CentreRight

Ed Vaizey MP: Another Budget U-turn you may have missed shows again how Labour are following the Conservative lead on arts and the creative industries

Ed Vaizey is Conservative MP for Wantage and shadow arts minister in Jeremy Hunt's DCMS team.

Labour's last Budget contained an intriguing announcement - a tax credit for the video games industry, along the lines of the film tax credit, which already exists.  As recently as December, Labour had ruled this out.  So this is a significant U-turn. Although, as is typical with this Budget, the policy has only been put forward to win votes, because Labour will have no time to implement it.

For years, our video games industry has been losing talent abroad, notably to Canada which has huge tax incentives in place.  Labour has done nothing to help.  They spent years claiming that the World Trade Organisation would sort out the problem with Canada, until we exposed the claim as false.  By contrast, the Conservatives have been saying consistently that we would look at ways of helping the industry against this competition from abroad, most notably by looking at whether we should extend the film tax credit to video games.

This U-turn is symptomatic of the lack of leadership at DCMS, where Labour continually follows the Conservatives.  In the three years that Jeremy Hunt has been in post he has seen four secretaries of state - Jowell, Purnell, Burnham and Bradshaw; and five culture and creative industries ministers - Woodward, Follett, Simon, Carter and Hodge. When Sion Simon resigned in February, Labour couldn't even be bothered to replace him and simply handed his responsibilites to Hodge. And Hodge is retiring at the election.  The creative industries and culture are not taken seriously by Labour.

The tax credit is one of a long line of U-turns prompted by Conservative campaigns.  Replacing the BBC Trust, product placement, top-slicing the licence fee to fund Channel 4: on all of these issues, Labour has reversed its position to follow the Conservative lead.  Their plans for state-funded regional news look similarly dodgy with the news that ITV will not, after all, abandon regional news as it has threatened to.  In other areas, Labour continue to follow our line, whether it is leadership for libraries, superfast broadband or deregulating ITV..

Whenever Ben Bradshaw attacks Jeremy about the Conservatives' plans for the arts, Jeremy has a simple response.  We have a policy, what's yours?  So an analysis of just one Department shows the difference between Labour and the Conservatives.  All the ideas are coming from our side.  Labour is directionless, and simply follows where it can.  Whether or not you agree with our positions, it can't be denied that we have taken a clear view and Labour has been forced to catch up.  This is just one example of why we can't go on like this, and why we need a new, Conservative, Government.

Betting the mortgage

The political is particularly personal at the moment. We need to decide what we think the election result will be, what decisions the next government will make, and what the impact will be on mortgage rates. Not want we want to happen, but what we think will happen.

Our mortgage had been on a fixed term, which expired last year. Since then we have kept our mortgage on the tracker rate. But what will be the impact of the next government? Should we stay with the tracker, or opt for a 2-year or 5-year fixed rate? Should we decide now or wait until after the election?

We are pretty sure we know the answer. But I would be really interested to know what you think. And also to know how many other familes are making the same caluculation. And how many voters are making a direct connection between the decisions made by an incoming government following the election, and the impact on their personal finances? Do enough voters think the choice is real, and the outcome really matters?

FYI, Natwest rates today:

• Tracker: 2.89%
• 2-year fixed term: 3.79%
• 5-year fixed term: 5.49%

We're going to win this election. And I can't wait

Ok, let's talk about it: that YouGov poll last night wasn't too brilliant, was it? A two percent lead? Not very encouraging, right? OK, so it might be about the 400th poll in a row to show Labour behind the Tories, but of late we've been spoiled. We want bigger leads. We're not content to go from having fewer MPs than Michael Foot did at his nadir against Thatcher to turfing Labour out of government; no, we want one of the biggest turnarounds in modern electoral history. And with David Cameron and the rest of our leadership, poll numbers have led us to expect it.

But as I said in my last blog, now is the time for a bit of guts. For some self-belief. For some passion for what we are doing and what we stand for. For some fire to change this country, and, frankly, and I don't think this is an exaggeration, to rescue it.

