Liberal Vision

Probably the best qualified unemployed workforce in Europe

“The mystifying assumption that, by improving Britain’s education and training record, somehow unemployment will disappear is not just debatable; it is misleading at best, and at worst it is utter nonsense… The emphasis on formal qualifications alone without incorporating labour demand may thus lead to a bizarre situation where – like Germany – one ends up with probably the best qualified unemployed workforce in Europe…

[G]overnment has been too concerned to raise numbers entering higher education at the expense of its quality, and with no real economic argument to back this expansion…”

Thomas Lange, Professor of Economics and Director of the Centre for International Labour Market Studies, Faculty of Management, The Robert Gordon University, Aberdeen – 1998.

The dole queue

What is politics?

“Politics is the art of looking for trouble, finding it whether it exists or not, diagnosing it incorrectly, and applying the wrong remedy.” – Ernest Benn

Chris Huhne goes, but is this the Rule of Law(s)?

So Chris Huhne (and ex-wife Vicky Pryce)  is to be charged with perverting the course of justice as a result of allegations that the former Environment Secretary Secretary of State for Energy and Climate Change allowed or persuaded his wife to accept speeding penalty points on his behalf in 2003.

Mr Huhne strenuously denies the charges (and one can’t help but wonder whether Ms. Pryce will be less keen to repeat her allegations now that she is being charged as well) but it has not saved him. He has been forced to resign from the Cabinet.

It’s an odd business, to say the least. Not the charges themselves – this matter needs to be investigated and, if there is a prima facie case, charges should be filed. What is odd is the fact that he has to resign now.

It is a fundamental principle of the rule of law that a person is innocent until proven guilty. In most walks of life, that would extend to whether one has to resign from one’s job as well. If one is accused of a crime, an employer might suspend a member of staff, to distance itself from the issue, but to sack a person (or expect them to resign) while they try to clear their name is usually considered to be unfair.

What is interesting is that different rules appear to apply to politicians – and to other public figures. On the one hand, there is no process for suspending a minister, or allowing them to step aside temporarily, while the matter is investigated. The minister must quit – end of. I suspect that this is a hangover from the origins of ministerial office, with the minister acknowledging their duty to protect the sovereign from embarrassment. It seems to be a bit harsh in the modern world. Chris Huhne, like anybody else, should have the opportunity to prove their innocence without penalty.

And if he’s guilty, he should be sacked, rather than being allowed to resign.

That being said, it has happened, and there is feverish speculation about who will replace him. Will Ed Davey come into the Cabinet? Will Norman Lamb replace Ed Davey as Employment Minister?

Both would be welcome moves, but people seem to be forgetting one obvious potential promotion. It is widely recognised that David Laws is ripe for a return to the front benches. Is this unfortunate event an opportunity to bring about the return of Laws?

Clearing up some confusion about ‘market failure’

Nick Clegg thinks that the “short-termism and recklessness [that] eventually consumed our banks, taking the whole economy to the edge of a cliff” is an example of “market failure”.

For David Cameron, it is a sign of “a market failure [that] between 1998 and 2010 the average pay of FTSE executives [went] up four times”.

While for Ed Milliband, there is a “the market failure in the finance gap for SMEs that want to expand.”

All three make a common and simple mistake: they believe that market success is defined by a number of uneconomic measures such as social justice, or even (that ultimate weasel-word) fairness, and that it is a sign of market failure if market participants (that is to say, you and I) do not act in a way that the politicians think is appropriate for a market actor.

But that isn’t what market failure means at all. Market failure is a clearly defined economic term, and it has nothing to do with whether we get the outcomes that we want.

I explain this in more detail in my latest article for the Institute of Economic Affairs. Please visit their site to read more and to leave your comments.

Shocking market failure as woman rejects apricots

A Labour Party we could work with

If there is no outright winner of the next general election, who should the Liberal Democrats form a coalition with in 2015? Is the deal sealed with the Conservatives, or can the hatchet be buried with Labour? That is a question that will trouble strategists of all three parties as the next year, and the two following, develop.

John Kampfner has explained why he thinks that the Lib Dem’s future lies with the Labour Party, while  Labour Leader Ed Miliband has indulged in petty personality politics in refusing to even consider an alliance as long as Nick Clegg remains leader. So could the Lib Dems  really work with Labour?

It’s not as crazy as it might sound. It’s not as if the Tories are a natural fit for a party that likes to see itself as “of the Left”. Admittedly, the Conservatives may be far more sensible than the borrow-and-be-damned Labour Party when it comes to deficit reduction, but the Labour Party are in opposition; in government, we all know Labour would have introduced cuts deeper than those introduced under Margaret Thatcher. In opposition, the Conservatives made many loud and populist noises that they knew they would have to ditch once they were in power.

So, can the Lib Dems work with Labour? It depends very much upon which Labour you are talking about. The tax-and-spend, borrow-and-spend, ignore-falling-productivity-and-spend Labour Party can never be allowed to reign again. They were a menace to the British Public and left the UK in no position to face a global recession.

Neither can we willingly join forces with a Labour Party that is willing to keep interest rates artificially low just to achieve unsustainable short-term growth. But then, we should say the same about the Conservatives, who created the Lawson Boom that turned into the recession of 1990-92 and are again hoping to fuel the UK economy with a bout of cheap credit.

But the Labour Party’s legacy was not all bad. This was the party that stood against prejudice and allowed the hard-working, entrepreneurial people of Eastern Europe to come to our country, “steal” jobs nobody wanted, create lots of jobs they people <i>did</i> want and pay a bucket load of tax in the process. The Tories, by comparison, are poisoning the UK economy with their anti-immigration bias.

This was also the party that, famously, was “intensely relaxed about people getting filthy rich.” That may seem an unpopular sentiment now, but one should remember the words of the Liberal Prime Minster and leading light of New (now irritatingly re-labelled “social”) Liberalism, Herbert Asquith, who observed that:

“Socialism seeks to pull down wealth; Liberalism seeks to raise up poverty. Socialism would destroy private interests; Liberalism would preserve private interests … Socialism would kill enterprise; Liberalism would rescue enterprise from the trammels of privilege and preference. Socialism assails the pre-eminence of the individual; Liberalism seeks, and shall seek more in the future, to build up a minimum standard for the mass…”

There is nothing wrong with extreme wealth. There is something wrong with hopeless poverty. A Labour Party that was more interested in social mobility and wealth creation and less interested in envy and wealth destruction, that was willing to adopt fiscal prudence and spend within its means, that was willing to put petty personality politics aside and work for the good of the country… That is a Labour Party that we could work with.