Is Liam Fox A Tory Version Of Chris Huhne?

I read the The Times (£) that Liam Fox has been opposing Cameron's commitment to enshrine in law the maintenance of a foreign aid budget at 0.7% of Gross National Income.

The defence minister's thoughts on the subject were exposed via the familiar (to him anyway) medium of the leaked letter. Yes, surprise, surprise, this isn't the first time a letter has been leaked that relates to a subject in which Dr Fox takes a starkly different point of view to the Prime Minister, a point of view that would appeal to the Tory right and boost his reputation as a more authentic voice for the party as a whole.

So is Liam Fox to the Conservative party what Chris Huhne is to the Liberal Democrats? Well, I don't know how reckless a driver he is but it certainly looks like he shares the same deluded ambition to be leader. He markedly described Cameron recently only as a "good coalition Prime Minister". He also seems keen to court the right wing of his party in the same way a Huhne is courting the left of his.

Now, I've got a lot of time for Foxy and his dogged defence of the Defence Budget but I can't see him as a credible leader of the party. Regardless of whether he has a point on the overseas aid budget, he would do better to leave the over-ambitious, internecine behaviour to the likes of the increasing pointless Huhne.

The timing of this leak seems odd though. After the successful elections and referendum Cameron is in the strongest position he's been in as leader than ever before. Fox would do well to apply the breaks and play a longer game. If he can tame his drive for the top spot, others may be more likely to accept his points.

UPDATE

I've just read James Kirkup's blog on the subject. He makes some interesting observations including asking how much insubordination can Cameron tolerate before he starts to look weak. He's allowed Huhne and Cable to get away with it. Now it's a Tory can he afford to turn the other cheek? But if he doesn't and sacks Fox (an unlikely prospect in the short term perhaps) Tory backbenchers will be justifiably angry at the inconsistent treatment of Lib Dem and Tory ministers expressing dissent.

I spotted this in The Telegraph, made me chuckle:

The Spending Cuts In Context And The North/South Divide

A report by the Centre for Economics and Business Research (CEBR) tomorrow will expose the true extent of the Coalition's cuts.

It will point out that analysis of figures from the OECD reveal that the UK is cutting public spending LESS than the European average over the next 2 years. And this despite the fact that public spending increased far more sharply in this country than other major economies during the recession years.


This report is just further evidence of the myth being propagated that this country is being put through some kind of especially draconian state spending squeeze. Fraser Nelson's Coffee House blog analysis further proves the point. Fraser demonstrates with the graph below how Osborne isn't even cutting as hard or as quickly as Labour did the time they bankrupted the economy before last.


Indeed, projected spending in most departments is expected to increase by 2014/15 compared with 2009/10.


Worryingly, the CEBR report highlights that the economy in regions like the northwest, northeast, Wales and Northern Ireland will still be dominated by the public sector where it will still account for over 50% in 2015, after the spending cuts have been implemented. So we will still have large parts of our country where the sector of the economy that contributes tax income is smaller than the part that consumes it.


Of course, Ed Balls, seeing a report that undermines his economic "master plan", has already begun to spin it in his favour. It is obvious that public spending cuts will affect areas with the highest public spending the most. But rather than address the questions this report raises about his economic strategy, he prefers to point to the obvious fact that proportionately, northern areas dominated by the public sector will see bigger affects of the cuts. He ignores the government's plans to assist private enterprise in these areas so they can take up the slack and instead claims the government is attempting to exacerbate the north/south divide.

Expect a lot more of this kind of spin from Labour and the left generally. Attempts to revitalise regions of the UK to make them less dependent on the dead hand of the state will be portrayed as typical Tory attacks on traditional Labour voting areas. Labour's fear being that once freed from the employ of and dependancy on the state people there will take a more independent view when they vote. God forbid.

On The Hour - Council to Evict The Old To Teach Government A Lesson

On The Hour, Chris Morris' spoof radio news series and forerunner to the excellent The Day Today included a story about how a fictitious Labour council was evicting old people from their homes and making them sleep on the streets in boxes to prove a point to central government...



That was back in 1992. Now the Conservatives are back in government, we see Labour councils living up to their old reputations. This time it's about the governments attempts balance the nations books and asking councils to do their part by reducing what has been burgeoning spending on their part over many years.

We've seen the stories put out by (mostly) Labour councils - child protection services to be cut, sure start centres to close, all library services to be disbanded, even worse treatment of the elderly in council run homes etc. It seems Labour (and indeed some LD and even Tory) councillors would rather this than make long overdue efficiencies in the way they run their services and better prioritising those services most needed by the communities they serve.

