In Furious Denial Over The Failure Of Leftist Economic Policy, Owen Jones Misrepresents Conservatism

Owen Jones continues to use his Guardian column to peddle lies and misrepresentations about conservative economic policy, in a Herculean effort to save British leftists from having to come to terms with their failed economic policy dogma.

In praise of John McDonnell’s unabashedly left-wing conference speech, Jones whines:

It was a speech not lacking in concrete proposals: a tax transparency and enforcement programme; a £250bn investment programme in infrastructure and clean energy; a national investment bank, backed up by regional investment banks, to support small businesses; legislation to stop the emergence of Philip Greens by reforming companies – preventing them from “taking on excessive debt to pay out dividends” and ensuring company takeovers protect workers and pensions; the promotion of cooperative and worker ownership; protection for self-employed people; plans for a universal basic income and the reintroduction of collective bargaining to stop the levelling down of wages.

The critique writes itself: Labour lost the last election because it was not trusted with the nation’s finances. How on earth do these speeches address those concerns? There are two points to make. Firstly, Labour’s failure to defend Blair and Brown’s spending record – with the Tories revising history to claim that the investment they backed was at the root of Britain’s economic woes – is critical to understanding the party’s election loss. That’s why the Tories’ line – “why hand the keys back to the driver who crashed the car?” – was so devastatingly effectively.

My emphasis in bold.

Sorry, but this is complete balderdash from Owen Jones. The conservative / small government criticism of New Labour economic policy is not that runaway government spending *caused* the economic crisis – that is clearly false, when we know that the crisis was precipitated by a bad credit-fuelled housing bubble which undermined a grasping and improperly regulated banking sector. The conservative position is that by spending money like it was going out of fashion and running budget deficits even in the good years, there was absolutely no “rainy day” fund or financial buffer available when the bottom fell out of the economy and tax revenues dried up.

That is the real reason for today’s so-called “austerity” (meaning slightly reduced increases in government spending compared to earlier baselines). Jones later goes on to charge the Tories with “the failure to eliminate the deficit as promised, a rising national debt” – well, what would his preferred spendthrift policies have done? If Owen Jones is seriously suggesting that the forsaken economic recovery resulting from continued or increased government spending from 2010-15 was so great that it would have paid for itself, eliminated the deficit and taken a chunk out of the national debt then he is treating his readers like they are stupid. And he is holding the Tories to a standard of economic miracle-working which he would never expect of his own beloved Labour Party.

The reason that nobody trust the Labour Party on the economy – the reason that Labour MPs are laughed out of town whenever they even make a claim to economic competence – is that New Labour’s remorseless cranking up of the size of the state, together with their endless expansion of government spending and determination to hook more and more people on government welfare, meant that Britain was uniquely badly positioned among advanced nations to weather the global financial crisis.

The charge is not that idiotic PPI contract-delivered hospitals and shiny new school buildings in Britain actively caused a global credit crunch and recession. The charge is that this ignorant spendthriftery weakened Britain’s financial position, meant that the slightest cuts in government spending would immediately impact public sector workers or those encouraged to be dependent on various benefits, and made our subsequent economic pain that much more brutal – the cost of which can be counted today in lost and stunted lives. This is what Labour “compassion” hath wrought.

So no, the Tories do not suggest that electing a Labour government would be akin to “handing the keys back to the driver who crashed the car.” For all their faults, Labour did not deliberately crash the vehicle. But they did set out on treacherously icy roads having previously cut the brake cables, and that is just as bad, however desperately Owen Jones tries to spin it.

 

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Budget And Autumn Statement Theatre Is No Way To Run Modern Britain

Homer Simpson - George Osborne - Budget - Annual Statement

The way British governments set budgets and tweak spending plans is a recipe for bad, short-termist decision making

Forget tax credits for a moment. Forget Right-To-Buy, stamp duty, beer duty and the tampon tax. MPs may still be debating George Osborne’s 2015 Autumn Statement, but step back for a moment and look at the broader picture.

Twice a year – once in the annual Budget and once in the Autumn Statement – the Chancellor of the Exchequer gets to his feet and delivers a refreshed set of economic policies in a big, set piece speech where he is essentially forced to favour tomorrow’s headlines over optimal long or even medium term decision making.

Nationally significant policies from every government ministry live or die by the concessions that their ministers are able to wrangle from a Chancellor who is forced by political reality to be more concerned with tomorrow’s Daily Mail headline than the state of our public finances in a year’s time.

Spending decisions are made based on economic forecasts which are sunnier than a warm day on Venus. Questionable political decisions are defended to the hilt, because to question them in light of new data would be to commit the gravest of self-inflicted political wounds, the U-turn. The government of the day rolls out a “smoke and mirrors” act worthy of David Blaine, and all to glam up the fact that they have slightly re-arranged the deckchairs on the Titanic.

And for what? To draw the public in to the political process? To high-mindedly arbitrate complex questions of economic policy? To astutely position Britain  vis-à-vis our global competitors, ensuring that our tax code, infrastructure and labour market are the most attractive in the world?

