CentreRight

UK earnings rise £1 a week

The average worker earned £7.60 a week more in 2007 than 2002 in real terms.  That's a pay rise of just over £1 a week each year for the last five years. A full spreadsheet of every country, region and local authority can be downloaded here.

The headline findings are:

• UK real weekly earnings rose by 2.1% - £7.60 a week or 2.1%, England £6.70 or 1.8%, Wales £9 or 2.7%, Scotland £18.50 or 5.4% and N Ireland £8.60 or 2.7%
• English regions: North East rose by £15.60 or 4.9%, North West £7.90 or 2.3%, Yorks £11.60 or 3.4%, E Mids £3.40 or 1%, W Mids £3.60 or 1%, S West £13.80 or 4.1%, East £4.70 or 1.2%, London £6.60 or 1.4%, South East -£4.80 or -1.2%.
• Biggest riser: Tynedale up £112.30 a week or 36.9%.
• Biggest fallers: Newport -£41.1 or -11.4%, Wear Valley -£42.00 or -11.7, Wycombe -£60.8 or -12.8%, Cotswold -£48.60 or -13.2%, Durham -£53.9 or -13.3% Corby -£49.30 or -13.7, Ellesmere Port and Neston -£62.00 or -15.6%, South Oxfordshire -£89.10 or -17.1%, Mid Bedfordshire -£81.90 or -17.3%, St. Albans -£97.10 -17.4%, Bridgnorth -£72.40 or -18.1%, Rushcliffe -£101.20 or -20.6%.
• Overall, Scotland and the North East have done very well - the South East very badly.

Opposition Government?

This evening, the BBC reports that the Government is considering allowing banks to swap mortgage books for Government bonds to free up the mortgage market. Last Monday, Shadow Chancellor George Osborne MP gave a speech where he set out a new policy where banks would be allowed to, er, swap mortgage books for Government bonds to free up the mortgage market. Deja vu or what? 

And deja vu on the flight tax, IHT cut, non domiciles etc. etc. Can't be long before we get deja vu on the 10p tax thing.  But what to call this unprecedented situation - how about "Opposition Government"? 

Is RIPA an Enemy of the State?

What do readers make of the state's powers on secret surveillance?  Have we got right the balance between the protection of the national interest and the protection of our privacy and ability to go about our business?  I am moved to ask because last night, I watched Enemy of the State on TV.  For those who haven't seen it, it is a yipping yarn about the abuse of power and invasion of privacy by Government agents.  The forces of freedom win, as they always seem to in Hollywood movies.

For some reason this film made me think about the Regulation of Investigatory Powers Act 2000 - the one that allows local councils to spy on anxious school run parents. A friend of mine runs an ISP.  He tells me he get a daily barrage of RIPA requests to look at your emails and the internet sites you are viewing from across Government for all sorts of seemingly minor reasons. He is concerned it has all gone to far and at the lack of scrutiny. No doubt phone companies get similar requests to listen in to your calls. The Conservative Party has a tradition of scepticism here as can be seen from this 1929 election poster and I feel deeply uncomfortable about the current position.  Is it time to restore checks and balances above a junior Police officer signing off a request, should local councils and loads of Government workers have access to these powers, or should there be a limitation to a national security purpose only? I'd really like to know where you think the balance lies and I think it could help our Parliamentary team too.

An Olympic caravan of death

Yesterday's spectacle of the Olympic torch's procession through London reminded me how lucky we are to live in Britain.  We are free to protest - and to live.  People in Tibet are not and have been subjected to the caravan of death, Chinese style.

Those who say sport and politics should not mix have a point.  Yet this is not about politics.  It is about the right not to be subjected to arbitrary and extra judicial state murder.  It is about the right to life.  The most basic right that comes before food and shelter. This is not "politics" - it is part of the very gossamer thread of human existence that joins us all together.  All regimes who have gone down that ugly path have rightly been condemned as international pariahs - Germany, the Soviet Union, various South American regimes, Saddam Hussein to name but a few. Our own failings are well remembered - such as the Riot Acts and the treatment of people in Ireland.  When states act in such a manner, their deeds live long in infamy.

Those who took part in yesterday's relay cannot be surprised that their actions are viewed through the prism of this most basic of human rights.  So they should not be surprised by the opprobrium that even now descends on them all.  Especially those, like Konnie Huq, who engaged in quite disgusting attention seeking, limp wristed hand wringing about their participation, yet went ahead anyway.  Most of all, Gordon Brown should be condemned for his part in the piece.  It was a(nother) serious error of judgement and shows how unfit he is for Prime Ministerial office.

