Deal with unemployemt - Scrap the minimum wage


With unemployment now at around 2,435,000, it is clear that despite all the talk of green shoots, they are certainly not taking root in the job market.

Unsurprisingly, those in the public sector are still doing nicely. In the three months to May the public sector saw an average pay rise of 3.7%, while average annual rate of pay rose at 2.5%. For those in the manufacturing sector that saw an average pay increase of 1.1%, this is a slap in the face.

The response to unemployment by both Lord Mandelson and George Osborne has been to attack the other for their lack of policies. Yet it is quite clear that both are at something of a loss on how to deal with unemployment beyond the introduction of equally wasteful and ineffective government initiatives. Of course Mervyn King has had an idea – namely quantitative easing – whicn I would rather he had kept to himself. The BBC reports that he is planning other stimuli. Inflation is certainly not the best way out of recession.

In truth, the only sustainable way to deal with unemployment is to remove the shackles placed upon businesses of onerous and multifarious government regulations. A good place to start would be scrapping the minimum wage. Although when we were riding high on the credit bubble, such talk of its removal would have been met with bafflement by many, now that the bubble has popped, this policy could be an honest way to work our way out of this recession.

Scrapping the minimum wage would have immediate benefits for those employers that could afford to take someone on for less than £5.73 per hour and for the workers who would rather work for less than not at all. And certainly many of those currently unemployed do indeed want to work. The statistics show that many recently unemployed are not turning to the state for handouts but are instead relying upon family and savings, a dignified mentality that this government cannot understand (it is launching an investigation into the discrepancy).

As the IEA found in its extensive analysis of the minimum wage prior to its introduction in 1999, “in a period of sustained economic growth, a minimum wage has negligible positive or negative effect; but in a period of recession a minimum wage is likely to deepen that recession by preventing labour markets from clearing. Firms will be unable to take on new employees willing to work for relatively low wages in order to escape unemployment; if firms cannot take on new employees and people cannot exit from unemployment, then the route out of recession becomes much slower and more arduous."

Scrapping the minimum wage is a policy that the opposition parties could and should immediately adopt. The economics and morality behind such a decision are entirely sound. This Prime Minister should be held to account for his decision to introduce and increase the minimum wage when he was Chancellor and the effect these decisions are now having upon the job market and in prolonging the recession.

Howard Flight on elected tyranny


The system we now have is one of “elected tyranny", where, provided governments have a large enough parliamentary majority, they continue in power until legally obliged to call a General Election, irrespective of their competence; and become ever more out of touch with the nation. The floor of the House of Commons has become little more than an ill-attended, empty shell, apart from the weekly “spectacle" of Prime Minister’s Question Time.

Howard Flight 'The number of independently-minded MPs of stature can be virtually counted on one hand' ConservativeHome.



With the announcement of the government’s latest policy idea comes that familiar mixture of disbelief and despair. This time, DEFRA is demanding that supermarkets end buy-one, get-one-free offers. The aim is to reduce food waste, but the proposal is idiotic from start to finish.

First of all, it probably won’t reduce waste. As those of us without a £400 per month food allowance know, supermarkets often offer two-for-one deals on products that are near their sell-by date, to get rid of them before they perish. It’s commonsense that banning the deals will mean more food ends up in the supermarkets’ bins.

Even if it does reduce waste, a ban wouldn’t help anyone. The market, left alone, allocates food pretty efficiently. Supermarkets offer BOGOFs because it makes them richer, and people buy them because it makes them happier. Banning them will eliminate mutually beneficial trades, and make both groups worse off.

To suggest that people are unable to manage their own grocery shopping, that the state needs to step in to make sure we’re not going home with more food than we can use, is as insulting as it is ridiculous. Perhaps Hilary Benn and chums would also like to regulate how long we grow our hair and what colour socks we wear.

This is the sort of creeping interventionism that constitutes an ever-growing threat to our economic liberty. If Tesco wants to give me a free punnet of strawberries then that’s up to them. If I want to amass vast quantities of perishable fruit and leave it to rot in my kitchen then that’s up to me. The government should keep well out of it.

The worst thing about the proposal is that it distracts from real problems. Tinkering with supermarket offers is a gimmick that diverts attention from genuine waste. DEFRA should take another look at the Common Agricultural Policy, that last year funded uneconomic agricultural production worth €55bn.

