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Budget Day: Our panel members give their verdict

This morning we posted the Budget hopes of ConservativeHome's expert panel of political figures and commentators in their respective areas of interest or expertise. Did Alistair Darling deliver what they hoped for? Their responses will be posted during the course of the afternoon.

5pm

Jill Kirby, Director of the Centre for Policy Studies, on The Family

This Budget was an insult to our intelligence - who would believe the Chancellor's growth forecasts? But it was also an insult to families.

Darling refused point blank to accept the failure of the tax credit scheme, claiming it was helping families through the recession. So, you might be living through the worst downturn in peacetime, but if your hours are cut as a result then (provided you can face entangling yourself with all the bureaucracy and form-filling whenever your circumstances change) you might get a bit more working tax credit.

And the Chancellor's answer to child poverty? Child tax credit will go up by (wait for it) nearly 40 pence a week from 2010. Wow. Using that old Brown trick, Darling announced that the credit would "increase by £20"- failing to add that he meant £20 A YEAR - so the casual listener might think he meant £20 a week. A cheap trick.

Matthew Sinclair: The years of tax and spend are over

Matt Sinclair of The TaxPayers' Alliance welcomes a Labour MP's call for lower taxes and lower spending.

First Alan Milburn argued that the number of civil servants should be cut by a quarter; a measure which could save billions that might then be returned to taxpayers’ pockets.  Today in The Telegraph Denis MacShane tells us that the answer to Gordon Brown’s problems is “obvious: cut taxes and spending”.

Former ministers are coming out of the woodwork to acknowledge what ordinary people have long understood: government wastes a lot of money and ending that waste could make room for tax cuts.  MacShane says that he does not “know of a single minister who privately does not despair at the waste of money on pointless projects, publications, or legions of press officers that add no value.”

TaxPayers’ Alliance polling (PPT) shows that two thirds of the public think that the Government wastes more than one pound in every six that it spends.  Fifty-three per cent think that it wastes more than one in every five pounds of government spending.  MacShane and Milburn confirm that Ministers, as well as ordinary people and the TaxPayers’ Alliance, think that if the Government did things more efficiently tax cuts could be delivered.

Matthew Sinclair: One year at the TPA

Matt works at the TaxPayers' Alliance and blogs at CentreRight.com.  In this post he reflects on the TPA's mission and how it might succeed.

I’ve been at the TaxPayers’ Alliance a year; I’m a year into my first serious job.  It seems a good time to take stock and think about what that work is for.  What is the role and function of the TPA?

Of course, there is a simple answer to that question: to campaign for lower taxes and public sector reform.  However, I think that such a simple answer misses the deeper problem that the TPA addresses.  The case for low taxes, and for the government to do less, isn’t just one more conflicting priority that must be lobbied and advocated for.  Campaigning for low taxes requires us to confront the fundamental logic of how a democracy operates.

Mancur Olson, in a landmark work of political theory, set out the Logic of Collective Action in the mid-sixties.  An understanding of his thinking is vital to understanding how the modern British state functions.  He explained how a minority could effectively dominate a majority.

Any individual has a powerful incentive to free-ride on the efforts of the rest of any group providing public goods.  While someone may want lower taxes they have every incentive to leave the political effort required to get tax cuts to others.  The results of their effort, or slacking, will be diluted across all those with an interest in low taxes.  It will not be in their interests to put the socially optimum amount of effort into securing tax cuts.

Successful societies evolve ways of encouraging people to act in the common good.  However, it is harder for large groups to do so.  It is easy to encourage six people to act in their common interest by personally appealing to their sense of duty, tradition, loyalty or shame.  It is far harder to do the same for a group of sixty million.

Matthew Sinclair: Wasting lives

Matthew Sinclair, policy analyst at the TaxPayers'Alliance, outlines the findings of today's report on low levels of mortality amenable to healthcare.

“There has been a 16 per cent reduction in cancer as a result of the new investment since 1997”

While that particular example is from Gordon Brown at Prime Minister’s Questions in December it is the kind of argument you will here regularly from those trying to defend the performance of the NHS in recent years.  It is a much less meaningful statement than it might seem.  Over ten years new technologies will be developed and a richer nation will usually spend somewhat more on healthcare – even if the percentage of national income does not change.