No. We do it just so that the government of the day – or a nimble opposition (remember those?) – can score political points. And, of course, because it is traditional.

Some traditions – like MPs not clapping in the Commons chamber – are antiquated and affected, but do little real damage. Others – like MPs having to leave the Commons chamber through a specific door in order to vote, rather than availing themselves of fast electronic voting technology – are an irritant, a brake on the smooth running of our legislature.

But some traditions belong in another category – things that do real, actual harm, not just to the running of our Parliament but to the political outcomes which we then have to live with every day. Some traditions actively harm our democracy.

I would submit that the Budget and Autumn State set-piece theatre events fall into this latter category. Politically astute chancellors (like George Osborne on a good day) may relish them because they provide an unparalleled opportunity to draw red lines and create traps for the opposition. The Westminster media may like the status quo, because if nothing else, these events can be moments of real political drama.

George Osborne - Chancellor of the Exchequer - Budget

But besides savvy chancellors and the established media, it is hard to tell who else benefits from the current system other than the cause of Big Government.

Having two occasions each year when an already-powerful chancellor like George Osborne in an already-centralised country like the United Kingdom gets to play with nearly all of the controls and levers which influence our economy – as though he were Homer Simpson at the controls of Springfield Nuclear Plant – only encourages meddling and tweaking of things that should properly be left to local government and individuals.

When you have direct, ultimate control over which families deserve help buying a house, which people should keep or lose their benefits or how much a person pays in sin taxes for their guilty pleasure, the temptation to use those powers is irresistible. And because of the ratchet effect, it is the easiest thing in the world to give away new perks to favoured interest groups, but nearly impossible to ever claw them back without being exposed to political attack. Even under this nominally conservative government, budgets and autumn statements have often been a one-way ticket to bigger government – or at least more activist state.

No system is perfect. One needs only look across the Atlantic ocean at the United States, with their unseemly debt ceiling fights and government shutdowns (oh, to have one here) to realise that you do not need a Westminster parliamentary-style system to sow budget chaos. But the flaws in our current system are obvious, and have been staring us in the face for years – yet nobody has proposed the slightest alteration, choosing instead to cheer when their side “wins” and whine when the other side is in power and sets a budget with which we disagree.

People did not elect a Conservative government only to have George Osborne sit at the control console of their lives, Homer Simpson-like, flicking switches and adjusting dials here and there in order to manipulate our mood so that we vote Tory again in 2020. If conservatism still means anything, it should mean a healthy scepticism of the state and its power to influence or police human behaviour.

Surely at some point our desire for smaller government and a smarter state has to outweigh our devotion to the dusty tradition of a man standing on the doorstep of his house, waving a red box around.

Autumn Statement - George Osborne - Conservative Government - Man at Control Panel

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Beware The Short-Termism Of Those Who Fail To Prioritise Defence Spending

HMS Queen Elizabeth

 

As Britain heads toward an incredibly hard-to-predict general election, nearly everything about our country seems up for discussion – everything except Britain’s declining level of military spending, our long-term national defence strategy and our commitment to the armed forces we are quick to call heroes but grudgingly slow to fund.

James Forsyth, writing in The Spectator, talks about the bear in the room:

You wouldn’t know from this election campaign, but Europe is in crisis. On its eastern border, the threat from Russia is as great as at any point since the end of the Cold War. Crimea has been annexed and large parts of eastern Ukraine are under control of Russian-backed forces. Russian aircraft have even been taunting the RAF in the English Channel. The Baltic states are increasingly fearful that they will be next to suffer from Vladimir Putin’s attempt to reassert Russian dominance on its doorstep.

On Europe’s southern border, Islamic State continues to cause death and destruction — the recent decapitations in Libya were filmed along the shore to make the point that the jihadis have reached the Mediterranean. More worrying, perhaps, is the number of Europeans fighting for it. Last weekend, Manuel Valls, the French Prime Minister, warned that the number of Europeans who will have taken up arms with Isis may treble to 10,000 by the end of this year. As these radicalised youths return home, the terrorist threat in Europe will rise exponentially.

But neither of these subjects features with any prominence in the election campaign. Isis and the Russian threat are deeply inconvenient truths that don’t fit into the party leaders’ scripts. The Tories’ six-point long-term economic plan doesn’t have room for foreign entanglements. Labour wants to talk about the National Health Service, not international security.

These are sobering words. There has been a worrying tendency of late in the Tory-friendly press to excuse David Cameron’s various failings and oversights – be it refusing to champion the conservative case in the televised leaders’ debates, or failing to ringfence defence spending during a period of global turmoil – in order to help push the Conservatives across the finish line on 7 May. It is good to see The Spectator taking a firmer stance on the issue of defence, at least.

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End The Scandal Of Squalid Army Accommodation

Catterick Garrison

 

An overlooked article in the Telegraph reveals that serving British soldiers continue to endure crumbling substandard living accommodation at a time when the political elites in London are more focused on averting a tube strike and pandering to the whims of the RMT union and its overpaid train drivers than looking after the welfare of those who do a truly difficult and irreplaceable job.

