27 January 2011

Lunch and flat tax

Lunch today with top Lib Dem blogger and Baltophile - Cicero.

As usual he was very keen to impress on me the positives of all things Estonian - including their system of 30% flat tax.

I've never been convinced by the proponents of flat tax - usually because they are a bunch of right wing nut jobs or US tea party loons. But Cicero made the case that it actually can be progressive (in the true use of the word) and is fearsomely efficient - the 'fiscal drag' (the amount of money lost through collecting tax) is miniscule as a result of its simplicity.

The key is to have a sufficiently high tax rate and a sufficiently large tax free allowance. For example if the UK introduced a 40% flat tax on all earnings over £20,000 (earnings up to this level - approx 80% of average earnings - would be tax free) the marginal rates of tax effective overall tax rate would be as follows:

£15,000 = 0
£25,000 = 8%
£40,000 = 20%
£100,000 = 36%

And it would be much much simpler to collect. The complexity of the current tax regime is reflected by the fact the Revenue and Customs currently employs nearly 75,000 people (not all obviously involved in tax collection) and spends £39 billion each year. (Source HMRC accounts)

Given it can be progressive, is clearly far more efficient to collect and results in government getting more revenue bang for its buck - it's time the Lib Dems and the coalition look seriously at a flat tax for the UK.

We also talked about Estonia's land tax, but that's another story...

24 January 2011

My coalition reshuffle

Caron Lindsay has kindly nominated me to play fantasy cabinet and suggest how the coalition cabinet might be reshuffled. But before naming names I thought it might be interesting to look at the make up of the current government.

According to the No 10 website there are 23 ‘full’ cabinet ministers, plus five who are ‘in attendance’, plus the Attorney General who also attends on an ad hoc basis.

Outside of the cabinet there are a further 97 ministers at various levels (including the six who attend the cabinet).

There are 18 ministries, plus the cabinet office (who service David Cameron), two leader’s officers (Commons and Lords), two sets of whips offices and the law offices.

So it’s easy to see how the tentacles of government reach into every corner of the political sphere and how difficult it is for backbenchers – with hugely limited resources in comparison – to call them to account.

So my first reshuffle would be a cull of ministries and ministers – particularly as the number of MPs are about to be reduced (Lords filibuster not withstanding). I’d also strengthen the power of select committees to make it easier for government to be properly held to account.

I’d abolish seven ministries that appear to duplicate other areas of government or where what little power they actually have could be exercised elsewhere:
· Scotland
· Wales
· Northern Ireland
· Culture, Leisure and Sport
· Local Government
· Transport

I’d create a new infrastructure department to oversee housing, transport, rural affairs, Olympics and strategic planning policy (basically the bits of the seven abolished ministries that can’t be done away with completely).

I’d merge Business Innovation and Skills (dropping the innovation bit as it’s not the government’s job to pick winners) with Education. I’d take the green stuff from DEFRA to a new Energy, Climate and Environment department.

The food agenda can be safely despatched to Brussels (CAP and tariffs etc) with food standards to local government

However the most glaring omission from the current governmental arrangements is support for the Deputy PM – the PM has the Cabinet Office so an Office of Deputy PM should be created to provide Nick with the policy, research and communications support that has been so obviously lacking over the past 9 months.

With a reduced number of portfolios I’d envisage a Cabinet of 19 split 15:4, with an additional 13 other Lib Dems serving as junior ministers. Sadly under my scheme Tory casualties would include Eric Pickles, Michael Gove and Caroline Spelman…

Obviously there would be Lib Dem casualties too, but I’d go further and bring in new blood and try to do something about the party’s lack of gender balance. So out would go Vince (once he’s smashed up the banks) – there’s a place for him on the Strictly Come Dancing judging panel. Chris Huhne could return to Brussels as UK commissioner and with the Scottish office gone Michael Moore could go back to looking rugged and sweet talking the ladies of Lauder.

I’d promote Sarah Teather to Secretary of State for the enlarged Environment department and Ed Davey to the new enlarged Business and Skills and Learning department.

Danny Alexander would stay at the Treasury.

