Sod Off Kinnock

On Radio 4 this morning Neil Kinnock explained the true horror of what he would like to see come out of the the Murdoch press fiasco. Kinnock said that there should be a requirement of balance in the press as there was already in TV.

Just think about that for a minute. What cranky Kinnock is asking for is that the government should set up some sort of charter requiring newspapers to establish ‘balance’ in their reporting of political matters as is already required of the BBC.

What the hell is that supposed to mean? Are the Telegraph required to present the left wing view as well as their own opinion, and the Guardian must balance their editorial with a Tory viewpoint? Perhaps when you go into the newsagent to buy a Times, you might have a legal obligation to buy an Independent as well. I always knew that Kinnock was an idiot, but I didn’t really understand how big an idiot he was until today.

What he is saying is obviously stupid, but the interesting thing is how revealing it is about the instincts of Kinnock and the Labour Party. What Kinnock really hankers after is a soviet style control of all the media. In the first instance this would be justified on the grounds of political balance and then it would inevitably lead into the expression only of approved opinion which did not disagree with that of the government.

Instead of trying to control the political views of newspapers, what we need is for the rest of the media to be released from the stranglehold of controls within which they work now. For ITV that would mean the ability to compete properly with world broadcasters like CNN, Al Jazeera and thousands of smaller companies. In he case of the BBC, independence could only be brought about by moving it out of state ownership.

Related articles

• Kinnock Wants to Shut Down Our Free Press (order-order.com)
• Ed Miliband needs to disown Neil Kinnock’s absurd ideas on press regulation (blogs.telegraph.co.uk)

Strike At The Heart Of Freedom

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Today most schools are disrupted, some emergency call handlers are not working and many other public sector workers are striking in a struggle with the government over pensions.
LibCon ministers and the London Mayor are muttering darkly about how most trade union members did not vote for the strikes and that it might be necessary to change the law if workers persist in disrupting public and emergency services in this way. But what is the legal position and would it be right to make striking more difficult?
These problems have a long history. The Combination Act 1799, and the Master and Servant Act 1823 stipulated that all workmen were subject to criminal penalties for disobedience, and calling for strikes was punished as an “aggravated” breach of contract. But then the position was slowly liberalised and through the Trade Union Act 1871 and the Conspiracy, and Protection of Property Act 1875 trade unions were legitimised. Toward the turn of the century the House of Lords emphasised that businesses should be free to organise into trade associations in the same way that employees organised into unions. However, with growing unrest and industrial action the House of Lords changed its mind. Soon afterwards the Taff Vale judgement made unions liable for the costs of industrial action. Although employers could dismiss employees without notice, employees in a trade union were open to penalties for withdrawing their labour.
This case led trade unions to form a Labour Representation Committee, which then became the Labour Party, to lobby for the reversal of the law. The Trade Disputes Act 1906 prescribed that any strike “in contemplation or furtherance of a trade dispute” is immune from civil law sanctions. The Trade Boards Act 1909 created industrial panels to fix minimum wages.
Discrimination in employment was prohibited on grounds of race in 1965, gender in 1975, disability in 1995, sexual orientation and religion in 2003 and age in 2006. Starting from the Contracts of Employment Act 1963, workers gained a growing list of statutory rights, such as the right to reasonable notice before a fair dismissal and a redundancy payment.
From 1979, the Conservative government enacted laws reducing the power of trade unions. Reforms to the internal structure of unions required that representatives be elected and a ballot is taken before a strike, that no worker could strike in sympathetic secondary action with workers with a different employer, and that employers could not run a closed shop requiring all workers to join the recognised union. The wage councils were dismantled. In 1997 the new Labour government brought the UK into the European Union Social Chapter, which has served as the source for most reform in UK law since that time. The National Minimum Wage Act 1979 established a country-wide minimum wage. The Employment Relations Act 1999 required employers to compulsorily recognise and bargain with a union.
A ‘repeal of all anti-union laws’ is official TUC policy. A ludicrous objective since it would be impossible to get agreement on what laws are anti-union, but they are on to something. What is needed is for the repeal of all laws relating to the workplace or industrial relations. The common law that applies to all of us for activities outside work is just as adequate for our needs when we are working as it is when we are not.
When a person enters into a contract to work for somebody else they have all the same rights and responsibilities as a person contracting to buy a house, borrow money, go on a holiday or make any other commercial transaction.
It is nonsense to have special laws for picketing when the common law of public order is long established. A workplace dispute which spills onto the public highway is no different from a possibly unruly gathering outside a football match, pop concert or night club.
Just as it was wrong for the state to prevent the formation of unions, it was wrong to protect contact breakers from the consequences of their actions and the huge body of industrial law since then has only confused and worsened the situation.
The reason we need government is to protect the life and property of citizens from crime and external threat. The police have not been on strike because it is illegal for them to do so, and those who have chosen to join the military do not have trade unions. As far as the rest of the public sector is concerned there is only one solution to their pension problems. That is to transfer all of these ‘services’ to the private sector and let the new employers work out the right package of remuneration for their staff as determined by the market in which they operate.

