Who should form the next government ?

Our political life is in a terrible state.  It would be interesting to speculate how we got here – with a worthless, leaderless Conservative government whose Cabinet members fight like ferrets in a sack leading an unimpressive Labour opposition with a domestic policy based on nostalgia for the 1940s (nationalise, tax, free universities) and a foreign policy based on being anti-Israel, and not much else.  It isn’t possible to join either party and influence things locally, for each are in the hands of people who would be called extremists in any normal political world.

What therefore should the ordinary decent voter – the one who thought battles against fascism were over, who bases economic views on evidence not dogma, who though food banks and means tests were in the past, who believes in an efficient public sector and adequate welfare provision for the poor, but knows they are easier to achieve with a lively and prosperous private sector: what can such a person do in today’s politics ? I think it means selecting the best candidate locally, regardless of party.  If widely adopted, this would create a coalition of common sense in Westminster.  A movement could publish a list of essential moderates to support.

I say this in the knowledge that there are good people (pace Trump) in all parties, and also some dreadful ones.  Where I live, in Sheffield, we have a fine local member, and an absolute shit in the constituency next door. Within the Tory party, there must remain the moderate majority that supported Major, and voted Remain in the referendum.  They are keeping their heads down now, but they cannot all have disappeared.  So here is my proposal – that we list the characteristics we want in a member of Parliament, and see who fills them the best.  This might involve making some political decisions you’ve never faced before.  I’ve never voted Tory, but give me Nicky Morgan ahead of Jared O’Mara any time.  This is no time to be tribal.

What would such a checklist involve ?  Here’s my suggestions, and any additions, subtractions, or comments are welcome.  The main priority is evidence based policy, and new initiatives launched with clear and measurable objectives. That would enable us to assess progress in the following areas:

  • We need members who recognise that there are factors at work in our economy pushing the distribution of income and wealth in an unwelcome direction. So, set a target for greater economic equality, with sensible measures to get us there.  This will avoid the silly 95% ‘soak the rich’ taxation of the past, but include progressive income tax, and an inheritance tax (probably best based on recipients’ income).
  • An intelligent understanding of environmental issues. These are more important to our children and grandchildren than some microscopic shaving of the national debt, or restriction on productive immigrants.
  • Vigorous action on tax avoidance and evasion. Governments of all hues get enthusiastic about this now and again (Panama Papers, anyone ?), then the trail goes cold. A suggestion: we need at least as many officers working on this as on welfare fraud.
  • Public and private sector links are essential – for both sides – and so we must see the crude PFI of the past replaced, and public service potential and skills recreated. Read Marina Mazzucato if you don’t understand.
  • Staunch support for NATO, and a realistic attitude to Putin’s Russia. Other than that, keep us out of external entanglements apart from supporting democrats and refugees.
  • We are one of the most centralised states in the advanced world, and this cries out for strong regional government, with powers on education, transport and economic development. While that happens, we must seek a generation of local government, with a sensible land/property tax to provide the resources that have been stripped over the past decade.
  • Substantial, long term investment in transport infrastructure, with a priority to reducing private carbon based journeys. Our transport system at the moment is inadequate, and some parts (trans-Pennine roads, northern commuter rail) are a disgrace.  Actually, governments recognise this, but then do nothing (and obfuscate when challenged).  Any investment needs to look at ownership issues.  Public money must come back to those who put it in.
  • We need a unified state education system. There is little evidence that the patchwork of free schools, academy chains, faith schools, home schooling and so forth are any improvement on a well-supported and coherent state system.  There is plenty of evidence that selective schooling is worse.  Have you ever tried to explain our system to a foreigner ?
  • Recognition that the NHS is underfunded: any international comparison, or even assessment of the past ten years in the UK show plainly that it needs a substantial increase in money based on simplified organisation and evidence based medicine.
  • Attitude to national debt that respects the above priorities. It is not a major target that should dominate government policy (it was always a bit of a red herring, but useful to those who wanted to cut public spending anyway).  Of course government finance needs to be managed well, and on the whole spending lots of taxpayer money on interest payments to foreigners is not a good idea.  But the way to have a buoyant public finances is to have a buoyant economy, not cutting capital projects.  In passing, quantitative easing should be aimed at supporting the poor and our development needs, not providing cheap reserves for banks.  A recent BBC radio programme showed less than 1% of the cash created for quantitative easing went to productive investment: the bulk just drove up asset prices.
  • Vigorous action to reduce the influence of the rich and other undemocratic bodies on the democratic system. The right complains about George Soros, the left about the Murdochs.  They are both correct.    If corrective action means public funding political parties and making donation illegal, so be it.  There is work also to be done on the bias in the media, but that can wait.

Above all, (as George Orwell might say) break any of these rules rather than support someone awful.  This implies some idea of the moral strength and decency of our candidates.  We don’t want an expense-fiddler, or someone with an array of private businesses, or who makes appearances on the TV channels of dictators.  We need members who can bring us together, who will not blame the poor for being poor, expel unsupported teenagers to countries they’ve never seen or prevent NHS GPs from re-entering the country.  Sexists not welcome (this might mean raking through Twitter), nor anti-semites (especially those who look into the far distance and say “I’m against all racism”).

