Monday 31 May 2010

The Danny Alexander story

Following on from David Laws, the Telegraph today pushed a "big expenses scandal" story about Danny Alexander, the new Lib Dem Chief Sec to the Treasury.

Except this is an astonishing non story. Alexander didn't pay CGT on a house he shouldn't have paid CGT on, he changed the definition of his primary residence not so that he could flip - like various high profile Tories have done - but so that he could sell his other residence. Nothing crooked, malign, or dodgy here. Nothing against the parliamentary rules, or even vaguely related to them.

But clearly the Telegraph are back on the warpath.

Now, it might just be coincidence, but it seems to me that it's unlikely that the two exposes they've pushed are about Lib Dems in the treasury - when the far more corrupt Osborne and Gove remain with the easiest of rides from the right-wing press - just happen to be the two biggest scoops in the Telegraph's locker.

It seems even less of a coincidence when you realise the Telegraph are heading the right-wing Tory campaign on the CGT issue, on trying to keep it below the levels of income tax: although they never quite explain why. But apparently it's a "bad thing". Yes, for all those buy-to-let landlords who're making obscene capital gains on properties whose value rockets because there are more buy to let landlords paying no tax. It's probably bad for all those wealthy Telegraph editors and journalists and owners who've been using low CGT to get around paying tax on income for ages.

Anyway, off from my sniping about it - the Telegraph are running a campaign against it; Lib Dems in the treasury are going to be much more deficit-hawkish than the Tories in terms of raising tax as well as cutting services to bring finances in order. So, I suspect the Telegraph is trying to bring them down. But it's powder is very, very feeble on this one. Expect them to try and find other ways to go after Alexander now.

Meanwhile, I feel there's a certain irony that they now have a much more liberal and less conservative Lib Dem in the higher ranking job, having disposed of Laws. My guess is that they were hoping Cameron would bring a Tory in. It's very funny that he hasn't, and the Telegraph and right-wing Tories might have ended in a worse position than before.

Saturday 29 May 2010

Laws

A couple of thoughts on this morning's David Laws revelation. He's been claiming, completely against the rules, about £40,000 of second home allowance when he was renting a room from his partner.

Now, he says he claimed because he didn't want to come out as gay. Directly, this seems fair enough. But you do wonder how someone who made millions in the city needs to claim £40,000 in the first place. Particularly if he wants to maintain discretion. Clearly he's not being cynical about his claiming - there's no flipping, no dodginess of the level of Gove or Osbourne if we want to pick other members of the coalition: if Laws steps down, surely those two have to, too - he's been claiming less than an equivalent one bed flat would cost to rent; and if he was really dodgy he'd have had his constituency mansion as his "secondary" residence.

That said, he's clearly on very, very shaky ground, and it's pretty hard to defend. If he was genuinely poor and needed the money, that would be another thing; but he's not. Why break the rules to take money you don't need?

The other thought is that this revelation comes from the Telegraph, who must have had the info for months. Why now? I suspect it's a deliberate attempt to undermine the Lib Dem parts of the coalition because of the CGT thing. The Telegraph are spitting nails now they know they will be taxed on the huge massive unearned profits on their multiple homes. And they know that the Lib Dem in the treasury is the one most likely to make headway on the issue, particularly as his stock has risen dramatically in Tory circles with the way he's handled budget cuts.

So, I'm torn. I think Laws probably should go, but then so should Osbourne and Gove. But I'll be happy if he doesn't for tactical reasons. I suspect Cameron will keep him, anyway - it's too useful to have a Lib Dem take the flak for the cuts; and there's the just-out gay thing, which Cameron may also decide to defend because he wants to be seen a liberal, and not as an old school nasty Tory.

Friday 28 May 2010

QT and CGT

Acronym day today. First, QT - there's a huge row about the fact that the coalition government refused to put a cabinet member on to the show if Alistair Campbell was appearing.

To me, this looks like the Cameroons trying to invent an argument with the BBC. The Lib Dems, perhaps Laws excepted, might be expected to push back a bit, but the Tory party still seems to want to take down the BBC, and probably privatise it. They, of course, being in the pocket of Murdoch.

So here, they think, is a good opportunity. Labour haven't put a front-bencher forward so the Tories in government throw a pretended fit.

