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Labour’s dishonesty on tax.

There are few things that annoy me more than watching Labour complain about a “tax-cut for the rich”. The top rate of tax is higher under the coalition than it was for all but one month of Labour’s time in office. The rate was raised as a nasty political ploy in order to trap the coalition. Labour raised a tax, knowing it would be damaging, simply so they could accuse the Tories of being “for the rich”. I cannot think of anything more damaging than using the tax-system to score political points.

This is why Labour ruin everything, every time they get into power.

Never, ever let them get in again.

The Nuclear Deal

Q: Why do we so desperately need new power stations?
A: Because Labour calculated that the blackouts wouldn’t happen on their watch, and new power stations aren’t popular and nuclear ones especially so. Therefore Labour, despite advice, only gave the go-ahead for renewables.
Q: Why do we need the French and Chinese to build our power stations?
A: Because Labour shut down a successful domestic nuclear industry in 2002.
Q: So isn’t there a huge subsidy?
A: Yes, probably, but much less than offshore wind (though wind’s guaranteed price is for a shorter time). A subsidy through a guaranteed price is likely to be cheaper than the Government bearing the risk of building costs, and may even be free (ish) if energy prices rise in line with inflation as expected.

Prediction, Labour will have a field day pointing out the “expensive” energy procured by the Government, then will not change anything, or indeed take any decisions at all about power stations, should they ever get into power again. Because Labour prefer being noisy sound-bite ranters than seriously dealing with the energy shortage to which the UK is extremely close.

Labour: Utterly irresponsible student union politicians. This is why they break the country every time they get power.

Left-wing Myths.

Of course people have left wing views when they’re ignorant of such concepts as Tax Incidence and have opinions formed around myths like “world inequality is rising”, which went unchallenged on “thought for the day” this morning. Of course, with the Chinese, Indian and much of African economies growing at 8-12% (thanks to the much maligned free-trade) the number of people living on less than $1 a day is falling faster than at any time in history.

Even within western countries, inequality isn’t rising that fast. The UK’s GINI numbers are skewed by the presence of the international super-rich in London, a feature which probably affects New York, Hong Kong, Los Angeles, Monaco, Paris and Cape-Town. Otherwise, the middle class is growing, and the working class is shrinking. Inequality is mainly between welfare-recipients and those who work. I argue that our poorly designed welfare state with its manifest disincentives to finding a job represents a trap.

Vodafone doesn’t pay tax? Vodayfone may have successfully won a case against HMRC, and had £4.8bn written off, but it otherwise paid the tax due. Does anyone argue that a company isn’t allowed to challenge the Revenue in the courts? Because the left is dangerously close to arguing for retrospective and confiscatory taxation. It’s there in the report and accounts – they paid 27% of £9.8bn operating free cash-flow in tax (compared to a headline corporation tax rate of 24%). It may have been aportioned in different years, resulting in a figure in the profit & loss account of 17% on £8.5bn of operating profit but the CASH is the actual amount paid to the revenue and the equivalents around the world in that year.

Lefties often reject widely accepted economic concepts like tax-incidence, the idea that the economic burden of a tax doesn’t always fall on those writing the cheque. If corporation tax was abolished, some of the extra money would go to shareholders who pay CGT and income tax on dividends (at a slightly lower rate), however much would go to customers in the form of lower prices (does anyone argue that the mobile phone market isn’t competitive?) with the money spent (and taxed elsewhere) or workers in the form of higher wages, resulting in a much higher rate of tax. The result of abolishing Corporation tax would probably be rather small overall, at least in the long-run.

The idea that Corporate Tax avoidance is THE problem is ridiculous. Avoidance involves using the legal means to keep your tax bill to the minimum. It’s up to the Revenue to challenge “abuse” in the courts. If the court agrees, you pay the difference. The problem the revenue faces is that the UK is now pretty much at the limit of what the people (and the companies they run) will take. People will not pay very high marginal rates. They will hide income offshore, they will move, they will take lower wages, bring forward capital expenditure. Many will think that the rewards of running a business are simply not worth it, and retire.