I’d promote Norman Lamb from whip to head the ODPM and coordinate Lib Dem policy in government, ably assisted by Jo Swinson (with a particular remit to look at lifestyle issues) with the political grit provided by Lord Greaves (communications and campaigning)

There would be no change at Justice (Lord McNally as junior minister), Home Office (Featherstone), Defence (Harvey), Work and Pensions (Webb) and Health (Burstow), Norman Baker would switch to the new infrastructure department.

I’d bring in John Thurso into the Foreign Office to replace Jeremy Browne – for the beard if nothing else - (and because like many I’ve been deeply unimpressed by Browne).

I’d keep the whips – Alistair Carmichael and Mark Hunter – and David Heath in the Leader of the Commons’ office.

This would mean there would be a Lib Dem in every department – apart from International Development.

There would of course be one vacancy left and given the need for the parliamentary party to put the splits of the tuition fee debacle behind I would bolster the Whips Office (replacing Norman Lamb) with the inestimable Lord Bonkers – the party’s last remaining link to the Liberal landslide government of 1906, Bonkers is the epitome of loyalty to the party over the years, can recite the Areopagitica backwards and comes with unpaid support from Meadowcroft. I’d reckon he’d clampdown on the slightest sniff of rebellions as quickly as you can say ‘counterfactual’.

20 January 2011

Johnson's exit exposes Mili minor's flawed judgement

Alan Johnson's exit while a surprise in its alacrity isn't exactly unexpected in that he was clearly only ever an interim solution (or the anyone but Balls candidate). One assumes the timing is driven by a forthcoming Sunday newspaper expose about his private life.

No doubt his resignation will be soon forgotten - unless the revelations are of a particularly lurid or criminal nature. But given rumours about Johnson usually consist of the particularly stereotypical late middle aged politician playing while away from home, they probably would have proved to have been 'ride outable' if the will was there.

But the interesting thing is what it says about Miliband minor's judgement. Just a few months ago Mili minor appointed the excreable Phil Wooolas to his front bench - while he was embroiled in a court case about his campaign lies. Now he has lost his right hand man and been forced to appoint his nearest rival - the man whose poor advice to Gordon Brown helped contribute to the economic meltdown.

And in other news Ed Miliband says the Iraq war might have been better handled, ID cards might have had some negative impact on civil liberties and the increase in poverty under Labour, while the bankers raked it in, might just harm Labour's progressive credentials ...

19 January 2011

Time to cut tax on fags (and possibly booze)

While listening to radio 5 live earlier this evening they ran a piece on a BBC Scotland investigation into the counterfeit tobacco trade. More details about it here.

The documentary will also be available on i-player from Thursday.

But the salient points are that 80% of the cost of tobacco is tax and duty, so the incentives for criminal gangs to bypass the taxman are huge.

As a result half of all handrolling tobacco is now illegitimate and 20% of cigarettes. This costs the Exchequer £4 billion a year in lost revenue.

It seems to me a clear example of the Laffer curve in action so sensible public policy should be to reduce duties to a level that maximises revenue and drives out the incentives for the criminal gangs.

But what about the health effects of cheaper fags you'll hear the health lobby say in a flash?

Well given the investigation found that the counterfeit tobacco sold in Ayr market contain more than 30 times the lead levels of duty paid tobacco and high levels of toxins, including arsenic and cadmium, meaning that smoking a packet of 20 counterfeit fags is as harmful as smoking 600 legitimate ones. The health effects of this - given that one in five cigarettes are now counterfeit - will soon surely outweigh the effects of a marginal tick up in smoking as a result of a lowering in the cost of tobacco.

Ludicrous American animal story of the day

I'm sure the accused would get a 'fur hearing'...

18 January 2011

Pointless alcohol price law

Unfortunately, pointless and wasteful nannying is back.

The tendency for governments to intefere through pointlessly legislating was epitomised by the 13 years of Blair/Brown and I was hopeful that the coalition might end their legislative diarrhoea. So I was saddened to read that the coalition is going to introduce a new law to ban the sale of alcohol below the cost of the tax and duty on it.

The Royal College of Physicians, told the BBC, it will have 'no effect at all on the health of the nation' and the Wine and Spirit Trade Association, admitted the amount of alcohol sold at below the level of duty and VAT was 'fairly minimal'.

Now estimates suggest that 99% of alcohol is sold above this level and one can assume that those retailers who do sell at below cost only do it as a short term 'loss leader' (otherwise they'd go out of business), why is the government bothering to legislate at all?