They would rather cut front line services in the hope voters will blame central government than their historic profligacy, inefficiency and waste.

You've got to laugh.

Ed Miliband's Credibility Deficit

"Watch my nose grow out to here when I talk about the deficit"

Ed Miliband writes in Thursday's Times newspaper that the deficit that the Government (or Conservative-led government as he insists on spinning it, in a pathetic and transparent attempt to alienate Lib Dems) is grappling with, is not the fault of the last Labour mis-led government.

In continuing his attempts to convince voters, who he clearly thinks are as gullible as 4 year olds, that this is the case, he is demonstrating what a poor leader he is and how he hasn't a clue about creating a credible narrative for his party that could return the credibility required to make them electable again.

In attempting to sell the lie that the deficit was caused by a "global economic crisis" he merely invites Coalition supporters to remind everyone, as if they needed reminding (sorry), that it is the structural deficit that is being addressed. In other words, the difference between what is spent from and earned in taxes after the economic cycle is taken into account.

The deficit wasn't created by the evil bankers, as some would have us believe. The bail outs of the banks, something Labour and Gordon Brown are quick to claim were part of their "save the world" strategy, certainly have added to the overall debt levels but not to the yearly structural overspend (a better word for deficit in my opinion). Eventually, those banks will be sold off (presumably just before the next election) and the taxpayers money spent on buying them out will be returned with interest. So, even the bank bail outs are only temporarily inflating the debt level that is being added to by the tune of £150bn a year, currently.

It is the £150bn overspend that needs eliminating if we are to start to tackle to frightening level of debt already racked up. The overspend has been caused by reckless and politically motivated structural spending increases that were unaffordable and now have to be brought back under control.

If you cast your minds back just a few years, you will remember a time when the word "cuts" was political poison. Labour's electoral strategy (something Ed Miliband was heavily involved in) was to keep spending more and more and then dare their opponents to suggest spending was too high. If they did, as the Tories had done in previous elections, the cry of "cuts in hospitals, nurses, doctors, police, schools, teachers, etc etc" would go out and voters were duly repelled. It was a successful strategy until the growing recession hit the banks and sparked the banking crisis. After that, people looked to government to spend more on supporting the economy and on social welfare for those cast into economic difficulty. But they saw a Government that had spent all the money during the good times and now had to rack up enormous debts to act to support an economy during, what was an inevitable downturn. We, the electorate, have to take some of the blame for being taken in by Labour's strategy and
the Tories learnt they had to avoid talking about cuts if they were to "detoxify" their brand.

So, the one thing Little Miliband gets right in his Times article was this lack of political clarity from Labour's opponents back then. That is regrettable but not an excuse to ignore the crisis now, as he proposes. His approach would leave us continuing to add to the £4.8 trillion debt mountain that is already a millstone around our childrens' necks.

2011 will be a testing year for the Coalition. It's on the right economic path but it starts getting rocky and is uphill for most of the rest of the Parliament. Let's hope it can keep itself together during the coming dark days of unpopularity and political tests, like the forthcoming AV referendum. The only way a clown like Ed Miliband will get elected is if the Coalition drops the ball in the middle of the game. The inbuilt electoral bias will return a Labour government with them just a few points ahead (or even possibly one or two points behind) the Tories. So, it's time for Tory and Lib Dem politicians and supporters to gird their loins and battle through the next couple of years while doing everything they can to counter the deceits put out by Labour such as "the deficit wasn't our fault"

Euro Billions

Cameron is right to resist the European parliament's demand for a 6% hike in European funding. He clearly wanted a freeze or cut, but it seems that is not a possibility.

Some suggest he should refuse to pay but, sadly and especially since the Labour government ratification of the Lisbon treaty, this is not a realistic position to take. We are reduced to fighting for the least worst outcome.

There was an interesting graphic in The Times yesterday illustrating where our money goes in Europe.



It's episodes like this, a funding boost at a time of austerity for member states, that shows just how long over due it is to have a serious look at what the EU is good for and where it should withdraw and leave individual countries to run their own affairs. It would be worth checking how your Euro MEP voted on the budget increase proposal. It's hard to believe the European Parliament's decision to ask for a 6% increase is a democratic reflection of public opinion.

Cameron should be lobbying for future cuts in budgets, especially given our own austerity measures are yet to bite. But, as his government is doing at home, those cuts should be allied with serious reform so public confidence can be restored in the EU and people can start to feel they get value for money.

The Great Fairness Debate

The reaction to the Comprehensive Spending Review (CSR) has been nothing if not wholly predictable. Leftists popping up all over the shop to denounce the cuts as savage, regressive and unfair. But what does constitute fairness?