Renewable generation – The reality


Government ministers continue to eulogize about the potential of UK renewable energy. New policy documents have proliferated and ever more ambitious targets are being set. What remains short, though, is adequate finance for renewables investment, which remains uncomfortably dependent upon the six integrated energy suppliers and on the monopoly grid operator, National Grid.

For some years now, these six players have dominated UK electricity generation. EdF, and the two German companies – E.On and RWE - are the leading players in England, along with Centrica. North of the border, Iberdrola, the owner of ScottishPower, and Scottish and Southern Energy (SSE), which owns many old – and fully depreciated - hydro-plants, prevail.

Since the net debt levels of most of these companies have soared over the last two years, there are now more financial constraints on their investment programmes. Importantly, EdF’s investment focus is on new nuclear-build. And, whilst E.On remains committed to heavy renewables investment overall, much of it will be in the US. Moreover, Centrica’s strong interest in renewables has been diluted by the recent fall in gas prices. But Scottish renewables investment remains robust with both Iberdrola and SSE, along with Sweden’s Vattenfall, continuing to support new wind projects there.

Securing grid connections also remains a serious problem, especially in developing offshore wind plants. This scenario is not helped either by National Grid’s net debt currently exceeding £22 billion. In terms of renewable technologies, only onshore wind – with a few exceptions – has made real progress to date in the UK, especially in Scotland where planning requirements are less restrictive. Offshore wind offers some prospects, along with biomass plants, which the Government has been trying to develop.

The key issue remains. Will the six integrated energy companies deliver the required renewables investment, given the many attractive investment opportunities beyond the UK - notwithstanding their own deteriorating finances?

Food food everywhere...


...but not a morsel to spare. Or so we are being led to believe by the Anderson Review. This view is further entrenched by the opposition's, Nick Herbert, highlighting our 'shockingly' increased reliance on food imports. Yet a question hangs over both of these opinions: what is the problem?

Why is food security important? To the government it represents a step in the process of controlling our food supply chains and food production. In no uncertain terms: nationalization. To the Conservatives the remaining large agri-businesses represent a key constituent in funding and support, and therefore anything they can do to increase agricultural prices to the detriment of the consumer will be undertaken. Both approaches show the short sighted, short-term gains and befuddled economic thinking of our current crop of inept politicians and inane civil servants.

Why do we want to produce something at a higher cost when someone else wants to do it for us, cheaper and more environmentally friendly than we can? Where is the benefit to us? Quite simply: there isn't any.

We currently hold enough intelligence to feed all the people of this world (and a few billion more). Yet we decide to hinder ourselves by attempting to make bio-fuels, subsidizing farming, rejecting GM Crops and embracing previous technologies that tie multiple farmers to the land in inefficient modes of production (re: organic and fair trade). All of this is done so that the moral minority can sleep at night safe in the knowledge that they are doing their bit to reduce their impact on the climate. They are living in the Dark Ages and pulling the already impoverished unto them, foisting a life of drudgery and despair on them. All in the name of their selfish ideal. We have been feeding ourselves since the New Stone Age, 10,000-15,000 years ago (becoming more successful as time passed). We need to end farm subsidies/food tariffs, privatize land and seas, and get government out of the way; this would lead to efficient production and resource allocation and the alleviation of food shortages.

Are you being watched?


The latest report by the Interception of Communications Commissioner reveals that government authorities monitored citizens’ telephone calls and emails more than 500,000 times last year.

This “Use of Communications Data" is permitted under the Regulation of Investigatory Powers Act 2000, which has introduced a system of governmental surveillance on a scale unprecedented in Britain, and internationally unrivalled.

Of course, the police and the security services need the means to investigate serious crimes and prevent acts of terrorism, but these demands must always be balanced against the protection of privacy; both because our privacy is inherently valuable, and because a system of surveillance inevitably risks abuse by rogue employees or government itself. A just policy must be based on two principles: proportionality and supervision.