If the legislation passes who will enforce it? Will hard pressed local authority trading standards officers be expected to take on new duties (or god forbid new staff to help them cope)? Or will it simply be ignored while they get on with more important duties?

Whatever the result this proposal is utterly futile and pointless. It's time the coalition made good its promise of 'one in one out', so that for every new law an old one is repealed. In fact I'd go further and make it 'one in two out'.

15 January 2011

And so the defections start...

Following overtures from the leadership of a larger and more successful party the BBC reports that three leading activists have switched sides as part of a specially designed campaign to encourage such switching.

Spokesman, Keith Newton claimed up to 50 more defections were expected.

Full report here:

Is Ed Miliband really the pope?

More on cover versions (including Andy Bell and Steve Harley) ...

I was going to post about Steve Harley and the fact that his 1975 Cockney Rebel song 'Come up and see me (make me smile)' is my favourite of all time, but my mind wandered back to a posting about cover versions and I found this one on YouTube which apart from the instrumental dancy bit in the middle is actually quite good - almost exclusively as a result of Andy Bell's wonderful voice:

Not a bad effort

But this is the version I want at my funeral
(I particularly like the obscure Dutch TV version - edit sadly deleted by the commissars at Youtube - so I've replaced with the TOTP's version).

Oh - and there used to be a rumour that Steve Harley was a member of the Liberal Party in the 1970s/early 80s.

14 January 2011

Some Oldham truths

So an opposition party holds a seat with a swing against the government. Nothing to see here - move on.

Well that's one way of interpreting 'Old and Sad', but not one I'd support. There's a worrying degree of complacency among Lib Dems about the result - probably as a result of the relief that it could have been so much worse.

But this was an election the Lib Dems should really have won. Elections in individual seats have nothing to do with the national picture - other than a general perception about the state of the parties - and voters decide on the balance of local campaigns, issues and candidate's personalities. This was vacancy caused by Labour's illegality - for which no-one has still apologised - at a time of the Lib Dems choosing, with an identikit Nu-Labour carreerist clone candidate parachuted in having been rejected by voters elsewhere in May.

Labour won with their highest ever share of the vote in the seat and their second highest ever majority (full results here). The Lib Dem vote was the lowest ever and the share was the second lowest ever. It was clear that many previous Lib Dem voters either stayed at home or voted Labour.

What is equally clear (and has been for a number of years now) is that the Lib Dem campaign machine has no way of reaching tribally loyal Labour voters who will loyally turn out for that party come hell or high water and whatever the privations thrust on them by the latest careerist hack that Labour chooses to represent them. And as the by-election circus moves to Barnsley, unless a new strategy is found, you can bet the burgers of that benighted borough will return another Labour MP, despite the current one defrauding them of tens of thousands of pounds.

However, in the long run Oldham and Saddleworth is likely to prove a Phyrric victory for Labour. It means that Ed Miliband's leadership is secured in the medium term and his opportunistic strategy of denying his party's culpability for the economic crisis and of the need for any spending cuts will continue. And ultimately that can only be good for both coalition parties.

Secondly, it shows that despite the polls - locally in Oldham and nationally - that talk of the Lib Dems demise is wrong. Yes it shows how hard we will have to work to explain to dissillusioned voters the party's case, but it shows attracting new voters is possible. Hopefully, it will provide a boost to Lib Dem campaigners up and down the country and convince them that this year's elections will not be the wipe out that most commentators are gleefully (and ignorantly) predicting.

13 January 2011

The stupidity of the SNP's police merger plan

News reaches us exiles about the latest ludicrous SNP plans to destroy local policing while increasing the costs to the taxpayers north of the border. The Beeb has it here - Alex Salmond morfs into Jack Straw.

So from what I can gather the whackjobs running Scotland think they can save money by merging the eight police forces into one giant police force for the whole country.

If the Scots are so stupid to agree to this then here is my prediction for what will happen:

1. A new job of super commissioner would be created with a new super remuneration package to match. The eight (or at least seven depending on who got the new job) existing Chief Constables would no doubt be given very large pay offs/pensions by way of compensation.

2. Local people would demand some sort of influence over regional policing so the new super efficient force would set up (say) eight regional divisions - all headed by a commander who would obviously have to have a salary and pension package reflecting their seniority.