Matthew Parris writes on the subject in The Times yesterday (behind a pay wall). He makes the point that fairness is more than some arithmetic calculation of who loses most or whether the cuts are "progressive" or not...

"The essential point about the word “fair” is that it doesn’t add anything to words like “right”, “just”, “reasonable” or “ought”. “Fair” doesn’t (contrary to what the IFS assumes) imply a number, a quantity, a mathematical relationship between two different portions. It doesn’t (contrary to what the Labour Party thinks) imply equality: of outcome, opportunity, pain, gain, or anything else. When a speaker says “fair” he appeals to his hearer’s sense of what people do or don’t deserve.
Without this sense of deserving, any analysis of mere numbers is sterile. The raw, unprocessed arithmetic of financial gain or loss makes no impact on the moral imagination of the public unless illustrated by real cases of real groups about whom we may have an opinion — I stress: opinion — on each group’s moral claim on welfare. Accountants’ formulae for deeming cuts “progressive” or “regressive” are counterfeit, unless weighted by moral judgment.

A crude example: many people would think that, in a queue for an expensive lung operation, it would be “unfair” to put a penniless, jobless and incorrigible chain-smoker ahead of a hard-working young mother who had never smoked — although on the IFS calculation the decision would be “progressive” because it redistributes income from a richer citizen to a poorer one."

This is an important point and, as Parris suggests in his article, not one the coalition is making very effectively. The debate needs to move on from the "progressive" / "reactive" terms, that the left have managed to keep the focus on for decades, and start thinking about what truly is "fair".

The coalition has made a rod for its back by insisting on referring to its plans to reign in Labour's budget overspend as being "progressive". This term means, to most people, that the rich pay more (not just in absolute terms but proportionately) than the poor. Surely, that is fair?

Redistribution of wealth is not, in of itself, fair. Taking from the "haves" and giving to the "have nots" may have a Robin Hoodesque romantic appeal but it doesn't follow that it is fair in all circumstances. When choosing what to cut and what to spare the Chancellor had to made many individual decisions on what was fair and what wasn't.

This is where we see the fundamental difference between the Tory and Labour approach to fairness. Leftists think the main objective should be to redistribute wealth from the better off to the poor. Thus they hope to alleviate poverty and create a more equal society. This, they tell us, is "progressive". For them it would be enough to be able to prove statistically that they were taking more from the better off than the worse off. That's fairness in their book.

Osborne's starting point was more specific; that it wasn't fair to run up unsustainable debt levels for our children's generation to pay off at great expense. In truth Labour already had, but his point is still valid. We should not continue to grow that debt level by continuing to spend more than we can afford for years and years to come. Remember, all the government is proposing is to stop adding to the national debt, they're not planning on paying any of it back before the end of this Parliament at least.

From there the Chancellor had to make a number of fairness judgements. Inevitably these judgements are influenced by the values of the people making them (which, these being politicians who want to be reelected, in turn are influenced by the broad consensus in the country). Matthew Parris describes the kind of judgements he would make and they clearly tally with the Chancellors'...

"Here are mine; and I wouldn’t trouble you with them if I wasn’t convinced they are shared by tens of millions in our country.
I say it isn’t “fair”, if you’re only on an average wage, to have something approaching half your earnings confiscated through income, council, excise, fuel and spending taxes, and redistributed, even though it was your efforts that earned the money.

It isn’t “fair” that people housed by the State at your expense should be given homes for life, rather than only for so long as they cannot afford to pay market rates.

It isn’t “fair” — from the viewpoint of those who would expect their own grown-up children to rent a room if they lacked the funds to buy a house — that a person assessed as being in housing need, once he passes the age of 25, gets a right to a home of his own rather than just a place in shared accommodation.

It isn’t “fair” that the benefits system provides an incentive to jobless people with a medical condition to claim, and stay on, incapacity living allowance, even if they have a partner in work who can support them; and it isn’t “fair” that the costs and numbers of such claimants have swelled so enormously in recent years, without any evidence that the nation has become more ill or disabled.

It isn’t “fair” that workers in the public sector — whose jobs have been safer and whose salaries have risen faster than those in the private sector — should enjoy pension provisions so much more generous than what the rest of the country gets, paid for partly from the taxes of people in less secure jobs with inferior pension rights.

In every one of the five examples I’ve just cited, I’d bet that a shift in resources away from the recipients of state welfare would be seen by a majority in Britain as “fair”. But any fiscal calculation of the “progressive” versus “regressive” effect of the shift would conclude that the cut was “regressive”."