Somebody's got to say it, so I will: YouGov's numbers are wrong. They are just simply flat-out wrong. They do not pass the smell test. According to YouGov, in a period that has been wall-to-wall bad news for Labour - from the Unite BA strikes to Stephen "Buyers" eight grand a day taxi - Labour have gone up and the Tories have gone down. Ah, sure, ok there guys. Now, I do not allege any nonsense about bias from Peter Kellner. That is just pathetic and unworthy of any serious discussion. Where was the bias when YouGov correctly (under its old methodology) predicted the London Mayoralty? Nowhere.

But why fix what's not broken? The firm's new methods are coming up with some very weird numbers, often big outliers versus other polls. Crowdsourcers over at political betting have run YouGov's unweighted numbers for the prior 4% lead poll. According to them, those numbers were Con 42, Lab 28. Any weighting system that takes a 14% lead and magics it into a 4% lead, is for want of a better word, dodgy.

YouGov is not only outlying versus other firms, but even itself. Its recent poll for London showed the Tories a huge 9% ahead in London (where Labour traditionally have the advantage). That is simply incompatible with a 2 or even 4% national lead. The polls must have had different weightings. Mike Smithson, magisterial editor of political betting, has promised a thread on this later and i will be intrigued to see what he says. 

By reason of their frequency, YG polls drive the debate sometimes. Recent polls by other firms have had us at 9%, 11%, 8%, 7%, etc. They are literally all over the place. We have to ignore the disparity and we have to get on with it.

Scandal of freezing the Income Tax allowance at £6,475

One of the most disgraceful aspects of our tax system is that someone earning more than just £6,475 starts paying tax. That is a key component of the dependency culture. By freezing that already miserable allowance for 2010/11 the Government make the situation worse in real terms. By refusing to increase it even in line with inflation they are particularly punishing low earners.

I've written about the Budget for the Daily Mail online and have highlighted various failings. But having had a chance to look at the Budget papers it is Labour's stealth attack on the low paid that makes me most angry.

The next phase of the fiscal debate begins now

By Neil O'Brien

We just missed the last chance to have a sensible election debate about public spending.  The Government could have finally told us where the axe is going to fall, and challenged the opposition parties to say how they would have done things differently.

Instead, the Government will now go into the election simply refusing to tell the electorate which items of spending they would cut, or which taxes they will raise. We will be asked to sign a blank cheque.

Today’s Budget doesn’t really deserve a response.  It contains endless micro-policies and political wheezes: all intended to distract from the fact that it does nothing to staunch our ever rising debts.

The budget gives away £1.5 billion now, and says that it will be taken back again after the election. To put things in context, that's just one in every 500 pounds the Government spends.

You can get a sense of how little difference any of this makes from the chart below.  It shows how much debt the government is running up for every family of four people.  In just a few years it will have spiralled from £40,000 to safely over £100,000 a family.  And even that is based on wildly optimistic assumptions about growth - which are not shared by independent forecasters.

A worker at Heathrow abuses body scanner technology. Who'dathunkit?

You may recall that Big Brother Watch has raised various objections to body scanners. Prime amongst them privacy concerns and the potential abuse of the images generated by these machines.

Don't worry, we were told. These are in the hand of serious, trained professionals, we were told.

"I told you so" is such an ugly phrase. So let's use the charming words of the Heathrow worker looking at his colleague in the scanner, instead:

"I love those gigantic t*ts."

He's still in post, by the way.

Speedboat attacks on British ports: we need a new paradigm for counter terrorism

Security minister Lord West has announced that he is concerned that al-Qaeda terrorists could launch a radiological dirty bomb on London.

This announcement is not in itself new. As I observed on Centre Right last November, one of the major justifications for our current military engagement in Afghanistan is that there is clear evidence that the Taliban have already obtained nuclear materials and hence have the potential to create a radiological ‘dirty bomb’.

However, Lord West went further by highlighting the possibility of a radiological or Mumbai style attack launched either against London or another UK port from speedboats. He observed that hundreds of thousands of small boats arrived in Britain unchecked every year and that the agencies responsible for guarding the coastline did not know “with any clarity what is going on around our coasts”.

What is needed in the face of such threats is a paradigm change in the way we approach counter terrorism. Lord West’s comments illustrate the failure of our present approach. He is rightly concerned that the Maritime and Coastguard Agency (MCA) simply do not know about every small vessel entering British waters or heading for UK ports. However, as I revealed on Conservative Home recently, the MCA are at present considering closing one of only two main coastguard cordination centres on the East Coast of England...

