Politics Archives

Thursday

27 Nov 2008

A scary use of police time

So what did Damian Green leak that has warranted his arrest? From what I can gather, here are the three of the stories in this case. The links are not necessarily to the papers who broke the stories. The topics are not just immigration, as I had earlier thought. But they are all in the public interest. They all raise serious questions about the way government is conducted in Britain. February 2008 – Illegal immigrant found cleaning the Commons with a fake identity pass February 2008 – Details of a secret blacklist of Labour MPs suspected of plotting to defeat Gordon Brown’s flagship terror reforms which had been drawn up

Fraser Nelson

Tories angered by Green arrest

We can now give you that Tory story. Damian Green, the shadow immigration minister, has for some time had a whistleblower in the Home Office, which resulted in four stories ending up in the newspapers. And for this, at 12.50 today he was arrested – but not charged. On suspicion of what, you might ask? “Suspicion of conspiring to commit misconduct in a public office, and aiding and abetting counselling or procuring misconduct in a public office.” In other words, using his contacts to bring the truth to the British public via the press. David Cameron is standing by him, and from what we know so far this sounds perfectly correct.

Fraser Nelson

Brown’s worst nightmare

When Gordon Brown has nightmares, what does he see? I suspect it’s something pretty close to Ken Cox’s brilliant cartoon to accompany my cover piece in this week’s Spectator. It shows Cameron and Osborne in their Bullingdon Club outfits jostling Brown, taking a leg each, until borrowed cash is falling out of his pockets. Like all confidence tricksters, Brown will live in fear of being rumbled, having gotten away with so much for so long so far. And I think that – after an agonising period of faffing about – Cameron and Osborne are finally on his case . There are five reasons why the PBR plays into Tory hands.

Fraser Nelson

Merkel rejects the Brown approach

Can someone please tell Angela Merkel that the world is behind Gordon Brown in a great consensus? Because the German Chancellor seems to have forgotten. After rejecting Brown’s casino approach to public finance (borrow like mad, and encourage the public to do the same, then hail yourself as an economic genius), Germany has two things Britain woefully lacks: a balanced budget and a trade surplus. Germans have always been nervous about the debt-fuelled growth which Brown relied on. They recognise the danger in asset bubbles. The Bundesbank was always mindful of this, and its DNA is in the ECB which has handled this better than the Bank of England. Germany

Wednesday

26 Nov 2008

Fraser Nelson

In Brown’s debt

Can David Cameron make national debt into a campaign issue? He tried in PMQs today asking if Brown can confirm he’s doubled the debt to £1 trillion. Problem is: few knew “trillion” was a real word until recently. When Brown decided not to have a payback plan he figured no one would really care. It’s like his pension fund raid: it’s such a little-understood area that people don’t know they’re being diddled. This video is how we see debt, it’s adapted from a MoveOn.org ad in 2004. How do CoffeeHousers think Cameron could bring this issue to life on the doorsteps?

Fraser Nelson

This is who will pay for Brown’s debt binge

Gordon Brown is hoping that the sheer size of the borrowing numbers that Alistair Darling announced on Monday will stop people from comprehending them. But we hope that this video—adapted from the brilliant one that won MoveOn’s competition to design an ad against Bush in 2004— will bring home the consequences of this debt. On Monday, Brown decided to saddle each British household with a £40,000 debt by 2013 with interest payments collected through the tax system for decades. This will be Brown’s legacy to Britain. Many thanks to James Fletcher

Michael Wolff

Murdoch’s big secret is that he doesn’t have one

Michael Wolff reveals how he secured Rupert Murdoch’s co-operation for his biography and discovered that this media titan has no interest in posterity. He is, at heart, a city editor There is, on the one hand, the unparalleled global dominance in media and politics that Rupert Murdoch and his News Corporation have achieved. And yet, on the other, there’s an almost endearing attention-deficit lack of organisation and heedlessness that I witnessed in nine months of chatting with Murdoch and his executives. The fact that I was talking so often and so openly with Murdoch was as good an example as any of the absence of planning and strategy that backs