Left wing myths are so deeply embedded, it’s difficult to challenge all of them, all the time. But these myths result in a slowly strangled economy. Because the solutions that fall naturally from left-wing myths: more investigations, tighter regulations and stronger enforcement are so poisonous to economic endeavour. This is why Labour break everything every time they get power.

Who advocates for the Poor?

It may surprise you to learn I am not against generous benefits, or even the principle of redistribution.

Much of your wealth or otherwise is down to luck. There are moral and practical reasons for supporting redistribution. The best is based on one simple fact: It’s just much, much easier to get rich if you start with wealthy parents, good nutrition, high IQ, an education costing half a million pounds, height above average (if male) good looks (if male or female) and no regional accent. Start with these advantages, and you’re most of the way to getting into the top 10% of earners straight out of university, which your parents, of course were able to afford. Of course some have some or none of these advantages and succeed, but very few. Those who succeed support those who don’t through redistributive taxes and benefits. This is fair because many of those struggling do so because of bad luck.

There’s a utilitarian argument. The poor have a much higher marginal utility for money than the rich. This is the argument for progressive taxation. A pound on benefits matters more to its recipients than a pound on taxes to a higher-rate tax-payer. So society is better off if some money is moved from one to the other.

Finally, if you make sure everyone has enough money to eat and keep a roof over their heads, there’s less likelihood they’ll pick up pitch forks and re-distribute by force. Think of the benefits bill as insurance against being on the end of a gibbet come the revolution.

So your taxes, about a third of which go to paying working-age benefits, about a third in pensions, and the rest, everything else are part of a decent society in which everyone’s helping everyone else. Or they would be if the system wasn’t comprehensively broken, failing at all the significant tasks the welfare state is supposed to achieve. The welfare state is supposed to prevent poverty. It is, in fact, its major cause.

The problem is one of incentives, and not just those faced by the poor themselves. It’s obvious to anyone who isn’t paid handsomely to farm the poor, that for many people, it’s simply irrational to work. Once they’ve paid for taxes, clothes, transport and lunch, they’re considerably worse off than they would have been had they stayed in their pyjamas and watched Jeremy Kyle. Why would you take a miserable, boring, unpleasant minimum wage job instead of existing on benefits? The job insecurity at the bottom of the pyramid and the bureaucratic complexity of informing the authorities of a ‘change in circumstance’ is a further barrier. So when when the low-waged is “let go” after a couple of weeks, he’s got to re-apply for Housing benefits, Job-seekers’ allowance, Council Tax Benefit, income support and so on, from scratch. He may be genuinely destitute as a result of payments stopped, then restarted again too late, thanks to an abortive effort to “do the right thing”. Is it really any wonder so many feel trapped?

So, who benefits from this system? Certainly not those getting the benefits many of whom are comprehensively trapped in a life they wouldn’t have chosen. Not the Children of those getting benefits, who learn no other life thanks to the distorted incentives faced by their parents, but in whose name the benefits are paid. Certainly not the people paying the bill, John Q. Taxpayer, who thanks to the system face a sullen and resentful underclass, some of whom spend their non-working lives looking for ways to relieve you of your easily saleable property in order to buy sufficient narcotics to break the tedium for a few hours.

The main benefit of the benefits system accrues to those employed on secure graduate salaries to administer the system. These people are the farmers of the poor. This is not just the civil servants and local government employees who administer the system, but also the charity employees who don’t see the homeless and destitute (they outsource this to unpaid volunteers). It’s the police who are part of the state-crushing of the spirit of the young who find themselves trapped in this hell. The that the poor exist at all causes fear in the hearts of the affluent, and justifies the need for a police force. The Bureaucracy is an excellent provider of jobs. Which is why none of the solutions suggested by the Left of the political spectrum would ever reduce bureaucacy or police numbers, or the benefits bill. For that would involve firing sub-paying members of Unite or the PCS, and Unite is by far the biggest funder of the Labour party.

