Sunday, October 31, 2010
The Conference was a first for us - we had Cabinet ministers speaking at it! Chris Huhne and Michael Moore to be precise.
New Redcar MP Ian Swales addresses Conference.
Chris Huhne MP addresses Conference
Michael Moore MP addresses Conference
Parliamentarians in attendance: Alan Beith MP, Baroness Maddock, Michael Moore MP, Fiona Hall MEP and Ian Swales MP
Overflow into the public gallery
Reading matter: Chris Foote Wood catches up on the latest news via the Conference edition of Northern Democrat, published by, errrr, well me actually!
Friday, October 29, 2010
Air travel is free of VAT. That is a huge advantage in the retail market. Whilst most other goods and services are liable for VAT, air travel comes tax free. APD does not constitute a significantly bigger burden than VAT would, were air tickets to be liable for it.
But this is not the only tax advantage enjoyed by airlines. They pay no fuel duty. This is a long standing advantage that goes back to post war international trade talks. Were fuel duty to be introduced by governments setting their own rate, it would be easy to fly to a country with a low rate to fill up. The effect would be a duty war between countries and almost certainly more pollution as planes fly further to pick up fuel and carry more weight than necessary.
So, two significant tax advantages are enjoyed by an industry whose customers tend to be mainly from the better off. The rise in APD helps to balance out these advantages.
The government is looking into replacing APD with a duty on aircraft. When I worked in the Policy Unit in Cowley St, I worked on aviation policy and I proposed this tax change when I wrote a paper on air travel. The aim is to make air travel more environmentally efficient. Under APD, a full aircraft (and therefore one used more fuel efficiently) pays far more tax than a plane flying half empty. This does not make environmental sense. So hopefully, this tax change will be implemented.
Back to the duty increase coming in next week. One of the arguments put up by opponents of the rise is that it will make holidays in the Caribbean "unaffordable". Are we really meant to cancel the increase because expensive holidays in the Caribbean which are well beyond the means of the overwhelming majority of people will end up costing more for those wealthy enough to afford them in the first place? I think not.
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Thursday, October 28, 2010
Labour MPs are relighting the fire of socialism as they rant against the privatization of Royal Mail. So I thought I would take a look at what the socialist brothers and sisters from my neck of the world have to say. Let’s start with Sharon Hodgson, MP Sunderland. Mrs Hodgson opened up her attack with the claim that, “Reform of the UK’s postal services was in the manifesto of both the Conservative party and the Liberal Democrats.” Then she went on to admit she had read the entire Conservative election manifesto but found no mention of postal services. Sharon, you really do need to get a life! However, it does seem odd that you can make an opening statement in a speech and then go on to trash what you have just said!
Mrs Hodgson wanted to make great play of the fact it was the Liberal Democrats who are committed to the sale of Royal Mail. Labour claim incorrectly that this is a Conservative government pursuing Conservative policies and constantly claim incorrectly that the Lib Dems are there simply to prop up the Conservatives. The reality is that this is a Coalition following an agreed and negotiated programme between the two parties.
Mrs Hodgson demonstrates however that Labour wants it both ways – attacking the Lib Dems for giving too much away to the Conservatives whilst attacking the Conservatives for following Lib Dem policy. As we have seen from her opening statement however, consistency is not her strong point.
And so to Dave Anderson, Labour MP for Blaydon and dubbed “Heritage Labour” by Vince Cable. This came about because of an early intervention by Mr Anderson following a comment by Vince that he was ahead of the Labour party is calling for nationalization of banks at the start of the financial crisis. Mr Anderson intervened: “May I point out to the right hon. Gentleman that for more than a century a number of Labour Members have believed in the nationalisation of the banks?”
Nice try Dave. But consider the following. It was said by Mr Anderson on 12th December 2007 when he vociferously argued against the nationalization of Northern Rock when proposed by Vince Cable:
“It is clear that the Liberal Democrats are starting to bottle out. As usual, they have taken an opportunistic chance to make some hay while the sun shines—that is the way they work, and that is up to them. They talk about nationalisation. I spent my life working in nationalised industries—20 years in coal mines and 16 years in local government. I have a very different ideological view from that of my party's Front Benchers: their view is that public ownership is a good thing and we should have more of it.”