Time to cut the House of Commons to 500?

Do readers of Centre Right think we need as many as 650 MPs?  Is the quality of legislation made better by such a large number of lawmakers? In the the United States they seem to get by just fine with just 435 members in the House of Representatives. Could fewer MPs offer a better deal to the voters and enable MPs to be paid at a level that is likely to see less difficulties with expenses?  Should MPs sitting for Wales, England, Scotland and Northern Ireland automatically become devolved lawmakers, thereby cutting the number of politicians the public are expected to pay for?

If we do go down such a route one thing seems especially important to me.  Equality of voters.  Each seat should have a set level - e.g. 85,000 voters.  No ifs, no buts.  The variance of electorates around the country is unacceptable and distorts election outcomes. It also results in an unfair democratic deficit for voters in more heavily populated constituencies. I would be really interested to know what Centre Right readers think.

Scandal of Government plan to "bury" massive increase in child poverty

In March every year, numbers are published on child poverty and the earnings of the poorest people in our nation.  But not this year.  No, the Government intends to bury them.  This is because the figures are expected to show a massive increase in child poverty.  They are expected to show real problems for pensioners and the poorest in our society.  Falling earnings across the board say the men in dark glasses.  The figures will be published on May 2 - the day after the local elections, where they will be safely buried deep in the Boris landslide.  You'll be cheering about Ken while the Government will be jeering at you.  Proof, if any more were needed, that the Government really is as bent as a corkscrew.

On April 1 the new "independent" Statistics Authority came into being.  News of the suppression of official statistics reports like this for political convenience shows that, after just one day of existence, it really was an April Fool's joke.  It has previously been pointed out that millions do not believe official statistics.  It's not difficult to see why.  There is an urgent need to clean house. 

Cameron talks of moving Britain to go

The importance of the speech by David Cameron on economic policy should not be underestimated.  Some have asked how the Conservatives would be different to Labour and he is starting to sketch out the key areas.  He acknowledges the basic Conservative desire for lower taxes, fewer regulations as well as economic stability.  Yet what is really important is the widening of the Conservative engagement on economic growth into improvements to transport infrastructure and education.

This is well founded.  The OECD did an in depth review into what makes economies grow.  It concluded that key to faster growth are better transport infrastructure, greater success at research and development, a more flexible job market, lower taxes along with knowledge and skills. For a more in depth discussion of why these issues matter, see a couple of articles here (page 28) and here. The key reforms needed are in the areas of vocational education - especially for success in helping the 5m people who could work yet do not get off benefits and into work. This stronger engagement by David Cameron will do much show how the Conservatives can be trusted with the economy and help deepen the case for change.

Filthy Finance Bill

This year's Finance Bill is published today.  It is 443 pages long.  There are 1,148 pages of Explanatory Notes.  It is another filthy tax bill from a Government dedicated to the great cause of complete bamboozlement.

This tax bill underlines the need for change.  Rather than an ever more complex tax system which makes us personally ever poorer and as a country ever less competitive we need simpler fairer taxes and to promote competitiveness and wealth.  This tax bill will make us weaker.  Britain should be stronger.

Not just broke - but squeezed too

Yesterday's launch of a campaign on the rising cost of living while our wages stutter shows how badly Labour has been handling the economy.  The cost of living report sets out brilliantly and relentlessly just how much the costs of necessities have gone up while the amount of money we have is going nowhere.

Why now after ten years of Labour?  It's been a game of two halves.  The first five years saw Labour benefit from the reforms we had put through to strengthen our growth rate as well as coinciding with the start of the rise of India and China which initially kept costs down.  The position has reversed in the last five years due to Labour's policies which tend to slow growth and the strengthening of India and China which adds to their demand ability to raise prices.  Labour is guilty because they lay down and basked while the sun shone instead of making hay.   It's a price we're all now paying. 

It will take some time for an incoming Conservative Government to sort out the mess. This is why, although I am a natural tax cutter, I think David Cameron is right to steer away from crowd pleasing promises. That said, the report does set out quite a few good ideas on what a Conservative Government would do to improve things.

