The line from Ed’s speech  that pushed the boundaries of credibility was his promise to “be laser-focused on how we spend every single pound.” Lasers equal precision. So where is the precise detail of how Ed intends to get the welfare bill down? So far we have only had vague pledges to spend more by building houses and somehow guarantee jobs (presumably in the public-sector) which doesn’t bode well for the debt. Hardly laser like…

The TaxPayers’ Alliance has shot down Ed’s vague policy ideas to deal with welfare problems:

Housing Benefit
The main cause of Britain’s ever-increasing housing benefit bill is a lack of housing supply due to planning restrictions, not poorly negotiated deals by local authorities. Freeing up private investment in housing will bring down housing costs for everyone, including the Housing Benefit bill. Trying to cut Housing Benefit by increasing direct spending on housing won’t help taxpayers.
 
Grants for living wage
Offering taxpayers’ money to companies in return for paying a living wage would do little more than link two bad polices into one. Incentives for companies to switch from low-paid jobs to capital investment could lead to fewer jobs, not more.
 
Tax Credits and low pay
Heavy business taxes and onerous regulations mean companies have to pay lower wages. The Government should stop making it so expensive to hire low-paid workers by cutting business taxes like employer’s National Insurance and let workers keep more of the money they earn.  
 
The contributory principle
Benefits and taxes are already too complicated. Reform should focus on expecting people to work for their benefits and preparing job-seekers for the job market while simplifying the system. 

Guido was told that while discussing another much trailed “big speech“ in January, the late Maggie told a friend that the problem with modern politicians is that “they think that once they’ve given a speech, something has happened.” That anecdote came to mind this morning…

Setting up a policy consultation that doesn’t actually do any proper consulting seems to be a growing theme under Dave. A report by Rupert Darwall, the policy wonk who helped expose the Civil Service foul up over the Virgin West Coast train franchise, has laid into the Department of Health’s consultation on plain packaging. Darwall’s report finds:

• The consultation was deliberately framed to garner support for plain packaging, presenting policy-makers with a loaded question.
• Questionable evidence: no causal link between packaging and smoking.
• Department of Health admitted the consultation was biased but has done nothing about it.
• Consultation does not consider negative impacts such as reducing barriers to illegal tobacco.
• Overall the consultation creates a misleading impression that plain packaging will cut smoking.

That went well then. You can read Darwall’s report in full here…

With James Purnell off to the Beeb, Labour wonkshop IPPR have signed up another party thinker as his replacement. Andrew Adonis is their new chair of trustees.

A big name…

LibDem wonk shop CentreForum is a breeding ground for SpAds and bag-carriers. It’s not all mansion taxes and jewellery duty for these yellow sages, believe it or not they are now actually calling for tax breaks for small and medium sized enterprises.

Proposals include ditching stamp duty on all share transactions, allowing ISAs to include shares traded on SME equity markets and reducing capital gains tax on shares. Cable dryly describes the report as “interesting”. What’s the betting we never hear of it again…

Just what is it with the BBC and forgetting to mention lefty vested interests? They’ve gone big this morning on a report claiming that millions of low-income households face a council tax rise. Just a few things they forgot to mention: The report is written by one Matthew Pennycock, funnily enough a Labour councillor in Greenwich. Not only that, Pennycock was formerly a parliamentary assistant to Labour foghorn Karen Buck. His past life is there for all to see on the pinko wonkshop’s website. For some reason the BBC omitted to mention that to their viewers…

Just before Christmas Tory MP Alec Shelbrooke presented a 10 Minute Rule Bill calling for a welfare cash card for benefits claimants. At the time Guido thought it seemed a promising idea – not least for the invective it inspired from the skiver-loving left. The wonks over at the Demos think-tank say 59% of the country backs the move.

Demos, where Blairite-ultra Philip Collins is Chair of the Board of Trustees, have published a paper calling on the government to embrace the idea by issuing the Universal Credit on a pre-paid welfare card. Crucially it would exclude disability benefit and the basic state pension. This is not some Orwellian statist attempt to control people’s lives, it could be a much-needed means of protecting the taxpayer and tackling dependency culture…

Left-wing think tanks the IPPR and the Resolution Foundation have a joint report out advocating higher “living wages” forced on employers by regulatory diktat. Guido doesn’t dispute their claim that low pay increases the welfare bill by billions. Brown’s blizzard of redistributive bureaucracy and welfare transfers effectively left taxpayers subsidising low paying employers. Low paid workers pay taxes which they then get back in benefits…

Apart from the obviously wasteful tax-to-pay-benefits merry-go-round their policy has another fundamental flaw completely ignored by the wonks; it will increase wage costs and reduce corporate competitiveness, further undermining economic growth. Wouldn’t it be better instead to just raise the personal income tax threshold to £12,500 – as advocated by the LibDem’s Danny Alexander – effectively taking minimum wage earners out of income tax. It will have the same outcome – raising take home pay – without undermining competitiveness.