So Dave, supporting nationalization is “bottling out” and “opportunistic”.
Yesterday, Mr Anderson claimed that 6,000 miners will die as a result of privatization of mines in China. And for good measure he attacked the last Conservative government for letting Royal Mail have a holiday from paying pension contributions. Given that this happened with Royal Mail as a publicly owned company, quite how that helps the case of continued public ownership is unclear. If anything, it is a case for privatization. The same point goes for his claims that 200,000 miners were put on the dole in Britain. He simply failed to point out that the huge number of job losses in the industry took place under public, not private, ownership.
Mrs Hodgson and Mr Anderson are not lone voices in the Labour Party singing the old tunes of Clause 4 socialism. Retro Labour does seem to be attempting a comeback tour following the collapse of the Blair/Brown central control. Whilst Ed Miliband may want to reject a swing to the left as making Labour unelectable, that same swing is what so many in Labour’s ranks want to do. I suspect the swingers will get their way. Miliband did after all raise expectations which will now be difficult to control. That was clear from yesterday’s Royal Mail debate.
The only proposal offered by Labour was continued public ownership of Royal Mail. It seems tickets for the Clause 4 Comeback Tour have arrive in the post.
Friday, October 15, 2010
This is the video programme I filmed at the Liverpool Lib Dem Conference last month. Presented by me and Greg Stone from Newcastle, we interview 2 Cabinet ministers, lots of members and take a look at the exhibition area and the fringe meetings.
Click on "close to play" at the bottom of the ad to play the video rather than the advert.
Tuesday, October 12, 2010
On the agenda was an examination of the projects used by employers to help tackle obesity. Though not a committee member, I was allowed to speak. And during my contribution, I suggested that not having a plate of chocolate biscuits and jammy dodgers at the start of council meetings would be good for our own health and set a good example. I suggested that if something had to be served, provide fruit instead.
Alas, I didn't expect my suggestion to be taken up so quickly. By the time I got home, I received an email from an officer which was to the catering section asking for an end to the supply of biscuits to this committee. Rather embarrassing I think - I'm not a member of this committee and I fear its members may now regard me as the Biscuit Snatcher!
The scrutiny committee of which I am a vice chair appears unaffected by this austerity/anti-obesity drive. Perhaps I need to make clear that my suggestion was for all council meetings to make do without biscuits!
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Friday, October 08, 2010
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Thursday, October 07, 2010
The biggest problem with final salary schemes is that they were invented decades ago for a different era. Then, career mobility was much less than it is now and people would live only a few years into retirement. Schemes relied less on public funds to top up pension payments when the funds themselves were insufficient.
Times however have changed. Increased longevity in particular has put incredible strain on final salary schemes in the public sector. The private sector has recognised that for some time. That's why most private final salary schemes have been closed to new entrants. Many companies have switched to money purchase pension schemes. This is not what is proposed by Hutton for the public sector.
What Hutton has called for is the replacement of final salary schemes with what is an average career salary scheme. There is a strong fairness argument for making this switch. Those at the top end of the salary scale in the public sector who have risen in the ranks in previous years have not paid across their working life the contributions that reflect the final salary pension to which they are currently entitled. That is far less the case for people at the lower end of the salary range in the public sector.
The result of this anomaly is that lower paid public sector workers and the taxpayer generally subsidise the pensions of well paid public sector bosses. This is hardly fair on lower paid public sector workers generally or on the private sector workers who may not be in a pension scheme but whose taxes pay the pensions of those earning vastly more than they do.
So generally, the Hutton proposals at least need serious consideration. Unfortunately, all we have had from Unison is a kneejerk reaction with hints of strike action.
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Wednesday, October 06, 2010
Tuesday, October 05, 2010
So having dropped off my camera equipment back home, I headed off to Lotties Wood and spend an hour picking hazel. I got about 2kg before I had to return home to get ready to go to the Sunniside History Society meeting. Next September I am the person doing the talk to the Society. I'll be speaking on wartime rationing and recipes. I'm doing some work on this at the moment. I now know I have 11 months to complete the research and write the script. Hazel nuts will make an appearance in this talk!