To really understand Gordon Brown’s record on the NHS you need some context.  You need to compare the performance of British healthcare in recent years with its performance in earlier periods and see how other European countries – facing similar changes in the technological and social environment – have fared.

Our new report, Wasting Lives: A statistical analysis of NHS performance in a European context since 1981, has been released today and aims to provide that context.  It studies amenable mortality – the number of deaths from certain conditions, at certain ages that a healthcare system can reasonably be expected to prevent – and compares Britain’s healthcare performance, over time, with European peers.

Matthew Sinclair: More green taxes – a bad idea and politically dangerous

Last week a ConservativeHome survey of party members identified a sceptical attitude towards environmental taxes.  A report today from the TaxPayers' Alliance argues that the nation is already paying too much green taxation.  The TPA estimates the social cost of Britain's carbon emissions as £11.7bn but notes that Britain already pays £21.9bn in green taxes.

Today the TaxPayers’ Alliance releases a report setting out the state of green taxes in the UK today.  Our findings are stark.  We already pay far too much in green taxes, £10 billion or £400 per household per year. 

This result isn’t based upon some new and controversial understanding of the science.  The estimates we use of the harms resulting from global warming are taken from the reports of eminent climate scientists, William Nordhaus and Richard Tol, British civil servants, Sir Nicholas Stern, and the UN body usually cited as the ‘scientific consensus’ on climate change, the IPCC.

We compared their estimates of the harms, now and in the future, of climate change with the actual amounts of green tax charged, net of road spending.  The logic of green taxes is that if polluters are made to pay the social cost of the emissions they put out then they will balance the value to them of emitting against the social cost and the optimal amount of carbon will be emitted.  We found that green taxes have been set too high.

Matthew Sinclair: In search of competitiveness

Matthew Sinclair of The TaxPayers' Alliance believes that the Redwood-Wolfson report on economic competitiveness should be welcomed by taxpayers.

The benefits of cutting corporation tax to Irish levels were established quite clearly by research into the dynamic impacts of such a move by the Centre for Economics and Business Research for the TaxPayers’ Alliance.  They found that the scale of the ‘shadow economy’ and tax evasion would decline, reducing the burden that law-abiding taxpayers have to pay to compensate for tax lost to fraud.  International footloose investment would come to our shores and increase the size of the tax base.  There would be general improvements in competitiveness sufficient to boost GDP by 9% if we moved towards Irish levels of corporate taxation over nine years.  Importantly, such a cut in corporation tax would more than pay for itself within nine years, substantially reducing public borrowing in the process.  Redwood’s, more cautious, proposals would lead to similar effects though not on the same scale.

Reducing the pain of inheritance tax would be incredibly popular – polling for the TPA suggests that it is the second most hated tax after Council Tax.  It is also very sensible.  These changes would go a long way to lessen the injustice of IHT on the ‘unwise and unfortunate’ who either die suddenly or who do not have the wherewithal to avoid the tax.  Inheritance tax causes massive social harms as grieving families are hit with bills that they struggle to pay without selling homes or family businesses.  At less than 1% of total tax revenue IHT is far from essential to funding public services and many other countries, including such socialist utopias as Sweden, have abolished it entirely.  The government’s own Gershon Review identified £21 billion of savings, more than enough to pay for the abolition of inheritance tax, which only raises £3.6 billion last year.  Redwood’s proposals, by exempting the main home from inheritance tax, are a good step in the right direction.  Applying a rollover relief to the new short-term capital gains tax, such as operates in Ireland and Australia, would take the reform further, meaning that grieving relatives only pay tax on inherited assets if they sell them – a much fairer proposition.

Finally, recommendations to cut regulation have become one of those perennials of British politics that the public have, unfortunately, become quite cynical about.  However, Redwood’s proposals are aggressive enough that, if prioritised by an incoming government, they could make a genuine difference to businesses, especially smaller companies for whom the burden of regulation is particularly onerous.