The Conservatives, Iain Duncan-Smith especially, are aware of the above. They were just unprepared for the sheer effectiveness of the poor-farmers at defending their state-financed do-gooding jobs. The Tories tried to cut the number of benefits, simplifying the system. They have tried to work on the incentives by reducing withdrawal rates. And they have tried to limit benefits. No-one should be richer out of work than in.

The problem is the Conservatives blamed the poor for responding to incentives quite reasonably. The Left have a nice handy boogey-man to scare their charges into continuing to voting for a machine which is actually enslaving them. The poor are still trapped. Some policies that might have worked are only half-implemented. And life goes on. Unite the Union gets bigger, the bureaucracy gets more opaque.

So now I’m going to sing the praises of another surprising character: Nye Bevan the architect of the welfare state, who saw precisely the outcomes described above. Which he saw benefits as being low and universal, where possible, and contributory where not. Basically, everyone got a bit, and if you needed more, you had to have paid into the system at some point. Worklessness for life was simply not an option, so it didn’t really happen. Bevan would have been horrified at what his system has become.

People need to advocate for the poor. What do they actually need? Options. And what does the system remove from them? Options. They cannot choose where they live, whether they prioritise transport or housing, food or clothing. They are given a house. Their housing benefit bill, incidentally distorts the housing market for everyone else too. They are made a pawn in someone elses game which involves stats and targets and certainly not the aspriartions of a human being at the bottom of the pyramid.

The only way we can ensure a decent standard of living for everyone is to provide a basic income below which it has been decided that no-one can fall, in perpetuity, for life. No work done will see that basic income withdrawn. So there’s no disincentive to find what work is available. In return, we scrap the minimum wage, which prevents the poor and low-skilled having any means to improve their lot through effort. We stop taxing income and profits altogether reducing the costs of hiring people. We replace income tax, NI, council tax and corporation tax with a proper land value tax and a few pigou taxes. This means the poor will be able to escape taxation almost entirely, if they wish to live far away. And we stop demanding the poor account for their choices to people who want to help, but actually trap them in a bureaucratic hell.

The losers from this policy: The tens of thousands of civil servants who administer the thousands of pages of tax-rules. The hundreds of thousands of civil servants and local government employees who administer the benefits system (some of whom will be needed to administer a LVT). The winners are the poor, who will have real options once again and won’t have to submit to the whim of the bureaucrat or fill in endless forms. This will also give options to the rest of us, and hopefully make the country a much, much better place to live.

The poor have the same Hierarchy of needs as the affluent. Would a system which didn’t seek to crush their self-actualisation and didn’t put barriers in the way of the social and human contact be better, not just for the recipients, but all the rest of us too? The problem is the system serves best those employed by it. It gives them a secure, well-paid job, and power over fellow humans. The poor deserve better. With options, you can bet few would choose the trap they’re currently in. By freeing human talents from the trap, we’re all wealthier. Give the poor what they need. And then leave them alone.

More redistribution. Less Government.

Where are the Right-Wing Comics?

They exist. They just don’t shout about it, perhaps due to not wanting to be associated with 70’s throwbacks like Jim Davidson. There are many who’d not describe themselves as “right”, especially at the Libertarian end of the spectrum.

The problem is that comedy should always “punch upwards” taking aim at people in power. Conservatism is Traditionally about the defence of the status quo. The spectre of rich, smug people denigrating the choices of poor people is often cited as a reason for there not being “right-wing comedy”, but this is a staple of left-wing comedy: Think of Labour-supporter, Harry Enfield’s “The Slobs” or much of Little Britain. Indeed the assumption that rich people are the only people to benefit from “right wing” solutions, is part of the problem. People commissioning comedy don’t mind laughing at the chavs, if there’s a Labour supporter doing the laughing.

Listening to the ‘now show’ on BBC radio 4, where the song (series 41, episode 3, about 8 minutes in) lamenting the privatisation of the Royal Mail, was basically a paean to nationalised industry. Surely there are comics out there who can write a gag about how totally useless the Government’s been at running everything, and why do they still run ANYTHING? If only for balance.