It's assinine, of course. Labour don't have a leader at the moment, so any shadow cabinet position is broadly meaningless; better, instead, to have a Labour heavyweight. And Campbell is about as tightly associated with the Brown and Blair years as anyone except Mandelson. Why on earth would you pretend that this is a serious matter if you're Cameron High Command?

Only if you deliberately want to pick a fight. And it ends up with the government just looking a bit stupid, really. It looks like they're telling the BBC who they can and can't have on their programs. It is, effectively, direct government interference in broadcasting (there's an Alistair Campbell related irony here, too, of course). It is also spectacularly petty - particularly in the weeks when the government is popular, and has just had a queen's speech out which has broadly popular support. Now is the time to bask. The time to hide from the media is months or years away yet, but it will surely come.

The other acronym of the day is CGT. There's a huge amount of froth, from the right wing press - particularly the Telegraph - and from the right of the Tory party, about how evil the proposed changes to CGT are. Apparently, this is going to hit the middle classes. That is right. All those median income earners who have huge share portfolios and who have lots of extra properties.

Which means, of course, only the "middle class" in the definitions of people who are very, very rich. Nothing like the genuine middle classes.

Don't listen to their wailing.

In addition, apparently having CGT at the same levels of income tax will discourage people from being entrepreneurial. Does this mean that income tax discourages people from working? I'm sure, to a small degree, it does. And you know what? Tough. The state needs to raise cash to pay for stuff, and to pay down debt. Some of it comes from income tax. There's absolutely no reason that income you get on a second home appreciating in value through you doing nothing should be taxed at a lower rate to income you get from busting your nuts off working hard.

If anything, it should be taxed higher because the person making the money has done so little to earn it.

Obviously, the government should not be making value judgements on how people earn. So, instead, it should make the value judgement on how much people earn. And whether your income is from renting out your property portfolio, selling your property portfolio, selling shares, income from dividends, or actually, normal, salaries, it should basically be at the same rate. There's no good reason for it not to be.

If the government does want to offer a taper relief, it should exist at the value of inflation only - your house can appreciate by CPI or RPI, and you won't get taxed on those earnings, as they aren't real earnings, they just maintain value. But any other capital increase in the value should be taxed.

Incidentally, share dividends are a slightly different matter in how they should be taxed, because the earned income of the company is already taxed as corporation tax; and therefore that amount should be discounted before "income" (in the broad sense, including CGT) tax is applied.

I hope Cameron doesn't buckle to the laffer curve bollocks of John Redwood and goes with his and David Laws's instincts to raise CGT. It makes things not only fairer - removing a tax loophole for the rich that the poor are wealthy enough to use - but it raises cash to help fill the deficit hole we're in.

Thinking of the deficit hole; I just had a look at last year's treasury report. One thing that the Labour government must be massively commended on is increasing the length of repayment of government yields. The average maturity time has increased consistently during the full length of the last decade or more, and that insulates and protects the country far better against short term debt/deficit issues and against interest rate variations. It's not the kind of thing often talked about but it means we're in a far stronger position than almost any other country with a similar debt and deficit profile.

Thursday 27 May 2010

Good news for London, probably

It looks like Boris wants to increase the congestion charge and get rid of the western extension.

You would think that, as a cyclist, I'd want the congestion charge everywhere. And high. And that's partly true. But it has to be a sensible congestion charge.

When the central zone was introduced it was a huge success, and it remains a big success, and it raises a decent amount of cash. It's a very good thing.

But the western extension, from Park Lane out to Earl's Court, was utterly ludicrous for a number of reasons. It is actually counter-productive. Mostly, this is because the western extension is a very largely residential area, in a way that the central zone isn't. That means that there are lots of people obliged to pay it. This wouldn't be so bad if they didn't get a massive discount. But they only pay at 20% of the rate the rest of us pay.

That means, ironically, that all the obscenely wealthy people in Kensington and Chelsea, who drive their hideous BMW X5s and Porsche Cayennes and so on, get to drive in London for less than everyone else. What's worse, though, is that lots of people have automatically paid the charge just because they're taking young Jack to his private prep school 200 yards down the road. And now they've paid it, and are out in their monstrous 4x4, why not just drive into work? Why would you put up with the horrors of the District Line if you're already comfortably listening to John Humpreys in your preheated faux-leather seats?

