Lib-Dem Manifesto – an appeal to the Labour Left

After Nick Clegg produced the best performance in last night’s ITV debate, it is time to examine their manifesto. Others has so far failed. John Redwood attacks the £5bn hole in the Lib-Dem figures, but misses the more important bits. Brian Barder on LabourList has clearly not read the Manifesto and Tom Harris thinking that the policies are irrelevant. However, the manifesto is significant for anyone (like me) sad enough to read the thing. In detail it is a direct appeal to the Liberal Left. It is far more re-distributive than Labour, whilst also scrapping some of Labour’s more authoritarian policies like the ID cards.

For instance

–         In the army, reducing the top brass to fund increased pay for the lower ranks.

–         Tax increases for the rich (CGT, pension tax relief, mansion tax)

–         Anti tax avoidance measures.

–         Hitting big business with higher corporation tax.

–         Devaluing the Nations investment in the Banks by a banking levy; by breaking them up; through state sponsored competition in the form of a PostBank; and a UK Infrastructure Bank (high interest safe returns for “green investment”).

–         Cancelling a replacement fo the Trident nulear missile system. They say they will look for cheaper alternatives, but this is unlikely to happen soon with even bigger cuts in other areas necessary to pay it.

Added to this the fact that Labour have created a structural deficit that will undermine public spending for a generation, and you have a strategy to overtake Labour as the party of the left. Perhaps it is Nick Clegg’s strategy to emphasise this in the third debate when Gordon Brown thinks he will avoid Clegg’s criticism.

Does Lucy Powell support the Robin Hood Tax or the European Union?

Lucy Powell, the Labour Prospective Parliamentary Candidate for Manchester, is proud to be associated with the the Robin Hood Tax Campaign.  You will find Ms Powell proudly proclaiming this on her website, with pictures of her next to Glenys Kinnock and Arlene McCarthy MEP. Ms Powell also got a splash in the local South Manchester Reporter on 19th March 2010 campaigning on the very subject.

However, on the 1st April, the EU published a Commission Staff Working Document “Innovative Financing at a Global Level”, SEC(2010) 409 final. Before you yawn and drop to sleep, on the subject of Financial transactions Taxes it says

At least for a levy on currency transactions some legal aspects have to be considered. In relation to the original proposal by Tobin for a currency transactions tax legal obstacles were put forward by the ECB on its compatibility with the free movement of capital and payments between Member States and between Member States and third countries under Article 63 of the Treaty on the Functioning of the European Union (TFEU) (ex Article 56 of the Treaty Establishing the European Community (TEC)).45 Since the mechanism of a currency transactions levy is supposed to be based on taxing the net position of foreign exchange transactions, it could represent a restriction of the free movement of capital and payments (Article 63 TFEU). Besides the effect on the netting operation itself, it indirectly restricts underlying transactions, including those between Member States and with third countries, by rendering them more costly. It is unlikely that, for this restriction, a justification sufficient for the purposes of the Treaty could be found. Even if e.g. raising funds to benefit stability funding were to be considered as an overriding requirement of general interest, that requirement could not explain why transactions involving countries with different currencies would be treated less favourably than those involving only one currency. Furthermore, the tax is considered to be disproportionate as funds could alternatively be raised by other means of budget attribution without affecting a basic freedom of the Treaty and, in any event, because the scope of the tax would be unrelated to the risks to be covered by the tax revenue raised. Even a very low tax rate would constitute an infringement, and it would not be possible to establish a threshold of insignificance.

Which translated into simple English means that a Robin Hood Tax is illegal under European Law.

So a simple question for Ms Powell.

Do you, Ms Powell, as Labour PPC for Manchester Withington support

a) The Robin Hood Tax?

OR

 b) The Labour Party’s Policy on support for the European Union?

I think that the voters have a right to know before May 6th

Is Lucy Powell the right candidate for Manchester Withington?

Lucy Powell has some of the qualities to make a good politician. In particular she is hard-working and believes in the cause. However, there are two debilitating hurdles she needs to overcome. (see also here)

First, is that she stands for a political party that has undermined public services for a generation. By creating a structural deficit in the boom years, by my estimates, up half the National Debt of £1400bn in 2014 will be due to Labour’s policies, with less than a fifth the hang-over of the world recession.

Second, one of the worst aspects of the present government is failure to admit when their errors and learn from that experience. In the wake of defeat of the Manchester Congestion Charge by 4 to 1, Ms Powell wrote in the Guardian on 12th Dec 2008

 “Even after a big public information campaign, the basic facts of the proposed scheme just didn’t get through. It was a complex set of proposals, which were not readily understood. There remains much confusion and misunderstanding about them.”

I suggest, after an enormous expenditure of public money to vote in favour, people understood exactly what was proposed. Though only 20% of adults would have paid the charge, there were loads of voters who know someone who would be. Like donating to disaster relief, lots of people sacrificed a little to help a minority a lot. It would be a mark of political maturity for Ms Powell to recognise this aspect.

Update – Ms Powell’s strong support for the congestion charge caused her to make a little video.

Labour “Has Got Us Lost” Party Political Broadcast

Iain Dale’s first impressions of Labour’s new Party Political Broadcast “The Road Ahead”

I have an alternative impression.

This is a solitary guy who seems to have gone for a walk on unfamiliar bleak moors without a map, or compass, or drink, or food and no idea of where he is going. He was not prepared for the journey.

