23 May 2009
14 May 2009
Wise Web Woman at The Other Side of Sixty has given me an award thingy, pictured right. Here are the conditions:
Liam, for reminding me what political debate is all about and for grounding today’s political issues so firmly in socialist history and philosophy. The latest post, on financialisation, is a cracker;
And the Dublin Opinion group blog, for all things Dubby. Where is the Belfast equivalent?
10 May 2009
Although the expenses row is going to affect MPs from all parties, there’s something particularly distasteful about those from the party professing to represent the many not the few claiming for bath plugs and second-hand books. MPs are saying they’ve kept to the rules, although naturally they understand why the public are so upset and of course the rules have to change and they can’t comment on individual cases. A new independent body is apparently going to do that.
But the debate has become too focused on examples, rather than on the important more general questions. Why should MPs be able to claim for, say, groceries and home improvements? Why should the people who decide on our tax levels be able to evade Capital Gains Tax and their full council tax liability? Even if there is no rule to say money for home improvements should be repaid on sale of the property, why didn’t it feel wrong to be making a profit out of the taxpayer?
So it’s time to think about what the total package should be for the job - let’s say for the sake of argument a backbench MP. First there’s the salary. It’s been said that the labyrinth of allowable expenses has grown up as a response to comparatively ‘low’ basic pay of £64,766 a year. If I hear another Labour MP say that we’re in danger of creating a climate where only rich people can go into politics, I’m going to throw something at the TV. Backbench MPs basically do three things: constituency work; attending the Commons and committees; and party political business. Other public sector workers earning comparable amounts may work equally long hours, often managing larger budgets and more staff. So let’s stick with the salary level, and if some of the present incumbents think it’s inadequate then they should butt out.
Then there’s accommodation. In jobs where you’re expected to work on two sites, your employers should pay for what is in effect your second home. The majority of the contested issues over the past few days have concerned the purchase, refurbishment and sale of either first or second homes. None of these would apply if the costs of renting a second home were met but home ownership costs were disallowed on grounds that they were an investment rather than a requirement for doing the job; and if no costs at all were met on the MP’s primary residence. It would also make MPs lives much simpler as they wouldn’t have to spend so much time in John Lewis. Needless to say, rental costs wouldn’t be paid if an MP’s main home was within an agreed distance from Westminster.
Which brings us to travel costs. I do actually think First Class train travel is justified. Second class is crowded and noisy, and it’s likely our MPs will have to work in transit. So - a First Class season ticket between the constituency and London, which also gets you to and from the London second home. For MPs who fly home, Business Class is perhaps not so essential in the air but gives access to better working facilities while waiting, so again is probably worth it for the taxpayer.
Finally, a couple of more minor points. We’d all expect MPs to be able to keep in touch with the news, with Parliamentary business, with their constituents and with their families. Provision of PCs, laptops, broadband subscription (in both homes) and BlackBerry or similar seems reasonable. And the provision of a cash-limited hospitality budget, claimed against receipts, with the names of those entertained provided and a justification for the event, is actually a safeguard against corruption.
And just one other thing. MPs should pay their taxes. All of them, in full.
30 April 2009
Two recent items in the Guardian have started me thinking about how the British people have lost the run of themselves over Labour at the moment.
The first, today, was the reaction to Peter Hain’s Comment is Free piece about the BNP. Hain said, correctly, that it was vitally important they didn’t win a European Parliament seat, and cast his mind back to the 1970s campaigns against the National Front:
‘…the BNP leaders are more sophisticated than the old National Front. They wear suits rather than openly flirt with nazism. They sound smooth and plausible on radio or TV. They are exploiting alienation from Westminster politics, particularly among the white working class. Yet their politics are fundamentally similar: the scapegoating of black people, Muslims, Jews, foreigners, gays and lesbians for social and economic problems. Whenever they are ascendant locally, racial violence and racial hatred are barely beneath the surface.’
And what’s the reaction from commentators – in The Guardian, remember? Well, it can be summarised as: ‘Labour is making such a mess of things that we don’t blame anyone for voting BNP; Labour will get what they deserve.’