Why we should help Post Offices

The news that Essex County Council is looking to save post offices is very positive.  Post Offices are of vital importance for people living in rural areas, the elderly and the disabled.  They provide valuable services and act as important centres that help to bring together communities.  Anyone who doubts this and the passion felt by so many people on the subject should see the post bag I had when six were closed down in the Dover constituency last Christmas.

Most of these post offices were not in need of subsidy, even though Labour has stolen away much of their business in recent years.  Much of the closure programme was about dumping what the Government considered to be a nuisance.  Most can pay their way.  What I hope we can see built with rural shop groups and local government working together is an organisation that will provide services - particularly financial services and bill payments - that local shops and former post offices across the country will be able to buy into. I very much hope local councils will look closely into the possibility and would be really interested in what people think can be done to help preserve these important parts of community fabric.

Sharing the proceeds of growth is good

Given the state of the public finances, the room for tax cuts may be limited.  This is not new following Labour Governments - Mrs Thatcher had to raise taxes initially to get the country's finances back under control before cutting them through the 80s.  The priority may have to be cutting borrowing ahead of tax cuts in order the strengthen the country and restore sound money.  For those that are attracted to deficit funded tax cuts, look at the state of America and see what happens - yuk! - so for me George Osborne's strategy is the right one, even though I feel deeply that we need to reduce the tax burden over time. Essentially the same strategy Margaret Thatcher advanced with such success.

Will Obama win Texas?

No, I haven't been lost in a time warp!  The rules of the Texas primary are a "two step".  Roughly two thirds of delegates are chosen by the popular vote, one third by caucases.  Barack Obama and Clinton were near tied on the popular vote.  The caucus results take much longer to come in.  So far 40% have come in according to CNN and Barack has 56% to Clinton's 44%.

If this position is sustained as more results come in, it seems possible that Barack Obama could yet win Texas.  I have my fingers crossed for that. There are few things in this World more dreadful than the idea of Clinton in the White House.

Fayed must pay

The Diana inquest has got all the best ingredients of a media fest - toffs, royals, courtroom drama, shady characters, various mad people, Nazis, angry policemen, plots, MI6 and of course the death of a national icon.  So no surprise there's been a complete media frenzy.  And to top it all, Fayed did not disappoint yesterday in accusing half the known universe as complicit in this great conspiracy.  Many are appalled, but most I suspect found watching Fayed unzip in public with all sorts of fascinating accusations, one of the funniest things to happen for a long time.

Yet while we are all richly entertained by this particular piece of car crash television, we should bear in mind that the cost of all these inquests and investigations now totals £6m.  It's Fayed who has driven this huge expense.  If Fayed wants to turn himself into a national laughing stock, it should not be on our ticket.  Fayed must be made to pick up the tab.

Time for a positive approach to Europe

Reading Caroline Jackson MEP's article on the Conservative approach to the EU reminded me of the need for a more positive approach when it comes to Europe - and the need to use temperate language in an area the arouses great passions on all sides.  Ms Jackson, who was elected as a Conservative MEP, expresses concern about the Conservative Party's "nasty" tag.  She then goes on, without irony, to refer to Conservatives who do not share her more Euro enthusiast vision as "patches of poisonous fungus".  Fellow Conservative MEP Dan Hannan comes under fire. Ms Jackson also trains her guns on Conservative representatives at the Council of Europe who, on my reading, are effectively labelled as toadies of Russia's President Putin.  Temperate language.  Hmmm.

Now I greatly respect Ms Jackson's right to hold a viewpoint and would not attack her for what she and many other members of the war generation so sincerely believe.  We should not forget that when we signed up, our political leaders had failed us to the point we were a total basket case.  So they thought - and many still believe - that they were saving the country (from themselves or itself is never too clear).

Watering the camels

Elections are fought on lots of things, but basically always seem to come down to money.  "Who will I be best off with?" is the ultimate question of the floating voter.  So in his excellent post Simon Chapman is absolutely right to focus on voters - especially families - who are under pressure.  The camels who have got the hump. It is not a surprise so many feel so broke.  Years of low rises in earnings, tax hikes, increases in mortgage costs, rising home costs like council tax, along with electric and gas bills.  All these add to the pressure, as explored in my recent offering with the Centre for Policy Studies.