Tonight's talk was about shipbuilding on the Tyne in the First World War. This was of some interest to me. For my PhD I wrote the biography of Walter Runciman who was President of the Board of Trade during the first two years of the First World War. That meant he was responsible for shipping. He also came from a family of shipping owners from Tyneside. So tonight was clearly of interest to me.
Monday, October 04, 2010
The financial situation requires some difficult choices to be made. If the decision today to end child benefit in 2013 for higher rate taxpayers is not taken, alternative savings will have to be found. That could be done by cutting benefits of those who genuinely need them. That's simply not an acceptable choice. It could be done by raising taxes further on the wealthy. But what purpose would it serve to tax the wealthy more just so they can be given the money back as benefits? It could be done by raising taxes generally but who would be stupid enough to put up taxes on people on low incomes to pay for benefits for the wealthy? Or it could be done by borrowing more. The result of that however would be cuts down the line to services as we would still need to pay back anything borrowed, with interest.
So, there are alternatives but they each have consequences. Which one Labour follows is difficult to work out. All I have heard today from Labour is Liam Byrne (he of There's-no-money-left fame) who has attacked the plan to end child benefit to the wealthy.
So, if Labour are to continue to oppose this cut, they should at least have the decency to explain how they would pay for these cash handouts to the better off and the rich.
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Sunday, October 03, 2010
Now I see that under the leadership of Raul Castro, Fidel's brother who recently took over the reins of power, Communist Cuba is to shift towards capitalism in an attempt to cut the ballooning government deficit. By April next year, the state payrole will be cut by half a million people. Self-employment is to be legalised in a large number of trades.
I wonder what the Labour party in the UK thinks of that. They continue to argue for massive borrowing to maintain revenue expenditure. The rest of the world is moving to balance budgets. The Left, when it is in power, recognises that economic and financial reality cannot be ignored. The real world kicks in.
It is an interesting point that socialist governments the world over are bringing in austerity drives. It's not just Cuba. Spain has a socialist government. And austerity measures there are far greater than anything planned for the UK. Perhaps the UK Labour Party should look abroad to their "comrades" for a lesson in economics and finances.
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Saturday, October 02, 2010
So, here's to hoping that East Coast Trains ensure a greatly improved service will be available to paying customers (which doesn't block channels such as YouTube). For those lucky people travelling first class, the service will continue to be free. For the rest of us plebs, we get 15 minutes free and then the bill kicks in. My experience is that it can take 15 minutes to download a single page.
I can appreciate the need to raise revenue and as a regulated train operator, there are controls on the level of fares. But I have a niggling doubt about all this. Is it the start of a shift towards pricing structures similar to budget airlines. Will there be hidden costs coming down the line such as baggage costs and a charge to spend a penny? I hope not, but we may need to watch carefully what comes our way.
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Mr Balls claimed:
And the previous Prime Minister to say ‘there is no alternative,' was a Labour Prime Minister, Ramsay MacDonald, in 1931, two years after the 1929 Wall Street crash - the second biggest financial crisis of the last hundred years.
There is no alternative, MacDonald said, but to cut spending and unemployment benefits to get the deficit down and keep the financial markets happy.
But this party said No – and so did Lloyd George and the Liberals.
And MacDonald had to form a Coalition with the Conservatives to make his cuts.
And what happened?
The Great Depression of the 1930s, mass unemployment and – yes – the deficit got worse.
You either learn the lessons of history or you repeat the mistakes of history – and that’s what they are doing.
Just think if Clement Attlee in 1945 – when after the war when our national debt was over twice its current level – had said that the first priority was to get the deficit down…there would have been no NHS, no new homes for heroes and no welfare state.
But we don’t need to go back to the history books to see the warning signs over George Osborne’s economic policy - we only need to look across the Irish Sea.
So let's take a look at the History of the World According to Ed Balls.
"There is no alternative, MacDonald said, but to cut spending and unemployment benefits to get the deficit down and keep the financial markets happy." - The question has to be asked, why did the Labour Cabinet in 1931 consider and agree to massive cuts? The Labour Government in 1931 was ready to make cuts to close the deficit. They fell apart because a small majority of Cabinet members could not go the full distance - they agreed to 90% of the cuts but baulked at the proposal to cut unemployment benefits. Balls was simply wrong to suggest Labour opposed cuts in 1931 (just as Labour are historically wrong to say they did not bring in cuts before they left office in 2010.)