3. The new force would demand a new HQ as none of the existing ones would be large enough. This would cause a political row between Edinburgh and Glasgow over its sighting, so a EU style compromise would be reached with the new super efficient force having two brand new HQs - one in each city.

4. The IT wouldn't work so a new super efficient contract for new computers would be let and would come several hundred millions over budget.

5. Because the new force would have nearly 80,000 square kilometres and 790 islands to police it would clearly require a squadron of helicopters and a fleet of boats to be an effective crime fighting force. This new kit would obviously have to be top of the range with all singing and dancing functionality. And the cost would reflect this top of the range specification.

6. Of course the new force would need a new mission statement and brand. So the PR consultants would be brought in.

7. It would also be important not to ignore equalities and diversity issues. So compulsory training and development for all staff would be needed to make sure all staff were aware of their duties and a consistent approach was adopted country-wide.

8. Oh and bilingualism couldn't be overlooked - Scots Gaelic would have to have equality of respect in the force's literature, branding and signage and gaelic coordinators would obviously be useful across the force to ensure a consistency of approach.

The SNP claim a single Scottish police force would save £194 million.

11 January 2011

Ratcliffe-on-Soar police mole shows why public spending cuts are needed

The bizarre case of the undercover police officer who spent seven years with climate change protestors before his apparent switch of sides and the possibility that he was actually inciting protestors to break the law raises many questions - not just about police tactics and competence.

It is clear that for organisations like the Met police money has been no object on cases like these. The fact that those they were pursuing were generally well meaning people (whether you think they are misguided or not) - who provided no threat of violence - let alone terrorism showed a wasteful lack of prioritisation. One might say the Met had more money than sense.

With lower budgets in the coming years, as the coalition cleans up 13 years of Labour waste and incompetence, one hopes that the public servants like the police will not only be less cavalier with civil liberties but more careful on how they spend our money. Hopefully, the spending cuts will expose the waste, inefficiency and featherbedding of senior public servants that has taken place over the last few years.

Given the vast increases in cash that were ploughed into public services and the small increases in outcomes that resulted, it is clear that spending cuts should not lead to the kind of service cuts that Labour, the unions and sadly some misguided people in the Lib Dems seem happy to scaremonger about.

I'll leave it to the protesters' defence lawyer to sum up:

"Serious questions must be asked relating to the whole policing of this protest, from the use of undercover police officers, to the use of expensive and legally questionable mass pre-emptive arrests, to the use of pre-charge unaccountable bail conditions, to the seemingly arbitrary nature by which the 114 initially arrested were reduced to the final 26 who were eventually charged."

7 January 2011

Norman Tebbit should be careful what he wishes for in Oldham

In an article in yesterday's Daily Mail Norman Tebbit inadvertently lets slip a fundamental truth about next week's Oldham East and Saddleworth by-election.

'A Lib Dem win would tilt the Coalition even farther Left and away from Conservative policies.'

Sounds like another sound reason to back Elywn Watkins.

5 January 2011

The expenses shame of the 111 ‘no to AV’ Labour MPs

Just before the new year the ‘No to AV’ campaign proudly announced a list of 111 Labour MPs (at my count) who proclaim their allegiance to the current status quo voting system for electing MPs.

The ‘No’ campaign’s lack of basic research has been highlighted by Stephen Tall on Lib Dem Voice for the inclusion in the list of a number of Labour MPs who are supporting the case for reform. But perhaps when the ‘No’ campaign gets round to reading these MPs records on expenses they may regret the publicity they’ve given them and wish they’d done a bit more research. Because among the 111 are some of the greediest, most venal and pathetic MPs to survive the 2010 expenses cull.

And the reason these MPs may just be backing the ‘No’ campaign is the status quo makes it easy for them to hide from public scrutiny in their safe (even tribally Labour) seats and with AV they would have to work harder, meet more voters and no doubt have a bit of explaining to do.

