Liberal Vision

GUEST POST: TPA say UK heading for £2 trillion debt

Debuting on our blog, Matthew Sinclair of the Taxpayers’ Alliance highlights new research predicting Labour’s legacy of enormous debt, vast unemployment, and general misery…

Everyone knows that the public finances are in a mess.  Unfortunately, it looks like the Government still aren’t facing up to the scale of the crisis.  At the time of the Budget, many senior economists criticised their forecasts for being decidedly optimistic.  Now new research by the Centre for Economics and Business Research for the TaxPayers’ Alliance shows what could happen if things don’t work out that well: £2.1-£2.3 trillion in debt by 2017/18 and 3.2-3.8 million unemployed.

At the same time, the research shows that big tax hikes would have disastrous results for the economy the 50p tax rate alone will reduce economic growth by 0.4 per cent of GDP, increase public borrowing by £1.8 billion a year and increase the base unemployment rate by 0.8 per cent by 2020/21.

The answer has to be spending cuts.  Politicians need to do more to set out plans that could seriously bring down spending.  Even if the Treasury’s numbers are right the public finances are in a crisis, but if they’re wrong then they could be sleepwalking into another catastrophe.

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Health Minister faces corruption enquiry

As the tawdry goings on in Westminster begin to recede into the distance, it is nice to know that we are not the only country afflicted with corrupt politicians.

According to CNBC news,

“Germany’s Social Democrat health minister [Ulla Schmidt] came under pressure on Sunday to explain why she took her official limousine, complete with chauffeur, on holiday to Spain where the vehicle was stolen.”

That’s going to take some explaining!

It would be easy at this point to make some easy philosophical point about the fact that the political system lends itself to corruption, and how taxpayers’ money being wasted is the third Inevitable along with Death and Taxes.

But it’s Friday.

Let’s just sit back and enjoy a good laugh.

+++ Happy Birthday, Friedman +++

It’s Milton Friedman ’s birthday today!!

Happy Birthday - from the Liberal Vision team!!

^_^

Can the LibDems get more votes than Labour at the next election?

The Labour Party’s continuing atrocious polling numbers and Nick Clegg’s increasingly impressive performance as LibDem leader raises the enticing possibility of us pushing Labour into third place in vote share at the next General Election.

Now, a few notes of caution are needed. Most polls still put Labour about 5% or 6% ahead of the Liberal Democrats. An awful lot could change - in Labour’s favour - between now and polling day. But, surely, the shot is on the board.

If the governing party staggers into the General Election with Brown still at the helm, their campaign could be a Michael Foot -style PR disaster. There’s also good reason to believe that Labour always ends up performing at the low end of its polling numbers.  All things being equal, I’d expect Nick Clegg to have a strong showing in the campaign itself. He is a  capable TV performer (by far the most important communications medium in modern politics) and the Brtish public will like him more as they get to know him more. There’s something of a myth that the third party always gains votes as an election campaign progresses - but there is some evidence that this is true when the third party has a leader fighting his first General Election. This is because, in the course of the campaign, the new Liberal leader moves from “vaguely heard of him” to “household name” in the national pysche. An optimist might conclude that if we enter the campaign just 5% behind Labour in the polls, this is a gap that could be bridged before polling stations open.

I still think it’s a bit of a longshot, but the prize is an enormous one. The SDP-Liberal Alliance nearly secured more popular support than Labour in 1983 and - despite only securing a couple of dozen seats - may have “broken the mould” if it had come second in vote share. Since then, under Chris Rennard’s strategic leadership, the Liberal Democrats have targetted aggressively, yielding a mammothly greater haul of seats than the Alliance, despite  lower overall percentage support. But this incrementalism may be reaching its limits. Liberal Democrats should ask themselves which of these two (very rough and ready) hypothetical General Election outcomes  they would prefer:

Conservatives 40% (360 seats) Labour 28% (205 seats) LibDems 20% (70 seats)

Conservatives 42% (380 seats) Labour 24% (195 seats) LibDems 25% (60 seats)

I’d prefer the second result, as I think it does much more to transform the political landscape. That is to say, at some ill-defined point, I care more about vote share than seats and would rather see us polling very impressively (but losing) in “moving forward” and “devlopment” seats than making a handful of tactical gains.