Tuesday

25 Nov 2008

Alex Massie

New Labour RIP

I’ve too much respect for my friends at The Times to ask if Rupert Murdoch dictated that this Peter Brookes cartoon appear on the paper’s front page today… The Thunderer’s leader column makes it pretty clear, I think, that the Times will not be endorsing Labour at the next election: Tony Blair and Gordon Brown both promised reform of public services that might have allowed the quality of services to be maintained at a lower rate of spending. In the absence of that reform, high spending and the maintenance of a large public sector workforce became the only way of maintaining servive levels. Yet such spending has proven unsustainable. It

Alex Massie

Best, Brightest, Fabbest Cabinet, like, Evah

I’d been meaning to write something about how all the cheering at the supposed brilliance of Obama’s cabinet picks was reminiscent of the huzzahs that greeted George W Bush’s peronnel choices. But Ezra Klein has beaten me to it: “Isn’t it amazing,” asks Krugman, “just how impressive the people being named to key positions in the Obama administration seem? Bye-bye hacks and cronies, hello people who actually know what they’re doing. For a bunch of people who were written off as a permanent minority four years ago, the Democrats look remarkably like the natural governing party these days, with a deep bench of talent.” That certainly feels true. But the

Fraser Nelson

Why squeezing the rich doesn’t produce much juice

A devastating blow against Brown’s “tax the rich” plan from the Institue of Fiscal Studies today. How much will the new 45 percent tax rate for those over £170,000 raise? “Approximately nothing” says the IFS and adds that “HM Treasury would raise more with, eg, a 44 percent rate”. This reminds us why most developed countries have cut their top marginal rate: it discourages risk-taking. After the briefing, I asked why a higher tax could fail to collect more revenue. Mike Brewer from the IFS replied: “People will contribute more to their private pensions. Convert more income into capital gains. Emigrate. Work less.” I asked him if, then, Brown’s 45

Fraser Nelson

Digging down

The IFS post budget briefing is becoming as anticipated by the media as the budget itself, and I’m sitting at the back with the crowds. The IFS spotted the 5 million losers from the abolition of the 10p tax band which Brown claims to have only noticed afterwards. So what do they see this time? My notes… 1. The Treasury forecasts that a chunk of the City that once generated four percent of GDP is never coming back. That accounts for £22bn of the projected deficit, the splurge is just £9.3bn. To me this acknowledges that debt-financed boom was just that, not stability as Brown assumed. 2. The £5bn efficiency

Fraser Nelson

Incredibly, this was the best case scenario

The more you study the Recession Budget, the more it hits you: this horror story is a best-case scenario. It’s based on almost comically optimistic assumptions. We are apparently halfway through a recession that finishes next May. Then growth starts again, they’ll magic up £5bn of efficiency savings and the rich will somehow break the habit of a lifetime and not find accountants to get them out of paying extra tax. Darling may as well have finished his speech saying “and we’ll sprout wings and fly to neverland” because that’s the gist of his forecasts. It is strikingly unoriginal. Brown has done what he has always done: borrow, based on

Monday

24 Nov 2008

Fraser Nelson

Debt, debt and more debt

So this was the Recession Budget surprise: a seven-year horizon with no debt repayment plan. Ha! Bet you didn’t expect that. Britain is to be transformed from a low-debt country into a nation saddled with a wartime debt without having fought a war. And as for today’s Brownie – it’s one the Stern Review used: fake juxtaposition. Brown presents the splurge (or splutter: £9.2bn this year, £16.3bn next) on one hand. And on the other, tax rises for the rich. He wants newspapers to write that one somehow cancels out the other. But it doesn’t: he has no plans to fund his extra spending. He’ll just keep borrowing. Debt will

Fraser Nelson

Is Brown’s debt binge worrying the lenders?