Related articles

• Strikes hit 11,000 schools in England as public sector workers protest pension cuts (mirror.co.uk)
• Hundreds Of Thousands Join Pension Strikes (news.sky.com)
• Britain faces summer of civil service strikes (theglobeandmail.com)

Population Growth – Welfare Not Immigration

It was announced today that the UK population increased more last year than at any time in almost half a century. According to figures from the Office for National Statistics, the number of births in the UK is now at its highest since 1991, with 797,000 during the year to mid-2010 and this contribution to overall population growth is greater than that from net migration.

So why has there been a new baby boom without a war for an excuse?

Increased government support for families – notably the introduction of the Working Families’ Tax Credit (WFTC) in 1999 and greater generosity of means-tested Income Support (IS) payments – has coincided with a rise in births among couples who left school at 16 relative to those who stayed in education after 18.

According to research summarised in the Autumn 2008 issue of Research in Public Policy, the probability of having a birth increased by 1.2 percentage points among women with low education, which equates to nearly 45,000 additional births. The study also finds that the decision whether to have children – or when to begin having them – seems more susceptible to financial incentives than the decision over how many to have. The UK birth rate has increased steadily since 2001 and now stands at an average of 1.9 births per woman, the highest level since 1974.

Some women told researchers they had stopped using contraception. The more generous welfare system is being credited with contributing to an increase in the overall UK birth rate, which is now at its highest level since 1974. The report by the Institute for Fiscal Studies concludes: “We have shown that more generous Government support coincided with an increase in births among the group most affected by the [welfare] reforms.

The study says that the introduction of Working Families Tax Credit and an increase in Income Support between 1999 and 2003 triggered a rise in taxpayer spending on children “unprecedented” in the previous 30 years. Because the reforms were targeted at the poorest families with children, the value of their state handouts increased by 10 per cent of their total household income. For couples who both left school at 16, the reforms meant an increase in benefits of 45 per cent, from £39 a week to £56.76. This is a rise almost twice as much as the handouts for which a couple who went on to sixth form college would be eligible, which increased by 25 per cent to £37.27 a week. The researchers then looked at fertility rates both before the reforms were announced and after, for a sample of 101,330 women aged between 20 and 45. They found a large increase in the first year after the benefits were made more generous, particularly among women who had left school as soon as possible. The results show a 15 per cent increase in the probability of having a baby in the “low education group”.

People will have different views about whether a larger population is a good or bad thing. What cannot be rationally disputed is that dipping into taxpayers pockets to encourage the births of a whole new generation of welfare dependants can only take us closer to the economic collapse that state spending and borrowing has speeded us toward. Labour justified this handout on the grounds of reducing child poverty. The result will be lots more children in homes where inadequate parents don’t have the will or the ability to raise these children to be responsible and contributing members of society.