The implications for LibDem strategy could be huge - perhaps suggesting a shift of resources to nationwide communications rather than funnelling as much money as previously into marginals. It would be controversial too - and probably particularly unpalatable to incumbent MPs. But if we could beat Labour in vote share, that would be a quantum leap forward, even if it left us with fewer Parliamentarians than we might otherwise secure.

So what on Earth is going on in Area 51?

On a day’s break from the poker tables of the Las Vegas strip, we took the $200 tour to the infamous secret American military base commonly known as Area 51 (alas, my modest performance at Hold ‘Em has precluded us from going for the $1,000 option where you actually  get to see the recovered alien spacecrafts and share a few beers with the greys!)

Even admitting the existence of Area 51 seems too much for the US authorities to concede, it is only referred to eliptically in a few scant legal documents. The base therefore lacks an official name - with the description “Area 51″  being derived from the site’s grid position on old Nevadan maps.

The obsessive secrecy has helped stimulate the wonderful myth that the base is the final resting location of the extra-terrestial bodies supposedly recovered from a crash in Roswell, New Mexico just after the Second World War.

Whilst such theories are encouraged by the locals in the nearby “town” of Rachel (population 98), the truth is, of course, much more prosaic.

The base is the testing centre for the most advanced, cutting edge American military technology - and is  where the Stealth bomber was developed.

The sombre warnings that lethal force will be used against those that cross the security line (reinforced by our tour guide), and the creepy presence of Men in Black arriving in 4 x 4s on the nearby hillsides as you approach the limits of civilian territory are strong and sinister confirmation that whatever is going on in Area 51, the US government don’t want you to know about it.

The peace dividend we were expecting when the Iron Curtain fell two decades ago has yet to materialise.  The dreadful threat of Soviet Communism may have been seen off. But the Western world has yet to heed the words of President Eisenhower in his farewell address in 1961:

“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together.”

Are we confident that the citizenry are alert and knowledgebale enough to keep this beast in check?

Libertarianism is “the Marxism of the Right”

At least according to a post on a strange conservative website from several years ago.

My attention, since you’re wondering, was drawn to this by a friend of a friend, who I had the pleasure of having a friendly disagreement with at the pub the other week (regarding passports and the ID database - he supports both, combined).

On the article, he said:  “Personally I think that there is a lot of junk and assumptions in this article, but it does highlight a few ‘minor’ flaws in your ideological system…”

Personally, I don’t even know where to start with this, viscerally disagreeing as I do with virtually every sentence in the piece; so with “real work” impingeing on my day, I thought I’d throw it out here to create a stir.

Over to you, readers.

Stir.

Growing pressure to rethink Assisted Suicide laws

The Daily Mail and the Evening Standard are both reporting the story of Dr. Michael Irwin, 77. The retired GP admits that he help his patients receive assisted suicides abroad. He told the Standard:

“I’ve done this before (help assisted suicide) and I would do it again if someone is terminally ill. It’s so wrong that people have to travel abroad to die when they could die here at home with dignity. I say to the police ‘arrest me’.”

He hopes to become an assisted suicide “martyr”. By bringing attention to the laws which mean relatives, who choose to help end the suffering of their terminally ill relatives, face as much as 14 years in prison.

This story comes just days after the Royal college of Nursing decided to drop their opposition to Assisted Suicide.

Unfortunately recent amendments to the current laws, which were brought to the House of Lords by Lord Falconer were rejected despite the laws being widely considered to be “unclear”:

Under the proposed changes, a person planning to die in an assisted suicide abroad would make a declaration of their decision in front of an independent witness.

The move was backed by the campaign group Dignity in Dying.

But peers voted 194 to 141 to reject the proposed changes, with those opposed saying the rules would have been open to abuse.

More than 100 individuals have sought to end their lives abroad. Yet no individual has been prosecuted in the United Kingdom under the current laws for assisting this process.

Giving away the family silver

When the Thatcher Government began privatising the nationalised industries, the former prime minister Harold MacMillan is erroneously alleged to have likened the policy to selling the family silver. Whether or not one believes that the commanding heights of the economy should be in public or private ownership, however, one would hope that a decision by a government to dispose of something would at least see them receiving a return on their investment.

So a recent story in The Mirror leaves me at a bit of a loss. Apparently,

Gordon Brown could turn Britain’s nationalised banks back into building societies.

