Thursday 28 June 2018

Not . . . not . . . HIGHER TAXES?

The Cabinet is wrestling with whether to give the NHS more money.  And if so how much.

The response to this has been telling. In the first place I don't detect any desire to extract structural health reforms as a price for a cash injection. And this despite, for example, a growing sense among some doctors that a modest payment for GP access, something routine in other European countries, might weed out some of the more frequent attenders.

The NHS is a money pit. An organisation that is paying prices for drugs which are many multiples of those charged on the high street is not the best custodian of public money.

Secondly there has been a chorus of outrage from those with vested interests in other areas of public spending (particularly defence), who have pointed out that every extra £1 for the NHS means less for them.

Thirdly there is the awkward fact that Britain is still living beyond its means. True, the Government is borrowing less than £1bn per week now, less than at any time before the financial crisis, but that's still money borrowed because we can't afford the standard of living we want now.  It might be legitimate to borrow to invest, but borrowing to finance current spending - to employ more nurses and doctors for example - is asking our children to pay taxes in future to sustain our lifestyle now.  This is something Conservatives have long felt was immoral.  And we have a Conservative government, remember?

You wouldn't think so, in particular because the talk is that any NHS boost would have to be funded partly by tax rises.

In a way, this is a hallelujah moment for me. I have long argued that Britain cannot afford its public spending at current rates of taxation. We have to decide what sort of public services we want, and how much we're willing to pay to get them. Excessive borrowing of the counter-cyclical type favoured by Gordon Brown from 2002 onwards has to some extent masked the acuity of this choice. But the long years of fiscal retrenchment under George Osborne and Philip Hammond, whilst nothing short of miraculous in economic terms (avoiding recession, cutting the deficit, creating record levels of employment, taking the lowest paid out of tax) have undoubtedly made public services worse.  And people are noticing.

The UK takes about 37% of GDP in tax. That's higher than the US, Canada, Australia and Switzerland.  Scandinavian countries pay more. We could pay more without the wheels falling off the wagon. Doing so might be better than borrowing from our children.

Thursday 7 June 2018

Brexit reflections #20 - the process is being driven by people and institutions who never wanted it in the first place

I often like to remind Remainers that the margin by which they lost in the 2016 referendum was just shy of 8%. 

Not so, they retort - 52% minus 48% equals 4%.  Aha, I say, with a flourish that makes me doubly unpopular (once for having voted Leave, twice for being better at maths), but 52 is nearly 8% bigger than 48.  They retreat, muttering, and calculating.  

Childish I know, but true.

How does this matter?  Only in that 4% seems a close result, almost within the margin of statistical error.  8% does not.  8%, if not a thumping majority, is a significant and decisive result.  

I'll come back to this.

The British press is always full of how badly Brexit is going, but a couple of pieces have stood out for me recently - Jonathan Powell's article in the Times under the headline, "Brexiteers play the blame game as they run out of solutions", and Ambrose Evans-Prichard's in the Telegraph, apocalyptically entitled, "Weep for Brexit - the British dash for independence has failed".  No need I think to sum up the substance - readers will get the picture.

I agree.  Brexit is a mess, and looks like being a failure.  Why?

Well, the people (see above) decided we should Leave the EU.  But how we should Leave has been decided by politicians, egged on by the media, civil service and academia.  Let us frankly enumerate their positions.

The Prime Minister is pro-Remain.

The Cabinet is mostly pro-Remain.

The Parliamentary Tory party is mostly pro-Remain.

The Parliamentary Labour party is mostly pro-Remain.

The House of Commons is mostly pro-Remain.

The House of Lords is mostly pro-Remain.

The Civil Service is mostly pro-Remain.

The media is mostly pro-Remain.

Academia is mostly pro-Remain.

Did I miss anyone out?

Now let's go back to Leave's majority.  Leave obtained nearly 8% more votes than Remain.  A significant and decisive victory in the biggest ever exercise of democracy in British history. And yet all of Britain's institutions have - conspired implies a conscious process - lined up to either prevent Brexit taking place at all, or, failing that, to ensure that it happens in name only.

If this is a tragedy (and it may be), it is not because Brexit represents the sunlit uplands and Britain's institutions are preventing us getting there.  It is because those institutions are doing their damnedest to prevent the exercise of the popular will as manifested in the referendum.  

Every Remainer politician who tries to control the direction of travel will tell you that they are only seeking to save Britain from national disaster. But they are forgetting that, however badly Brexit turns out, the fatal undermining of the democratic process their meddling is causing would be a far greater disaster. 

Collectively they have taken leave of their senses.

PS. A message to Jonathan Powell, by the way, he of the "Brexiteers play the blame game as they run out of solutions" article. The people running the Brexit process are those implacably opposed to it in the first place. No wonder it isn't working. Mr Powell - if you don't like the direction of travel, why are you so determined to hang on to the steering wheel?