The current arrangement is far from proportional. The Act (together with subsequent statutory instruments) allows almost 800 government bodies, from the Charity Commission to Wiltshire County Council, many with no obvious law enforcement responsibilities, to view our telephone and email records, and to send employees to follow us covertly. These powers have notoriously been used to pursue infringements as trivial as allowing a dog to foul on the street. The power to listen in on our telephone calls, surely among the greatest possible intrusions into our privacy, can be justified under the dangerously imprecise purpose of “safeguarding the economic well-being of the United Kingdom." We must recognise that these surveillance measures should only be used in the most serious circumstances, and (given past events) we should not trust the authorities to exercise restraint in their use of the legislation. The measures must be restricted by statute to be employed only by the police and security services, and only in cases of national security or serious criminal behaviour.

The RIPA act is even weaker in ensuring adequate supervision. All the surveillance measures covered in the Act can be authorized by an officer of appropriate seniority within the investigating organisation itself, with the exception of intercepting the contents of telephone calls and emails, which requires a warrant be signed by the Home Secretary. These are hopeless safeguards: the executive has no incentive to restrain itself. Authorisation of surveillance must be put in the hands of the judiciary (as the Lib Dems suggest), who can provide genuinely independent supervision with adequate concern for citizens’ privacy. Unless a court decides to the contrary, details of any surveillance should be released to the suspect if a conviction does not result.

Spot the difference


"Depicting the president as demonic and a socialist goes beyond political spoofery, it is mean-spirited and dangerous." Earl Ofari Hutchinson commenting on President Obama's recent depiction as the Joker. His silence in 2008 though on the appearance of George Bush in Vanity Fair as the Joker, shines a light on how the left in America reconstructs politics on all levels primarily to enable the reorganization of the state as a top down centralized bureaucracy.

Luckily for Americans their right to free speech is protected in the First Amendment to the US Constitution. Unfortunately for the liberals of America it means that they cannot yet control who says what, meaning that their 'darling' President will be continually parodied, as seen above. But if we cast our minds back to the previous occupant of the White House and the unceasing attacks upon Bush and the comparisons made against him, the above is 'attack-lite'. It was incessant from the moment he set foot in the White House, hardly letting up in the aftermath of 9-11. Yet the few voices of dissent against these attacks struggled to gain a foothold in the US media, indeed should anyone seek to stand up for Bush they too were branded as a 'neo-con fascist.' Dissent must be approved.

The left in America seeks to control the public domain via its shrill screaming of some perceived wrong, in this instance, racism. Liberals in America will have to accept that the President is a focal point for perceived wrongs and a driver of negative change. The fact that President Obama wishes to 'nationalise' health care via government control leads to him being labelled as a leader of the socialism movement, wholly understandable in the circumstance. It seems after eight years of dishing out abuse, the liberals of America don't like it when it comes home to roost. So typical of the 'holier-than-thou', 'morally superior' herd like mentality that they exhibit. For them wrong is what they say it is, not what it actually might be.

Biofuel regulations and subsidies


The intellectual premise upon which the latest Policy Exchange report is sound enough:

Aviation is, amongst other things, a fundamental part of the global economy and facilitates inter-cultural exchange. Moreover, people throughout the world want to travel. As a result, we must promote methods that can reduce emissions from those flights that do take place.

Yet the substance leaves a lot to be desired, as Martin Livermore has discussed previously on this blog.

Green Skies Thinking argues for the EU and UK polities to promote the development and commercialization of sustainable bio-jet fuels, complaining that at present “there are no specific policies within Europe to create that aim." The policy suggestion is built upon the creation of an EU Sustainable Biofuels Mandate, that if introduced would require planes to be run on 20% bio-jet fuel by 2020, rising to 80% by 2050.

If as this report suggests there is commercial viability for bio-jet fuel, then there is no need to upload airline energy policy to EU. Competition, not subsidy is the only sustainable energy policy. Of course there are financial risks involved, but this will not deter the entrepreneur. And it is much better that they take on this risk, as opposed to European taxpayers.

The argument for regulations and subsidies for investment are never a sensible move for the defenders of free markets. Even if you happen to make the right call on the technological path (hard enough in itself), overturning the regulations and turning off the subsidy tap becomes increasingly difficult.

Although the political capital of climate change gives think tanks an opportunity to cash in and exert influence over government policy, those usually on the right side of the debate should tread with caution. The policy suggestions contained in this paper put politics before markets and upload key aspects of private company and national energy policy to the European level.