Excuse me? I remember the days when, if you were fed up with Labour, you thought about voting Liberal Democrat, or Green, or staying at home. Not voting for a party whose policies include repatriation, and whose concept of Britishness isn’t based on citizenship as measured by your passport, but by the colour of your skin. Since when was there any justification for voting for such a party? - or excusing others who do so?
The second item was a summary of three recent opinion polls on voting behaviour, all of which put the Tories on 45%. That’s nearly half. Surely there can be no clearer demonstration of the political and economic illiteracy of the British people than the intention of large numbers to vote for a party that would cut public spending at the present time, just when unemployment is rocketing. Do people really think they will pay less tax under a Tory government? No – the Tories may well use a greater share of tax revenues to repay national debt more quickly, but it’ll be at the expense of the services we all depend on.
So let’s recap. If you want to live in a country governed by the Tories, along with a sizeable BNP presence in Europe and in local government, and you are middle class:
- you’ll have to pay higher taxes
- and pay for medical care
- and for your children’s education, including university
- and for a state of the art burglar alarm.
If you're working class:
- you'll be fucked.
23 April 2009
So what do you do when you’re responsible for a national economy in the worst recession for sixty years? You hold your nerve and have a good look at the options.
You’ve already bailed out the banks to the tune of 3.5% of GDP, to ensure that, unlike 1929, voters don’t lose their savings. You are now stuck with rapidly increasing unemployment, plummeting inflation, a damaged housing market, and loss of public confidence including dreadful opinion polls that indicate you are likely to lose the next election whatever you do.
The options involve the amount you borrow, the amount you tax, and the amount you spend. It’s where economics meets politics and most of us run screaming from the room.
The Chancellor responded with a skilful strategy to begin to restructure the UK economy for the very tough ten years or so ahead of us. Borrowing will remain high, because maintaining public services and investing in the future are more important. Income tax increases were restricted to 50% tax on earnings over £150,000, which for once could be popular. But Alistair Darling did say that further measures were to be considered once recovery sets in, and I would expect these to hit many more of us. In terms of benefits, Labour continued to provide a framework to back people’s own efforts to earn a living and care for their families, rather than make cuts as the Irish government has done. Most impressively, the caring responsibilities of grandparents were recognised. Older people did well out of this Budget, with an increased pensioners' tax allowance, keeping the fuel allowance increase, and larger ISA limits for older people. Again, Darling did not have to do this.
But the most interesting aspects of the Budget came in the spending provisions. First, the emphasis on supporting younger people back into work was welcome. They have had the worst deal in the economic crisis and are quite rightly a priority here. Second, the emphasis on investment to tackle climate change and to kick start a green economy was impressive, although I suspect it doesn’t go far enough. Third, the difficult balancing of ‘efficiency savings’ and new investment in public services: here, growth in overall spending has been reduced but in England the focus remains on health and education, along with a fund for new business development in emerging technologies. The devolved administrations will have their own priorities; Northern Ireland has done much better than we deserve in terms of overall allocation, although what we do with it will be another story and for another post.
I do have some reservations. Predictions of growth in 2010 and 2011 sound over-optimistic. It’s not worth retaining the VAT reduction until the end of the year. References to public sector ‘efficiency savings’ may lead to back door service cuts or quality reductions. Raising the minimum wage now would have helped to set the standard for new lower paid jobs as they come on stream in the next few years. Most importantly, there were no tax cuts for lower income households.
But by and large, the Chancellor did hold his nerve. This Budget sets out Labour’s stall for the next UK general election, and voters in Britain will have the starkest choice to make since 1979. Labour intends to grow us out of recession, thus providing clear Keynesian water between them and the Tories. On Newsnight, Philip Hammond was clear that the Tories would borrow less and cut sooner. The problem for Labour, though, is what to do if the anticipated recovery is slower and more modest than predicted.
It’ll also be interesting to follow the progress of the UK and Irish economies over the next year or so, given the different approaches of the two governments. Cowen’s first two budgets show us what could be in store for the UK under Cameron – a sobering thought.