Well – could this be the basis of a national movement.  I have more than 100 Twitter followers, so plainly, in the words of the old song, as soon as this pub closes, the revolution starts.

State your case

Getting tired of being told the public sector/government does not create wealth, that can only be done by the private sector.  This is demonstrably untrue.  The Soviet Union ran for seventy years – maybe not very efficiently, but well enough to put the first man in space and beat the Nazis – on public sector production.  The reason the claim is made is basically to justify a low tax economy with minimal public services.

Still, it’s worth saying why the assertion is untrue, because it is lazily spouted (and left uncontested) in many discussion shows.  A business executive can trot it out as if it was a law of nature that no-one could dispute.  In fact state creates value in a number of ways:

  1. Simply providing law and order, property rights and defence creates wealth. Assets that can be defended in the courts and protected by police are worth more than those that can’t.  If you don’t think so, have a wander round the Congo basin to see what an economy does without that.  Welfare services that ensure a healthy population create efficient workers (and also, in passing, effective soldiers. Some of the push for a British welfare state came when it was found that about half our young men were too malnourished to carry a rifle in the Boer War).
  2. The state has a role in direct provision of many services, like education and health care. Now, these could be provided privately, and let’s not argue whether that would be better (I’ll spare you the rant about US health care or UK rail services). The truth is the bulk of UK education, health and many other services are provided by the state.  The very existence of private providers shows that the state is wealth providing, for the same activity often goes on in both sectors.  An example: I have two knees.  One had an NHS cartilage operation, the other a private cartilage operation.  Is it seriously maintained that one of these operations created wealth, but the other one didn’t ? Or that a kid doing “A” levels at Eton is getting wealth creation, but not at Slough Comp next door ?
  3. The state is often behind innovation. It is conventional to depict the contribution of the public sector as behind the times, a sluggard compared with the dynamism of a changing privately owned world.  Except for antibiotic drugs, discovered by a public sector researcher. Or the jet engine, where the state had to lick a failing private operation into shape. Or DNA & gene therapy, where the latest breakthroughs are announced from public hospital research departments, and universities. Or the internet.  Professor Mariana Mazzucato’s book “The Entrepreneurial State” shows how the new economy is based on support from the public sector.
  4. The state can add value by granting permissions – like adding planning permission to a tract of land, vastly increasing its worth; allocating frequencies for radio stations and mobile phone companies; mapping areas for oil & gas exploitation; or granting permission to a business merger, allowing companies to reduce costs and raise profits. This aspect of value adding activity is rarely mentioned, but is plainly true.  The point is to ensure that the nation benefits from this power to permit – which it does in the case of auctions of phone wavelengths, but is less obvious in the area of building planning. Sometimes supermarkets or developers undertake to add a feature of public value to their project – affordable housing, social facilities, better access roads – but it’s rarely done well.

The state is so important in the modern economy that big business puts a lot of effort into getting it to do what they want.  It’s a fallacy to believe that the new right want a minimal state.  They would like quite a big state, but one that benefits them, allocating rail tracks to them, asking them to run social services, schools, healthcare and prisons, buying their fighter-bombers, selling them postal services and water supply and training contracts.  James Galbraith (son of the great JK) dealt with this deliciously in “The Predatory State” – “a system where entire sectors have been built up to feast upon public systems built originally for public purposes”. George Monbiot sometimes argues that this process has gone so long and so deep that progressives need to think of abandoning the idea of the state as a knight riding to social rescue.

So, in summary, the state is an essential part of a functioning modern economy.  It is not a limp parasite, as the right suggests, nor a way of using some of the wealth created by others for social good, as wimpy centrists sometimes advocate.  Anyone running a modern country must find ways to use the power and wealth of the state, rather than seek to disempower it.

Think straight

One reason I started a blog – really the only one (I have no fantasies about influencing the flow of public affairs) – was to get things clear in my own mind.  At the moment, it’s quite hard.  I am a card carrying liberal, so am against Trump & Brexit, and in favour of public spending and open debate.  This does not mean I have a list of beliefs that all fit neatly together, and I think that’s a good thing.  At present, controversialists of both sides appear to believe things according to how it affects their tribe.  An example – conservatives who believe in balance budgets say that cutting billionaires’ tax will expand the economy, create more wealth and reduce the budget deficit.  Er, sorry, it won’t.  On the other hand, though, progressives who have spent years saying (rightly) that far too much is being made of worries about government budget deficits and the National Debt are now apparently alarmed that Trump’s tax cuts will increase the National Debt and leave our children with a financial millstone round their neck.  No, no, no – that’s what brainless conservatives say.  We know it’s not true, and it doesn’t become true just because the government, outrageously, gives tax cuts to billionaires.

