Thursday, December 4, 2014

First They Came for the Upper Decile…

top-decile

Yesterday was another orgy of “bash the rich” political populism. Once again, as the above chart from the Treasury shows, the most productive people were punished the most by the Chancellor. This is because he thinks it is good politics. It isn’t.

Osborne boasts that he is putting the biggest burdens on the broadest shoulders because “the rich can afford it”, a view widely held across the political spectrum, even some Tory MPs agree. They might have a rethink when they understand that the upper income decile getting clobbered year after year is not the mansion and yacht owning super rich, it includes them. The median gross income that puts an individual in the top decile is £60,500, that is less than what an MP earns. The same MPs whom so often claim they can’t live in London on their salaries….

Since 2010 Osborne has gone out of his way to make sure that the gini coefficient is better than it was under Gordon Brown, the measure of income inequality shows that inequality is declining under the coalition, the rich are not getting richer relative to the rest of the population. We are all relatively poorer is Osborne’s pathetic boast.

quintiles-since-2010

By the next election the upper quintile since 2010 will have suffered the most under this government – upper income voters are usually well disposed towards voting Conservative,  yet the Chancellor clobbers his core vote. Why do members of the commentariat glibly repeat that Osborne is a strategic genius? The Conservative voter’s answer to Reagan’s famous question “Are you better off now than you were four years?” is most likely “no”. For an individual to be in the upper income quintile they have to earn the princely sum of £39,800. Not exactly people who spend their weekdays in mansions and weekends on yachts… 

Why does the son of a baronet do it? It is because he is the son of a baronet that he feels he has to do it, the toxicity of the posh, rich charge is what they fear most. The polls persistently show that people think they – Cameron and Osborne – don’t understand “ordinary people like us”. So to neutralise the charge they punish their own supporters most, and it still doesn’t do any good…

Tuesday, December 2, 2014

Now Even the Nerds Turn On Ed
Top Prof Warns Miliband Has “Failed to Perform”

If there was one voting block Ed Miliband thought he could rely on, it would be his fellow nerds, yet a four-year academic study granted access to Ed Miliband’s inner circle today concludes he has “failed to perform as a leader”.

Professor John Gaffney’s research project carried out interviews with “well-known and high profile” Labour figures including advisers, speechwriters and spinners, finding “Miliband as a leader has simply not been inspiring enough to attract supporters”.

The study claims Miliband “fails to inspire his followers because he is not getting the narrative of leadership right,” that “many are unclear as to Miliband’s identity,” and warns “Labour’s chance is slipping away”.

Prof. Gaffney says “Ed Miliband must make peace with New Labour to win in 2015″, arguing that if he fails to “reconcile” and “unify”“the Labour Party is… in serious trouble”. Also known as “stating the bleedin’ obvious” from the University of Aston.

Monday, November 24, 2014

Ending the Migrant Worker Subsidy

immigrant-subsidy

Youth unemployment in the Eurozone’s southern victims is catastrophic, half their young have no jobs. The young are mobile, usually without children and it is entirely natural that they will seek work where it is, in fact it is admirable. The above chart highlights the lure of the UK, unskilled minimum wage workers from the EU can double or triple their wages and the British taxpayer will top up their income with a benefits/tax credit subsidy as well. This is counter-productive, the subsidy is not required, the competition undercuts already difficult to employ unskilled British youth.

Open Europe’s research out this morning charts a legal and political path that is achievable within the EU. Open Europe is seen as having the ear of the Chancellor on EU matters, though these proposals should appeal across the political spectrum. Even to europhiles – if they have any sense…

Thursday, November 20, 2014

Debating Sound Money

steve

Hayek MoneyIn the commons chamber right now Steve Baker MP is proposing the denationalisation of money. Together with colleagues spanning four parties – Michael Meacher (Lab), Caroline Lucas (Green), Douglas Carswell (UKIP) and David Davis (Con) – he has secured a debate on Money Creation and Society. It is a complicated and important subject.

The Cobden Centre, which campaigns for sound money, explains: we have a system of paper or “fiat” money: it exists due to legal mandate as opposed to being a physical commodity like gold. Reserves, notes and coins are created by the state but claims on money are created by the banks when they lend. Most of the money we have was created by banks lending.

This video from Dominic Frisby is a good primer on the issue:

As things are now, recurrent financial crises are systemically built into the global monetary order… 

See also: The Death and Rebirth of Sound Money

Friday, October 31, 2014

Defusing the Debt Timebomb

Sponsored post.

Government borrowing is currently running 10% higher than last year – exacerbating the already parlous state of the UK’s public finances.