How to cut public spending (and still win an election)

Today I had an article in the Telegraph and Tasha Kheiriddin had an article in City AM.  They are both based on the soon to be released book How to cut public spending (and still win an election).  Copies reached the TPA office today and it is available to preorder now.  Here are a few of the questions that the book should help ConservativeHome readers answer:

How big is the challenge over the next decade?

The TPA is working on a big new project to remind everyone just how big the national debt has got, and how fast it is growing.  But an important point, to remind anyone who argues against public spending cuts of, is that everyone is planning them now.  In their Budget 2010 Briefing Note, Reform point out that all the major parties are planning significant cuts in spending.  Policy changes to reduce Total Managed Expenditure, from planned levels, by between £57.8 billion (Labour) and £67.8 billion (Liberal Democrats) between 2010-11 and 2013-14.  Reform, to their credit, go further than the parties to keep down tax rises.

All of the debates about cutting in 2010-11 or 2011-12 are important, and as I've written on the TPA blog there is a strong economic case not to delay, but they will quickly be in the past.  Sooner rather than later even the most ardent of Keynesians will have to admit the need for a big fiscal adjustment.  Another way of understanding the scale of adjustment needed is to use the Government's plans as a baseline and look at the cumulative amount of money being taken out of people's pockets over the next ten years.  Since Budget 2008, the Government have announced £341 billion in reduced spending and increased taxes between 2011-12 and 2017-18.  Add the investment needed to connect people up to high-speed Internet, upgrade the water network, keep the lights on and meet climate change targets and you're talking a grand total of nearly £23,000 per family over the next ten years.  Managing that without placing an intolerable burden on families, crashing the economy or creating a political crisis will be the big challenge facing policymakers.

No Poofs

A warm & friendly welcome awaits all guests at Susanne Wilkinson's Swiss Bed & Breakfast in the idyllic village of Cookham, near Maidenhead in Berkshire.

Unless you're gay, of course, as Michael Black and John Morgan found out when they attempted to check-in to Ms Wilkinson's 'warm & friendly' guest house, ahead of a night out at the theatre with friends. As is now well known, Ms Wilkinson's 'warm & friendly' welcome extended to refusing to let them check in, giving them their booking fee back, and turfing them orf her land.

Coincidentally, as Alex Deane pointed out in his superb post yesterday, it is now illegal to incite hatred against gay people. I'm not sure that refusing to let you stay in a guest house would count as inciting hatred, but a professor of law has helpfully contacted Mr Black and Mr Morgan, to suggest that Ms Wilkinson's actions may already be a contravention of the 2006 Equality Act, which makes it illegal to discriminate against someone on grounds of their sexual orientation. I'm not a lawyer, but humiliating a guest from whom you'd accepted a booking, on the grounds of the chromosomal disposition of the person they turn up with, is probably ipso facto a case of discrimination. It's certainly not what I'd call 'warm & friendly', so maybe the advertising standards authority should contact Ms Wilkinson to discuss her website.

Banking on confusion

What do we want of our banks? In particular, what do we want of those banks in receipt of taxpayer funding? Should they be making a profit? Yes of course, so that they can be sold off and the tax payer reimbursed as soon as possible. Will the threat of punitive taxation make them more or less likely to be profitable? err, can we get back to you on that one... What about Alistair Darling's leaked Budget proposal to force banks to provide accounts for the homeless and 'financially excluded'?  Socially just perhaps - but good for the balance sheet? Weren't there some state-owned US mortgage lenders just a year or so ago who were instructed to be more financially inclusive...? And today we learn that the Government is so unhappy with the banks' failure to make enough loans to business that it has set higher targets - notwithstanding reports of low demand for lending due to lack of business confidence.

I guess the banks could achieve their new targets by lending to higher risk customers on lower security and easier terms... if the loans go bad, well they can always repackage them and sell them on.... hang on a minute....haven't we been here before?

The public heard you Jack: the only problem is getting caught

Ok, the above title is paraphrasing. But the attitude demonstrated by Jack Straw at 8.10am on the Today programme will only fan the flames of disillusionment already felt by the public towards their political representatives. The Taxi-gate 4 did "nothing wrong" and they were "stupid" because they were "suckered into a sting", Not because they abused their positions, Jack? Not because they have dealt another blow, post expense-gate, to the standing of the British Parliamentarian? Not because they have broken the spirit of the law, if not the letter? Making a case because you feel it's right (call it lobbying if you will) should be considered (informed) bias - making a case for cash when you hold public office should be considered corruption.