Another lot are Modern Monetary Theorists, who tell us that the government does not need to tax to fund public services, as it can effectively print money.  The function of taxation, in this mindset, is to control inflation.  OK, it’s arguable, and even the Treasury is now leaning their way on a theoretical basis (though good luck entering an election by telling the voters that there really is a magical money tree).  But if tax is there to control the price level, it surely acts by restraining spending, and billionaires actually spend a very low proportion of their income.  We’ve been saying it for years, us progressive folk.  That’s why tax cuts to the rich don’t reflate the economy.  But if that’s true, increasing taxes on the top .01% won’t reduce consumer spending.  Logically, if we are using tax in the way that MMTers say, we don’t need to tax the super-rich.  Or have I missed something ?

(My view, for what it’s worth: you sometimes need to make a choice between public services and private consumption.  If (at a time of full employment) you want to allocate more resources to public works, than you have to throttle back on private expenditure.  A progressive tax system is quite a good way of doing that. In fact, it’s the only good way).

As I was saying …

This is a blog I prepared a few years ago, and never published.  In the light of current concerns about productivity, I’ve decided to publish it, even though it’s a draft. I think it’s a pretty good draft.

The Tories, sadly, will win the next election because they have made most of the public believe four things that aren’t true.  Firstly, that the 2008 crash was caused by the Labour Party, rather than banks in New York.  Secondly, that the right response to this is raising taxes and cutting public services, when we learnt in the 1930s that in these circumstances these are the last things to do – the government should maintain its spending to keep employment and demand high.  Thirdly, that the UK government has been successful in managing a recovery from the crunch, when they have done less well than most.  Lastly, they have got people – and especially journalists, for whom deficit mania means they do not have to prepare for interviews when talking to politicians – to think that the most important economic issue is the budget deficit (or the National Debt, a different thing) when the main problem is productivity.

I am aware that there are many people who would agree with me on the first three points.  The last one has only recently (and marginally) crept into public debate – for example, this blog, posted last week, and this one too.  Productivity basically means output per head, and the news for the UK is not good.  The Labour shadow Business minister points out that the average French worker has produced by Thursday the output that a UK worker needs all week.  This is a nice way to start thinking about productivity, though not technically the last word.  After all, a foreign worker could be more productive – create more wealth, make more stuff, do more things – with the aid of better but very expensive machinery.  In this case, greater labour productivity might be outweighed by inferior capital productivity.  But the problem in the UK is that we have poor labour productivity and poor capital productivity.  Our people produce less value, and so do our machines.  The LSE’s Centre for Economic Performance have recently identified UK’s poor productivity as “probably the greatest challenge facing our economy”.

Why does this matter ?  Because our productivity determines our standard of living.  We can only consume what we produce – unless, that is, we are into selling off assets (which we are in a big way – ever wonder why the French own our dustbins, the Arabs our football teams and the Russians Kensington ?).  There is also a minor moral point, in that if we are producing things inefficiently – taking more fuel or more equipment than others seem to need – we are using more of the world’s resources than necessary – and that includes the time and effort of our people.  The superior productivity of overseas economies can be taken in improved living standards (Germany, USA) or in increased leisure (France – interesting that the BBC’s economics guru Robert Peston could complete a full programme on the awfulness of the French without mentioning that they are more efficient than the British).

The UK Commission for Employment and Skills’ recent report acknowledged that the UK has usually been behind that of its industrial competitors.  But it also noted that the gap, rather than closing, has recently been widening.  And it’s not that other countries are shooting away – here’s a discussion of the problem from an American eye – they are stumbling, but we still fall behind.  The LSE worries about the “danger that low pay and productivity could become entrenched”.  This should be surprising.  The UK is not a low skills economy.  We actually have a high proportion of well qualified people, and the growth in jobs has been at the upper end: “productivity has crashed despite the UK’s highly skilled workforce”.  It attributes the problem to ‘multi-factor productivity’, which basically means they don’t know.  It’s not that the UK worker has inferior equipment (that was thought to be true in the 50s and 60s, when the problem first became obvious).  They then say:

An important backdrop to productivity performance is that we have a workforce which has never been so well qualified. If we have a better-educated workforce, then we have to look at how their talents are being applied: the workplace must have played a role in that productivity slowdown.

I think this must mean that the UK workforce is poorly managed.  What else could it mean ?  We have the people, they have the skills, they have the equipment, but they are not performing well.  If that is not down to poor organisation, I don’t know what is.  It is worth recalling the various excuses that UK management has used to explain why it does not perform well.  It was because we were outside the EEC’s fast growing market (we joined). It was because investment was costly (we gave investment tax breaks). It was because trades unions prevented efficient work practices (we disempowered trade unions).  Tax rates were too high to incentivize talented individuals (we slashed the top rate of tax).  The Commission, and credit to them for telling the truth in a world and government dominated by rich executives, agrees.  “The UK clearly has a deficit in management quality, and this is likely to be a key factor explaining the productivity gap with other countries  such as Germany and the USA”.  The deficit is at the bottom end – the UK has a tail of poorly run enterprises, and other countries do not.