Of the 111, just six – Adrian Bailey, Gordon Banks, Jim Cunningham, Kelvin Hopkins, Dennis Skinner and David Winnick – were found to be clean by the Daily Telegraph expenses investigation, and with 27 being new MPs there are 78 with varying sizes of blemish on their records. Here’s just a selection of a few of the most egregious (the full list of crimes and misdemenours can be found here):

Margaret Beckett – claimed £600 for hanging baskets and pot plants, claimed it was a mistake, but the Telegraph revealed she made three similar previous claims.
Clive Betts – claimed £1,268 for carpets, £570 for sofa bed, £689.99 for a TV, £1,433.50 on decoration, £1,220 on furniture and £1,135.20 on a bed
Hazel Blears – did not pay capital gains tax on a property she sold despite having told the Commons authorities it was her second home and was filmed writing the cheque to pay the tax back.
Ronnie Campbell – claimed a total of £87,729 for his London flat. Agreed to repay £6,000 for furniture.
Tom Clarke – designated the Sloane Club in Chelsea as second home, and claimed about £1,500 a month while in London and £400 a month for food
John Cryer – he and his MP mother Anne Cryer both designated the same flat as their second home.
Ian Davidson – paid £5,500 to a family friend to renovate his flat and then took him shooting with members of the House of Lords
Natascha Engel – charged the taxpayer for copies of a DVD of her maiden speech to Parliament and a copy of a novel by an acclaimed German writer
Tom Harris – became embroiled in a row with the Commons fees office when his claims for a baby cot and bottle steriliser were rejected
John Healey – claimed £1,172 for a new front door and spent £6,194 on his kitchen at his second Lambeth home
Mark Hendrick – admitted “estimating” the amount of mortgage interest he paid on his second home. He secretly paid back nearly £7,000
Stephen Hepburn – in 2007-08 he claimed almost £2,000 every month without receipts
Margaret Hodge – claimed thousands of pounds to pay for public relations services from a former government press officer
George Howarth – claimed £1,000 for a chest of drawers, saying “they were the only ones that matched” his furniture and £20 for a colander.
Diana Johnson – claimed nearly £1,000 to cover the cost of an architect for a decorating project at her second home
Kevan Jones – claimed £9,670 for fees and stamp duty in May 2004 and carpeting his second home in “Berwick Sand” cost a further £1,913
Eric Joyce – did not pay capital gains tax on the profit when he sold his London home and now stays in hotels in the capital
Gerald Kaufman – charged the taxpayer £1,851 for a rug he imported from a New York antiques centre and tried to claim £8,865 for a television
Alan Keen – the ‘Mr’ part of the ‘Mr and Mrs expenses’
Steve McCabe – over-claimed on his mortgage by £4,059 during the course of two years
Alan Meale – spent more than £13,000 on his garden in four years, billing the taxpayer for a new storage building, repairs to his fencing and gates, and bark to keep the weeds down
George Mudie – claimed £62,000 in expenses for his London flat in four years, while having a mortgage of just £26,000
Meg Munn – claimed hundreds of pounds in office expenses for financial advice services provided by her husband.
Linda Riordan – claimed for £219 bedding, £1,310 sofa bed/chair and a £1,936 carpet. Regularly claims maximum £400 for unreceipted monthly food bills
Jim Sheridan – reclaimed the cost of a 42-inch plasma TV, leather bed and hundreds of pounds worth of furniture. Claimed £2,091 for furniture for his London home bought from an Edinburgh store in March 2006
Angela Smith – sought payment for four beds for a one-bedroom London flat
Keith Vaz – claimed £75,500 for a second home near Parliament even though he already lived just 12 miles from Westminster
Joan Walley – claimed for more than £4,400 of furniture in London flat and a £195 blanket
Dave Watts – claimed £3,543 for refurbishment to kitchen, £3,500 for bathroom, £742 for redecoration and £549 Philips LCD 26in television
David Wright – accepted a £16,787 payment from the owners of his flat in return for giving up the right to cheap rent, then moved out. Claimed £599 for a TV but a £64.99 claim for a razor was turned down.

With supporters like these the no campaign are going to find it very hard to counter the ‘YES’ campaign’s argument that with AV MPs will need to work harder and go further to get – and keep – public support.

3 January 2011

A new year, pig racing and Man U

To a farm in the Surrey Hills for a fourth birthday treat for the wee one. Highlight of the day the pig racing, I backed the pig in green - needless to say it trailed in second last (an omen perhaps?)

Overheard dad saying to son - bedecked in brand new Manchester United togs - in finest sarf London, 'who are you backing?'. Son replied 'who ever is in the lead at the end'. Sort of sums up all those football glory hunters...

Happy new year!