“But Labour are the butt of jokes too…” as they are. However attacking Labour from the left, and the Tories from the left isn’t balance. It’s advocacy. When Ed Miliband is the butt of jokes, it’s about him being weak, or giving into right-wing policies. Tory policies and politicians are routinely derided as stupid, ignorant and heartless. This isn’t balanced at all. What is political comedy for if not for challenging the entrenched ideas? Laughing at the Conservatives as they try to shrink the state bit is simply bullying by the new establishment, from a position of power. It’s little better than the jokes about blacks moving in next door, from the 1970s.

Thanks to Labour, the state now spends 50% of GDP, borrows more than any peace-time government in history, and despite the cuts, is still doing so. The idea that all would be ok if only the Government had more to spend, has been tested to destruction yet comedians still set up their gags with the assumption that the cuts are unnecessary and evil.

We’re the 6th largest economy on the planet, giving nearly 25% of GDP in direct fiscal transfer to the poor. Instead of this vast transfer of wealth reducing poverty, it has entrenched it. Surely naiive, but well-meaning social workers not ACTUALLY solving anything lest they lose their jobs could be the butt of the occasional joke? Surely left-wing politicians cynically fixing it so the poor are worse off in work, to ensure their nicely concentrated vote, could be the butt of a joke or two? Instead of comedians swallowing the Labour line about the ‘bedroom tax’ and regurgitating it for laughs, maybe, just maybe, they could point out the hypocrisy of the Labour position (they introduced a near identical policy for private tenants)? Or is that too much to ask?

There are ideas challenging the status quo – attacking corporations, not from a profit-shy left-wing perspective, but an anti-corporate welfare, small government perspective, which are crying out to be turned into comedy. Maybe, just maybe, the butt of the joke could not be a rich, posh guy after profit, but a spiv, abusing regulations to avoid competition? The predictable, but unintended consequences of popular but simplistic policy could surely be turned into comedy?

“Alternative comedy” in the 80s worked because it attacked the new power – Thatcher. The Ben Eltons and Alexi Sayles and the remaining political comics of the UK are too stuck in this narrative. It’s Lazy to blame Thatcher and business for everything when she left power nearly a quarter of a century ago. The time is ripe for a new Alternative, attacking the lazy assumptions of a bloated state and asking where half our money goes, and why it achieves so little of what it sets out to do. Perhaps a comedian could find another punchline than “profit is bad” when talking of business?

Had I any talent at all at stand-up, I’d give it a go myself. In fact, there’s an ‘open mic’ slot at my local… anyone want to help me write a few gags….

State-Funded Political Parties?

No Thanks! And here’s why.

At present, British political parties operate on shoe-strings. They have to scrabble round for money. Which means they can’t lose touch with people. In Labour’s case, they can’t get too far from the Unions and their membership. And the Tories rely on their membership and business. This need for money keeps them honest, so long as these donations are in the open, declared and public (which I accept they sometimes aren’t.)

Imagine a world where politicians could vote for political staffers to be paid by the state. Anyone think this bill would ever go down? Anyone think it would rise alongside wages? No. It will go from a few million to a hundred million very quickly. A billion would become “the price of democracy”.

All state funding would do is support the incumbents against the likes of UKIP (with whom I disagree, but who’s right to fight in the arena on a level playing field I will defend to the death). UKIP are building a movement on private donations, and they’re able to do so BECAUSE THE ESTABLISHED PARTIES HAVE LOST TOUCH with much of their base. State funding would hamstring UKIP who’re successfully stepping into the void left by parties squabbling over a managerialist middle, while preventing the Tories and Labour ever having to engage with their people ever again.

State funding is a solution to a problem that exists only in the minds of people who can only see corruption in a business-owner supporting a party. It says more about the cynicism of the people who support it than about the problems politicians face now.

State funding is anti-democratic, foolish and will more profoundly corrupt the British body politic than any rich man ever could.

Why? Because the state is richer than any man.

Labour and the Unions.