What can we do about all this ?  One thing is to make the problem publicly known, and talk about it rather more than Jeremy Clarkson or politicians’ kitchens.  A good start would be improved financial support for small business training and investment.  We are the only major economy without a special bank for small enterprises.  Mind you, firms have little incentive to replace people with machines when they can get workers so cheap – only Greece and Portugal have lower hourly wages, and we can always rely on immigration to stop them edging up.  Investment in research and development is poor compared with other countries: not just industrial research, but government R&D.  No major party has committed itself to safeguarding the science budget: with 10% of world research, 4% of world scientists, we invest less than any other G8 country.  Worse, I suspect, is the way that technical and further education is being savaged.  I nearly said decimated then, but decimated actually means ‘cut by 10%’ and the adult skills budget this year is being cut by 24%.  For a country with an ageing population and a productivity gap, it is difficult to think of a more foolish policy.  Even if you believe in the nonsense of balancing the books, this is not a necessary part of austerity, forced by budgetary constraints.  Mick Fletcher points out that the giveaways to whisky and beer in the last budget could pay for substantial improvement in skills training – and throttling back on pensioner bonds could avoid any need for cuts there at all.

The authors of the LSE report conclude:

The UK’s longstanding productivity underperformance has been heightened since the global financial crisis. ‘To meet this central policy challenge, the UK needs a long-term framework for investment and innovation. This ties in with many other policy areas, not least ensuring that there is an adequate supply of skills and a strong infrastructure network. 

And even Robert Peston – who seems to have swallowed the austerity pill without a blink – recently wrote a BBC column entitled “productivity is almost everything”:

… it would be a pretty foolish government that neglected to take any steps to improve productivity. And calibrating the balance between austerity and productivity-enhancing measures is perhaps the most important judgement for the next government. If we could only boost productivity, there would be no need to ink in any more austerity in Wednesday’s budget. So how on earth do we improve output per worker? 

Well, Robert, why not make your next documentary about international comparisons one that looks at why France has higher productivity than us, rather than worrying about the wickedness of their longer lunch-hours.



Now, there’s a reason I’m releasing less wisdom than normal, and that reason is Twitter.  This takes away the urge to blog for a number of reasons.  The first is to find that my views are not unique, and the things that annoy me annoy others.  I don’t need to explain about the national debt or the deficit or the causes of the 2008 credit crunch or the idiocy of Brexit, because others are doing it, and some of them are doing it better. Very much better.

Another reason Twitter diminishes my output is that I can explain my views on the world, or react to others’ views,  whilst lying in bed or sitting in my favourite armchair.  Now that the number of allowed characters has doubled, you can even include subtlety and/or irony. And, of course, Twitter gets more readers than blogs, especially if you’re part of a national debate run by a celeb columnist. Don’t think I’ve ever had a ‘like’ from an major economist or Times columnist on my blog, but I have on my tweet.

Twitter does, however, have disadvantages.  The first is that it enrages you.  I have given up reading it last thing at night, because you can’t get to sleep with all that adrenalin pumping.  The second is that it is often inaccurate.  I’m not talking just about fake news, though there is plenty of that about.  Last week there was a terrorist attack in Oxford Street, only, er, there wasn’t.  People retweet non-quotations from great men and women (I’ve written before about that, but it still amazes me that people can believe that Sophocles or Pliny agreed with the current Republican agenda in such a detailed way).  Obviously posed videos show mankind’s essential badness, or goodness.  There’s one going the rounds at the moment where a dog rescues a woman from a mugging, which would be more convincing if the camera weren’t to follow the fleeing miscreant in a way no security camera could or would.

Trolls are always there, too.  Sometimes its people who simply cannot believe the possibility that they might be wrong.  Recently, I corrected a tweet that claimed that the richest 1% paid 27% of government tax, by pointing out in a caring way that it was probably just talking about income tax, and when you take all taxes into account, the tax system is broadly proportionate.  “I’d like to see the details of that”, the author spluttered, so I sent him the details, charts and all.  His response was to say that tobacco and alcohol taxes are essentially voluntary, so the poor are obviously choosing to pay more tax.  This response not only missed the point (in practice the bulk of indirect tax comes in things that are not voluntary like council tax, petrol tax, insurance tax etc.), but moved on from his first assertion, which had been proved plainly wrong.