Matthew Sinclair: Taxpayers aren't the right people to pay for improved public services

Matthew Sinclair, a TaxPayers'Alliance policy analyst, worries that the Conservative health proposals will increase the size of the state and points to university fees as a model for how the NHS should develop.

Andrew Lansley’s new healthcare proposals contain some interesting ideas but from a taxpayers’ perspective it is worrying that they do not encourage funding of healthcare from any other means than general taxation. If we wish to avoid a substantially higher burden on taxpayers in the future the use of personal funds will need to be encouraged in healthcare and other services.

Patricia Hewitt recently spoke to an audience at the LSE on the subject “The NHS: the next ten years”. Media coverage focussed on her attack on the idea of an independent NHS board. However, an under-reported but probably more important part of her speech came at the beginning where she argued that the current slowdown in healthcare spending was likely to prove transient. Sooner rather than later public demand would build for another major increase in expenditure on health. This assertion is both correct and vitally important to the debate over the future of the public services as it is true not just in healthcare.

Matthew Sinclair: The democracy taskforce needs to be realistic

Matthew Sinclair is a TaxPayers'Alliance policy analyst and is author of Sinclair's Musings.

Ken Clarke’s Democracy Taskforce has focussed its attention on redistributing power from the Prime Minister, and special advisors, to Parliament. This has resulted in proposals such as giving Parliament control over the decision to go to war, increasing Parliament’s power to set its own agenda and enhancing the capabilities and status of select committees. These proposals are extremely good and should serve to improve the quality of democratic decision making by increasing the extent to which Parliament is able to properly hold government to account.

However, the report sets its objectives rather higher than a marginal improvement in the quality of policy. It aims to "rebuild public trust in our democratic institutions". Achieving that aim will require a more fundamental rethink than has been contained in either this report or the original interim report. The limitations of this report can be seen in the fact that it is titled "Power to the People" but subtitled "Rebuilding Parliament". It might strengthen Parliament but does not address the more important question of where the division of responsibility for public services should lie between politicians, whether the executive or Parliament, and civil society, the People.

Matthew Sinclair: A Sceptics' Response to Climate Change

Matthew Sinclair, a regular contributor to ConservativeHome.com, has his own blog.

One of the big problems that classical liberal politics faces in the modern era is that liberalism is dead.   Liberalism has been corrupted from a principled position to libertinism; people are all liberals if anyone is going to stop them having fun but most lose interest with issues of economic liberalism like the minimum wage.   At the start of last century the minimum wage was opposed as an infringement upon freedom, nowadays it can only be opposed as a creator of unemployment.   Part of this problem is that if there is a big political issue, like global warming is generally accepted to be, there is an expectation that government do something.  Even if that action is thought highly unlikely to do much good it is "better than nothing".

Sceptics would do well to have a plan of action in mind to propose which might offer a reliable and affordable alternative to costly and ineffective emissions restrictions.   It wouldn't take much to be better than the vague internationalist idealism of the greens but pretty sensible policies can, I believe, be put in place to adapt to the possible consequences of climate change.   It is important to note that the effects in Britain are likely to be minor or even positive, certainly over the next century, and the major pains of global warming are forecast by the pessimists to be felt in the Third World.  Any plan should be drawn up with this in mind.

Detailed work is obviously needed but it is easy to outline initial ideas, some easier to put into practice than others, for how Britain might make a practical contribution to lessening the harm of climate change:

1. Redirect UK aid money and campaign for EU aid money to be redirected towards defence in areas vulnerable to flooding.   This is a good idea regardless of whether global warming is real as floods in places like Bangladesh have been a serious humanitarian problem for some time.
2. Fight the precautionary principle for technologies like the genetic modification of crops in order to ensure that technology to mitigate falls in agricultural yields is developed if it's safe.
3. Encourage a similar differential pricing deal for treatments and any possible vaccine for Malaria as was established for HIV anti-retroviral drugs.   Such agreements can combine incentives for new drug development with access for the Third World if rich countries do not take them as an excuse to free ride.
4. Help directly in the fight against infectious disease.   In particular, non-agricultural use of DDT should be actively supported.
5. Make sure that the principle of conditionality is not lost in World Bank reform so that aid can still be used to encourage liberal economic institutions.   Rich countries respond best to climate change and good institutions are the most reliable route to development.