The Government wants to offload the two banks it wholly owns - Northern Rock and Bradford & Bingley - once the market conditions are right.

But ministers may insist any sale is conditional on them being turned into mutually-owned societies.

The plan has the backing of Labour MP John McFall, chairman of the Treasury select committee and a close Brown ally, and 29 more who are also Cooperative Party members.

They cite mutually owned societies as a “safer business model” who have been the main survivors of the credit crunch as they are owned by customers and so took fewer risks.

Now a mutual like the Nationwide could be given first refusal if and when Northern Rock goes on sale.

Forgive me if I am missing something, but are not building societies owned by investors, with their deposits and withdrawals technically being purchases and sales of shares in a company that inter alia provides a free share-dealing service in its own equity?

If this is true, I am not clear how the government can “turn Britain’s nationalised banks back into building societies” without giving them away. Shares would have to be given to all the depositors in proportion to their deposits. Nationwide could not buy Bradford & Bingley unless they effectively turned the B&B deposits/shares into Nationwide deposits/shares.

In theory, the Government could also hold an IPO in which further shares were sold, but who would buy into this IPO when all they were getting was a building society account?

This suggestion has all the marks of a daft idea cobbled together by mutualists who have not thought through what they are proposing. Either that or the Labour government is so sure that it is doomed that it is planning to rob its successor of any assets to privatise, thus exacerbating the crisis in the public finances to the point where it destroys the next government.

Scarlett’s Seven on Sunday - 26th July 2009

Hello everyone!! And welcome to “Scarlett’s Seven on Sunday” - because bloggers like lists, apparently - and I like alliteration. So here is where I shall muse over noticeable story from the past week or so. Hopefully Scarlett’s Seven is something you will enjoy waking up to in the morning, however, if you prefer to wake up to a warm mug of Joe then here’s another reason to shun socialism:

1. According to the Adam Smith Institute: “It really takes a certain amount of cunning, if not good sense, to turn a coffee exporter, one acknowledged to produce some of the finest Arabica in the world, into a place where it is now difficult to get a cup of coffee.”

2. Cicero assess George Osbourne’s plans to reform the banking industry: “There is a case for critical regulatory change, but the disruption that Mr. Osborne proposes will be dramatic and long lasting. Almost immediately Hector Sants, the head of the FSA, has had to cope with a rapid exodus of key staff, and this is degrading the institution even before the Conservatives can even enter office.”

3. A good piece by Lester Holloway over at LDV where he examines our reaction to defections: “As a party we really need to start learning some lessons from these regular blows because I, for one, am tired and frankly quite bored of witnessing the same depressing spiral of losing bright young BAME talent followed by a debate more notable for its heat than light, as the membership lob brickbats at the defectors.”

4. Over at Aid Watch William Easterly assesses some of the more shameless behaviour in the name of Aid:

‘nough said…

5. Iain Dale ponders Drug use (not literally I might add): “I don’t mind admitting that I am a complete prude where drugs are concerned. I have never taken an illegal drug and will never do so. It’s never wise for someone with a vaguely addictive personality to put themselves into that situation! But everyone has to answer for their own actions and their own lifestyle. No one will ever win a war on drugs. All government can do is try to limit supply and educate people about the disastrous consequences of taking all drugs, not just class A substances.”

6. The excellence we’ve come to expect from Jock Coats is featured here: “This is because I am, in Hayek’s terms as explained in his “Why I am not a conservative”, a genuine liberal - one who is willing to take a leap forward into the unknown without first having to know absolutely the outcome; that I have an unshakeable optimism that humanity is so damned clever that it will find, co-operatively rather than coercively, ways of dealing with any problems such change throws up; that if the cause is important enough we will find along the way solutions to issues as they arise.”

7. Yet he excels himself with what is the last of my significant seven: “Screw the lot of you. Leave. Now. Don’t come back from your obscene fucking (some of you no doubt literally) vacations. Leave real people to create real wealth; allow real people to work for whatever they can get and with their dignity intact seek to better themselves in one of the many innovative different choices that will spring up in a revitalized education market. Don’t patronize them with quotas to plaster over your screw-ups.”

If you’ve seen any posts you think should feature on “Scarlett’s Seven on Sunday” - then send me the link at sara.scarlett@liberal-vision.org. I’m not looking for “the best” posts but anything eclectic which may go under the radar otherwise. Have a great week.