However, right wingers who can’t bear to say “I want to keep all my money, and to hell with society” and so have to invent excuses (if you lower taxes you’ll raise more money; let the rich keep their money, and it’ll all trickle down to the poor; successful societies have low tax rates) are to be expected, and in their easily understood blend of idiocy and selfishness are not the worst.  I have found three other areas where you can be sure of greater abuse.  These are:

  • Any suggestion that Israel might have a right to exist, or that its opponents are not angelic. I won’t argue my views now, but this is an area where sensible dialogue is not possible. No-one changes their minds, and the (true) assertion that being anti-Zionist is not the same as being anti-Semitic is often put under great strain.  I’m a gentile with a degree, but have been called a Zionist moron on line (in a debate that was not about Israel).
  • Green stuff. I recently attended a lecture by George Monbiot, of whom I’m a fan.  I tweeted that it was a great event, but that sadly the only group taking the opportunity of energising local lefties en masse were those trying to prevent the removal of trees by Sheffield’s roadsides.  The reaction was as if I had advocated murdering their children. The first reaction – that just because you wanted fewer trees removed didn’t mean you were impervious to other issues (true) – became a collective howl.  And, er, the fact is that (in a world of shrinking welfare funds, wars in Yemen and Syria, staggering growth in inequality, health service cuts and so on) no other issue was raised. And the tree issue was absurdly exaggerated. Rather than saying that the council had mishandled a necessary programme, some seemed to say the tree issue illustrated the decay of late stage capitalism.  Others people claimed that the street I had named in my defence as needing treatment was just fine.  Indeed, they pushed their grandchildren’s’ prams or disabled husband’s wheelchair down there frequently (non-Sheffield readers will not realise this is mendacious nonsense).Similar reaction when I suggested, after a hairy journey in autumnal dusk – that cyclists and pedestrians would benefit from wearing more easily visible clothes in murky November weather.  Angry respondents said it was cars that should be painted in hi-viz colours, as they were the criminals responsible for crashes; indeed, car drivers are the ones who should be made to wear helmets.  These answers – tweeted with many ‘likes’ – share two things. They don’t relate to my comments (I never mentioned compulsion or helmets), and they would do nothing to reduce road casualties.  Sadly, when a car hits a cycle, it is the cyclists who gets hurt.  But the feeling of personal worthiness seems to have overwhelmed these obvious points, and the knowledge that most cyclists own cars.
  • Right wing fans of Friedrich von Hayek. I once remarked that Marx had been proved wrong when he said that the working class would get progressively poorer under capitalism, and so was no longer seen as a faultless guru.  However, von Hayek was wrong in saying that social democracies with welfare states would become more and more tyrannical, less and less free, yet has not been discounted for an equally flawed prediction.  Nowhere in the world – certainly not the right wing autocracies – enjoys the freedoms of European social democracies.  You’d have thought this was an uncontroversial statement, yet … wow !  Fritz’s fans piled in.  They either denied he held these views (how can this be ?  A simple quotation from his books – indeed the very title of “Road to Serfdom” – shows that he did), or felt it was outrageous, almost blasphemous, to suggest the god of neo-liberalism had misspoken.  This wasn’t just one response, but a stream, and some very abusive.

I guess the thing these three themes have in common is tribalism, the warm feeling of knowing that you have a gang of mates who will leap in waving the same broad sword of truth as you are bearing.  These tribes have a clutch of common views, and I guess their list of Twitter reading will have few deviants from the approved wisdom.  If you are against fracking, you must be against nuclear power (not logical, as Mr Spock might say); if you oppose capital punishment, you must favour freer abortion.  Oh, and the other supporting driver is virtue – the feeling that your views are not just sensible policy prescriptions, but represent moral excellence. The danger here is that anyone who disagrees with you is not only mistaken but wicked.

And that way lies a very dark path indeed.

Politics and sport

Funny how political topics rotate, isn’t it ?  When I was younger, the politics v sport debate was about the South Africa.  The British establishment were happy to play against their segregated teams for years, claiming this did not show any approval of apartheid. As a progressive student, but a fan of rugby and cricket, I tried to look the other way, but in the end it wasn’t possible, particularly when the South African authorities wanted to pick the England side. Peter Oborne*’s book “Basil Oliviera” reveals rather more than we knew at the time about the back room manoeuvring, and is pretty clear who was mixing politics and sport, and it wasn’t Guardian journalists or Welsh councillors.

And now we have the knee bending, and President Trump says that any sportsman who uses the playing of the US National Anthem to make a political point should be fired.  Well, he actually says more than that, and you’ll know what, but let’s leave it there. I will add the normal progressive spluttering here – how absurd that he can dodge the draft, how ironic that he can support those carrying the Confederate flag, whilst reading lectures on patriotism.  And a man whose only qualification for public office is his wealth can claim that prosperity disqualifies others from comment.

Unless you are a very lucky young black man in America, the oppressive behaviour of police must be ever-present. You will have friends in gaol, you will know of black people shot by police officers with little or no cause.  The idea that you must celebrate the greatness of your nation whilst this is going on must be hard to bear, and athletic prowess gives you a platform to express your view.  It’s the wrong time to say ‘you’re no political expert’ – this is not a minor political topic, a change in tax codes, a new education law.  It’s friends and family being shot, by the authorities, without effective redress, for heaven’s sake.

So, let’s be clear. I’m no Republican apologist.  One, Trump is a disgrace. Two, there is a major problem of police brutality in the USA. Three, the young footballers have a constitutional right to free speech, and have made their point with calmness and dignity.