Might Gordon Brown take so many risks with the public finances that Britain would be considered in danger of defaulting on its loans? This prospect may be laughed off in Westminster, but not in the City where five-year contracts on UK gilts today surged another 4bps to a record high of 87.5bps. In English, this means investors are now paying £8,750 a year to insure every £1m of UK government debt against default. It’s a straight equation: the higher this premium rises, the greater the perceived chance of government insolvency. Credibility in the debt markets is crucial: for the next five to ten years the UK will be dependent on

Fraser Nelson

Weasel No.1: turning the VAT cut into a tax rise

Okay, I’m getting a bit ahead of myself, but I suspect I’ve spotted the first tax con of the budget – because there is a way Brown can turn the VAT cut into a tax rise for small businesses. He may find it too alluring to resist. Small firms and sole traders must charge VAT to their customers at 17.5%, but if their turnover is below a certain threshold they pay their VAT to HMRC at a flat rate of, say, 12.5%. They keep the difference, 5%, on which they’d pay corporation tax. Now, if the VAT rate falls to 15%, will the flat rate they must pay to HMRC

Mark Wallace

Value for money?

With recession tightening its grip, the taxpaying public are more concerned than ever about the size of the tax burden, the efficiency of public services and getting value for money from the state. It is for that reason that the TaxPayers’ Alliance has published the third annual Public Sector Rich List, which provides a full run-down of the 387 public sector employees from 140 different organisations whose total remuneration in 2007-08 was above £150,000. With ordinary people footing the bill not only for these individuals’ large salaries, hefty bonuses and generous pensions, but also for the services and organisations they run, the list provides a crucial opportunity for taxpayers to

Fraser Nelson

Join us in catching the pre-Budget weasels

The Great Budget Game starts at 4.30pm today. Darling will have delivered his speech; copies of the report will have been sent out; and journalists across the land will be rushing to write it all up. With the post-Budget briefing finishing at 5pm and news desks shouting for copy from 6.30pm onwards, that leaves very little time for scrutiny. So you write like mad. To come up with respectable-looking edition is a miracle in itself. But the less time journalists have, the more room there is for Brown to manipulate the message. As we wait for Darling at 3.30pm, I thought I’d give you my take on the battle for

Sunday

23 Nov 2008

Fraser Nelson

Labour planning new 45p top rate of tax

The latest rumour is that Brown will pay for his VAT cut with a delayed 45% rate of tax for those on £175,000 and over. So off the radar has this move been that (unlike a VAT cut) it’s not even in HM Treasury’s ready reckoner. Enough is now know about tax economics at these salary levels to establish that raising the top rate results is a false god – the super-rich don’t hang around to be taxed. That’s why top tax levels have been falling worldwide to compete for the high earners. France has cut its top rate from 48% in 2003 to 40% now. So “tax the rich”

Fraser Nelson

Brown is blasting out his false message

Whatever you may think about Gordon Brown, he does deserve to be recognised as a master of his art. I can’t think of a more accomplished confidence trickster ever to enter Westminster. And he’s ready to unveil a whole Potemkin Village tomorrow, the climax of his life’s work. It will be built out of non-sequiteurs, exaggerations, half-truths and Brownies. His interview on the BBC1 Politics Show gave a preview as to how he will conduct himself. He is in full election mode, talking as if he’s in the heat of an election campaign—which, in his head, he is. Here’s my take:- 2) “That has now spread to become not just

Saturday

22 Nov 2008

Charles Moore

The Spectator’s Notes | 22 November 2008

‘A money-financed tax cut is essentially equivalent to Milton Friedman’s famous “helicopter drop” of money.’ So said Ben Bernanke, now the chairman of the Fed, in a speech about how to ward off the ‘extremely small’ chance of deflation, which he delivered in 2002. ‘A money-financed tax cut is essentially equivalent to Milton Friedman’s famous “helicopter drop” of money.’ So said Ben Bernanke, now the chairman of the Fed, in a speech about how to ward off the ‘extremely small’ chance of deflation, which he delivered in 2002. Today, deflation looms, and Gordon Brown seems to want ‘money-financed’ (i.e. paid for by printing money) tax cuts. The Conservatives have responded