This week, as part of its 2020 Vision initiative, the Institute of Economic Affairs launched its new report, Defusing the Debt Timebomb.    The think tank says spending restraint, pro-growth reforms and fundamental changes to pensions and healthcare provision are urgently needed to tackle this colossal problem.  Download the report for free here.

And a new short film from ieaTV Danny and the Debt Mountain shows why this story is unlikely to have a happy ending.  Watch it here.

Thursday, October 23, 2014

Wonk Watch: Loss of Faith But It’s No Talent PX-odus

Nick Faith is leaving his role as comms chief at the shrinking Policy Exchange to set up a new wonk shop with former Cameron adviser turned PX propeller head Sean Worth. It isn’t another talent exodus however, Faith and Worth’s Westminster Policy Institute will still work closely with their previous employer.

Will the last Cameroon to leave please turn off the light?

Wednesday, October 15, 2014

Miliband Slammed for “Shameful”, “Disgraceful” Attack on Freud …But Welfare Minister Offers Grovelling Apology

Interesting that Labour’s Anne Begg admitted on Sky News that she had not been told the context of Lord Freud’s comments by party spinners, heavily caveating her criticism accordingly. The Adam Smith Institute have come out in support of Freud, condemning Labour for misrepresenting what he said:

“Lord Freud has been shamefully mistreated by Ed Miliband. His point was that the market value of some people’s wages is below the minimum wage. This is often true of the severely disabled and can have appalling consequences for their self-esteem and quality of life. Fixing this problem was the justification for Remploy, a government-funded firm that gave jobs to disabled people who could not find work elsewhere.

To point out that someone’s market value is less than minimum wage has nothing to do with their moral value as human beings. Freud’s point was that we should help people in this situation by allowing them to find jobs paying below the minimum wage and topping up their pay directly to make up the difference.

Even if you don’t agree with this method, it is motivated by compassion for the disabled and an understanding of the unpleasant side-effects of our minimum wage laws. Freud’s only crime was to speak bluntly: it is disgraceful to use his words against him in the way Miliband has.”

Not like a spinner to take something out of context…

UPDATE: Freud mea culpa:

“I would like to offer a full and unreserved apology. I was foolish to accept the premise of the question. To be clear, all disabled people should be paid at least the minimum wage, without exception, and I accept that it is offensive to suggest anything else.

I care passionately about disabled people…. I am profoundly sorry for any offence I have caused to any disabled people.”

Tuesday, October 14, 2014

Finding NiMo Another Special Adviser

Nicky Morgan hid in her office while she had the three SpAds she inherited from Michael Gove sacked back in July. Now she has finished replacing them. Guido is told Morgan has hired up Holly-Lee Davis from the Centre for Social Justice – which is becoming the government holding pen once embodied by PX. The LSE-educated brainbox who also works with an “initiative aimed at promoting peace amongst school-aged children in the Middle East”. Davis joins gay rights activist Luke Tryl and Lynton Crosby’s former assistant Chris Wilkins at DfE. She should be able to spot a Trojan Horse plot a mile off…

Friday, October 10, 2014

Through the Roof

Sponsored post.

Property prices and the soaring cost of living are never far from the headlines – and never far from politicians’ lips.

This conference season, all four main parties have discussed ways of cutting the UK’s cost of living. Tax cuts, price freezes and increasing the minimum wage have all been put forward.

But in this new short film from the Institute of Economic Affairs, Director General Mark Littlewood argues that suffocating planning restrictions have the most profound effect on housing costs in the UK.

Watch more videos from ieaTV.

Friday, October 3, 2014

I Don’t See Much Sin… Just Taxes

Sponsored post.

Have you seen “Sin Taxes”? This stylish video short – from the Institute of Economic Affairs – shows how the poor are hit hardest by sin taxes. It puts forward proposals that would ease that burden – and boost the economy at the same time. It’s the most watched video of the year on ieaTV – the think tank’s online channel. Find out more here.


Seen Elsewhere

Rise of Angela Merkel | New Yorker
May SpAd Removed From Candidates List | ConHome
Clodagh’s Law | Press Gazette
Whitehall Bosses Ban Christmas | Sun
Meanwhile, in Russia… | Media Guido
Christmas TV Tips | Laura Perrins
Labour Marginal Fright | Lord Ashcroft
Osborne’ Real Deficit Reduction Record | ConHome
Blameronism | Peter Oborne
Everyone Can Lose | Staggers
Splintering of the Left | Tim Montgomerie


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Labour insiders turn on Ed over Powell’s latest gaffe:

“When is he going to stop promoting useless people? He was warned about her.”


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