Having a congestion charge in a highly residential zone just encourages the people who live there to drive more.

There is a better solution than abolishing it - that is, to have it as an entirely separate zone: Pay £5 to drive in the western zone, but it gives you no right to drive in the central zone. I doubt Boris would do anything quite so likely to anger the motoring lobby, though.

I'm pleased, too, that the price is going up. Central London's congestion is returning to previous levels, so it makes sense to charge more. The worst that can happen is that London stays as the mess it is, but the GLA's coffers get fuller, paid not by London's taxpayers but instead by the people who make it a misery. Or, better, some people stay away and London becomes fractionally more civilised.

Triangulation

There's been some interesting commentary recently about how the various realignments in British politics are going in this post-coalition world; and how these relate to previous years. In particular, these thoughts were triggered by some comments from David Lammy who mentioned that New Labour had increasing success under Blair as they triangulated their opinion by shifting rightwards on to natural Tory territory.

This was tactically succesful because core Labour voters weren't going to shift to Tory; and because it might encourage those in the centre to vote Labour. Mostly, Blair pushed right, and nastily, on war in Iraq, and cosying up to Americans, along with all the law and order and civil liberties stuff, along with some pretty unpleasant hints about immigration.

What this did, initially, is to shove the Tories out further right - they appear to have had a feeling that they wanted to be even more nasty than Labour, because they all knew Labour were soft and pathetic.

This created a mood in the public of an extreme and rather scary Tory party who were unelectable.

When Cameron came in to the leadership of the Tory party he almost immediately changed the mood music on civil liberties stuff. You never quite trusted that he really believed it; it always seemed pretty cynical. And as the last couple of years went on, Tory policy seemed to drift further and further back to the sort of stupidities we heard under Hague and Howard.

Now, though, he's in a much stronger position, ironically. Being in a coalition with the Lib Dems, it means he has an excuse to not track to where his party wants him; and this breaks the mould a bit. He can push for more redistributive policy, and to protect services, or - as right now - he can push to raise tax through using CGT and when his party throws a fit he can stand up to them. It is, in a way, his Clause 4 time. His way of proving to the public that he's not as mad as his party.

And that makes this coalition extra dangerous for Labour - it means that the public, which are used to seeing the Tories as extremist nutters, get to see them as people inclined to pragmatism and compromise, and implementing some sensible policy, like the elimination of ID cards, or cutting tax for the poor by raising tax on the rich.

This makes some mutterings I heard last week from Andy Burnham "The Blairite it's OK To Like" seem even more problematic. Burnham commented that the public liked some Blairite stuff, and that their anti-crime stance really helped the poorest; he was pushing the line that the anti-civil liberties extremisms of Labour were, in fact, not only redistributive but also popular. This is the same sort of madness as we regularly hear from Tories claiming that the public are concerned about immigration, so they actually want to hear politicians being extreme and unreasonable.

As I mentioned in my previous post - the public may want tough on crime, or tough on forriners, policy; but they very rarely vote for it. They understand, enough, that this is representative democracy, and even if we want nasty policy in individual cases, we'd rather have moderate and reasonable leaders who, in general terms, will be moderate and reasonable. The ones who froth about rivers of blood are not, basically, to be trusted to be reasonable on any other matters. The ones who think Labour should talk more about beating up criminals are not to be trusted.

Cameron, I think, does understand this, and is going to reap the benefits - provided he can keep his party together. If the party begins to reject it, and brings down the coalition with the Libs, there's a good chance the public will see the Conservatives as still being unreasonable and extreme - and not only that, it means likely future coalitions will be Lib/Lab and thus pretty crippling for the Tory future. At the moment, Andy Burnham, and I suspect the various Eds and Millibands, do not quite understand this, and until they do, they'll be in an IDS type wilderness.

Wednesday 26 May 2010

Academy Schools and Devolution of Power

Apparently, Cameron is obsessed with handing power back to local communities; he's all about giving power away from central government.

It's interesting, then, that the first thing he's done in terms of local government is to freeze council tax. Which should be the decision of elected local councils - it should be local people making local decisions. But instead, he's decided that diktat from above is the best way to approach this. Frankly, it bodes ill. It bodes ill, too, in terms of evidence that he actually cares about cutting debt - because you do actually need to raise tax as well as cut spending.