Can I, however, throw a grenade into the room here ? I said in my blog introductory page that for me the point of writing is to clarify – or even muddle – my own views.  So, then, what would we say if the young footballers were white supremacists who gave the Hitler salute at the beginning of their match ?  The constitutional right is the same, isn’t it ? The England football team gave the Nazi salute when they played in Berlin in 1938 – are we comfortable with that ?

A way forward.  It is not possible to take politics out of sport, but there may be ways of disinfecting it.  For example, why do we play anthems at matches ?  It’s as if it has increased in recent years: notice how the Olympics, overtly awarded to cities not countries, start with a flag parade. To be fair, that’s been going on for decades.  In fact, you may feel there is a case of sorts to be made for important international events to have flags and anthems – not for me, but there you go – but why do Americans have it for internal club fixtures ? I know they call their NFC and baseball finals “the world championships”, but they aren’t, are they ?  And the Armistice Day poppies that the UK’s home country football teams wear – when did that start ?  Wouldn’t it be better for footballers to make a donation to charities for ex-service personnel (or, better, work with the Invictus Games, or promise to supplement donations by fans ?). What would happen to someone who wore the white poppy, used to lament the dead of all sides and all wars ?   As it stands, the exercise is used as a piece of right wing propaganda, half ‘Bulldog Britain’, half xenophobia; the effect on a minority of fans is palpable.  German fans – and players, all of them – protested against nationalist elements when they saw them in the Czech Republic. English fans sing “The Dam Busters”.

Of course, the best way to take politics out of American Football would be for the police to stop shooting black people. Maybe an extreme proposal.


* Former political editor of the Daily Mail, so hardly a teenage Trot.

Part of the business plan ?

What are we to make of the recent decision to withdraw the licence for Uber, the digital minicab company, to operate in London ?  As soon as the decision was announced, the two predictable sides – Roundheads and Cavaliers – saddled up and rushed to the battlefield.  One side said that Uber was a terrible thing, interfering with an effective public and taxi system using exploited staff on the end of a computer programme that squeezed money out of customers when they were most at need.  Others said that the black cab system was out-dated and expensive, and often wasn’t around when you needed them, or wouldn’t go where you wanted them to go (especially, the proverbial south-of-the-river).

Firstly, let’s note that Uber were not stopped because of Luddism or taxi monopoly. The reason for the decision was that they had failed to help the police investigating sexual assaults on passengers: not just once, but more than 40 times.  But the debate needs to be had.  Technology does move on, and the potential of just popping an address into your mobile phone to get a taxi immediately – one that will, via satnav, know exactly where you want to go – is obvious.  Customers love the service – apparently half a million have signed an on-line petition in favour of the company.  Some drivers like the freedom to log on or off, but on the other hand (or even the same hand – it’s not a zero sum activity) many would no doubt welcome a pension, or sick pay.  If Uber (i.e. its users via charges) doesn’t pay for them, someone else will*.  There is a legal case at the moment suggesting that Uber should pay VAT, rather than pretending it is some federation of independent traders.  And who can defend managers concealing violent criminals from the police ?

Move on a moment. Amazon is a superb service. Any book I want, however obscure and even out of print, can be supplied to my doormat in a day or so.  Lots of other products too, but let’s stick with books.  However, they evade tax (see blog May 26 2013; it’s been going on a while) and treat staff badly.  I use Amazon often, and swallow when I notice my bank account has been deducted for an ‘international payment’ between here and Daventry, or Doncaster, or Manchester.  And then there is Google, which I use every day, and often.  Twitter sometimes tells us of the trifling royalties – pennies and cents – Spotify pays to the creative people without whom it would have no business.  Airbnb had a turnover of £657m in the UK last year, and paid £188,000 in tax.  Ebay had a turnover of £1.6bn, and paid £1.6m in tax. That’s one-thousandth of their revenue.

Here’s my point. One group says these are companies that show the future of the digital economy, offer great advantages to consumers and users, and they are right. The sort of people who say they are appalling monsters who should be banned, the sort of people I have consorted with politically most of my life, are not only wrong, but have no chance of winning.  But why cannot we have the advantages of the new economy, whilst staff are well paid and looked after, and whilst the companies make the appropriate contribution to public funds – to the schools, roads, law and health care they use and need ? As a tweet asked plaintively, “is being an arsehole an essential part of the business plan ?”. If these companies cannot exist without exploiting staff, stiffing governments and hiding from the law, then they are not viable businesses.  But if they can, they should, and must be made to.


* interestingly, this is the mode of thinking that is thought to be very market-driven, up-to-date and realistic in relation to university fees.  If students don’t pay, we are told, how unjust that the rest of us will have to.

The Joy of Tax

I’ve been reading Richard Murphy’s book, “The Joy Of Tax” – subtitled ‘how a fair tax system can create a better society’.  Let me start by saying I am entirely sympathetic to this message. The low-tax boors, usually backed by think-tanks funded by very rich and very anonymous men, are one of the major groups creating our fractured society, and there is a real need for them to be taken down. We can’t run a decent society without tax, and the arguments that progressive levels damage the economy are weak.

