Skip to main content

The Tipping Point

Ah Budget Day!

What tradition, what *significance*. The journalistic references to the historic budgets of years past, while all the time most people are simply working out the immediate financial impact of what ever complex fiddles the Chancellor is prepared to impose upon us. The polices that are simply robbing Peter to pay Paul while trying, of course, to prevent Peter from noticing too much.

Yet this year there is a certain ennui, a certain fatigue. The calculated posturings of the rather downbeat Chancellor will be met by the equally choreographed outrage of the Conservatives, as they struggle to work out just what on earth the Labour government have actually done. In the end, this is probably the last real Labour budget- and I expect that when Mr. Darling sits down that this will probably be the single saving grace for most of us.

Yet actually I think that the 2009 budget may indeed end up being something of a mile stone.

The Liberal Democrat pre-budget briefings are usually about as well attended by the eager media as a Stalin appreciation society self criticism and bring-and-buy sale. *Usually* of course was before the media realised that Vince Cable was that rare politician: a man who demonstrably knows more than the journalist. Yesterday, the labyrinthine Cowley Street headquarters of the Liberal Democrats was packed for one hour by journalists- probably several are still lost in the building.

Well what can be so interesting about what the Lib Dems have to say?

Ah, well- let us look at the situation that Nick Clegg and Vince Cable were discussing.

The basic story is that the most credible comment that the Chancellor can now make about the economy is "oooomygaaaawd".

Its bad.

In fact it is absolutely bloody awful.

Even more "fabulous" is that while for the richest five percent there really is a great deflation, for the great majority there is an acceleration of inflation: yes it is really true that you are feeling the pinch, because prices for you Mr & Mrs Average, really are going up.

So raising the tax threshold to £10,000 is a more than just a very good idea. It also goes to the heart of the economic matter (not to mention a very long way towards my long expressed preference for a flatter, simpler tax code). My response: *thunderous applause*.

At last.

Dealing with another bugbear- the unearned public sector pension gap- is also on the list. Good, we must do this, as a society we just can't afford to pay out what has not been earned.

Actually I have become increasingly proud of what the Lib Dems have done over the past week: credible and coherent economics is being matched by the political courage that has unearthed the crimes committed by the Police during the G-20 demonstrations on April 1st. I was frankly a bit sceptical of the need for Lib Dem MPs to attend and effectively act as some kind of Marshals, I am certainly not anti-Police in any way, but as we now know, it was indeed a necessary action. I don't think I am alone in being genuinely flabbergasted at the filmed actions of certain individual officers. While the other parties have begun to respond to the political weather on this issue, the Liberal Democrats have ended up being the better weather forecasters.

Meanwhile the latest opinion polls are confirming that the Lib Dems are indeed back up to the levels that they achieved at the 2005 election. Sure it is a function of the fact that Lib Dem supporters are now, like me, feeling even more committed than they were. It is also likely to be a recognition of something more. Without getting too excited about a single poll, we can at least now be more optimistic about the trend for a better outcome in 2010 than 2005. Let us see what the next few months bring.

However, I think that being able to lead on the issues of the economy at a time of economic crisis is highly likely to propel the party forward quite dramatically.

As the tired Labour government limps towards its tawdry conclusion, Tomorrow's budget could be their last ever. Meanwhile the British people are genuinely less susceptible to hype and spin.

I see a great opportunity emerging for the kind of principled Liberal beliefs that I have spent all my adult life supporting and indeed advocating. I can see several of my friends now limbering up up to join other of my friends (and OK, my family) already in the House of Commons.

If so, it will be because of what is happening this week. The Lib Dem policy of raising the tax threshold is I think, truly a tipping point. An economically and socially liberal party seems to be in the making- the Liberal Democrats- and un-spun Liberalism might just be what the country recognises as being necessary after all.


Popular posts from this blog

Concert and Blues

Tallinn is full tonight... Big concerts on at the Song field The Weeknd and Bonnie Tyler (!). The place is buzzing and some sixty thousand concert goers have booked every bed for thirty miles around Tallinn. It should be a busy high summer, but it isn´t. Tourism is down sharply overall. Only 70 cruise ships calling this season, versus over 300 before Ukraine. Since no one goes to St Pete, demand has fallen, and of course people think that Estonia is not safe. We are tired. The economy is still under big pressure, and the fall of tourism is a significant part of that. The credit rating for Estonia has been downgraded as the government struggles with spending. The summer has been a little gloomy, and soon the long and slow autumn will drift into the dark of the year. Yesterday I met with more refugees: the usual horrible stories, the usual tears. I try to make myself immune, but I can´t. These people are wounded in spirit, carrying their grief in a terrible cradling. I try to project hop

Media misdirection

In the small print of the UK budget we find that the Chancellor of the Exchequer (the British Finance Minister) has allocated a further 15 billion Pounds to the funding for the UK track and trace system. This means that the cost of the UK´s track and trace system is now 37 billion Pounds.  That is approximately €43 billion or US$51 billion, which is to say that it is amount of money greater than the national GDP of over 110 countries, or if you prefer, it is roughly the same number as the combined GDP of the 34 smallest economies of the planet.  As at December 2020, 70% of the contracts for the track and trace system were awarded by the Conservative government without a competitive tender being made . The program is overseen by Dido Harding , who is not only a Conservative Life Peer, but the wife of a Conservative MP, John Penrose, and a contemporary of David Cameron and Boris Johnson at Oxford. Many of these untendered contracts have been given to companies that seem to have no notewo

KamiKwasi brings an end to the illusion of Tory economic competence

After a long time, Politics seems to be getting interesting again, so I thought it might be time to restart my blog. With regard to this weeks mini budget, as with all budgets, there are two aspects: the economic and the political. The economic rationale for this package is questionable at best. The problems of the UK economy are structural. Productivity and investment are weak, infrastructure is under-invested and decaying. Small businesses are going to the wall and despite entrepreneurship being relatively strong in Britain, self-employment is increasingly unattractive. Red tape since Brexit has led to a significant fall in exports and the damage has been disproportionately on small businesses. Literally none of these problems are being addressed by this package. Even if the package were to stimulate some kind of short term consumption-led growth boom, this is unlikely to be sustainable, not least because what is being added on the fiscal side will be need to be offset, to a great de