And no investigation is to follow. No public light will be shone into the opaque heart of government. No one will lose their job. No trust will be restored.

Tomorrow, it becomes a crime to incite hatred on the grounds of sexual orientation

Section 74 of the Criminal Justice and Immigration Act 2008 comes into force tomorrow. It amends the Public Order Act 1986, creating offences of intentionally stirring up hatred on the grounds of sexual orientation.

I point to the words of Rowan Atkinson who, when advocating a free speech clause for the Bill, said:

Do I think that I would risk prosecution because of jokes or drama about sexual orientation with which I might be involved if we don’t have the free speech clause?

Not really – but I dread something almost as bad – a culture of censoriousness, a questioning, negative and leaden attitude that is encouraged by legislation of this nature but is considerably and meaningfully alleviated by the free speech clause.

Analysis of this subject also benefits from reflecting on the arguments Atkinson mounted against the religious hatred laws:

The prime motivating energy for the Bill seemed to come not from communities seeking protection from bullying by the British National Party but from individuals with a more aggressive, fundamentalist agenda. Those who have sought, from the very day of the publication in 1989 of Salman Rushdie’s book The Satanic Verses, to immunise religions against criticism and ridicule – or at least to promote legislation that is so sinister and intimidating, it can provide that immunity without even the need to prosecute anyone. In other words, to impose self-censorship...

The freedom to criticise or ridicule ideas – even if they are sincerely held beliefs – is a fundamental freedom and a law which says that you can ridicule ideas as long as they are not religious ideas, is a very odd law indeed. It promotes the idea that there should be a right not to be offended, when I think that the right to offend is far more important than a right not to be offended...

The Government says you will continue to be able to criticise or ridicule religion. Where in the Bill does it say that? Where is the clause that even implies that kind of freedom of expression? How can such bland reassurances carry any authority when there is no wording in the bill to support them and the chief promoters and supporters of this legislation, in consultation with whom the thing was drafted, have always taken the opposite view. They don’t think that religions should be ridiculed. They don’t think that religions should be criticised or insulted. That is why they have lobbied for this legislation for so many years and unlike the government are not blind to its potential to achieve those aims.

I note that exactly the same point applies with the sexual orientation legislation. The guidance is full of "don't worry, we're sensible" arguments. The legislation itself is not. Here's the most telling bit from the guidance:

The offences are not intended to cover, for example, teenagers who call each other names in the playground where this is not threatening and there is no intention of stirring up hatred against a group.

In the longer term, I fear that that is precisely the sort of thing for which these laws will be used. The recent history of legislation in our country shows us that when such powers exist, they are invariably used to the fullest possible extent.

If you don't think that this is a freedom of speech issue, I point to the fact that the legislation specifically creates offences which cover not only the use of words or behaviour and the display, publishing or distribution of written material, but also the public performance of a play, distributing, showing or playing a recording, broadcasting a programme and the possession of inflammatory material.

The chilling effect on free speech - whereby people self-censor, fearing prosecution - is bound to be felt, across our culture, literature, performance, our comedy, our national dialogue.

At Big Brother Watch we think that the benefit of the doubt should always be on the side of free speech - when issues are difficult, upsetting or challenging, that's when we need full and frank discourse most, not least.

I've just reproduced parts of Atkinson's speech here - I do urge you to read the whole thing.

Fixing NHS IT: how to save £1Bn and get IT working for patients

2020health’s report on “Fixing NHS IT” is published today and featured in the Financial Times and on smarthealthcare.com. In it we detail how incoming government could save at least £1 billion by realigning the troubled NHS computer programme and boosting its performance. We have compiled an unprecedented dossier gleaned from extensive interviews with key participants of what has worked, what should be stopped and what next.

Our detailed rescue plan for the £12 billion National Programme for Information Technology (NPfIT), which was launched with a great fanfare by Tony Blair in 2002 but now mired in cost over-runs and a four-year delay, is, we argue, essential for the future of UK healthcare.The NPfIT was supposed to link 30,000 GPs to nearly 300 hospitals across England, providing NHS staff with instant access to the medical notes of patients at every stage of diagnosis, treatment and discharge. It consisted of national infrastructure, an NHS Spine, integrated with local care records services.