Mr Murphy is an accountant on the side of the angels. He dismisses the argument that low taxes give people more choice – or that people do not consent to taxes at elections. The book takes a hard look at the various evaders and avoiders, and finishes by listing the measures that need to be taken to ensure we run a better society with everyone chipping in appropriately.  That’s good.  There are plenty of people criticising the way the world is, and few explaining how to make it better.  (In passing, another is, or was, Prof. A. B. Atkinson – https://en.wikipedia.org/wiki/Tony_Atkinson – whose last great book on “Inequality” not only bust the myths on the subject, but explained how to fix it). The old criticism – “I know what you’re against; now tell me what you’re for” – could be directed against controversialists on both sides of most current debates. Good to see colours nailed to masts here.

However (yes, you were waiting for the big but, and here it comes), the book could have been so much more effective.  This is because Mr Murphy makes mistakes of omission, and of commission.

Firstly, the mistakes of omission.  Any book that wishes to effectively sponsor a progressive role for taxation and public sending needs to face up to the charges that the Tories, Republicans, the IEA, Adam Smith, Freedom and other institutes and parties make against it.  Murphy doesn’t really do this. There is no rebuttal of the idea that public management is inefficient, compared with the lean practices of the private sector.  You’d have thought there are enough examples around to rebut this – from the water and rail companies to the excesses of the banks – but Mr Murphy is mute.  Nor is there much mention, let along contest, of the idea that higher taxes damage economic growth and wealth creation, apart from a chart that shows that richer states have higher tax rates.  And the common view – wrong, but popular and common – that raising tax rates actually doesn’t raise the tax take because of the deterrent effect on effort (and effective evasion) is also not covered.  This 300 page book, which aims at explaining tax policies to the common man, does not have Laffer in the index. Nor is the weird idea of public spending ‘crowding out’ productive private investment, the idea that Thatcher and her crew used to justify cuts in the recession of the early 80s, given the kicking it deserves – or any sort of kicking at all, actually.

The National Debt should also be discussed, rather than brushed over in passing.  It’s salutary to know that much of the debt that was used to rescue the banks in the 2009/10 period was simply conjured up, rather than ripped from the hard-working taxpayer, but there’s more to the debate than that.  Our children will not have to pay off the National Debt, and we have not come anywhere near to frightening off investors with government profligacy. The way to pay the Debt down is to expand the economy, not contract it: that is the way we dealt with the World War II debt (as described in earlier posts).

The mistakes of commission are in the presentation of his ideas.  If you assume (a fragile assumption, maybe) that the aim of the book is to persuade some tax sceptics that society needs a broader and fairer tax base to run better, the argument must be shaped to attract those views.  Yet the early chapters basically argue that tax receipts are the government’s money, not yours. This may be legally true, but it’s a view that your moderate conservative will find unappealing. What’s more, you can make a better case by representing public spending as a process providing goods and services on your behalf, than by saying it’s not your money really anyway. It would appeal both to people’s selfishness – you’re getting a great deal for health and security, much better than you could get individually – and to their altruism – how great it is that you contribute to the old and disabled, ensure there are no homeless, defend our nation effectively, educate kids of all classes, races and religions together.

A minor point – I also question whether we needed the detour into what’s known as Modern Monetary Theory – the idea that banks and governments can create money costlessly, with little risk and without using the process of deposits and re-lending known from traditional textbooks (like the one I wrote).  It may be partly accurate to say that banks can just print money, so we don’t need to make choices between public priorities, but to the average Joe it’s an argument that looks like Emperor’s clothes, or a way to do what the left is frequently accused of, unrealistically believing in magicking money from nowhere.  It also doesn’t explain bank crashes very well, and the need for liquidity reserves, very well, or at all.

The book ends with a Budget Speech incorporating Mr Murphy’s ideas. It is well worth reading, especially as it has been written by an experienced accountant who knows the ins and outs of company behaviour.  The proposals are radical and innovative.  However, he describes what is at least a five year programme, and it would be better presented as such.

Don’t get me wrong. I think this is an important book, and one that should be read by anyone interested in the management of our society.  Perhaps I’m criticising a different book, one for a different audience of non-converts. If I am, all I can say is that such a book would be even more valuable, and might even sell more. Maybe I’ll write it. As soon as this pub closes ….


My President

The recent hysteria about the birth of a royal baby (who might become king in around sixty yeas’ time, or, there again remembering Edward VIII or James II, might not) leads us back to republicanism.  It would be much more grown up for the country to carefully select who should be head of state, rather than be dumped with a distant relation of a German protestant princeling.  Particularly in the light of recent revelations about Prince Charles interfering with legislation.

One objection to republicanism in Britain has, however, asks the question “who would you choose ?”, on the assumption that there would not be any candidates who would be as neutral, as widely acceptable as a monarch.  I think there are several – Kenneth Clarke, Professor Robert Winston, J. K. Rowling – but the head of my list is shown below:


EU referendum

Well now. Good sense from many people, and less from some.  Here’s my take on the EU referendum.