Let’s take these figures at face value: Trades union membership is rising, even in the private sector and union Barons are trusted more than business leaders. That’s perhaps not surprising in the slowest most anaemic recovery on record, one in which jobs are only being created on declining take-home pay. Lower productivity means more jobs, but on lower wages. People’s living standards are falling and have been for longer than at any time in recent history. It does not follow that every Union member wants class war. One third of them vote Tory!.

Despite the headline numbers, It still means the Unions are a massive problem for Labour. Over half the electorate remember the 1970s and what untrammelled union power did for the country. There are obvious parallels with the Tories’ polling on Europe: The electorate agree with broad Euroscepticism, without being fully convinced with the need to pull out. Europe is still a toxic issue for the Tories.
Unite is the Party’s biggest donor, the Unions are responsible for the clearly inadequate Ed Miliband being picked over his much more competent, better looking, less weird and probably better hung older brother. The Unions are trying, openly to get as many of their people into the Parliamentary party as possible, and they’re block-buying labour memberships to achieve this end, whenever there’s a seat up for grabs. This is what happened in Falkirk.
And here’s what they want:

The key policies we want to see trade union activists within the Labour Party fight for at every level are quite simple. It’s about giving workers the right to collectively struggle to change their conditions. We want to shift the balance in the party away from middle-class academics and professionals towards people who’ve actually represented workers and fought the boss. At the parliamentary level the key fight is against the anti-union laws. We have to restore the right to take solidarity action and strike effectively.

They are after a return to class-based politics:

We want a firmly class-based and left-wing general election campaign in 2015. We’ve got to say that Labour is the party of and for workers, not for neo-liberals, bankers, and the free market. That might alienate some people, but that’s tough.

Labour has to be a working-class party — a party for workers, pensioners, unemployed workers, single parents, the whole class.

They’re absolutely right “that might alienate some people“. That is Labour’s problem. Their backers, with whom they have an absolutely symbiotic relationship, on whom they are entirely financially dependent, and who have the whip hand not only over the money, but apparently the party membership too, are intent on dragging the Labour party towards a position: representing a shrinking traditional working class, benefits recipients and those paid to farm them and those people alone.

This is a recipe for annihilation in England outside the Northern cities. It’s a platform which has seen Labour fail, and fail again. It’s only when Tony Blair realised the country (or at least the electorate) was broadly “middle class” that they won three elections on the trot.

Unite are about to put the Labour party out of power for a Generation. And I for one am delighted.

The Crisis Wasn’t Brown’s Fault. The Slow Recovery Is.

Let’s be absolutely clear. The near-failure of the financial system on Gordon Brown’s watch was not entirely his fault. Thus the rise in the deficit from 3% to 11% of GDP isn’t directly Brown’s fault. At least not in the short term. But the slow recovery is his fault. And here’s why.

It’s not just the defict. A 3% deficit once in a while is ok. No Government can balance the books every year. But running a deficit every year for a decade, that’s wrong. Running a deficit bigger than growth increases the debt to GDP ratio. This is fine, when the stock of debt is low, but doing so during a “boom” is wrong. And increasing taxes to fund increased spending isn’t always wrong either. doing so during a boom is fine in moderation. But increasing  spending, over inflation, and during the biggest rise in peace-time taxation in British history, year, on year, on year (as Brown did) was not just wrong, but insane. It’s difficult to over-state how insane Brown’s fiscal policy actually was. He raised taxes during a boom, then spent it all but it STILL wasn’t enough. So he borrowed more, and more, and more, every year on top of booming tax-receipts to keep illusory growth coming. Gamblers call this approach ‘the martingale‘, and it always results in catastrophic losses, because of house limits. Brown believed there were no house limits. But there are, even for Governments.

The pips were squeaking long before the market blew up. The private sector was over-taxed and barely put on any net new jobs at all over New Labour’s tenure. Squeezed by regulations and crushed by rising demands, business stopped hiring. A group of workers, the non-financial private sector, which were not growing, nor were they enjoying increases in living standards under Brown, were being asked to fund a massive increase in the number of, and payment to the public sector. All Brown’s “end to Boom and Bust” growth was debt-financed public sector spending. All the net new jobs were courtesy of the Tax-payer. And when those massive tax-receipts from the City which had allowed this to appear OK stopped, the wheel came off.