MPs on the Commons Public Accounts Committee warned last year that key parts of the programme – the biggest civilian IT project in the world – were on the brink of failure and that the revised completion date of 2014-15 (four years behind schedule) looked over-optimistic.Our study, conducted by 2020health.org and written by NHS IT expert John Cruickshank, warns that a hiatus for NHS IT after the election expected in May would be hugely detrimental to patient care. We based our findings on confidential interviews with NHS officials and the private contractors tasked with upgrading NHS IT.

The report’s starting point is to state that getting NHS IT right is critical for a new government. IT-enabled new ways of working are essential to enable the NHS to meet ever-growing health demands whilst also achieving its productivity targets and improved outcomes.The study then does a rigorous analysis of NPfIT, and dispassionately considers its successes and failures. It argues that the perception that the problem can be fixed simply by axing the Programme and localising everything will only makes things worse.

PIGS should fly in the Chancellor's Budget

By Andrew Haldenby, Director, Reform.

The Chancellor’s Budget should follow the example of Portugal, Ireland, Greece and Spain, according to Reform's new Budget briefing.   The other heavily indebted members of the EU are already cutting their deficits by cutting the costs of the public sector workforce and cutting benefits and pensions.  These ideas should be at the heart of the programme to return the UK public finances to surplus which should start now and last for many years.

The Chancellor faces three tasks in Wednesday’s Budget.  The first is to eliminate the structural deficit in the UK public finances and return them to surplus.  The second is to secure economic growth and employment so that the cyclical part of the deficit is eliminated as well.  The third is to reform the UK public sector so that it achieves greater productivity even after the deficit is eliminated, allowing taxes to be reduced.

The other heavily indebted countries in the EU – Portugal, Greece, Ireland and Spain, also known as the PIGS – are already doing what the UK needs to do.  The great majority of public spending lies in benefits and the costs of the public sector workforce, so that is where the cuts must happen.  Each of these countries is reducing the costs of the public sector workforce by reductions in both pay, of up to 15 per cent, and headcount.  Portugal is increasing the means-testing of benefits and Ireland is reducing public sector pensions.

Ben Pickering: Lobbyists urgently need to persuade lawmakers they are capable of self-regulation

By Ben Pickering, a senior board member of Conservative Way Forward and a public affairs head-hunter and recruiter for Hanson Search.

There’s a saying: tell God your plans and listen to him roar with laughter. If you work in the lobbying industry today, this probably seems about right.

If David Cameron and Gordon Brown follow through with their threats to introduce statutory regulation of the lobbying industry, their own well-developed plans for self-regulation – with its voluntary code of practice and adjudication by peers – is toast.

And ironically it’s not the lobbying industry’s fault for once – it’s just that the political parties don’t seem to trust their own not to fall for sting operations like the latest one run by Channel 4’s Dispatches team.

Their stunning revelations about the alleged behaviour of former Cabinet Minister including Stephen Byers, Patricia Hewitt and Geoff Hoon have given overwhelming momentum to existing calls for fundamental changes in the way the lobbying industry behaves and interacts with government.

The Conservatives have been hugely concerned about the influence of lobbyists under Labour – particularly those seeming to cash in on hundreds of millions of pounds of government-to-government contracts over the last decade – and have been pumping out increasingly strident rhetoric about the need for greater transparency and openness, coupled with pressure on the industry to give real teeth to self-regulation or face a new statutory body (funded by an industry levy) with powers to compel and punish.

Meanwhile, Labour (in a damascene conversion to rival that of Saul of Tarsus) now wants a statutory lobbying register, listing details of meetings between lobbyists and decision-makers.  This of course was the recommendation of the Commons Public Administration Committee last year to increase transparency, but after a painfully long and unexplained delay the Government rejected it (we now know why!).