  1. The stupidity of the referendum – the EU is in need of reforms, but if we (as I expect) vote to stay in, we will be completely disarmed in any campaign of change afterwards. “You liked it enough to vote for it, mate” will be the riposte.
  2. The likelihood of a socialist utopia if we stay out. Er, no. We’ll have an extended right wing mess. The idea that the interests of the working class or well-funded public services will be promoted by Gove, Johnson, Farage etc seems, shall we say, a little far-fetched.  While it is truly touching that people like IDS have discovered the problems of low wages and poverty, but I think it is an epiphany that will last about 30 minutes after the vote.  Note my good taste in not mentioning Venezuela.
  3. The budget contribution debate has been trawled over enough, I guess, for people to know (a) the quitters quote an exaggerated gross figure, before rebate and any EU funding of UK projects (b) cuts in the NHS and housing are about the domestic policy of the current government – austerity – not shortage of EU funds (c) almost every estimate of GNP and tax receipts post-exit would more than wipe out any gain from reducing our payment (d) to have access to the single market you have to pay anyway (Norway does). Oh, and (e) the full amount the quitters quote is only available if we stop funding the things – agriculture, environment, university research, unemployed retraining – that the EU currently pays for out of our cash.  What is less often said is our government cocks up the EU claim system: I stopped claiming European Social Funding at Lambeth, because every penny we got was taken out of our budget by central government.  I understand the same criticism can be made of how our government handles fishing quotas: we get a bad deal because our government isn’t sharp enough to get a good one.I also have the naïve progressive view that it is OK for the large rich members of a club to pay more than the poor small ones: if we are to have access to the markets of Greece & Portugal, I think it’s fair to help get their airports, roads and technical training up to scratch.
  4. Like almost every non-politician, I think we need to manage migration better. However, half our inward migration comes from non-EU members (Dyson bloody complains the EU stops him getting more of them), and if we wish to remain members of the single market we must agree to present rules on EU migrants. In passing, I truly doubt that many are attracted by our social security system, but if they are, it’s our own silly fault – we designed a non-contributory system with no European help at all.  But if (as we are endlessly told) migrants make a net contribution in the form, of taxes, then we can afford to spend money in areas where schools, hospitals and housing are under pressure.  (I’m not very PC on this issue, and believe that the migration issue will blow up in politicians faces in the not too distant. The problem is not the EU, as much as the fact that many countries are horrible – my wife’s Yemeni language student shudders when asked about her homeland – and travel is cheap.) 
  5. There will be a severe economic cost to leaving. There is no one respectable who thinks otherwise.  This doesn’t mean that we shouldn’t – I nod towards Dave’s idea that freedom is worth a cost – but the increase in freedom is illusory in a linked up world, and the cost is high and will be borne by the low paid.  Brexit’s tame economist Patrick Minford estimates that all manufactured exports will end.  Yep, you read that right.  I also recognise that the ‘taking back control stuff’ sounds plausible (even though it won’t work – countries now deal with internationally agreed standards in almost everything, from ivory to lamb).  Moreover, where does all the “I’m not paying for those buggers – I want the decision myself” stuff end ? UK ? England ? The south of England ? London ? Kensington ? My street ? My house ?  And what is there left to say when a member of the House of Lords decries unelected legislators, apart from ‘irony is dead’ ?It’s also surely true that many modern problems – pollution, terrorism, crime, migration, defence – can only be solved jointly.
  6. Red tape ? Don’t get me started. Most regulations are to encourage trade – to ensure that foreign governments cannot refuse our exports (or us theirs) on spurious safety or hygiene grounds.  Imagine stopping lorries at Dover because their weight per axle did not conform to the limits established by a sovereign House of Commons.  I also like the fact that our competitors are obliged to offer a minimum of working conditions, like maternity leave; this seems to be a way to avoid a race to the Dickensian bottom.  We are in any case one of the least regulated industrial countries.  Oh, and the people who tell us business will become more efficient and liberated when we end burdensome EU regulations are the very same ones who say we are importing so much more from EU than we are exporting.  That’s right, the very countries who are hobbled by legislation.   Er, shome mishtake shurely.
  7. The Euro was not a good idea, but the 2008 crash made it worse. I could quote from an article I wrote in 1974 against a single currency, but you’ve suffered enough.
  8. Brexit will hasten the end of the UK, more quickly if the results of the vote shows a strong regional/national bias.

I think we will vote to stay, but won’t be surprised at a vote to go – such is the appalling level of the debate (have you had that leaflet through your door that hints Syria is about to join the EU ?).  I attribute this to the amateurism of the Remain campaign, which seems unable to rebut plainly erroneous Leave arguments.  The emphasis on the economy rather than progress and peace has been overdone.  In particular, they seem to assume that everyone is having a prosperous, hunky-dory time in today’s economy, when real living standards for many people have crawled along the bottom since the 2008 crash.  Why fight to retain a system where you’ve had no rise for five years (my daughters are nurses), or had your pension trimmed by Sir Philip Green, or are on a Sports Direct zero-hours contract.

That’s enough.  References on request.