And there's lots of evidence that he's prioritising and fetishising stuff ahead of cutting the deficit and debt - why ringfence healthcare? why ringfence defence? why prevent councils from raising tax?

In particular there's today's announcement of allowing absolutely every school in the country to apply for academy status. It's madness. Academy schools cost lots more per pupil than LEA schools. So here's yet another insane spending commitment, throwing more cash away. It also removes the schools from local, community, control and brings them under central control - so this rather gives a lie, again, to the Cameron agenda of giving power back to local people. And, finally, it's deeply unprogressive. Academy schools appear to have been fairly succesful at helping deprived pupils in deprived areas, so there's some argument that throwing extra cash at them has a genuine progressive benefit. It helps bring the disadvanataged a bit further forward and gives them more opportunities.

Now, though, all schools that are graded excellent can have the chance to apply. And, of course, almost all "excellent" schools are in nice, polite, gentile neighbourhoods. This is not because they're better schools. It's because it's much easier to employ good teachers to go and teach well read, middle class pupils with engaged parents; it's because it's much easier for those pupils to get good grades. It's because the measurement process is flawed. But, it turns out, it's a rather nice way for that moderate Mr Cameron to throw lots of cash at the advantaged, well off, pupils in public education in areas where education is already good. Which, inevitably, means it takes cash away from the disadvantaged.

I wonder if this is a rather cynical way of counteracting the Lib Dems "pupil premium" on pupils from disadvantaged areas, so that Cameron's normal support in the shires doesn't get too annoyed with him helping out people who need help, rather than helping people who don't need help but vote Tory.

The flags are out

Over the last week, the wave of little St George's Cross car flags has begun to arrive. Increasing numbers on the streets every time I venture out.

You often hear claim that we've "reclaimed the flag" from the far right; that it's no longer the emblem of the BNP and the racists. I think this is slightly missing the point.

Firstly, of course, the BNP are primarily about the Union Flag, not the St George's Cross. There is no reason to reclaim it from them, because they never had it.

But, also, it is fairly apparent that when you look at the kinds of vehicles that are flying the St George's flag that they're primarily white vans, or cars driven by the kinds of blokes you might expect to see in white vans. Whilst I'm pretty sure that most of these people are, in fact, lovely, tolerant, reasonable nice people (when they're not behind the wheels of their white vans, obviously), they are also the kinds of people who would traditionally be associated with working class racism: they are the natural constituency that the Nick Griffins of this world try to appeal to. And I wonder if we can really think the flag has been reclaimed until a wider group of people start flying it.

Then again - apart from supporting national sports teams, I wonder why on earth anyone would want to reclaim the flag. Why should we fetishise a bit of cloth? When I'm in the US and see myriad star spangled banners flying everywhere, it doesn't move me, and I get a feeling that it doesn't really offer anything of any value to anyone. The flag itself is archaic (as, arguable, are nationalism and patriotism, although that's a much deeper discussion).

We should think of it as purely a football symbol; like wearing the shirt. Once it becomes the flag of the England Sports Teams, rather than the flag of the country, then we can start to believe that it really doesn't carry any other racist meaning.

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As a little addendum, here's a silly story about someone being kicked off the bus for wearing an England shirt. First - it didn't happen, but apparently that doesn't stop the Metro pushing the "It's PC Gone Mad" line, as the media desperately try and push this sort of rubbish on the most tenuous of links. Second - it is worth remembering that the England shirt does still carry some baggage, and people will have some trepidation when faced with blokes (OK, not 2 year olds...) wearing it.

Tuesday 25 May 2010

Queens Speech, Good and Bad

We've just had the Queen's Speech outlining what the government intends to do this year.

Let's start with the really bad part of it. 22 bills. 22. Are they serious? I know they want to be a great reforming government blah blah blah. But they're a government that wants cuts, that wants to do less, apparently. And they're starting this process with 22 bills? There should be about 6, probably. There's way too much clutter on the agenda, and this means way too many people doing way too much stuff; all the teachers and nurses and policemen and the rest are all going to have yet another bunch of things to adjust to, rather than just carrying on with their jobs. If the Tories and Lib Dems had really meant that they wanted government interfering less, they could, rather than having a new bill on changing school curricula, instead just not have a bill at all. Wait. Do nothing. That would be radical, and revolutionary, and welcome.