The need for a credible plan to restore the public finances

By Patrick Nolan, Chief Economist, Reform

One month ago on this blog Lucy Parsons and I argued for cutting government spending and for cutting soon. Arguments that a credible medium-term fiscal consolidation (spending cuts and tax rises) is necessary for a sustainable recovery have now been given extra force by John Lipsky, of the IMF, who has noted that:

"The projected government debt increase in the advanced economies is only partly due to discretionary fiscal stimulus. In fact, such measures has accounted for only about one-tenth of the projected debt increase. Thus, merely winding down the stimulus will not come close to bringing deficits and debt ratios back to prudent levels, considering the projected increases in health care of other entitlement spending.

"Addressing this fiscal challenge is a key near-term priority, as concerns about fiscal sustainability could undermine confidence in the economic recovery. Already in several countries with particularly high debt and deficits, sovereign risk premia have risen sharply, imposing strains for the countries affected and raising risks of possible broader spillovers. Over the medium term, large public debts could lead to high real interest rates and slower growth. We have estimated that maintaining public debt at its post-crisis levels could reduce potential growth in advanced economies by as much as ½ percentage point annually compared with pre-crisis performance."

Alistair Thompson: Why the "cash for influence" story will have given Gordon Brown reasons to be cheerful

Alistair Thompson is Conservative candidate for West Bromwich East. He also runs Media Intelligence Partners with business partner Nick Wood, the former press secretary to Conservative leaders William Hague and Iain Duncan Smith.

Sunday’s marmalade dropper in the Sunday Times will have actually cheered up Gordon Brown. Events they say are the enemy of Government, but as yet another sleaze row erupts around the Prime Minister, one would expect there to be a deeper gloom than normal emanating from Downing Street. But in reality the PM I suspect is quite relaxed about the latest batch of greedy MPs being exposed.

In fact I would go further. I suspect that as Mr Brown read the headlines yesterday and then got to the collection of his colleagues who had been named, his rage would have turned to whatever adjective passes as a description of joy in No 10. He might even have danced a little jig, perhaps I have gone too far.

This might sound quite fantastical, but let’s look at all the facts. The PM as we know is a deeply bitter person, whose motto is rumoured to be, “In victory malice, in defeat revenge”, who hates anyone associated with the old regime of Tony Blair. Now look again at those who have been implicated, not a single Brownite among their number.

Alistair Thompson is Conservative candidate for West Bromwich East. He also runs Media Intelligence Partners with business partner Nick Wood, the former press secretary to Conservative leaders William Hague and Iain Duncan Smith.

Alistair Thompson is Conservative candidate for West Bromwich East. He also runs Media Intelligence Partners with business partner Nick Wood, the former press secretary to Conservative leaders William Hague and Iain Duncan Smith.

Alistair Thompson is Conservative candidate for West Bromwich East. He also runs Media Intelligence Partners with business partner Nick Wood, the former press secretary to Conservative leaders William Hague and Iain Duncan Smith.

The policy (in)significance of a no-adaptation assumption

As reported on this week's Westminster Hour, the Green Alliance has launched a project called "The Last Parliament" contending that the 2010 Parliament will be the last that might take action adequate to prevent significant climate change.  Matthew Taylor suggested getting the party leaders together with the Queen to emphasize the importance and urgency of action.  But that boat has sailed, guys!  There isn't going to be any serious effort at mitigation, now - a fact that smarter environmentally-interested politicians such as Greg Clark have understood.  Mitigation may always have been a hopeless concept, and was certainly (and obviously) always an inefficient one.  We now need to try to understand adaptation, and government's role in it, much better.

Fighting crony capitalism

The announcement that the Conservatives are out to take on vested interests is potentially very important.  If they get it right, the fight against crony capitalism could become an important and popular theme for a government.  It could help restore the vitality and credibility of capitalism in Britain.

Luigi Zingales recently wrote a very powerful article for the journal National Affairs about how the recent crisis could have a lasting effect on American capitalism.  There is an important confidence among Americans that generally people do well because they work hard, have a good idea or otherwise provide some new way of providing some good other people want.  The moral quality of free markets is that everyone is encouraged to think of the needs of others; to paraphrase Adam Smith the invisible hand guides the butcher, the baker and the brewer to see their own self-interest in providing our dinner.  Americans' confidence in their economic system is largely well placed.    Wealthy people in the United States are generally that way because they have provided some valuable service that has made many other people better off.  From Andrew Carnegie, who produced high quality steel for the railway lines that made the United States a country, to Bill Gates, who saw a world in which there was a computer on every desk coming and provided the software to make it happen.

