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…
Ben Brogan, who has an excellent civil service source, broke the news this morning that Paul Kirby, the apparently “respected” civil servant head of the No.10 policy unit, was leaving his post. Downing Street has now confirmed it: “The Prime minister thinks Paul did an excellent job recruiting and leading an excellent team.” Interestingly, Kirby won’t be replaced by another Civil Servant, instead this crucial role will revert back to a political appointment. As Guido recommended months ago (See: Downing Street Needs Ideological Wonks).
Paul Waugh has some more detail: “I am told it was Kirby’s decision to leave as he felt his main work had been done and the mid-term review was a natural point to leave.” That’s not what Guido is hearing though.
A government source whispers that there was actually multiple reasons for the departure. Including that he was “completely useless” had “no political nous” and a “totally bureaucratic mindset.” More embarrassingly, details are emerging of a tantrum resulting in Kirby returning to KPMG:
“He completely humiliated himself by demanding a promotion to permanent secretary. When he was told he had no chance, he opted to flounce out of government altogether rather than take a job in another department.”
“A natural time to leave”, indeed.
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…
On the back of Ed’s “One Nation” schtick expect to see Red Toryism spouted on the fringe at Tory Conference, pushed out invariably by Phillip Blond. He is speaking at 5 fringe meetings. Such is his ubiquity songsters Sly and Reggie have done a ditty about “the intellectual curio of the Conservative Party”.
Not sure that Guido has ever heard a song about a policy wonk before, the lyrics are spot on, enjoy:
“My Name Is Blond… Phillip Blond”
Labour have spent the last week fretting about economic credibility, the cause is the realisation that the economy has probably bottomed and growth is returning. In fact yesterday saw an upwards revision of previous GDP figures which effectively halved the supposed depth of recession. The unemployment figures are going in the right direction, private sector growth is still anaemic though getting healthier, the re-balancing of the public sector is proceeding. The much awaited expansionary fiscal contraction is, whisper it quietly, almost upon us. This will fatally undermine the Balls mantra of “too far, too fast”. When Shadow Minister Ian Murray endorsed the idea of reviewing every single piece of public spending, he sent Balls into a spasm. Nobody came out to defend the policy or Murray, especially not Chuka Umunna, who despite numerous opportunities, ran to the hills. Now Ed Balls has stolen the policy in an interview with the Guardian.
In what looks like a a pre-conference policy side-step, Ed Balls has jumped on the “Zero Base Policy” bandwagon this morning. This state-slashing policy was outlined by Labour’s Miss Goody-Two-Shoes Stella Creasy earlier this summer. First advanced by the Adam Smith Institute this sensible policy is one that every government should embrace. Incoming governments should assess every single line item and every penny of taxpayers’ money spent. That should not be controversial.
Guido is glad that Balls has come round to this idea, though he does find it odd that just 48 hours ago Labour were trying to distance themselves from the very same policy when we asked. The problem Guido has with this Damascene conversion from Labour is that they have had years to review their spending. Instead of tackling waste they borrowed to spend and spend and spend – like a drunken sailor in a knocking shop. Balls has consistently denied debt fuelled overspending was ever a problem, repeatedly claiming (as recently as last month) that it was all going tickety-boo until the 2008 bank crisis hit. The metamorphosis of Balls into a supposedly frugal fiscal hawk willing to cut spending is something to behold.
Guido will only believe Balls if he announces – before the election – plans for line item spending cuts, in detail, in every government department and agency to balance the budget. Ed Balls won’t because he is only shifting his position because he knows an expanding economy with healthy growth will leave him looking foolish come election day. The only thing that is “zero based” is Ed’s fiscal credibility.
Guido is impressed. Stella Creasy’s endorsement of the ASI’s “Zero-Base Policy” that would see every single item of public spending reassessed is gaining traction in Labour. After Guido gave her interview a push last week, the idea has now been adopted by her colleagues over at shadow Business Innovation and Skills. Asked if he agreed with Stella’s reality-based thinking, Chuka understudy Ian Murray told an interview with London Loves Business:
“Absolutely. If you start from a zero budget spending review, you can always work forward if you have money available. It’s a bit about priorities isn’t it? I don’t think there’s anything wrong in saying that you have to look at where your money is best spent.
Finally a policy on the blank sheet of paper! A win for Stella and the ASI.
In a low-key interview over the summer, Labour’s Stella Creasy declared herself a member of the reality based community. She told Patrick Wintour of the Guardian that the main focus of an incoming Labour government must be value for money. Therefore they would have to “reassess every single item of departmental public spending in response to mounting government debt and the pressure on public resources.” The interview won her plaudits from the likes of ConservativeHome and the Taxpayers’ Alliance.
The Zero Base Policy is an idea advocated by the Adam Smith Institute and they’re delighted that it’s gaining traction in Parliament:
“It’s great to see that Stella Creasy has been reading some Adam Smith Institute publications. Now that she’s read Zero Base Policy, she should try Madsen Pirie’s “Economics Made Simple” and Eamonn Butler’s “The Alternative Manifesto” to learn that you can’t spend your way out of a recession.”
While you might think all this praise from sensible types will blot Stella’s copy book in the eyes of her deluded Labour colleagues, quite the opposite has happened. Instead, LabourList readers have named her as their MP of the Month– not only for her campaign against Wonga, but as the site notes, her Zero Base work too. There is a lesson for Labour there…
In rare moment of unsoundness Mad Frankie Maude has announced that Labour wonk-shop IPPR is to be given a “groundbreaking” policy formation role at the heart of the Coalition government. Guido supposes Frankie could hardly have chosen IPPR’s reality-based rivals Policy Exchange given he founded them with Minister Nick Boles and that Michael Gove is a former chairman. Instead the EU and union-funded IPPR will be given £50,000 of taxpayers’ money to research civil service reforms around the world.
UPDATE: PX get in touch to point out that they do not take public money and therefore would not have entered this government commissioning project.
Pearson plc, the owners of the FT, have caused a minor ripple today through their imaginatively named Pearson Think Tank. They’ve published a prophecy of doom about the state of primary education and teacher training:
“A perfect storm of