The article quotes a complaint written to the letter’s page of Soldier Magazine, detailing conditions that should rightly cause many red faces at the Ministry of Defence:

The letter from an unnamed soldier complained: “We are constantly without hot water, have only three showers per platoon and not all of them work.

The rooms at Somme Barracks in Catterick are “falling to bits”, the soldier wrote.

“We have made every attempt to make them bearable to live in, but their poor condition is now starting to affect the lad’s morale.”

The response given to the soldier by the Ministry of Defence spokesman is breathtakingly dismissive and arrogant, and is worth quoting in full:

The accommodation at Somme Barracks is not condemned. The MOD has already invested some £1.2 million in improving the site in 2011 and 2012, redecorating and upgrading a number of areas including flooring, toilet facilities and utilities rooms.

We will continue to invest in the barracks and are replacing boilers supplying hot water to blocks 11 and 12. This work should be finished by May 2, 2014.

Comprehensive maintenance service is provided but occupants must report any problem promptly to the help desk or repair work may be delayed.

Essentially, the government’s response to a serving soldier’s complaint about appalling accommodation is to call him a liar, boast about supposed renovations that clearly delivered no noticeable improvement when they were completed two years ago, and then to blame the squalid conditions on the soldiers themselves, claiming that they did not report the issue to the help desk as one would a malfunctioning BlackBerry.

Compare the serving soldier’s description of substandard British army accommodation with this grim account of army housing in backward-sliding Russia, taken from the excellent book “Putin’s Russia” by the late journalist Anna Politkovskaya:

[The soldier’s] home is a dreadful officers’ hostel with peeling stairwells, half derelict and eery … The windows of many now uninhabited flats are dark … We go up to the second floor, and behind a peeling door is a squalid, spartan room … There is no hot water, and it is cold, draughty and uncomfortable.

It is a much overlooked outrage that some in the British army live in accommodation that can be described in very similar terms to Russian army lodgings, the Russian army being synonymous with mistreatment of its soldiers. The comparison is even more galling when one considers the fact that the Chief of the Defence Staff earns £250,000 per year, and the Permanent Undersecretary of Defence an impressive £185,000 for his bureaucratic skills.

The story has gained very little traction in the media aside from the Daily Telegraph story, and with much of the national media’ attention focused on the upcoming European elections it is unlikely to do so. But even if the Conservative-led coalition government remains committed to its policy of diminishing Britain’s military capability though underinvestment and spending cuts, ministers could at least ensure that all serving personnel have the dignity of adequate housing.

In Praise of David Laws

David Laws

 

Yesterday I recently read some of the most refreshing words on economic policy to have been uttered by a British politician in recent months, and they came not from a Conservative but from a Liberal Democrat MP.

In an interview with the Sunday Telegraph, David Laws, briefly Chief Secretary to the Treasury but now a lowly backbencher, made the case for reduced tax rates, deeper (but more wisely targeted) cuts in public spending and reform of the public sector:

… Mr Laws said the share of the economy accounted for by the state was “out of kilter” with the amount of tax the public were willing to pay.

Only spending on health, education and pensions should not fall as a share of GDP, the MP said.

The former chief secretary to the Treasury’s views will alarm many Lib Dems who have opposed the Coalition’s spending cuts. However,

Mr Laws argues that cutting state spending would be in keeping with the founding fathers of the Liberal Party.

“Even after the existing fiscal consolidations, state spending will account for some 40 per cent of GDP, a figure that would have shocked not only Adam Smith, William Gladstone, and John Stuart Mill, but also John Maynard Keynes and David Lloyd George,” he says.

“The implication of the state spending 40 per cent of national income is that there is likely to be too much resource misallocation and too much waste and inefficiency.”

Too much resource misallocation and too much waste and inefficiency. Yes!

I have found it irritating beyond measure to see minister after government minister talk about the need to reduce the ridiculous proportion of national output accounted for by government spending as a sad necessity resulting from the economic recession rather than as something desirable as an end in itself. When critics accuse the Conservative-led coalition government of using the recession as a trojan horse to impose ideologically-inspired reductions in the size of the state, I actually wish that they had the impetus to do just that – but this accusation greatly overestimates the political savvy and core convictions of the current Conservative Party leadership and instead, government spending continues to increase in real terms, and no big-name Tories are speaking out in favour of a leaner public sector.

David Laws (together with other likeminded libertarian-leaning types such as Michael Gove MP) is one of the few politicians to actually come out and make the case that the British public sector has grown far too large and bloated, and that reducing its size is both necessary and worthy, not just because of the present economic difficulties but because it is the right thing to do.

But why do we only hear this call for a  from a backbench Liberal Democrat MP and not from a frontbencher in the Conservative party, who should hold these views just as dearly? Why isn’t David Cameron acting as head cheerleader for shrinking government and making the case that important services can still be provided – often to a higher standard – when the government does not have ownership of them? Where is George Osborne, and where are the urgently-needed supply-side reforms so glaringly missing from his last Budget?

In short, why did I campaign for and help the Conservative Party fight the last general election, when it has fallen to a Liberal Democrat to make the case for a small, lean state and for economic liberty?