Crony capitalisms produce plenty of millionaires and billionaires too.  But that wealth is invariably associated with political favour or being in the right place, at the right time, to take advantage of your fellow citizens.  Wealth comes at the expense of others, not from catering to their needs.  At the more legitimate end of the spectrum, from winning the favour of politicians and bureaucrats.  Without the institutions of a free market, you aren't rewarded necessarily for providing some good that others want to pay for, you are rewarded either for convincing those with raw political power to give you what you need or for simple graft.

Try your hand at being Chancellor of the Exchequer

By Dr Patrick Nolan, Chief Economist, Reform.

The Chancellor of the Exchequer faces a difficult task in putting together a Budget next week. Questions that the Budget will need to address include:

·         How can we convince the markets that there is a credible plan to reduce the deficit?

·         When should spending cuts begin – and what cuts can be made quickly (e.g., to the Child Trust Fund) and which ones will take time (e.g., some departmental budgets)?

·         How do we shore up revenues without damaging growth or weakening incentives to cut spending?

·         Is it possible to ring fence the largest areas of spending which have consumed the bulk of the increase in spending this century – or will ring fencing require cuts to non-ring fenced budgets (such as defence) that are too deep?

·         How do we avoid the temptation to use any reduction in the forecast levels of borrowing (which, to be fair, is at a dangerously high level) for vote buying measures, rather than doing the responsible thing and repaying debt?

·         How do we deal with interest groups who are already mobilising against reforms (such as to public service redundancy payments and education cuts) even though no real programme of cuts across government has begun?

So how would you approach the Budget if you were Chancellor? And do you think you could develop a plan that is better than those on offer from the political parties?

To help you to think through the revenue-raising side of this – how to shore up revenues without damaging growth or weakening incentives to cut spending – Reform has developed two calculators. One allows you to analyse how income taxes and National Insurance Contributions have increased so far this century and the other allows you to analyse what would happen if these taxes were reformed.

Vote Conservative, get higher electricity bills

The Canadian Conservatives won an election fighting against a carbon tax.  The Financial Times reports that the British Conservatives are going to go into this election promoting one.  Essentially, the tax would function as a floor on the price under the European Union Emissions Trading Scheme (ETS), making up the difference when the market price fell below a certain level.

The amount it would add to bills is highly contentious.  Mostly because it depends on the kind of market carbon price we expect in the future, and how much and how often it is below the new floor.  But the FT article reports that EDF Energy believe a floor in the range of €25-35 a tonne is necessary (confirming the figure in a Times report last year which EDF Energy appear to have attacked unfairly).  The current price is around €13 so you could easily be looking at doubling the contribution of the ETS to energy bills.

I once spoke at length to some of the lobbyists pushing for this new carbon tax.  What they are after is a stable incentive to invest in things like nuclear energy and carbon capture and storage which are more affordable ways of cutting emissions than building windmills.  After a long discussion, they didn't contest my point that there are basically two ways of changing policy to get the result they want.

How close will it be on 6th May?

Quite sensibly, the bulk of the discussion of the coming election has focused on the vote share the two main parties can expect – and the size of the gap. But does the number of actual votes by which a party wins tell us anything?

The table below shows the number of votes by which the party with the most votes beat the second placed party in each election since the Second World War.

Unsurprisingly, we see differences in the millions in years of electoral landslides and much smaller differences for very close elections.

But just as striking is how difficult it is to spot consistent rules. Does a big victory in one election help in the election that follows? It certainly looks that way for 1945, 1979, 1983, 1987, 1997 and 2001, when the winning party won big – and went on to be re-elected a few years later. But the Conservative victory in 1992 was on a similar scale. It didn’t help much in 1997. It is also worth noting of 1945 that Labour's huge margin of victory did not lead to a long period in power.

Nor is examining narrow victories very telling for future elections. The parties that won by margins of about 1.5 million in 1950, 1959 and 1966 were defeated at the election that followed, but much narrower victories have set the scene for long periods in power. The Conservatives actually took 224,000 fewer votes than Labour in 1951, then governed for the next 13 years. Labour did poorly in 1964 and February 1974 but went on to win by much greater margins.

What will be the difference in 2010? If you're interested in making a guess, my employer is offering two cases of champagne to whoever guesses most accurately – with one case of champagne also going to the best guesses made in March and April. I’d like to see some of the winners be ConservativeHome regulars.