Balls went on to claim, "But this [Labour] party said No [to forming a Coalition] – and so did Lloyd George and the Liberals." Utterly wrong. The Liberals formed a Coalition with the Conservatives. That's why it became a National Government and it is what gave the administration a majority in the Commons before the 1931 general election. It is true to say that Lloyd George stayed in opposition. He was joined by only 4 other Liberal MPs, one of whom was his daughter Megan, and another was his son Gwilym. The other 2 were close allies of Lloyd George. The rest of the MPs, nearly 60 in total, supported the National Government.
And to imply that Ramsay MacDonald was alone in the Labour Party in entering the National Government is simply historical rubbish. Philip Snowden, the Labour Chancellor, continued in his post in the National Government. Admittedly, the number of MPs who backed the National Government was small - 11 in total. But that is 10 more than MacDonald by himself.
Balls then claimed, "And what happened? The Great Depression of the 1930s, mass unemployment and – yes – the deficit got worse." This is an interesting interpretation of history. Unemployment did continue to rise but not as a result of the formation of the National Government. The depression started in 1929 and unemployment had already risen dramatically before the National Government was formed. Typically, Balls overlooked this. No doubt in years to come he will be claiming that unemployment did not happen until the Coalition was formed in May 2010.
Finally, Balls claimed, "Just think if Clement Attlee in 1945 – when after the war when our national debt was over twice its current level – had said that the first priority was to get the deficit down…there would have been no NHS, no new homes for heroes and no welfare state." This is becoming part of the stock of Labour's claims against the Coalition - 1940s history has been rewritten to suggest that Britain had massive debts but could afford to spend vast sums of money to create the welfare state and the NHS. The implication is that you can keep on spending without taking any austerity measures.
This is of course total rubbish. Labour introduced austerity measures which make what we are about to face pale into insignificance. The postwar years of the late 1940 are not known as the Austerity Britain for nothing. This was a period in which Labour introduced even more controls than were place in the war years to cut consumption, reduce the public sector deficit and get British industry exporting to earn desperately needed foreign currency (especially dollars). Rationing to cut domestic demand was even extended to foods that had escaped rationing during the war, for example, bread.
It is rather worrying to think that Ed Balls was in charge of the country's education system up to May 2010. Let's hope he never had any input into the history elements of the National Curriculum. He potentially could have turned the country into a nation of history dunces.
If anyone is interested, I wrote the biography of a National Liberal Cabinet Minister, Walter Runciman, for my PhD thesis. Hence my interest in the history of the 1930s. And I am currently doing research on British food rationing in the 1940s. I hope to have that completed next year.
I've included a few of my favourites below.
The Cabinet Q&A on the last day of Conference and one of the last photos I took before leaving Liverpool.
Nick Harvey MP, Armed Forces Minister, welcomes the Lib Dem call to put Trident into the Defence Review.
Daniel from Durham is interviewed by BBC North East at the Northern Night reception.
Nick Clegg speaking at the Northern Night reception
North East Lib Dems launch the "Yes" vote campaign for the AV referendum.
Nick Clegg's speech.
Miriam Clegg takes her seat for Nick's speech and is greeted by a scrum of photographers (me included).
In an attempt to boost membership even more, Teddy Bear's are now allowed to join!
Conference listens to Nick speak.
Conference continues to listen to Nick speak.
Nick visits the Parliamentary Candidates Association stand in the exhibition tour.
Friday, October 01, 2010
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Another bank bailout in Ireland took place because the banks borrowed more than they were capable of paying back. And that is the story of the Irish economy. The Irish Tiger turned out to be a useless fat cat supported by credit that ran out. There was no economic miracle, just a great deal of debt. Every time money is borrowed, it has to be paid back at some point.
Labour argues that spending should be maintained by borrowing. Look across the Irish Sea to see the end result of such a policy. Bankruptcy, unemployment, business closures and recession are the price ro pay when the debts come home to roost. That's the future offered by Labour.
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