Guido really likes this video from the wonks at the Centre for Policy Studies, it animates a very clear message, around the world lower taxes lead to higher growth rates.

The data is pretty clearly presented, are you watching Mr Osborne?

Tom Clougherty is leaving his post as Executive Director of the Adam Smith Institute at the end of April. He will be taking up a new post as Managing Editor of the libertarian Reason Foundation think-tank in Washington DC.

Dr Madsen Pirie, president of the ASI tells Guido, “We are very sorry to be losing Tom because of the incredible work he did to build up the ASI, but this is a wonderful opportunity for him and we wish him well in his new venture.”  There are a lot of ladies in Westminster who will miss the charmer’s smile too..

We are on the eve of a round of musical chairs in Westminster’s wonk-land – expect announcements soon. Downing Street is looking likely to have a big re-organisation of personnel on the policy unit front – Steve Hilton is off to California and Clegg’s strategy wonk Richard Reeves is also leaving for America. They are not the only ones said to be leaving Downing Street.  Foreceful political direction of the civil service is much needed, the permanent bureaucracy has become far too dominant in Downing Street…

The link between think-tank research and its “sponsors” has always been opaque. A cynical man would say companies bung a load of cash to shape supposedly independent research, but wonks wil always stress that their final recommendations are free from the influence of their paymasters. Not only did PA Consulting “kindly support” the New Local Government Network’s “Antcipating the Future Citizen Report” but the NLGN even let PA Consulting’s ‘Local Government Lead’, Graeme Walker, co-author the piece. The NLGN deny that any money changed hands for the research and stressed they have contractual commitments to independence. The “kind support” was apparently staffing, but it does look a little odd…

Westminster tube commuters are currently greeted with advertisements for “Think Tank: The Story of the Adam Smith Institute“. The book is the story of how a handful of motivated individuals, without any backing or resources except their own conviction, managed to create a think-tank which played a key role in the transformation of the country. One anecdote that is missing from the book is the tale of an intern once employed in the mid-80s, before the interweb, to stuff envelopes. After a day of stuffing envelopes the book’s author Madsen Pirie decided to give the teenage intern a lesson in practical economics. “Here at the ASI kiddo we believe in applying free-market principles, so why don’t you name a fair price for your labour, if it is too high we won’t hire you again and if it is too low, well that will be your loss…”

The intern hesitated and thought for a moment before responding “£100 please”. Madsen was a bit taken aback, “£100 for an afternoon’s envelope stuffing?” Nevertheless he wrote the cheque paying way over the market price daily rate for an intern in the 80s. That intern never worked at the Adam Smith Institute again. Guido really didn’t like stuffing envelopes…

Leaving aside IPPR’s massive shift to the left, that has culminated in quotes for Seamus Milne’s knocking copy, Guido had to chuckle at their latest email:

IPPR event series:
Where next for Europe?

The ‘democratic deficit’ and reform of the EU’s machinery

Tuesday 21st February 2012
12:30 – 14:00
IPPR Offices, 14 Buckingham Street, London WC2N 6DF

Nothing to do with the fact that IPPR stays afloat thanks to an €800,000 bung from the EU…

Today sees the evil Fabians holding their “The Economic Alternative” conference and Ed Balls is the keynote speaker.  To raise the curtain he has an interview with Mary Riddell in the conference edition of the Fabian Review. Print deadlines however mean the interview was given some weeks ago when the party line repeated ad nauseuam was different to what it is this morning. In the interview Balls says of the Tory deficit reduction strategy “Nobody in the Labour Party should get into the idea that it has to be this way”.

What a difference to his Guardian interview this morning in which he claims “My starting point is, I am afraid, we are going to have keep all these cuts.”

Same line of questioning, very different answers. The reality of public scepticism regarding Labour’s credibility on the economy and pressure from Shadow Cabinet realists combined with the weakness of Ed Miliband’s authority has forced Ed Balls to switch to George Osborne’s ‘Plan A’. There is no alternative.