As such he could easily get into trouble and need rescuing. Alternatively, if the weather turned, and with no phone he could die of exposure. However, most likely he will only end up exhausted with sore feet, wiser for the mistake.

Britain entered this recession with a structural deficit. It was not best prepared for the banking crisis and recession. We then had a Prime Minister who had spent years isolating himself from contrary opinions, and so had to make decisions on his own. As a result of his imprudence, we Britain may need to be rescued in the near future, no matter who gets into power. Most likely, in a few years, we will emerge a nation weaker as a result of imprudence, but wary of ever electing a Labour government again.

Fraser Nelson misses the mark on Jobs for Foreigners

Fraser Nelson of the Spectator has been making the headlines today with his report that the jobs growth since is almost entirely accounted for by increases in foreign workers.

However, whilst the two figures might be the same in size, they are not actually the same thing.  Nor did today’s debate did not bring out the full difference. You must remember that the unemployment is now higher than in 1997 due to the recession. Netting this out means that at an equivalent point in the cycle, there are more jobs for British workers, as well as there being jobs for the recent immigrants. The implication that many might draw – that foreign workers are taking British jobs – is therefore harder to sustain. Also to get a more balanced assessment, you would have to see the proportion of foreign workers that have returned home (e.g. the Poles in the building trades) as a result of the recession. If it is in the hundreds of thousands, the British economy benefits from their work, but does not have to fund their unemployment.

To be also be fair on Gordon Brown, the large numbers on benefits is a separate issue. In the absence of immigration, the extra jobs would not have emerged. Instead you would have had some of the boom choked off by much higher rates for trades people and cleaners. Remember the £100,000-a-year plumbers before the Poles arrived?

ManicBeancounter Elsewhere

Commenting at

Mark Reckons on Nigel Farage on Drugs Policy.

– Why mainstream politicians will not back an open discussion.

John Redwood on Can Labour End it’s War on Business?

–         Not without Labour imploding, as it’s involvement

Burning Our Money on Bashing the Rich Bankers

–         As a way of diverting from Labour’s involvement in the current crisis.

John Redwood on Are Christian Country?

– Christ dying so that we might be forgiven is the central message. Watered-down implication is that we recognize our mistakes, say sorry and move on.

John Redwood on Cutting Spending Abroad

Perhaps the biggest risk we are facing is with the foreign purchase of our National Debt. The resulting high value of the pound would further erode the ability of our exporters to compete. Also, if the deficit is not brought under control we may not only have to pay higher interest rates, but issue debt in other currencies, to protect the lenders against any weakness in the pound. Then we will be like the emerging economies in the 1980s and 1990s.

Iain Dale on the Perils of Saying Something Nice

Iain Dale wrote last week about the adverse comments he received when twittering some appreciative comments about a political opponent.

The worrying bit about this is not in making politics divisive and generally unpleasant. It is that we are not open to learning from experience and one another. Instead we have to be right and can never admit to having got things wrong.

Two important areas where this applies.

1. The Economy. Labour cannot admit that the financial regulations were ineffective during the boom years, nor that the recessions were abolished, merely postponed by the central banks. Gordon Brown is responsible for setting up a tripartite structure that was fundamentally flawed. He was also responsible for creating structural deficits through “only borrowing to invest”. To admit that he was wrong, would mean be blamed for recking the public finances for the next generation.  The consequence is that the bankers carry the full blame. Anyone who does agree is siding with this greedy and unscrupulous minority.

2. Climate Change. Anyone who did not agree with the scientific consensus was considered delusional, a political extremist, or in the pay of the oil companies. Now that the science has been shown to be suspect and biased, there is no possibility of a climb down without loss of face.

This country will be poorer for a generation because those in power have built a false image of infallibility. Further, if the climate change exaggerations are not forgotten, the impact will be much longer than that. The Conservatives should learn from this.

Finally, I hope that Iain Dale should keep on appreciating the good things in the Conservative party opponents, criticizing the conservatives who he thinks as wrong, as well as recognizing (and apologizing) his own errors. The general political debate is richer for it.

Labour bashing business to save facing their awful reality

John Redwood wonders when the Labour Party will stop attacking business.

Not this side of the election and perhaps never is the simple answer.

 

This war with business started with blaming the banks for the current crisis. In the Labour view their wild excesses created the crisis, and so must be now tightly regulated to prevent this happening again. Once you go down this route, it is only a small step to saying that all business is only beneficial to the general welfare if tightly controlled.

To go back on this might be to admit that the banks were not entirely to blame for the crisis and the mounting debt. Allow this chink in the anti-bank defence, and the debate in the general election campaign will be as to how far the tripartite structure of central banks, regulatory authorities and government policy was to blame.

The further stage is then to lay bare how poor the state of the government finances were during the boom years. That is, through creating an ever-increasing structural deficit when at least budget balance should have been attained. By my calculations about half the forecast National debt of £1400 billion in 2014 will be down to economic mismanagement since 2001.

During the forthcoming election campaign I expect a constant barrage of attacks on bankers in particular and business in general. The hope from the spin doctors is that people will be distracted enough not to look at the true causes of the current crisis. If the Labour party – the self-proclaimed defender of public services – were to admit that they have wrecked the public finances for a generation, the party would implode. If they have any let-up on the business-bashing, then Gordon Brown will end up with a bigger defeat than Michael Foot in 1983.