Related articles

• Britain adds half a million to population (ctv.ca)
• Population growth hits 50-year high (mirror.co.uk)

What Is Money

Most people use money every day so you would think that they would know what it is, but that doesn’t always seem to be the case. I would like to explore what is meant by sound money, hard currency, gold standard and those kinds of commonly used words.

 

In the bronze age, gold was known and used aesthetically or for ritual, but all the indications are that bronze ingots and axe heads were used as a proto currency. This makes sense. If gold was magical or too scarce for trade, the best durable to provide liquidity in commodity exchange was the metal that was most prized for tool and weapon use. Just as gold now gives some people confidence as a timeless holder of value, that must have seemed true for bronze two and a half thousand years ago. Unfortunately, iron came along and those who had hoarded bronze found themselves with a near worthless stash.

 

In these times people identified their own currency by discovering what was needed for the liquidity required for trading. As time went on, tribal leaders set standards for currency bars and then minted coins. Over the next thousand years or so we can track economic cycles and politico-economic crises by estimating money supply and the devaluations carried out by changing coin alloy composition.

 

From distributions of found coins it seems clear that different tribal coins were in use on trade routes at the very least. When the nation state developed, currency became one of the fetishes of sovereignty. Instead of being freely traded, monarchs and governments started trying to stipulate how much their money was worth and with this came a degree of national prestige resting on the exchange rate. This madness was with us until 1972 when sterling was partially floated on the market. There was an attempt to return to a more fixed exchange in 1990-92 in the European Exchange Rate Mechanism and it collapsed disastrously. Sterling value is now market determined, but that value is manipulated by the Bank of England fixing interest rates.

 

When paper bonds, securities and notes became widely used there were worries about what was behind the promises and governments tried to induce confidence by holding bullion stacks and setting money values against them. These gold or silver standards came and went and varied in credibility until international agreement at Bretton Woods in 1944 established the US Dollar as a reserve currency so that bullion did not have to be held and moved. In 1971 the US removed the gold convertibility of the dollar. That has made no difference to international trading, but those who need security for their currency achieve it by holding a basket of other ‘hard’ currencies instead of US dollars alone.

 

The history of money tells us what it is and what we need from it. Money is a commodity whose function is to exchange things you have for things you want. Money has only ever been as sound as the confidence you have in it. The owner of a hoard of bronze axes probably took a lot of care over the security of his store, but didn’t anticipate bronze becoming unwanted.

 

I want to sell some shares and buy oil. Tomorrow I will sell the oil and buy Japanese Yen to finance a business trip. In these transactions I will not be interested in state promises underlying currency. The only thing of relevance is the second by second price of these things in international markets. I do not even want physical contact with the money. I am satisfied with the movement of some electrons and reliable software to give effect to my deals.

 

In another scenario, I have accumulated money that I do not need and I want to set it aside for my grandchildren at some time in the future. Ignoring tax for the moment, it would not be the best move to hold it in cash, irrespective of whether that is under the bed or in a bank. Its value will be eroded by inflation and/or it is at risk of theft or the saving institution going bust. This would be true irrespective of whether there was a gold standard or not. Let us be clear, if you do not believe the promise to pay the bearer on demand, why would you believe a promise by the same government that it is holding the bullion necessary to support its promises? The only real gold standard is owning gold, but even if it doesn’t suffer the same fate as bronze, it is expensive to keep and hard to exchange so it is useless as currency.

 

There is no sure answer to my question, but the best option is quite likely to be to buy a bundle of blue chip equities including some land, some durable commodities like gold and shares in major companies.

 

The qualities required of money are different in the short term than they are in the long term. All money depends on the confidence it commands over the period for which it is required. Not only the best, but the only way of establishing that confidence is by a free market. What makes a currency hard (i.e. having the capability of maintaining its worth outside of the borders of the state in which it is minted) is by being traded without manipulation.

 

If we really want to see the free market flourish we should abandon nationalist attachments to a specific currency and give up trying to fix interest rates. Any country, region, organisation or individual should be able to issue money if they want to, and everybody should be free to accept whatever they want as value. As Hayek understood, this will not result in the chaos that governments want you to believe, but will allow the rational choices that we apply when we buy or sell any other product.

