Dearest reader, I promised you a "fisk" of Polly Toynbee (meaning I will go line-by-line through one of her columns and tear it to shreds). And yet I have not found the time to do this, despite the fact that she has to be one of the shrillest, least logical and most inconsistent of columnist published in the British press.
But here goes:
Cameron's basic error will cost this country dearlyThe all-conquering Conservatives are marching headlong into an elephant trap. Overconfident, they are starting to make mistakes. Too certain of victory, recklessly they dare to make enemies of the entire public sector.
Quite the reverse; half the trouble is that Cameron has yet to flesh out his agenda. The Tories haven't 'sealed the deal' with the electorate as people still don't undertsnad exactly what the party will do with power.
David Cameron transformed attitudes to his party overnight with that clever promise to stick to Labour spending plans: it blocked any Labour scaremongering about Tory cuts. It made Cameron look moderate, undogmatic and a friend of the public sector. He stole the trick from Labour, whose painful two-year freeze allayed old red fears. But now with Labour in directionless disarray, cocksure Cameron and Osborne ignore the perils of policies that lost them three elections. Their shrink-the-state glee is transparently ideological. Thatcher never promised cuts in advance.
Perhaps she didn't, but we have NO MONEY just now. We are stony broke, and yet public spending still outstrips tax revenues by £175bn this year. Public spending has soared since the early 2000s and we've got remarkably little to show for the extra money. And it's not as if taxes haven't risen; petrol duty is up, National Insurance conts went up by 10% etc etc etc... It's been said that we're actually in a worse position now than when poor old Denis Healey called in the IMF. And when did Polly become a fan of Mrs T?
The tax-and-spend battle began in earnest this week. But with every speech, Osborne and Cameron offer nastier medicine, sharper knives and worse to come: since when was inflicting pain a winning strategy?
When people realise that the Government have pissed away a boom that lasted for tweleve years (1995-2007), through spending the revenues of it, then spending some more, such that we have an eyewatering level of national debt. That's when.
Through ceaseless repetition they and their press have persuaded voters that paying down national debt fast trumps all else. So far they have won the argument, mostly because Gordon Brown was denying that anything whatever need be done. Now that Alistair Darling has forced Brown to his senses, the debate has shifted to whose debt-reduction plans are best.
Is paying down debt so bad? If you are a company that is "geared up" (have very high levels of debt), then much of your revenues will be used to pay interest on the debt. The recovery will be slower and more painful than it need be if most of the proceeds of any recovery are needed to pay the interest on the debt. And it will be even more expensive if we lose our AAA rating. This is more likely to happen if we stick to the drunken sailor spending policies of the last ten years.
With encouraging indicators this week that Britain is starting to emerge from recession a little ahead of Treasury forecasts, early signs suggest public opinion is shifting to the view that Labour's fiscal stimulus worked. Recovery will be fragile all next year, with fear of a double dip. So where are the Tories? Thoroughly trounced, proven to be wrong when all through the crisis they alone in the world opposed all intervention, including the bailing-out of banks. They have virtually no reputable economic allies.
People MIGHT thank Uncle Gordon for getting us out of recession (I'll believe it when I see it), but seeing as he's postponed the necessary tax rises to pay for the stimulus until after the next election. Remember: Churchill won the war...and was booted out of office in 1945. Why? Because people wanted to put the memory of WWII behind them. I'm guessing it will be the same this time... if Brown is lucky.
Economists Anatole Kaletsky of the Times and Martin Wolf of the Financial Times, both conservatives, this week walloped the Tory fixation with rapid and savage paying down of debt. Mervyn King, no Labour friend, has been the great promoter of quantitative easing. Robert Chote of the IFS warns Britain may already be planning to withdraw fiscal stimulus too soon. Every country, except Argentina, intends to keep spending through 2010, despite equally high debts. Nonetheless, at the spring election, just as recovery is fluttering to life, the Conservatives' one great priority will be to put it all at risk with immediate deep cuts, unprecedented anywhere else. Whatever blame Brown deserves for the bubble, is that a winning ticket for the Tories, really?
I think Mervyn King is damaged goods and the fact that he's still in a job, along with, strangely enough, the chaps at the FSA, only goes to show how weak Brown & Darling are. You cannot keep spending money we don't have and not suffer the consequences. And there are not many countries with debts the size of ours.
Even less popular will be their assault on the public sector. They are winning the argument now by talking of quangos, Whitehall bureaucrats and gold-plated public pensions. Everyone has a pet example of public jobsworths to cull. But vague assaults on the public sector can't take the Tories through an election. Once they get specific, they will be in trouble. For example, Tory sabres rattle at public-sector pensions, but a TUC report based on Office for National Statistics figures shows that taxpayers contribute 10 times more in pension tax relief to the richest 1% of earners than the state pays to all retired public servants. If Labour made proper use of this killer fact, they would promise instead to abolish all higher-rate income tax pension subsidies, bringing in £6bn – far more than public pensions cost.
A "killer fact"? Completely irrelevant. Tax relief is imply giving people back a bit more of the money that they have already earned before Greedy Gordon gets his claws into it. I might also mention that this actually costs the State nothing - no money is being paid out, only less taken in, and these 'richest 1%' will pay tax on their pension income in retirement. Are we suggesting that people should be taxed TWICE on their pension (once for the money paid in, and again on the income in retirement)? Actually, the Finance Act 2009 brought in some such changes - no doubt Polly was in favour. But the trouble with the money that the State pays to "retired public servants" isn't that it is unaffordable now, it's that we have an aging population, an increasing dependency ratio and that benefits are still being racked up while the cash isn't set aside to pay for them. It's when Polly's baby boomer generation has all retired that we'll have a problem.