Brown’s regulatory regime failed its first test, but so did every regime, everywhere. The Greenspan put, which I ultimately blame for the crisis was standard political economics everywhere at the time. Doing the standard thing does not make Brown culpable.

The financial crisis may not have been Brown’s fault, and his response to it was (I’ll grudgingly admit) not too bad. It’s not exactly what I would have done, I’d have let the banks fail, secured depositors only (not bond investors) and used helicopter money to bail out PEOPLE not bank. But Brown’s approach certainly wasn’t wrong, and represented one of the better options on the table. But the fact is Brown appeared to believe he’d ended Boom and Bust beforehand, and left Britain with no fiscal wiggle-room at all. The fact the crisis was as bad as it transpired to have been for this country was absolutely Brown’s fault. Financial crises happen. Brown though he’d stopped them for good. That is pure hubris. The Tory charge, that he didn’t fix the roof when the sun was shining is actually quite accurate.

Brown overspent when he should have been saving. He rose taxes when a prudent government should have been able to cut them. He left a huge, bloated public sector, the cuts to which are slowing down the recovery.  (That the cuts are slowing growth does not mean we should stop cutting and miraculously get growth, nor would that growth allow the deficit to fall). Thanks to the grotesque tax-hikes of Brown’s tenure, there’s no scope for further rises to close the gap. In isolation, each of the defences of Brown’s fiscal policy hold water. Together, they don’t.

Like the Irishman giving directions “Well I wouldn’t start from here”, should form the Tory critique of Brown’s time as Chancellor and PM. We should have been running a 1% surplus in 2007. This means the deficit would have been 7%, not 11% in 2010. We should have been a creditor nation by 2007, having almost entirely paid off the net national debt and been sitting on great piles of T-bills, JGBs and Bunds. Our stock of debt would have gone up, but we’d be rapidly approaching 40% of GDP, not 100%. There would be no need for decades of Austerity. The fiscal fire-power the Government could have deployed to keep the wheels moving would have been much greater.

But counter-factuals are pointless. All that’s left, is the long, slow, grinding process of austerity to bring the insane levels of state spending under Brown 2000-2007, back under control. This will take decades. I will be paying more tax, thanks to Gordon Brown, for the rest of my life. For that, I will never forgive him. For cheering him on, I will never forgive Labour.

“A Party That Reflects My Views”