 

Linden Dollars are just as much real money as any other currency so long as they can be exchanged for currencies outside Second Life. At some point Second Life will go away and so will the worth of Linden Dollars. State issued currencies sometimes fail. The Deutsch Mark collapsed in Germany under the Weimar Republic. Wilson’s Government brought sterling to the edge of failure when we had 25% inflation in mid 1970′s and recently the Zimbabwe Dollar sank to zero value because Mugabe and his mates screwed the economy. How long might the euro survive I wonder?

 

Words like sound money or fiat money don’t have meaning. All that counts about money is whether it works and you can’t rely on it working forever irrespective of who made it or what they say is backing it up.

 

The Big Society

Society has been progressively smothered by big government in a process that started at least a hundred years ago with the Lloyd George government.
It will take several generations for citizens to emerge from their present infantilised condition to be able to run their own lives, bring up their families and self manage their communities.
Government cannot create a ‘Big Society’, it can only start getting out of the way so that society is given the space to grow.
At the moment our economy is prevented from emerging from worldwide recession by the enormous debt created by the disgraceful spending spree in which the Labour Government tried to buy an election victory.
Job creation is also strangled by the the thousands of laws and regulations that began with the deluge of equality and health and safety laws in 1974 and reached epidemic proportions with the last government. I know that many people like to blame the EU for this. They play their part, but the truth is that our own government gold plates EU directives all the time and our bureaucrats are at least as bad as the Brussels ones.
Never mind the political slogan of Big Society. Let us have the freedom to build our societies. Essential steps are to cut state spending and cut taxes. Abolish laws and regulations that are making it difficult to employ people and unattractive for enterprises to want to operate in Britain.
Reduce the number of MPs, abolish all Quangos and scrap unaccountable bodies like the House of Lords. Devolution of some power to Scotland, Wales & NI was a good thing, but nothing like enough. Power must be devolved from Westminster to villages, towns and communities. Society can only function on a human scale. Things affecting our everyday lives should be the responsibility of ourselves and people who are so close to us that we know them and can call them to account.
National and international bodies are necessary for the law of the sea, defence of the nation and the small number of things which cannot be done locally.
Power corrupts. We have too many corrupt politicians because they have been allowed to take on too much control of our lives. Laws are necessary, but they need to be small in number, easily understood and rigorously enforced. We should never have got into a situation where some of our law makers are law breakers. The answer is to bring politics home, or at least to our neighbourhoods.

A National Ballot

As it seems that some form of agreement between the Tories and Lib Dems may be emerging, democrats must maintain the demand that electoral reform has got to be part of the political reform.

The need is straightforward. We need legislation in the first Queen’s Speech that provides a national ballot within months in which the following alternatives are offered to the electorate:

1. A Conservative preferred option which might be expected to be the maintenance of First Past The Post, but with a smaller number of MPs and equal sized constituencies.
2. A Labour preferred option which is likely to be the Alternative Vote System.
3. A Liberal Democrat preferred option which would be the Single Transferable Vote System that they included in their election manifesto.
4. No change to the existing system.
5. An additional choice proposed by the Electoral Reform Society if they wish to present one.

As the Conservatives are the largest Party and they are adamantly opposed to fair votes, it may be that the Lib Dems will cave in and agree to allow the Tories to govern without a commitment to give the voters this choice. If that is the case, we must demand that those people who argued for fair votes before and during the election should stand by their commitments and present a Bill to Parliament for a national ballot on the above lines. There is actually a majority in Parliament for reform of the electoral system and that should allow such a bill to pass into law. In the event that a minority Conservative Government prevented this Bill from being presented to Parliament or obstructed it being passed into law, they should face a vote of no confidence and another election be forced.

Democracy in Britain must be modernised and the current opportunity presented by the lack of an overall majority by a single Party must result in genuine electoral reform being offered to the public.

Electoral Reform

Opportunities for meaningful political change do not come often, but there is one now and it must be seized.