That said, there's stuff in this speech that's welcome, and stuff that's unwelcome. Unwelcome are the ludicrous Free Schools. They will be used as a trojan horse to get businesses to run schools, of course. But, frankly, I think that's mostly a misplaced fear. Because, really, this is a classic "Big Society" idea of Dave's, which means that it's ideologically fine for him, but he forgets that society is apathetic as anything and you struggle to find school governors in the most polite and middle class of surroundings, so really there is just not going to be much take up of the idea. It's silly, and ideologically screwed up, but it will be harmless because nothing much will actually happen.

Other stupidity is stuff like setting the state pension to be earnings linked again. Why would you put one of your absolutely highest ticket items, and make sure it increases ahead of inflation? You're in the middle of an economic crisis, and we're told we've got a horrendous sovereign debt problem. So you're going to throw more money away? And what message does this send, too? Under Labour, at least we were finally getting it into everyone's thick heads that there's not a hope in hell that the government can afford to pay for their retirement in 20 years time. Has the demographic time-bomb suddenly magicked away? I don't think so. We still won't be able to pay your pensions, folks, this is just a short term, pointless and expensive splurge that'll make it harder to wind down the state pension when they actually need to.

But - a vote on AV (and, cunningly, it seems, some Labour types might sabotage this and put in an amendment to make it STV, which could really screw the Tories...) is hugely welcome. And reform of the Lords: hopefully fully elected, but if not then leaving appointed peers with only speaking rights. And getting rid of ID cards. And restricting government use of DNA and CCTV. There's a lot of excellent liberal stuff here. Get this through and Britain will be a more liberal, more relaxed, more tolerant, less statist and less overbearing place.

£6bn of savings

Yesterday, Osbourne and Laws announced £6bn of savings - to try and save the country from a sovereign debt crisis.

Frankly, a bit pathetic, really. If they want to actually do something about debt levels - which I suspect that they do - they need to make rather bigger inroads than this, which appears to be something 5% of the annual deficit. The errors on the previous month's deficit calculation were bigger than this.

It's all posturing, mixed with cowardice - either they actually don't want to do anything yet because they're scared it will screw the recovery: an entirely reasonable viewpoint, but then why make £6bn of cuts? Or, they want to cut now, to make inroads quickly, in which case £6bn is a piss in the ocean and not worth mentioning.

And, of course, where has this £6bn come from? At least nothing very stupid yet, really. The child trust fund was pretty assinine to start with, as are any non means-tested benefits. To put it bluntly, why should Sammy Cammy be getting a lump sum of a few hundred quid from the government when she's got god knows how many millions in the bank? The rest seem to come from "non front line efficiency savings". Well, either the people doing these jobs were wasting their time and were utterly pointless in the first place - and, no matter what you think of New Labour, I don't think they're stupid enough to employ random people to do nothing at all, purely for the sake of wasting taxpayers money and driving up everyones' taxes and therefore losing votes - or this will have some, if only minor, impact on public services.

My guess is that it will have a very slight impact, but the cuts are so pointlessly small that it won't really be felt yet. But there have to be much bigger cuts to come next year. Let's hope the economy is stronger by the time that happens.

Monday 24 May 2010

The New Politics

It's been a long time since I posted anything, so this is an attempt to revive myself a bit.


Anyway, away from cycling, I've had lots of thoughts about the results of the recent election. It's an interesting time, and it's pretty much impossible to tell how it's going to play out. That said, I get some fantastic pleasure right now from watching the maniacs on the right wing of the Conservative Party, and in the media.


The daft idiots firstly don't seem to understand that they didn't win the election. So they're deeply upset at the failure of their government to implement the full Tory program. Livid, almost. Read, for example, the mad Fraser Nelson trying to explain that, in fact, the Tories didn't get a huge majority because they weren't mad and right wing enough, and didn't blather on more about immigration.

They haven't spotted that, in fact, Cameron became popular when he went off from early 2000s Tory obsessions and actually tried to present a moderate face. Stuff about immigration may appear to be popular with the public, but in fact voters mostly seem to want generally moderate leaders, rather than leaders that match their exact opinions.

But, in addition, there's the bilious anger against David Cameron every time he bends slightly to accommodate the Lib Dems. I love seeing this bilious anger. If Melanie Phillips and Fraser Nelson are angry, it can't be all bad, can it?