What's important to note about a sceptical response to climate change in comparison to a Kyoto-plus emissions reduction scheme is that even if it turns out that, as a former editor of the New Scientist suggested in the Sunday Times last weekend, the real reason for climate change is solar activity or a miracle cure such as fusion power is devised which allows for a costless emissions curb we will not have been wasting our time and money.   All of the measures listed above are a good idea regardless of global warming as they address existing problems.  None of them rely upon the dreamy internationalism, just as wrong now as in the Cold War, which supposes we can shame others into action by our example.  International agreement to curb climate change is particularly implausible given that if we increase the price of fossil fuels to control emissions we create comparative advantage for other nations in energy intensive industry and make it still more costly for them to concede that advantage.  Without such an agreement all Britain’s attempts to control climate change will do is shift fossil fuel use to other countries.

So far this article has focused upon the British response to climate change but directly or indirectly assisting states with particular problems related to climate change is not the most important role that we can play in ensuring poorer states adapt well to climate change.  While we can help to ease the pressures on states affected by the changing climate it is best that they not have to rely upon our good will and understanding of what they really need; international aid has a mixed to awful record.  As such, it is best if most of the heavy lifting in creating societies able to adapt to a climate change can be done by those states themselves.  Societies unable to deal with pre-existing environmental challenges are the ones most at risk from climate change and these societies are those without sufficient democratic accountability in their government and enough production in their economy.    Just as democracies don’t have famines rich liberal democracies will adapt to climate change. 

If Kyoto-style diplomatic dreams come true we will only succeed in pressuring poor societies into increasing government intervention in economies already overburdened with the heavy, corrupt hand of government.  We might pressure them into decreasing democratic accountability by accepting ‘global governance’ measures to enforce climate change policies and, in so doing, reduce accountability in states with governments already too inclined to blame others rather than confront important issues.  We might contribute to what makes those most in danger so vulnerable to the risks of climate change.   Doing this in the name of the fools gold that is controlling a system as complex as the Earth’s climate would be truly perverse.

As such, while it is necessary for those sceptical of the Kyoto-plus agenda on climate change to propose a positive programme, perhaps along the lines set out earlier in this article, we should also remember our first duty as conservatives:  To resist attempts to undermine the liberal democratic and economic order which can produce states able to adapt to all manner of challenges, including climate change.   The environmentalist demand for global action to tackle carbon emissions may now be a part of the threat to that order.

Also see Reconsidering some of the positive externalities to curbing emissions.

Matthew Sinclair: Let's have elected life peers

Blogger Matthew Sinclair, a student at LSE, turns his mind to House of Lords reform.

Lord Howe is squaring up for a fight with David Cameron over the House of Lords.  The Conservatives appear to be caught in something of a bind.  They are forced to choose between attempting to maintain the ghost of an old House of Lords not designed to function without the hereditary peers and creating a new system that threatens to lose the independence and calming influence that has lent the House such distinction.

It would seem to me that the design for a reformed House of Lords should balance two priorities:

First, it should aim to ensure sufficient democratic legitimacy that when it needs to challenge the House of Commons it is able to.

Second, the Lords should not become a second House of Commons but act as a check on any ambitions of that house to reach too far, too fast.  Civil liberties are best defended by a house which is not too accountable to short term popular spirits which are easily manipulated.

Appointment fails the first test as it is too distant a mechanism to have legitimacy in public opinion when it needs to stand up to the Commons.  A normal elected chamber fails the second test as the entire house or a substantial number will often be facing re-election and, hence, unwilling to tackle majoritarian prejudices which might endanger civil liberties.  Even the US senate with its irregular election pattern has become plagued by pork and other sectional interests.  Accountability is what makes a democracy so responsive to public needs and is definitely a good thing in the lower house but making the second chamber regularly accountable as well misses out on the opportunity of having a voice to think beyond transient public fears.