The situation is clear although it is complicated. The Tories did not win the right to form a government, but Labour most definitely lost the election. The bizarre effects of a First Past The Post (FPTP) election means that many people who do not support Labour or the Tories either do not have any opportunity to vote for a party that they do support or they vote tactically for one of these two in order to keep the other out.

This means that although the Lib Dems (LD) had 28% or 29% popular support before the election, only 23% of voters turned that support into a real vote. In addition to this, the LD vote was more evenly spread than that of the two major parties so they had lower chances of their votes being converted into seats. The consequence is that with 23% of the vote the LDs have only 10% of the seats. That is profoundly undemocratic and it is worse when you consider that 28% of voters may have wished to vote LD.

For Libertarians, the situation is far worse. We are in the position that the Green Party were in a generation ago. Despite the Greens standing hundreds of candidates and having a massive public profile for their policies, they have only just been able to secure a single seat in Parliament for their leader. This is a democratic disgrace.

For a new party with good, clear policies that would appeal to many voters, but lacking big financial backers and the army of backers of the big institutional parties, FPTP prevents any chance of even the smallest success in either national or local elections. That is not democracy and it must change now.

The Labour Government has taken this country into such massive debt that our economy is on the brink of collapse with all the terrible consequences that are beginning to unravel in Greece. This means that we must have a new Prime Minister and the prospects of reasonably stable government in the short term established very early this week. If that is not achieved, there will be great volatility in the currency markets and it will become harder every hour for all of us to be saved from very serious damage to our quality of life and financial future.

The tasks for today for our political leaders are these:

Gordon Brown.

Resign immediately. You were never elected as leader of the Labour Party, you were never a legitimate Prime Minister, your performance in office has been disastrous and in the only leadership election you have ever faced you have conclusively lost. The Labour Party cannot maintain any credibility so long as you remain Prime Minister and the interests of the country require Labour voters to be adequately represented in the negotiations to form a government.

Nick Clegg

Do not make any deal that does not include a commitment to the introduction of electoral reform with a timetable for completion before the end of this year. You stood on a platform of fair votes and your present bargaining position owes everything to that undertaking. Failure to deliver electoral reform would be a betrayal of the worst kind and would not be forgiven.

David Cameron

You did not win a mandate to form a government and the economy of this country is in such a perilous position that you have a duty to reach agreement without delay on the formation of a government that can command a clear majority in Parliament so that effective decisions can be taken without delay. There is no Parliamentary majority among parties of the political right. Differences between Tory and LD memberships mean that a coalition is unlikely and a supply and confidence arrangement will be fragile. In these circumstances you should present a simple draft Queens Speech and emergency budget to all Parties and seek agreement to them being allowed to pass. Despite the opposition of your party to PR, there is clear demand from the public for electoral reform and it must be offered within a strict timetable that does not extend beyond this year. All other Parties should allow your minority government to function until a reformed electoral system is in place and a new General Election can be held.

The chaos of queues outside polling stations as polls closed; the disgrace of stations running out of ballot papers; the nonsense of an unelected second chamber and the absurdity  of not having fixed term Parliaments, all contribute to Britain being seen as a country with third world election standards and grossly outdated democracy. All our leaders have an urgent responsibility to resolve these matters with the urgency that is necessary to prevent us collapsing into a third world economy as well.

Being Quango’ed into a Soviet State

 

The reason why western democracies have the highest standards of living in the world and why the Soviet Union and its satellites collapsed in economic ruin is that wealth creation is driven by private enterprise.

 

When the state owns and controls most of the economy the generation of new ideas and products withers. This causes public discontent because they are deprived of the things they need and which they can see being enjoyed in freer societies. The government which cannot face letting go of the control that it has grabbed from its own citizens can only respond by ever more interference in personal choice.

