Boris is Bringing Back Big State Conservativism

The manifestos are being finalised and Guido has bad news, they are all offering a bigger state, more spending and more government borrowing. All the signs are that the Tories plan to win Labour heartlands by outbidding Labour’s 2017 manifesto when it comes to spending. The scale of the planned spending splurge is unprecedented. This bear in mind is after Sajid Javid has already increased spending by 4.1% in real terms for 2020-21 relative to 2019-20. That is the biggest jump in spending since Gordon Brown in 2002 was released from his 1997 manifesto promise to stick to Ken Clarke’s spending envelope.

Resolution Foundation’s analysis of commitments, made before more free stuff is promised in the Tory manifesto, reminds us that:

  • Total Managed Expenditure by the state is on an upward trajectory once again, despite the (rising) deficit. Spending is set to rise to 40.6% of GDP; higher than it was under Chancellor Gordon Brown.
  • This is before an expected surge in infrastructure spending by the state. The Tories are hinting there will be a £100 billion splurge.
  • Increased spending on the NHS will take government spending up to 42% by 2023
  • Welfare spending has been increased at the expense of national defence
  • On this trend demographics alone will drive the state to spending 50% of GDP by the middle of this century

Without a fiscal framework and firm intention to resist the growth of the state, the Tories will end up being a party of big government, permanent deficit spending and high taxes. Sajid Javid has a portrait of Margaret Thatcher on the wall in his office looking down on him, her era now risks becoming an aberration in Conservative Party governance…

Resolution Foundation Flouts Charity Commission’s New Political Ruling

The Resolution Foundation, the welfare reform focused think tank which has charitable status, hosted an event this morning at its Westminster offices  on the subject of “British politics beyond Brexit: Where are Labour heading?”

According to their website

“Shadow Cabinet Office Minister Jon Trickett will set out his vision for tackling Britain’s big political economy challenges. He will be joined by leading Labour thinkers, including Bridget Phillipson MP, Ayesha Hazarika and Stephen Bush, to discuss what the priorities should be as they prepare for the next general election, whenever that may be.”

Speakers for the event were all Labour supporters, MPs or former staffers; Jon Trickett, Shadow Cabinet Office Minister, Bridget Phillipson, Labour MP for Houghton and Sunderland South, Ayesha Hazarika, former Labour Party special adviser, Stephen Bush, the Labour supporting New Statesman’s political editor, Torsten Bell, Director of the Resolution Foundation and former Ed Miliband adviser when he was leader of the Labour Party. Torsten came up with the “Ed Stone”.

They all obviously advocate voting for the Labour Party. Which is fair enough and Guido has no issue with a think tank examining the Labour Party’s policy options. However given the regulatory warning recently issued to the Institute of Economic Affairs, which said it had breached regulations stipulating that it is unacceptable if “at events, the audience is only addressed by people with the same views on a topic”. Guido put this point to Torsten this morning…

Torsten’s response was that balance can be “judged across sections of things, not in one given event.” That’s not what the Charity Commission’s guidance says…

The official guidance says that charities “must ensure that the charity’s outputs (research reports, articles, seminars and so on) are balanced and neutral” and that “activity would not be permissible if… its purpose is (in essence) political, party political or propagandist.”

Today’s Resolution Foundation event was clearly political and not clearly related to to their charitable objectives “to improve outcomes for people on low and modest incomes. We do this by undertaking original research and economic analysis to understand the challenges they face.” Guido has contacted the Charity Commission to see if they will be warning Torsten likewise in an even-handed* way…

*The Charity Commission’s duty to act consistently and fairly is one of their principles.

“People should be treated fairly and consistently, so that those in similar circumstances are dealt with in a similar way. Any difference in treatment should be justified by the individual circumstances of the case.”

Small Victory for Guido’s Think Tank Transparency Campaign

Followers of Guido on Twitter will be aware of his long-running campaign against the BBC prefixing introductions that frame the think tank guest for the listener or viewer. It always seems to Guido that centrist think tanks are described as “respected” as in “the respected IFS”, right-of-centre think tanks are described as “right-wing” [boo, hiss], left-wing think tanks tend to get no framing.

So it was this morning as the news presenter on Radio 4 reported on a press release from the think tank run by Ed Miliband’s former policy adviser:

Then as if by magic in the next news bulletin;

 

Victory! They suffixed the Resolution Foundation as “left-leaning”.

The serious point is that this framing by the BBC is uneven. The BBC clearly thinks that viewers and listeners are too stupid to know where guests are coming from politically. Guido thinks they should let the audience judge for themselves and so long as there are guests from across the spectrum, balance will be maintained. If they won’t do that perhaps they should let guests self-identify…

£10,000 Bribe For 25 Year-Olds Would Cost £8 Billion Per Year

The Resolution Foundation’s call for millennials to be given a £10,000 handout from the state on their 25th birthday has to be one of the daftest ideas from wonk land in a while. The Institute of Economic Affairs tell Guido that, while the number of people turning 25 will vary each year, on average it’s around 800,000 people a year. That means the policy will cost an estimated £8 billion a year. Which is roughly equal to the total annual income tax paid by one million average earners…

The IEA’s Kate Andrews is right:

“Why should the salary of a 40 year old person, earning the minimum wage, be redistributed to top-up a 25 year old, earning double or triple the average national income? There is nothing progressive about cash transfers that are based on age. This proposal stands in opposition to the fundamental principle of welfare safety nets: that resources are redistributed to those who are most in need.”

Not to mention the fact that a £10,000 handout doesn’t pay off a 25 year-old’s tuition fees or get them on the housing ladder, let alone address any of the reasons why the Resolution Foundation thinks they need the money in the first place. Bonkers.

No Deal Brexit + Slashing Tariffs = Reduced Prices

The top line of this morning’s Resolution Foundation report is that lower income households would be stung in the event of a No Deal Brexit should we revert to WTO tariffs. This is a false premise: in a No Deal scenario it is far more likely that the government would unilaterally cut or decline to impose tariffs. Ministers have repeatedly privately said they would propose a policy of unilateral tariff reduction – or even unilateral free trade with tariffs set at zero – in the event of No Deal. The Resolution Foundation looked at this scenario too and found that in a No Deal Brexit where the UK slashed tariffs household spending would be reduced by £130 a year. Look at all those cheaper prices above…

Of course this finding is nowhere to be found in the headlines of the Remainstream media, despite being the far more likely outcome in the event of No Deal. There you have it from a centrist think tank: No Deal means cheaper prices. Brexit is about breaking free into global markets, not putting up protectionist barriers to trade…

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