Matthew Sinclair: V for 'bloody awful'

Matthew Sinclair, a student at LSE - who has his own blog - reviews the new film - 'V for Vendetta'.

I won't deal with the technical flaws with V for Vendetta here. If you want a decent account of the film's flaws as a film you can take a look at the BBC movies website review. The BBC's account of a film that is essentially lifeless is accurate but misses the main problem with the film. This is not just a poor, vapid, attempt at intelligent critique but a part of the paranoid left's apology for terrorism and deserves far more strident criticism on those grounds.

The film is based upon a cartoon set within a dystopian future where the Conservative Party have been elected and all hell has broken loose. A "high chancellor" has been elected and is kicking out minorities, making homosexuality illegal, 'disappearing' dissenters and experimenting on prisoners (clearly the makers haven't heard that we're Cameron's Conservatives now). Essentially the country is being run by utter fascists and this sets up the moral case for V and his campaign of bombings (including a particularly distasteful scene with bombs on the tube) which are hailed as heroic. The original cartoon was a response to Thatcher but has been adapted to serve as a polemic for the modern conspiracy theorist.

This film's history is questionable. It has set up Guy Fawkes as a people's hero (the 5th of November is a recurring theme) but seems not to understand that the most likely result of success in his plan of killing off our parliament would have been an ugly religious conflict between Protestants and Catholics. While Guy Fawkes may have been responding to genuine discrimination against Catholics he was doing so on behalf of a far from blameless community (the reign of Mary wasn't pretty) and in a clearly counterproductive manner. Such historical distortion isn't terribly important but an attempt to render Guy Fawkes the new Che Guevara is hardly the most sensible of starts to a film.

More important and harmful are the constant attempts to associate the fascist regime in the film or the actual Nazis with complaints about our present government. First, this film constantly uses words, such as "Belmarsh", "rendition" or "spin", to associate the abuses in the film with less pernicious facilities used by our actual governments. Second, it features a regime banning the Koran in an allusion to the abuse reported in, false, stories such as those in Newsweek which have caused so much suffering. Third, it makes a major show of a conjoined US and UK flag with a Swastika at its centre. Finally, a major feature of the plot is the revealing of terrorist outrages as having been not the fault of terrorists but, rather, a government plot in order to scare the public into submission. This is an idea that has serious currency in radical circles and the Middle East where most think that either United States or Israeli secret services were responsible for 9/11. Feeding these conspiracy theories and blurring the line between the regime of the film and our government makes the rest of its message, about violent resistance, utterly awful.

This approach is not unique; blurring the line between fascist government and our current leadership is a common strategy of the far left and a central tenet of Noam Chomsky in particular. It is invariably based upon spurious "evidence". Oliver Kamm has done a fine job of exposing the flaws in Chomsky's assaults on Pat Moynihan, allegations of UK government censorship and attempts to distort other issues. Calling someone or a government fascist is largely used as a dishonest rhetorical device but has ugly consequences when combined with a celebration of explosive opposition to fascism.

Neither calling our government fascist nor calling for violent resistance to fascists are rare or particularly problematic stances. The problem is that this film combines the two premises:

1) If you are being persecuted by fascists you should respond violently.
2) Our current government behave like fascists.

The two combined send the message that terrorist attacks are morally justified in the here and now and for this reason V for Vendetta is an utterly awful political statement. As the New Yorker reviewer has noted, the Houses of Parliament are a symbol of liberal democracy and blowing them up on film does not signal the support of freedom. This film has, through its desire to make its message relevant to today chosen the side of tyranny and has no claim to be representing "Freedom Forever!".

The only defence that has the slightest traction is that the two premises can be separated and that as our current government are not fascists this film is simply making the case that attacks would be justified were our government Hitler's. Such a defence does not stand up, though, as associating conspiracy stories about our current government with one worthy of terrorist response leaves a film thoroughly unable to talk about questions of means and ends with any subtlety.

An IMDB reviewer hailed the honesty of this film. Let's hope it isn't remembered that way; this film is far from honest and far from pleasant.