UKIP is a populist party. It’s anti ‘other’: Immigrants,
‘Liberal Metropolitan Elites’, Foreigners, cyclists. It attracts golf-club
bores, and over-confident pub ranters, whose ideas bounce off a leadership
intent on stroking their prejudices. The idiocy resonates in the echo-chamber
and builds into a great crescendo of cant. The Green Party is a populist party
for environmentalist and left-wing extremists. Their policy formation is
identical to UKIPs, but starts with a different set of stupid ideas, but the
idiocy and cant are the same. As for Green and UKIP, so too Respect, SWP, SSP
and all the other minor parties in the system.
These parties, and the collapse of the main parties, is a
symptom, not of the Failure of the democratic system, but it’s success. The
main parties have presided over a stunning prosperity over the past two or three
centuries. The forms, if not yet the reality, of democracy are near-universal.
The richest, happiest and most powerful nations are the ones, still, who have
been democracies longest. The citizens of these countries are the richest,
freest, safest, longest lived, healthiest and most productive people who have
ever lived. The options open to the poorest Briton dwarf those of all but a
tiny proportion of Congolese. The people of Britain have now, thanks to democracy, moved so far up
Maslow’s hierarchy of needs, they expect to be listened to too.
If there’s one idea behind the rise of UKIP in
particular, it’s that the country has “gone to the dogs”. It hasn’t.
Nor is it “run by Europe”.  The
Tory party is not “the same as the Labour party”, and there isn’t a
grand conspiracy to do down the little guy by the “Liberal Metropolitan
Elite”. The conspiracy theories of all the other minor parties about big
business, or the oil industry are likewise, bunkum. They’re the result of
pandering to the prejudices of self-entitled people who lack the
self-discipline to accept that you cannot in reality expect to agree with
everything concerning the government of seventy-million people. They don’t like
some aspect of Labour or Tory policy and claim to want “A Party that
reflects my views”.
The fact is the rise of minor parties reflects a
self-centred ‘me-me-me’ culture, where people feel their ideas are valid,
however un-thought-out or spontaneous. Looking at a major party of Government
and thinking it insufficiently extreme, betrays a misunderstanding of what
democracy is FOR. It is not to impose one group’s ideal. It is not to conduct
accurate head-counts. It’s not even to do what ‘the people’ want. It’s to
temper the excesses of those who would seek to govern us, and vote the rotters
out  if necessary. The British have
traditionally preferred their coalitions WITHIN parties not between them. To
imagine you could ever agree with the entire manifesto of such a party, is just
stupid.
In order to get a radical change of policy enacted you
must first persuade a major party of Government, which involves persuading a
fairly conservative machine. Then you must persuade a sizeable chunk of the
activists of that party, each wedded to his or her own personal idiocies. Then
you must get supporters elected to offices of the party, selected for
safe-seats, and then win an election. Then the policy must be rammed through by
enthusiastic politicians against a conservative Whitehall machine. An idea has
to pass a pretty big set of hurdles before it becomes enacted policy of the
state. The length of time MPs can sit means ideas which were being implemented
in the 60s still have adherents in the commons to this day. Change is HARD to
effect. Only Atlee’s coming in after the war, and Thatcher’s managed to
significantly alter the direction of travel.
This is no bad thing.
Democracy, and the two-party duopoly will get shaken up
from time to time, but the Tory, Whig, Liberal, Labour stranglehold on power
which they’ve enjoyed for three hundred years isn’t all bad. Pick one. Try to
persuade it. Attempt to drag the centre ground of politics your way. Because
setting up a new party always ends up a vanity project for the likes of Nigel
Farage or the Dictator-toadying George-Galloway, and makes everyone involved
look like an twat. It also serves to ensure the splitting of your side of the
see-saw, ensuring the centre-ground of policy moves farther away from you.

Because we are all idiots in our own way, our enthusiasms
need tempering. Only the major parties have sufficiently high hurdles for ideas
to prevent most of the most idiotic ideas becoming official policy. Joining
UKIP or the Green Party rather than the Tories or Labour, is the action of an
idiot, without the self-awareness to realise he is one. It’s a reflection of
the egotism of our society. And it’s futile.

An Example of What’s Wrong with the Welfare State.

In around 2004, or 2005, I found myself between jobs. This is what the welfare state is for. I applied for Job Seekers’ Allowance and Housing Benefit, which I claimed for around 3 or 4 months, until I found another job.

If you believe the left, I’d be ‘hypocritical‘ for ever subsequently arguing in favour of welfare reform, after using it, as Iain Duncan-Smith once did. I’m not. I support a welfare state, just not one as currently structured. A welfare state is vital. Decent out of work benefits reduce the risk of temporary unemployment, and therefore increase an assortiveness labour market. It reduce the power of bosses to hold down wages or make unreasonable demands. It reduces the risk of quitting a job for a new, better one, and thereby lose protections for time served. A functioning welfare state is vital to reduce the risk of entrepreneurial activity.  A welfare state is vital therefore to a liquid, flexible labour market, which has been one of the successful things about the UK economy for the last 30 years.

Beveridge, the system’s designer however saw that there must be an eye on the incentives, to ensure the evil of idleness be combated as well as the evil of want. The welfare state’s cheerleaders in the Labour party appear to have forgotten this. Either that or they benefit from a large, permanent caste of welfare recipients who will never escape the trap. No-one wants to live on JSA. But no-one ever does. The problem is once you’re on Incapacity benefit, income support, Housing Benefit and so forth, you’ll never have to survive on JSA alone. This doesn’t stop Left-wing apologists for the current welfare state arguing that it isn’t over-generous, by citing the paltry amount of the most temporary of benefits.