So economic policy moves centre stage.  But what and how?  It's true Labour did not prepare Britain for difficult times and wasted the lot in the years of plenty.  Yet the voters look for answers to the questions of the future.  The truth is there is no quick fix.  Taxes cannot easily be cut, thanks to the chaotic state of the public finances and the poor outlook.  What room there is may have to be taken up with a deficit (and interest rate) reducing sound money priority.  Living costs cannot easily be cut as the price of necessities is determined by global markets. 

For me the starting point is uptempo economic growth to raise wages at the top line.  The OECD has studied this - from this study I conclude we need to look at halving business taxes, a knowledge revolution in skills and vocational education, wage raising labour market reform and proper investment in our creaking transport infrastructure. All this will take time, yet it would make a very great difference to our quality of life, general wellbeing and strengthen the nation.  Britain should be stronger.

Non doms should make a fair contribution

Almost every day in my work as a tax lawyer, I advise non doms on how to maximise their "tax efficiency".  This is a nice way of saying I advise them on how they can live in Britain and, quite legally, pay almost no tax at all.  It's true that generous tax breaks make gifted people move to Britain from abroad, but it is quite wrong that such people should basically pay nothing at all.  Everyone who lives in Britain should make a fair contribution to public services and that includes non doms.

And in this we are basically unique.  Every other major country imposes tax on the worldwide income of residents.  The US tax citizens wherever they live, resident or not.  That's why the Conservative proposals for a flat tax of £25,000 a year to cut inheritance tax made sense.  A contribution without being excessive or scaring people off.  The Labour Government have overcomplicated the proposal, have made a mess of it and created uncertainty.  The fact Labour suffer from mindblowing economic imcompetence should not cause us to lose sight of the essential basic principle - everyone should make a fair contribution to public services and inheritance tax should be set at a fair level.

Why do we feel so broke?

My report for the Centre for Policy Studies Why do we feel so broke? appears to have struck a chord judging by the coverage.  It put some numbers to the increase in the cost of running a home with a mortgage.  This is up from £130 a week five years ago to £230 a week today. The amount of interest on a mortgage has doubled in five years.  Payments on a £125,000 mortgage are around £150.  It's not just the interest rates.  We've also had to get bigger mortgages with bigger payments to keep up with house prices and sort out those credit card bills.

At the same time, wages have been pretty flat and taxes have rocketed.  A middling household now pays £150 more a week in tax than 10 years ago.  After you've paid the tax and for your house costs, we've not been much better off for some time.  Striving families seem hardest hit.

No patriotism please, we're British!

We cannot love our country because it's morally corrupt say a bunch of "educationalists" in today's Times.  I don't know about you, but that really made me choke on my cornflakes this morning!

According to the Institute of Education (part of the University of London), our role in the Second World War is nothing to be proud of.  Our imperial past is a disgrace and our involvement in the slave trade a travesty.  But hang on a minute.  We went to war in 1939 to protect ourselves, other countries and minorities who were being butchered against an expansionist threat. We were among the first to abolish slavery. Our imperial past brought an expansion of knowledge, trade and prosperity across the globe and it's passing was done more peacefully and smoothly than that of just about any other empire in history. The problem with some people is that they really just hate all that our country is and stands for.

I can't help feeling that if they had worried about all these things in the mid 1700s, when the foundations of empire were laid down, our country wouldn't have amounted to a row of beans - although on the plus side we wouldn't now be rich enough to support the scribblings of bien pensant liberals like this lot.

Re: The post-bureaucratic age

The CPS seminar was an excellent contribution in a critical area.  It's very, very important and central to putting together a convincing vision for the country.  Yet is there not a risk that when we talk of bureaucrats, quangos, de-centralisation etc. it can sound a bit 80s?  I do not feel we yet have the language that gets accross our ideas in a way that will really inspire people come 2010.

What I pick up on the doorstep is a feeling of "powerlessness".  Whoever you vote for the Government always gets in and we can't change anything.  Small wonder when ministers say "not us guv" and pass the buck to faceless local health chiefs for hospital problems or the faceless regional transport board for highways upgrades.  Suddenly MPs and councillors seem completely pointless, so why vote for them?  People tell me they want an ability to use the ballot box to get change - in other words "accountability" and "transparency".

Ministers should be accountable for things done at the central level.  Local councils should have direct accountability at the local level. Almost all quangos should go.  We could have a new covenant - you can understand, you know where you stand and the buck stops with someone holding elected office directly accountable to you or your MP / councillor.  We can do localist things like move a whole load of healthcare services to local authorities.  We can axe regional assemblies etc, and forge anew a real link between the electors and the elected.

