Tuesday, 25 November 2008

The End Of New Labour... In Office.

It’s so very difficult to describe how much Brown and Darling have completely flunked the PBR. Unless you are a parent, or a pensioner (though that warm feeling won’t last very long if you are either), what really did the Pre-Budget Report do for you.

VAT has been cut to 1992 levels, which would be great… if anybody had money to spend. Assuming of course that our shops and retailers passed on the 2.5% decrease. None of the tax cuts will create the necessary stimulus to create the needed liquid economy. In a sense, this is the perfect New Labour budget, the illusion of actions being taken, with ther reality of rearranging the deck-chairs on the titanic.

That’s before I touch on the pain to come, with the announcement of Ni and income tax rises. National Insurance is set to rise by equivalent of 0.5% from 2011. There are also proposed income tax rises, set to come in after the next general election, should New Labour win that election. Darling announced that the top rate of tax will go up to 45% for those earning £150000 and over. It is this measure which has seen commentators and columnists claim the end of New Labour, which is nonsense. They should have either set the threshold at £100000, set the new top rate at 50%, or both.

To announce a tax raising measure, to pay off an estimated half a trillion pound debt, which would only bring in £650 million in its first year, really is defeating the purpose. In any case, there should have been a raft of tax avoidance issues announced, as people who find themselves in the higher rate of tax are more likely to adopt tax avoidance procedures.

Brown and Darling have really gambled, but have spent the money on the wrong things, and have continued to compromise with the top earners and bankers who put the country in this position in the first place. Either way, it is very difficult to escape the conclusion that New Labour, when announcing the PBR, had just lost the next General Election.

Monday, 24 November 2008

Gordon To The Rescue!

One of the things which is striking about the current recession is that both the causes and fault have not really been discussed. As a result, our dear leader Gordon Brown has been portrayed as some sort of Superman by comrades, spin-doctors and allies in the press. Admittedly, he has done something to try and soften the downturn, though I would prefer that he “bails out” the hard working tax-payers and low paid who will find themselves behind the 8 ball when the storm hits, rather than the bankers who put us here in the first place.

This perhaps is the quandry behind the lack of anything that will stick to our dear leader. Brown hasn’t done that much in the past year which the Conservatives, in their heart of hearts, would disagree with. He has continued the ‘lasiz faire’ economics which was laid down by Thatcher, Howe and Lawson 30 years ago. Regulations have been dispensed with and direct taxation has come down, even if there has been a dramatic rise in indirect taxation over the past 10 years. Brown’s big failure, which has led to the credit crunch and this recession, has its seeds in his adherence to the listed ‘Thatcherite’ principles.

Had Brown imposed stricter regulations on our Banks, they might not have over-extended themselves by importing sub-prime principles to our mortgage markets or by going after, excuse the pun, a quick buck, by buying up American sub-prime debts. Brown has instead, left the stable door open. Even now, Brown and Darling are reticent to take action against the banks who have refused to pass on any of the 2% in interest cuts.

Of course, many people take their lead from the top, and this government has not set a good example with the extensive use of the capital projects version of the second mortgage, PFI/PPP. As much as £40 billion has been spent on expensive refurbishment projects for our Hospitals and Schools, with large sums not actually going towards funding the building works, but towards consultation fees for the various firms involved. At the moment, none of these fees will appear on any government books, as they have been deemed to be ‘off-sheet’. We have been promised that these will appear on-sheet by 2011, after the next election.

In the mean-time, on Monday we have the most important Pre-Budget report since… well the Budget was held at this time of year (1996 I believe). Targeted tax cuts have been hinted at, with the Conservatives claiming that this is irresponsible. One way that New Labour could be really responsible would be to raise income taxes for higher earners.

Raising the top rate of Income tax above its current rate of 40% is another course of action which Brown could have adopted, to slow the economy down. Again, Brown stuck to ‘Thatcherite’ principles and kept income tax for big earners low, the sort of big earner’s whose irresponsibility have led to the current recession. This course of action would be preferable to the other alternative being touted on Robert Peston’s blog, that of VAT being raised to 22.5%. VAT, apart from being a regressive tax, tends to be most penal on the low earners who would gain from tax cuts.

What Brown has successfully done again is marginalise the Conservatives. Cameron’s sudden policy announcement, that they would drop the policy of keeping in place the next cycle of public spending, which ends in 2011, shows a nervousness that perhaps the (poor) tactic of blaming Brown of economic miss-management has not gone as planned. The Conservitives now find themselves where they were in 2001 and 2005, arguing for economic policies which are not universally popular or acclaimed. Brown is at fault for the recession, because he followed the Thatcherite policies which brought us here. Promising more Thatcherisim to get us out of the recession, at a time where the right wing orthodoxy is being more and more questioned, is entirely the wrong tactic for Cameron. This move only brings the date of the next General Election closer, an election which could be very uncomfortable for Cameron.

Monday, 17 November 2008

Unwanted Saviours?