Cough up: trying to defend smoking is a dead end

Henry Featherstone is Head of Policy Exchange's Health Unit.

Let us come straight to the point.  Smoking kills people.  It kills tens of thousands of people in England every year, in a gruesome and horrific way.

In fact it’s most likely to kill poor people, as they are far more likely to smoke. 

So for Matthew Sinclair to argue that our proposal to reduce smoking is “regressive” is a bit rich, frankly.  There’s nothing “progressive” about a policy that means more poor people dying.  If you want a more trivial reason to cut smoking, helping people to break their addiction to fags makes them massively better off.

I thought the counter arguments – that absenteeism doesn’t cost anyone else money (wrong), and that people would only waste time in other ways, were spectacularly weak.  Other than labelling the costs to the NHS “dodgy”, it is not at all clear what your argument is.  It’s pretty obvious that smokers are less likely to die of natural causes in their bed, and - sadly - it is more likely that they will need expensive hospital treatment.

So Matthew’s post begs a number of questions. 

Firstly, what does he think the “right” level of cigarette taxation is?  He clearly thinks it should be lower, but how much lower?  Which taxes would he like to raise to pay for a cut in tobacco tax?  Taxes on jobs?  Taxes on hard work?  Please don’t say, “instead we should cut spending as much as possible” - because both agree about that 100%.  Or is the current cigarette tax rate the “right” rate?  If so, why?

He disagrees with our proposal to raise cigarette taxes.  But we know that raising the tax on cigarettes reduces smoking, which is why both parties have been doing it since the 1960s, and thereby reducing the rate of smoking, and saving lives.  So what’s his big idea?  Or do we just sit on our hands?

Thanks, by the way, for the question about whether the research was funded by ASH.  No it wasn’t.  But we would have no problem taking their money.  Let’s be clear: I think a campaign which aims to reduce the number of pointless, needless, deaths is a good thing rather than a bad thing.  It means thousands more families don’t have their loved ones snatched away in the middle of their lives.  Perhaps you disagree that it is a good cause.  If so, why?

What do the public think should be the priority for tax cuts?

Well, here’s the result of a YouGov poll of three thousand people, showing their net support for raising various taxes.  The first figure is everyone and the second is for tory voters.  Most people think most taxes are too high (they’re right) which is why most of the numbers are negative.  The most unpopular tax is council tax.  But there is strong support for an increase in tobacco taxes, and they are bottom priority of all the possible tax cuts.

Council tax -79 -83

BBC licence fee -67 -71

Fuel duty -64 -76

The basic rate of income tax -60 -69

National Insurance -57 -63

VAT -56 -59

Green taxes -52 -60

Stamp Duty -45 -57

Inheritance tax -36 -61

Air passenger duty -17 -30

Business taxes -8 -19

Capital gains tax -3 -20

Duties on alcohol 14 14

The top rate of income tax 32 17

Duties on tobacco 47 48

The TPA is a fine organisation, doing many brilliant things.  But trying to defend smoking is a dead end.

North Korea executes failed finance minister

The Guardian has this extraordinary story:

"North Korea has executed a senior official blamed for currency reforms that damaged the already ailing economy and potentially affected the succession, a news agency in South Korea reported today. Pak Nam-gi was killed by firing squad last week, said Yonhap, citing multiple sources. The Workers party chief for planning and the economy had not been seen in public since January. The 77-year-old was put to death as "a son of a bourgeois conspiring to infiltrate the ranks of revolutionaries to destroy the national economy", the agency said."

North Korea has one of the worst human rights records in the world.

Re: Cough up

In the comments people have already pointed out some of the key flaws in Policy Exchange's new report calling for increased taxes on smoking.  The critical table in their report is this one:

 
Their source for healthcare costs - a report from the taxpayer funded political campaign ASH - has an extremely dodgy methodology.  While the report is quite vague about its data and method (often a sign people are up to something dodgy) it compares rates of "hospital admissions, outpatient visits, GP and practice nurse consultations and prescriptions".  That is a problem because smokers don't die more often that non-smokers, we all die once, just of different conditions.  And I'm pretty certain that method won't properly count care for Alzheimer's sufferers for example, which smokers tend to avoid by dying early.