Should we slash business taxes?

Tim's ponderings on Britain's relative decline reminded me of the case William Norton and I made a couple of years ago to cut corportation tax in half over the course of a Parliament.  This Centre for Policy Studies paper included a foreword written by the father of the Irish economic miracle, Charlie McCreevy, saying:

"countries cutting taxes - especially on business - see more inward investment, higher growth and higher tax revenues"

The case is that the reduction in the headline tax rate would be made up for by increased growth, investment and a fall in tax avoidance.  You'd need to be sure about the dynamic effects and affordability.  Yet at 15%, business tax is not really worth avoiding and there probably would be a scramble for multinationals to have their headquarters and more operations in the newly competitive UK. It would certainly put a lot more zip into things.

French "Non" to Euro President Blair

The Independent today reports that not all the French agree with President Sarkozy that Tony Blair should be Le President of Europe.  Former French president Valéry Giscard d'Estaing and the former prime minister Edouard Balladur are reported as strongly opposed.

Their objections?  Britain is not committed to Europe or the euro and Blair is too close to the USA.

Our objections? We are not convinced by Europe or the euro and Blair is too close to the EU.

Entente Cordiale.

Taxes up £10,000 in ten years

Tim reported yesterday that Labour MP Jim Spellar said "the nation is at the limits on tax".

So I thought it would be worth setting out my calculations of just how much extra tax households are paying.  In 1996/97, all taxes raised £271.7 Billion.  In 2007/08 total taxes are expected to be £516.8 Billion.  Those are Budget Red Book figures.

Pretty much all taxes end up being visited on households - directly (income tax, council tax), indirectly (VAT) through lower wage settlements if business taxes rise or later on in the case of the pensions tax.  So it is reasonable to say that pretty much all this tax ends up as a burden on British households.

Spot the difference

Even after the passing of Tony Blair as PM, the Government is still struggling with what to say about the Iraq War.

This from Foreign Office Minister Lord Malloch (aka B***ock) Brown in yesterday's Times:

"The invasion of Iraq and the occupation of the country by US led multinational forces had been “a terrible episode for everybody”, a Foreign Office minister admitted yesterday."

While a more bullish view is provided by Defence Secretary Des Browne in today's Independent:

"Was the invasion of Iraq a mistake?

No I don't think it was – although I recognise that this is a question that people have strong views about."

Not least his Foreign Office colleague. 

Which will happen first?  Will Lord MB get fired, or the Government sort out its message? My guess is that both events will happen simultaneously.

Government cleaner

There is a stain on the character of this Government that will be erased only by a new Government with a fresh mandate, who will restore confidence in our public life for good - no, not Hain, anything to do with passports, dodgy loans, the purchase of exemptions from advertising bans etc. etc.

The most serious stain is that of the dirt in our hospitals and filthy little bugs like MRSA and C Difficile which have claimed so many innocent lives.  Labour have promised a £50m deep clean to tackle the problem.  Opposition to this now arises from a most unlikely quarter . . . the cleaners themselves.  Today's Guardian newspaper reports:

"The government's £50m "deep clean" of England's hospitals is a waste of money that will do little to tackle the spread of superbugs, cleaning companies said today.

Firms carrying out the deep cleans, trumpeted by the prime minister, said that the money would be better spent improving day-to-day cleaning.

The Cleaning and Support Services Association (CSSA), which represents many hospital cleaning contractors, said the benefits of deep cleans would soon be lost without better daily cleaning."

Oh dear.

More Europe = less money

In today's Times newspaper Labour's Europe Minister Jim Murphy attacks David Cameron's referendum pledge on the basis that it would cause economic instability.

But what's this?  Into my Inbox drop two papers from Barclays Capital.  And guess what?  In 2006 Britain Grew by 3% or so.  In 2007 Britain grew by 3.1%.  This year, thanks to years of Labour's high taxes and excessive borrowing that's left us all exposed, Britain will grow by just 2%.  Meanwhile arcross the Channel it's a very sorry little story.  In 2006 the Euro area grew more slowly that we did.  In 2007, the Euro area grew by just 2.2% and this year it will grow by 1.8%.

I know where I'd rather be.  One way we could be assured of economic instability is going any further into Europe than we already are.  So David Cameron is quite right to stick to his guns on a referendum.