So let me get this right, the SNP are accusing New Labour of trying to force through the merger of Lloyds TSB and HBOS, by any means necessary, even if this includes sullying the good name of the SNP appointed savours of Scottish banking, George Mathewson (right) and Peter Burt (left).
Bearing in mind that.. er … New Labour are bending over backwards to help Gordon Brown’s chum Victor Blank in his quest to take over HBOS, could the SNP not find better candidates to front their rescue of the Bank of Scotland than Mathewson and Burt. These are precisely the kind of bankers who sowed the seeds of the Credit Crunch.
Burt was the Chairman who oversaw (ie; was instrumental in) the “merger” of Halifax and the Bank of Scotland in 2000, a merger which saw Halifax’s lemmings over the cliff top like business plan adopted throughout the group. No good business sense shown there.
Mathewson, on the other hand, appointed and supported Scottish banking’s equivalent to Frankenstein’s monster, Fred ‘the shred’ Goodwin. His support of Goodwin culminated in the decision which has (almost) destroyed another Scottish institution, RBS. That decision can be described in 2 words. ABN Amro.
Ideal candidates to save The Bank of Scotland don’t you think?

Wednesday, 12 November 2008

Political Footballs

Whatever you think about our political leaders, today at Prime Ministers Question’s neither Brown or Cameron covered themselves in glory.

The Baby P trial has exposed not just the failures of the Social Services in the Haringey area of North London, failures which bizarrely are being investigated by the chair of the department under investigation. Surely the phrase conflict of interest came to the mind of whoever made or verified this decision. There are also questions to be asked about the education standards in Haringey. I am amazed that in the 21st century, there are people in this country who cannot read or write, this is the case for the parents of the child.

Also, isn’t about time that we had parenting classes for teenage/young mothers?

Friday, 7 November 2008

Two Tribes - The Glenrothes Aftermath

Quite a few of my recent posts have been about Renfrewshire council struggling to come to terms with the mess left behind by the previous regime, and having to enforce unpopular cuts and fee rises in order to meet its commitments. Sound familiar?

It is this exact facsimile of circumstances which has been the determining factor in New Labour’s by-election win last night. This was the central issue of this election, with the SNP candidate apparently being challenged in shops about his council’s budget cuts. While campaigning on Wednesday, Salmond was also hijacked by save South Primary School protesters from Paisley.

The fact that New Labour won is not a surprise, this election was always going to be nip and tuck. The majority of 6737 is something of a shock, it is believed that Brown thought that his party would lose the by-election up till 10:30 last night, when the votes started arriving at the count. This is the first concrete proof of a Brown bounce post the mass nationalisation of our banking system. Whether this holds up, meaning a General Election at some point in 2009, is anyone’s guess. I reckon we won’t get an election before October next year (I still think Cameron will win it, with a majority in single figures).

For the vanquished there are problems ahead. The Lib Dems and the Conservatives lost their deposits. For the conservitives to be able to claim that they have a mandate to govern Scotland, they must poll better than the 1639 in Glasgow East and 1381 in Glenrothes if they are to claim some sort of mandate. The Lib Dems are just going nowhere. Tavish Scott really has to pull his finger out, as the Lib Dems have shown their lack of patience in recent years with their leaders'. How much longer has he got?

For the SNP, the Blairesque honeymoon is well and truly over. To complain about this and that, to say well we got a 5% swing on our Westminster vote (in 2005) when they won pretty much the same seat in the Holyrood elections 18 months ago is a bit petulant (the swing between 2007 and 2008 being 15.2% to New Labour, if my calculations are wrong, I apologise). I saw Angus Robertson MP even try and convince us last night that the result was a good one. Politicians must realise that trying to convince us that Blue is Green is incredibly tiresome and risable to the electorate, if so why do they do it?

Like it or not the SNP government have suffered a setback, the best thing for them to do would be to stop the rotund winging and get on with the job. As a famous golfer would put it (Bobby Jones I think, not Donald Trump) “You have to play the ball where it lies

Wednesday, 5 November 2008

The Long Night Is Over

Conventional wisdom supposedly dictates that policy and political ideas are formed in the USA, our political classes look to America for new ideas on PR and selling the message like people obsessed. Blogging and online campaigning are the revelations of this Presidential race.

What I am trying to do is to pinpoint why the election of Barack Obama is so historic, without mentioning the R word, or the B word. Instead, lets mention the fact that, by all accounts, Obama is the most left wing president elect since, well Kennedy possibly. By promising to cut taxes for those less well off, and by putting taxes up for those more well off, well that suspiciously sounds like Socialism.

If it is, then good!

I do have a theory that we are at the beginning of the end of the right wing consensus, both in the United States and here in the UK. The Credit Crunch, and the growing public disquiet about the excessive executive pay being one sign, and our political leaders (here in the UK at least) lack of ideas on the correct way out of this economic crisis. Now this electorial victory, and the gains in both houses in Congress. Like I was trying to say earlier, British politics seams to assimilate ideas originally roadtested in America. Lets hope that Obama brings some good ideas to the table.

Oh and by the way, congratulations to the USA in your wisdom in electing Obama.

Monday, 3 November 2008

Scotland.... SOLD! To the Highest Bidder!

So the SNP cave in and grant Trumps' wish to build Trumptown, as intended by Trump with no consideration to the local enviroment. Whatever the "economic benefits" of this project, the SNP government, and the rest of the political classes for that matter if Lewis MacDonald (New Labour's 'Tourism' spokesman) and David 'taxi for' McLetchie are any sort of barometer, have signaled that Scotland is for sale.

Sorry, but I feel strongly that Scotland lost something that money cannot buy today.