So, fairness is in the eyes of the beholder. To my eyes the CSR has got it about right. There will be a lot more controversy to come as the details pan out over time. Hopefully the coalition can get their fairness narrative sorted before long, otherwise they'll struggle to convince people to accept the pain being inflicted.

And when you hear those leftist politicians, celebrities and journalists berating the government for their actions it would be worth remembering the glee with which many of them welcomed the recession The First Post reminds us. Follow the link and have read if you time. They were happy to accept hard times for the poor, as long as it was framed in anti-consumption, environmentalist terms.

Further to the progressive/fairness debate, I see Guido has an excellent post on the same subject that is worth a read.

Darling Loses Balls

I see the Labour leadership candidates have started to turn on each other already. It should be no surprise that it's the pugnacious Ed Balls that breaks ranks and starts blaming others for Labour's disastrous defeat at the election. How typical of anyone who models themselves on Gordon Brown to look for others to blame. Now the toady faced dissembler is calling for his party to be more robust in its opposition to the attempts by the Government to tackle Labour's debt mountain.

In his latest blog post, Ed "mini-Brown" Balls states...

Over 13 years, Labour made many big decisions on tax and spending: how to reduce the national debt in 1997, how to fund extra NHS investment in 2001, and last year how to reduce the deficit once the recovery was secured.

Let's quickly challenge the misleading suggestion that Labour made any positive contribution to how Britain reduced the national debt from 1997. They didn't, they stuck to Conservative taxation and spending plans for most of their first parliament in power and rode the wave of economic recovery that started when we regained control of our own interest rates following our exit from the disastrous Exchange Rate Mechanism and that was maintained subsequently by Ken Clarke's chancellorship. It was after that period of sensible economic management, that Labour started putting its own stamp on taxation and spending, by increasing both, a lot. But spending even more than tax, hence our current predicament.

Following this fallacious claim, his blog post goes on to make the point that at no point in Labour's 13 years did they raise VAT and that they should oppose any such move by the Government as well as opposing changes to the Child Trust Fund and tax credits to reduce their availability to better off people (or lower and middle income earners as he, again, lies about the policy). It is this approach to opposition that is the becoming a trend amongst the shadow cabinet. They have chosen to oppose the measures necessary to address the debt crisis they got this country into, but at the same time, refuse to spell out how they would clear up the mess.

Alistair Darling, one of the idiots that wouldn't listen to him and therefore lost Labour the election, according to Balls, recently claimed that Cameron would owe him a "very big apology" if the state of the public finances wasn't as bad as had been predicted. This is another line they are deploying. They point to recent figures that show that the Government didn't borrow as much as expected last year and that growth was slightly higher than expected. Let's be clear exactly what the proportions are of these "improvements" - £7bn less borrowing last year. Well, whoopy shit! That still left us having to borrow £156bn in 2009. With the IFS predicting that, of all the advanced and emerging economies, only Ireland and Latvia will borrow more than the UK, you get some idea of the mess we're in. They also predict, that once the new, independent Office for Budget Responsibility reports, we could be looking at a more honest total accumulated national indebtedness of £1.8 Trillion, taking into account PFI and pension liabilities.That's one hell of an overdraft!

Until we eliminate our yearly national overspend we will only be adding to that astronomical overdraft figure. This year's £6bn spending reduction seems pathetically small, put into context. And, of course, the larger that total amount of debt gets, the more debt interest we have to pay and therefore even less money is available for public services.

So, the next time you hear a Labour spokesman asking for an apology because one economic figure is slightly less eye wateringly disastrous than expected, you know what the answer should be from the Government on behalf of the tax payer, it starts with an "F" and ends in "uck off". And the next time you hear a Labour shadow minister or supporter criticising a specific spending cut proposal, don't take them seriously unless they explain how they would make the same saving in a different area of public spending.

UPDATE: following OBR Report

The Office for Budget Responsibility has reported and, as expected, Alistair Darling's growth forecasts are found wanting. The OBR say 2011 will see 2.6% against Darling's 3.25%.

The OBR have decided to avoid using a conservative (note the small 'c'!) central growth forecast to base their figures on. This wa the norm previously and is partly responsible for a slight drop in the overall borrowing prediction. But the most worrying aspect of today's report is the estimated growth of the structural deficit.

Read Stephanie Flanders' blog for a more knowledgable view on the figures! I love some of the delusional comment left by Labour supporters - 'This is now the coalition's mess, they cannot blame the "previous government" anymore' (Disnaymatter at 11:12am). They are so desparate for their party to be exonerated from responsibility for the debt crisis they will say and believe anything.

Here's a telling graph (lifted from the Telegraph):