Had I remained out of work for 6 months, I would have qualified for 6 month’s “run on benefits” worth at the time, several thousand pounds. I was actually advised to delay starting a job for weeks, in order to qualify. I told the Advisor in robust Anglo-Saxon to go forth and multiply. But the trap, the temptation to take the easy money must be great, especially for those for whom employment does not represent significantly more money than the welfare payments they’re turning down.

If you house people at public expense, in properties they could never afford by working, you trap them on benefits forever. Furthermore, housing benefit distorts behaviour in its recipients, who never have to plan to pay the rent. Landlords too, find themselves dealing with a stupid customer in the state, and make sure rents are the maximum the state will pay. This distorts the market all the way up from there, raising the cost of housing for all.

It is for this reason I find the Labour campaign about the “bedroom tax” abhorrent. Housing benefit needs reform. So too does every other benefit.

The hyperbole surrounding incapacity benefits from labour is likewise grotesque. Chris Mullins, Labour MP reported “scams” of people who are perfectly fit yet claiming disability benefits. John Hutton, another Labour MP, apparently told him of

“an ameteur football team, currently topping a local league, in which eight of the 11 players recently fielded were on Incapacity Benefit”. 

Yet when Iain Duncan Smith or anyone else broadly identified as “on the right”, who has made extensive research into the subject, makes the same point, the left make an appalling din about the demonsisation of the poor.

The fact is, it is quite possible to claim extensive benefits, which ensure your bills are paid, and keep a roof over your head, and work cash-in-hand thereby enjoying an acceptable lifestyle in perpetuity. Everyone knows of someone like this. Go down your local pub, and you will find one. But the left seem wilfully blind to the phenomenon. For this reason, few countries allow long-term benefits. From the vicious Americans to the cuddly Swedes, almost everywhere has found if you aggressively time-limit benefits, people suddenly become more resourceful as minds get concentrated. Long-term unemployment falls.

IDS’s plans revolve around simplifying and limiting benefits, to ensure no-one receives more than the median wage from the welfare state. This means some people in reciept of generous beneftits will get paid less. It means “the poorest” will suddenly find they have to move to a grottier part of town. You won’t find much sympathy from the tax-payers who already live there. It means Housing Benefit will be paid to the tenant, not the landlord. This means some people with chaotic lives may find themselves evicted if they cannot manage their budget. You will find little sympathy amongst tax-payers living on value spaghetti and ketchup when the money runs out at the end of the month. It means disabled people have to prove they are disabled in order to continue to receive benefits. Some people will be judged fit to work, when they’d got used to the idea they’d got it made on the “sick”. There will be little sympathy for shirkers who’re found out. The coalition’s plans would still leave the UK with one of the world’s most generous welfare states, and which asks the fewest questions of its clients. Ideological and evil it is not.

The Labour party in parliament has been parading the sob-stories of the halt and lame, some of whom are genuine victims of bureaucratic bungling by ATOS or others. All bureaucracies make mistakes, and there will be teething troubles with any new system. But many of whom are simply people who’ve become entitled to a big house provided at public expense, even though they no longer need it, and who are complaining to a Labour MP, who finds their complaint politically appealing. Labour don’t see, despite clear polling evidence, how the working public feel about their neighbours whom they’re supporting. The left needs to stop shroud waving. Labour had 13 years in power, yet sidelined the one man, Frank Field, who seemed to want to get to grips with the thicket of benefits. The conclusion that the client state it created was simply too useful is difficult to ignore. IDS’s plans aren’t demonising the poor. Some people (not all, or even most but SOME) benefits recipients are “shirkers”, which is in any case a word rarely if ever used by him.

It’s too easy for the Labour to malign the intentions of their opponents. It has the effect, psychologically of preventing them examining their record in office. I, like IDS used the welfare state for its intended purpose. A bit of support between jobs. He’s not a hypocrite, nor a monster. And nor am I.