Guido had better things to do than attend Chuka Umunna’s speech yesterday at an event organised by the re-energised IPPR, but that’s not to say he didn’t have eyes and ears in the room. There was a panel discussion afterwards featuring, among others, Lord Myners and Deborah Hargreaves, the Chairman of the self-appointed High Pay Commission. The event was trailed with a suitably hand-wringing leader in the Guardian which, once again, left them open to accusations of rank hypocrisy. Editor Alan Rusbridger’s package was up 7% to £605,000 last year and when a hack in the audience asked the High Pay Commission panel if this reward for failure was acceptable, with his characteristic charm, Myners instead chose to play the man rather than the ball, describing the hack that had asked the question as ”embittered”. Deborah Hargreaves was more forthright:

“The answer is no and maybe that is why they need an employee representative on the remuneration committee.” 

Which was rather honest considering Guardian editor Alan Rusbridger was until recently her boss, when she was his business editor and she still contributes occasional articles. Sadly nobody mentioned City tycoon and hedge fund boss Paul Myners’ multi-million pound modern art collection…

After leaving Downing Street a few months ago, in less than clear circumstances, policy-chief James O’Shaughnessy popped back onto the radar in this morning’s Times. Not only has he penned a passionate article about Gove’s education reforms, but he’s put his money where his mouth is:

“This is why I left Downing Street to start a new social business that aims to operate schools and to provide educational services based on a blend of traditional values and positive psychology: because after ten years as a policy wonk I believe that lasting change will only happen from the bottom up.”

However his blue sky days aren’t quite over yet. Having left Policy Exchange in 2007 to go to work for Cameron, Guido hears on the wonk-vine that he is on his way back to his ideological home. Policy Exchange are heading into their tenth year and are said to be lining up some big projects to celebrate. Guido understands that O’Shaughnessy will be coming back part-time to work, surprisingly enough, on the education side of things. You read it here first…

The Labour left and the Guardian are getting very worked up about the perfectly reasonable housing benefit cap proposal

“for example Louise Ryan, 41, who lives with her husband and two children in Islington, north London, will see the £438-a-week benefit, which covers the rent, reduced to £340 under the changes to housing benefit introduced this month.”

To just afford that £438 rent those of us who work would have to earn as below:

That rent alone is higher than median wages. It takes the taxes of four people on median wages to cover Louise’s rent. Add on her other benefits and Louise has a household income equivalent to a working family with a household income of over £40,000.  Where is the social justice in paying welfare benefits to people that are higher than the majority of the tax paying working people’s take home pay? This simply cannot continue.

To be fair the Labour shadow work and pensions secretary Liam Byrne recognises this, so the Labour left have begun excoriating him as “a reactionary”. The ubiquitous Owen Jones, author of “Chavs“, is representative of the Labour left. He thinks it is “progressive” to pay out to welfare recipients more in benefits than the majority of working people earn:

"Labour says it supports the principle of the benefit cap" – sorry, what? guardian.co.uk/society/2012/j… That's it – Liam Byrne has to go.—
Owen Jones (@OwenJones84) January 02, 2012

The Guardian reckons thousand of benefit recipients will have to move out of Kensington and Chelsea. Doesn’t your heart bleed? Guido really hopes that Owen Jones succeeds in getting the Labour Party to go into the election with a manifesto commitment to reverse the cap. It will be a huge electoral liability on the doorstep…

For the second time in a month Peter Mandelson’s think-tank, Policy Network, has launched a policy salvo against the direction the Labour Party is taking under Miliband. Mandelson privately is contemptuous of young Ed, these high-minded wonkish policy exhortations are the respectable manifestation of that contempt.

Last month his think-tank published “In the Black Labour: Why fiscal conservatism and social justice go hand-in-hand” is a discussion paper in which the authors; Graeme Cooke, Adam Lent, Anthony Painter and Hopi Sen, called for Labour to embrace fiscal conservatism. The paper was an explicit rebuttal of the kamikaze economics of Ed Balls endorsed by Ed Miliband, which poll after poll shows is not seen as credible by the public. Despite the state of the economy Cameron and Osborne are supported by the British public to a far greater extend than Miliband and Balls.

In exactly the same vein shadow pensions minister Gregg McClymont MP and Oxford historian Ben Jackson have written a paper for the think-tank warning that austerity governments often defeat opponents and that historically the Tories have achieved this on multiple occasions. They also urge Miliband to abandon his “predators and producers” rhetoric and ”put forward a more convincing strategy for private sector growth than the Conservatives”. McClymont and Jackson further warn that Ed Miliband must avoid the “tax and spend” trap and “a simple defence of the public sector and public spending”. Alas that is Labour policy in a nutshell..

See also: Labour-Centrists Laying Down Reality-Based Policy Ideas