The Institute of Directors and the Taxpayers' Alliance just produced their own juicy menu of cuts. While this is rightwing kite-flying, it offers a good frightener for what lies ahead. People may be stirred to anger by Tory tales of public waste, but voters will swing back pretty fast once real cuts are spelled out. On this £50bn death-list was Sure Start, Labour's best hope for rescuing young children. Away goes the educational maintenance allowance that has kept poor children in school beyond 16. Away go all grants from the Department of Communities and Local Government – mostly to charities. Freeze public pay for two years, freeze the state pension, end child benefit and no free travel for the old. Harmless-sounding cuts to non-frontline NHS staff mean fewer clerks to find hospital notes, make appointments and send samples to labs.
What is the defining characteristic of a charity, Polly? I thought that it was that it was funded by voluntary subscription. The State should NOT be funding charities, but it does - have a look at
fakecharities.org. Let's put a stop to this once and for all - the Government chooses groups that share it's view, and then provide them with cash to help them lobby the Government. It's corruption and it should stop. And the benefits of SureStart (a Polly favourite) perhaps deserve further scrutiny - either way it's more Big Government. The nationalisation of childhood - we can do with a bit less of that.
This useful report is a necessary reminder that few cuts are painless, most affect everyone, though the poor are hit hardest. Get out a political calculator and tot up how many tens of millions of voters will suddenly think that paying down debt fast is not the only priority after all. Ipsos Mori shows attitudes to the public sector are perverse: people criticise services in the abstract, but praise them mightily in their own community – where cuts will fall. I have been judging the Guardian Public Services Awards, looking at remarkable innovations and good ideas big and small by staff full of enthusiasm and energy. I can only think sadly that much of this would be gone when the Conservative axe falls. At election time, voters will contemplate this too – and daft public staff now telling pollsters they will vote Tory will come to their senses too.
In fairness, I've never heard of the Grauniad Public Services Awards, but "looking at remarkable innovations and good ideas big and small" is not necessarily a bad idea - lets find some efficiencies. But to describe public sector employees as "daft" for voting for the Tories? What a patronising bitch! Polly is one of these people that presumably believes that, say, black people, homosexuals and the poor have no business voting anything other than Labour - they should "know their place" and vote for the People's Party. But perhaps public sector staff can see the writing on the wall, same as everyone else. Perhaps they too realise that the gravy train has gone too far, and that the the money can be better spent. Perhaps they see waste every day and realise the game's up. I know a number of people who used to work in local government but packed it in as it was so soul-destroying, such a waste of time, full of make-work schemes where nothing ever got any better. And the taxpayer barely got a look in. Time for a change, Polly!
The autumn's pre-budget report must be bravely specific about what cuts and tax rises Labour will use to reduce the debt. Only clarity will force the Tories to produce their own plans. Labour will need to make some cuts – but they can raise some taxes too. One per cent on National Insurance yields £10bn. Capital gains on private homes would raise £3bn. Abolishing tax relief on savings and investments, which goes mainly to the rich, brings £3bn.
I agree - I'd like to see the Tories' plans as well. I think we need a proper, grown up debate about the mess we're in & how we get out of it. But let's look at Polly's ideas. 1% on NI - another 1%? They put it up to provide more money for the Health Service after the 2001 election (glad it wasn't wasted then), and yet she suggests we need a higher payroll tax. Just the thing to get companies to start hiring again. And capital gains tax on private homes??? Political suicide - Brown will lose the vote of pretty much every homeowner in the country. This idea was mooted before the 2005 election, but Brown had the sense to realise that it would have been a disaster. Oh, and a great way to discourage people from saving again (which Darling is telling us we should do) would be to scrap the savings tax reliefs that exist. As it stands, I think it's a bloody disgrace that we have ANY taxes on savings, given that the money has already been taxed as income, but that's for another day. So well done, Polly - these policies should give Cameron about, oh, a 400+ majority. And will bring in a whole £16bn - will pay for about ONE MONTH of the annual increase in the deficit caused by the spending outstripping tax revenue. Why not see if you can find a fiver down the back of the sofa?
Here's a suggestion - stay off economics when you're sharing your wisdom in the Grauniad. You're nearly as good at it as your Dear Leader. Have we got to the end yet?
This week figures showed that banks tripled the profit they made on mortgages in the last year: time to siphon some of that off. Meanwhile, a YouGov poll for Compass has found that 73% would support a new tax on bonuses above £10,000. Sixty-three per cent support the creation of a High Pay Commission. Labour has a chance to seize this public sentiment, since much public anger with politics springs from a sense that the parties are in cahoots with wealth. Cameron is making irreversible errors in his assault on the public sector. But Labour walks in an orchard of low-hanging fruit with its eyes tight shut, failing to take the chances on offer.
The banks profits will have been taxed then, along with the profits of ANY OTHER BUSINESS. You don't devise special retrospective taxes for sectors of the economy that you've decided this month that you don't like... unless you are running a banana republic. And the Compass poll? "Majority of people think someone else should pay more in tax" shocker. Everyone thinks THEY should pay LESS in tax, and 'someone else' ("the rich", invariably), should pay more. If you're a company deciding to locate in Britain, one of the things you will consider is the tax levels paid by the top people - I'm not saying it's a deal-breaker, but it's just one more reason to locate in Ireland/Switzerland/wherever... Same goes for Polly's High Pay Commission - I bet the New Labour toadies that would wind up serving on such a ridiculous body would not have to supplement their income by begging.
If the "low hanging fruit" is as poisonous as Polly's insane ideas listed above, Gordon's best bet is to cover his good eye and keep walking.
One down - many of Polly's columns to follow! In the future, I intend to make it a bit less heavy on the rant and a bit more on research, with links that disprove her "logic", but it's been a long day!
