can be made to fit the “progressive” template that would please the progressive choir would be to pay the unemployed more money taken from the working poor and the squeezed middle. That might be “progressive” but it won’t lead to progress.


It is in no one’s interest to increase the poverty trap by increasing the payments to those who aren’t working at the expense of those who are working. It isn’t progressive, it is divisive.

One example of a reform which struck Guido as common sense yet raised the hackles of “progressive” lefties; Osborne announced in the Spending Review that single claimants aged under 35 will be limited to claiming housing benefit for the equivalent of a room in a shared home, rather than for a one-bedroom flat.  Almost everyone working in the private sector who is single is unable to afford their own home in London, sharing is the norm. Is it fair that young single welfare-claimants are paid enough for a flat of their own which their working peers can’t afford? “Progressives” are campaigning against this fair reform.

Osborne’s “progressive” phase was a tactical necessity during the detoxification phase, it is a hindrance to real progress now. Attempting to solve the problems we face using policies that pass an arbitrary “progressive” bar will fail. It is time the Liberal-Conservative government abandoned the pretence to “progressivism” to move the country forward.

See also : Don’t Fight on a Battlefield of Your Enemy’s Choosing

Spending Cuts: Real or Unreal?

Last week John Redwood advanced the argument that we will not see any overall cut in government spending during this parliament, Guido would add that the government isn’t planning on paying down a single penny of the national debt by 2015 either.[…]

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"You Can't Have Politicians Stepping Into the Scientific Arena"

The sacked Professor David Nutt has turned the tables on Alan Johnson.  Johnson keeps repeating angrily that the professor should stay out of politics, the professor is squarely saying that politicians should stay out of the science. Dr. Les King has followed the professor and resigned as a government adviser, a third adviser Marion Walker, is said to be going.[…]

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Steve Richards Says "No Bank Collapsed"

Steve Richards in the Indy begins his panglossian column with “Labour activists heading for their pre-election conference in Brighton this weekend have cause to be in a mood of giddy euphoria. The Government called it right during the recession. No bank collapsed.”

Apart from Northern Rock of course.[…]

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Not Nihilistic, Realistic

Yesterday afternoon Guido put in a call to Paul Richards, Hazel Blear’s SpAd, after being tipped off that she was going to attack Guido in a speech later today to the Hansard Society. Guido also called the Hansard Society to arrange to attend the speech.[…]

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Hutton & Polly v Mises & Milton

Listening to Will Hutton and Polly Toynbee you would think they were actually monetary economists when in reality they are just soundbite savvy talking heads spouting the latest fashions of the metropolitan media elite. Both property millionaires in their own right, three-houses-Polly and Hutton have substantial family stakes in the property market.[…]

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Gordon Lives – CCHQ Celebrates Prematurely

Guido has been telling anyone who would listen over lunch that the media are ready for a change in the Westminster narrative. Guido would point to the Tatler photo-shoot and the Andy Coulson midwifed Cameron on Cameron hagiography by Dylan Jones as the spin tops.[…]

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The Case for Elite Politics and Not Listening to the People

Fresh from telling people that if only they were as clever as him they would vote for Ken Livingstone, Steve Richards has a pricelessly revealing piece in The Indy this morning. It reveals a core trait shared with many fellow pundits who are fully paid-up members of the political class – an elitist contempt for democracy.[…]

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The Price of Freedom of Information

After spending over £100,000 and losing his appeal the Speaker is going to finally hand over the 14 MPs expenses to Heather Brooke tomorrow at 4pm. She will then be chauffeur driven to Wapping, where the Sunday Times will pore over the expenses of 14 leading politicians going back three years.
[…]

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