 

When the Labour Government came to power in 1997 about 33% to 35% of the British economy was owned and controlled by the government. That was an unacceptably high proportion and very damaging to the efficient development of wealth creating companies. The laws we have to control monopolies and to try to stop large corporations from completely dominating a market define an unacceptable monopoly as control of one third or more of a market. On this basis the British Government had a monopoly grip on our economy even in 1997. Since then the government stake in gross domestic product (GDP) has risen to nearly 45% and it is growing at an increasing rate.

 

According to Dominic Lawson in the Sunday Times there were almost 1,200 quango’s in 2001 costing £20 billion a year to run. By last year the cost of quango’s had risen to £34.5 billion a year. In just seven years the quango bill has risen by 75% at a time when inflation has only been around 2.5% and at the moment it is close to zero.

 

This government has taken the country into near bankruptcy. We have a national debt so huge that our grandchildren we be left with trying to pay it off and it is still increasing at a rate of £200 billion a year.

 

Desperate all the time to find more money to finance their lust for control, the government continually increases taxes. The recent increase in top rate income tax from 40% to 50% will actually produce almost nothing if not even reduce the tax take because high earners will move away, but an even more damaging consequence is that the decline of the wealth producing sector will accelerate. This is the road to collapse that killed off European communism twenty years ago.

 

We need to call a halt before we are all ground into destitution and subservience. A good start is to kill off the quangos.

Childcare Vouchers

 

Two parents who are both higher rate tax payers can receive up to £2,400 per year of public money towards their child care. Who is paying for these wealthy families to bring up their children while they follow their fulfilling lives? All of the rest of us of course, but the burden falls hardest on people with low incomes who still have to buy clothes, furniture and all the other necessities of life and for whom VAT is a bigger proportion of their commitments than it is for the wealthy.

 

In a cynical attempt to buy middle class votes the Labour Government introduced this mad scheme and now he has bankrupted the economy Gordon Brown is trying to stop it. His big problem is that he doesn’t command any authority in his own party and the Labour MP’s who are scared of losing their seats are threatening to vote against him.

 

Face up to it Gordon, you do not have the remotest chance of winning a general election whenever you call it. Having wrecked the economy, crippled business and swamped us with a multitude of idiot laws in your periods as Chancellor and PM you must spend your last months making sure that the debt burden you pass on to our children and grandchildren does not get any worse.

 

You must scrap the childcare vouchers. It will go through parliament because the Tories will have to support it. You have to ignore Caroline Flint and her mates, the country cannot afford to feather bed the wealthy. If they threaten to throw you out as PM just say thank you. Months of misery from the revolting Sun followed by a humiliating defeat at the polls will do your family and health no good. Better to go down now by doing the right thing.

Poverty, Welfare & Big Government

 

The Labour Government set an impossible target to reduce child poverty and then it damaged the economy so badly by its excessive spending, enormous debt creation and crippling burden of bureaucracy on business that it made every one of us poorer than we should be.

 

David Cameron is quite right in saying that there needs to be smaller government and that individuals and voluntary organisations should be encouraged to take more responsibility improving their own life opportunities and assisting people close to them when they face difficult times. Our interfering state has made it increasingly difficult for people to help out with child care, volunteer in a youth group or do any kind of constructive community activity. The bureaucratic systems set up by local government and some of the huge charities have no ability to build genuine relationships with the people they are supposed to serve. Although usually well intentioned to begin with, they become self serving empires for their managers and the staff get reduced to box ticking target hunters rather than genuine carers.

 

The problem with the Tories is that they have not put forward any concrete proposals to show how they would cut the interfering state and we know that in government they will be hard to distinguish from the appalling Labour government they hope to replace.

 

The welfare dependency that has been built up over decades, including such deceptions as the incapacity system introduced by Thatcher to try to hide unemployment, cannot be wiped out overnight, but real progress must be made immediately.

 

Cameron says that people should not be worse off when they go off benefit into work. Of course not. He will not achieve that by fiddling with tax credits. The tax credit system is a costly, over complex, bureaucratic monster that needs to be scrapped. Incapacity benefit must be ended and the benefits for all people without work frozen at their current level.

 

As wages increase and benefits stay fixed the incentive to find work and not be penalised for taking it increases.