Raising the tax threshold is simple, has popular appeal and will benefit those on low earnings proportionately more than those on higher earnings. It will take some pressure off the “squeezed middle” and won’t increase the welfare trap. It isn’t a perfect policy, prominent Orange-booker Mark Littlewood, a wonk at the rival Institute for Economic Affairs, is wary that it will result in millions of voters being unaffected by the basic rate of income tax who therefore won’t be incentivised to vote for parties and policies that favour lower taxes. He fears that low-earners will have no reason to buy-in to tax cuts if they are taken out of the income tax bracket entirely.

IPPR’s wonkish sophistry may well appeal to Ed Miliband, IPPR’s Will Straw is likely to become a Labour MP at the next election. If in 2015 the coalition parties are both standing on a platform of reducing taxes on the working poor with the Labour Party standing on a platform of taxing the poor and increasing welfare benefits, Miliband will be on the wrong side of the dividing line. “Vote Labour and tax the poor” is a winning campaign slogan – for the coalition parties…

Neil O’Brien is leaving Policy Exchange to become George Osborne’s new SpAd tasked with developing the next generation of policies that will in all likelihood see their way into the Tory manifesto in 2015. Treasury sources say that the Chancellor likes his policy instincts and his style.

Policy Exchange is like a finishing school for Tory SpAds, in the way that the old Conservative Research Department used to be, alumni include Nic Boles. Other ministers like Gove and Maude were active in the organisation in opposition. Downing Street and ministries have often recruited people like James O’Shaughnessy and Sean Worth who were associated with the think-tank.

David Skelton will be taking the helm at the think-tank in the interim until a new director is appointed. It is a plum job and competition will be fierce…

Militant Unite boss Len McCluskey is continuing his drive to take over the Labour Party by setting up a pressure group to rival Blairite faction Progress. According to the Guardian, the subtly-named Class will aim to “remind Labour of their working roots“. The new think tank’s members read like a left-wing dream team, with Paul Kenny of the GMB and Mark Serwotka’s PCS providing the funding and Seamus Milne, Jack Dromey, Owen Jones and Polly Tonybee sitting on the advisory panel. Sounds more like a union for the 1% to Guido…

The prolier than thou ethos of “class” is to articulate “an alternative that will resonate with working people”. Which must be why they are advised by the Guardian’s Winchester educated Stalinist Seamus Milne and by the three home-owning, multi-millionairess great granddaughter of the Earl of Carlisle. Polly Toynbee was also privately educated (Badminton), went to Oxford (St Annes) and on to the BBC. Toynbee is the daughter of the literary critic Philip Toynbee and grand-daughter of the famous historian Arnold J. Toynbee, his uncle was the philanthropist and economic historian Arnold Toynbee after whom Toynbee Hall is named. She was born into three generations of metropolitan elitists…

The downtrodden workers on minimum wage should be grateful that the likes of GMB’s Paul Kenny on £114,000, the PCS’s Mark Serwotka on £113,354 and not forgetting Len McCluskey on £149,312 are leading the charge for equality. Class act indeed.

Francis Maude was much maligned by right-wing Tories during the opposition years as a wet moderniser, suspiciously tie-less and the éminence grise behind the Cameroon Policy Exchange think-tank.

In office he now wears a tie and has moved from policy wonkery to policy execution; bearing down on spending, battling the civil service bureaucracy, shining sunlight on government data to drive the transparency agenda. Maude is playing  hardball with the unions on unaffordable public sector pensions and full-time taxpayer-funded pilgrims. It is enough to gladden the heart of Margaret Thatcher herself – whom he once served as a Minister – it has also led to a grudging re-evaluation of him by many on the Conservative Party’s right-wing.

Now he is taking on the enemy within, the Civil Service permanent government, or in the case of Michael Gove’s Department for Education, the permanent opposition. The ability of the mandarinate to frustrate radical policies is legendary and their talent for generating inertia defies the laws of physics. In the ideological heart of many Thatcherites and Orange Bookers is a belief that the bureaucracy could be reduced, the government re-engineered and  improved. Quietly the Coalition will by 2015 have reduced the size of the Civil Service by 23% from the bloated days of Gordon Brown. The first step on the path to a post-bureaucratic government is making bureaucrats accountable and sackable when they fail to deliver.

Big Business has used the internet to strip out costs and whole layers of management, Big Government has barely started to do the same. Sir Humphrey and the rest of the mandarins have decades of experience in fighting Civil Service reform, they will fight these reforms every step of the way with cunning and subtlety rather than head on. They even have their own privately funded think-tank, the Institute for Government, possibly the most dangerous political force in Britain since the heyday of the Communist Party of Great Britain. The long-term gain from reforming and shrinking the Civil Service is immense, it was the area where the Blairite’s self-acknowledged failure was total. The prize is worth having at any cost.