The Pin Factory Blog

Last week's local elections were pretty disastrous for the prime minister, Gordon Brown, and his ruling Labour Party. They lost hundreds of council seats – not just in marginal areas, but in the Labour heartlands too – and were beaten into third place in the popular vote by the Liberal Democrats. Even worse, Labour lost the London Mayoralty to Tory Boris Johnson – and the support of the capital city is correctly regarded as a pre-requisite for any general election success. All in all, these were the worst local election results Labour has endured since the 1960s, so I'd say 10 Downing Street is not a happy place to be right now.

Yet it remains very unlikely that Gordon Brown's leadership will be challenged. The Parliamentary Labour Party are much less prone to coups than their Conservative counterparts and, besides, there is not yet anyone who can realistically challenge the prime minister. On the Blairite side, David Miliband is not sufficiently established, Alan Johnson not sufficiently ambitious, and Charles Clarke not sufficiently popular. If there is trouble, it is more likely to come from the left of the party – John McDonnell, perhaps – who think old-fashioned socialism is the best route to electoral success. It isn't, of course, and most of the Labour Party knows it, so Brown should be safe for now.

The question remains though, what should he do with his leadership? On this front, it is vital that he is seen to be bold and decisive. He needs to set out a clear direction for his party, make radical policy proposals and then stick with them. How about this – in order to fight poverty, he should take the poor out of the tax system altogether and eliminate the absurd marginal tax rates which condemn millions to a life of state handouts. And in order to reduce inequality, he should reform public services, so that everyone is free to exercise consumer choice – and not just the rich who can afford to go private.

No, come to think of it, I can't see that happening either.
 

I was in Oxford last week for a Union debate. The motion was "This House believes City pay is indefensible in light of growing social inequality." Naturally I was in opposition, along with the Telegraph’s Damian Reece. I put the case that it mattered more to have a richer society than a more equal one. When a country becomes richer, it often happens that income disparities increase, because some can manage wealth creation faster than others. Modern China is an obvious example. Fortunately, unless the rich store their money in brass pots in the garden, it circulates. What they save or invest provides capital pools to create more economic expansion; what they spend creates jobs, be it in the auto or travel industries, in services such as restaurants, or in areas like interior design.

Furthermore, with capital and talent never more mobile, attempts to limit rewards in London would simply drive both to more amenable surroundings, with loss to the UK of the economic success they bring. I don’t know if our eloquence won through, or whether the Oxford students were looking to the rewards of their own future careers, but the motion was defeated, as the house voted not to criticize the high salaries.
 

So are economists actually describing the real world? Or are they simply projecting the biases of those who become economists onto it? Perhaps a test here. Does this economic explanation for monogamy convince?

Apparently it was Guido Wot Won It. As to what to do now there seems to be some conflict between auditing all those special advisors and getting them out of the building immediately.

This food crisis thing: what we actually need is more large scale commercial agriculture, especially in Africa. Worth noting that Zimbabwe was a food exporter not so long ago...

Enquiring minds would like to know. Was this in fact Labour's worst result since WWI?

Economies continue to become more energy efficient, meaning the price of energy becomes ever less important.

Just how non-lethal is the non-lethal Taser?

And finally, spam was 30 years old yesterday while the office computer revolution seems a little younger.

But I think I'll put the boot in anyway, because I'm nice like that. Richard Spring MP has given the details of his income as an MP on his blog here.

Firstly, my own monthly salary. After deductions it is exactly £3,250.53. Deductions include 10% of the gross figure of £5151.67 for the parliamentary pension scheme (£515.17).

Certainly that's an interesting example of average tax rates on a not especially large salary: adding back in the pension contribution, that's 27% off the top in taxes. Now while many around here disagree with me I'm of the opinion that the number of people clamouring to become MPs means that the wage paid should fall, but leave that aside for a moment. The point I really want to look at is this: 

By June next year I will have been an MP for 17 years. If I were to stand down as an MP then and elect to draw my pension, my pension would be £22,952.41 per annum, slightly above the average parliamentary pension.

Well, 17 years of £515.17 a month (clearly it would have been lower in earlier years, but bear with me) would be a pension fund of £105,000 ish or some £7,000 a year as a pension. Hmm, yes, getting a £23,000 a year pension off that fund would be rather an achievement, wouldn't it? Even if we compound the interest at 8% on the payments into the scheme it gives us a fund of only £225,000 (and that's being absurdly generous, assuming that the payments in have been at £515 a month for 17 years). Given current annuity rates for a 60 year old, that would give a pension of some £14,000 a year.

But whether readers of this blog feel that my own contributory pension is generous enough to be described as ‘platinum plated’ or a ‘goldmine’ is for them to decide. I simply state the facts.

Platinum plated or a goldmine is indeed in the eye of the beholder: but I think the stated facts would support such a description?

Anyone who talked to voters on the doorstep in the run up to the London elections will have found themselves explaining time and time again exactly who the Greater London Assembly (GLA) are and what they do. The problem is that with such large electoral areas – typically equivalent to three regular constituencies – assembly members have a low-profile and are difficult to hold to account.

Now the New Local Government Network has proposed an effective solution. In a new research paper James Hulme argues that the GLA should be scrapped, with its power to scrutinize the London Mayor transferred to a London Leader’s Council (LLC), consisting of the 32 elected council leaders in Greater London. Hulme argues that:

The crux of the problem is that, put simply, members simply don’t have enough to do to justify full time engagement….Through day-today interaction with their local communities, Borough Leaders would be best placed to offer first-hand guidance on the views and aspirations of ordinary Londoners.

Not only would this make both the Mayor and those who scrutinize him more accountable to ordinary Londoners, it would also save a great deal of the £8.7 million allocated in the 2008 Mayoral budget to run the London Assembly. In fact, the report estimates that removing the Assembly would save £6.6 million – that’s an extra 165 police officers on London's streets.

I'm very pleased to see a new book by my friend David Starkie (no, not the TV historian, the transport analyst) called Aviation Markets. It comes in at a pricey £25 but it's a heavyweight item of 250 pages.

Basically, it's a collection of 17 reports that David has done over the last 25 years, including extensive editing and updating. They're organized in thematic sections, and put in context so that you get an understanding of the background to the issue, and can appreciate each paper's wider significance – including the extend to which current policy has been changed as a result of it.

But the main focus is one close to Adam Smith's heart – the role of the market and how economic and political policies help (or more often, hinder) it. Starkie is a great believer in the power of competition to solve the problems that politicians just can't fix. A useful message to everyone involved in transport: and not lost, I would hope, on people who work in or regulate other utility industries.

Buy it here.

Yes, of course the news is dominated by BoJo today. Guido has a situation vacant ad, Wat hopes they are indeed listening, Fraser thinks BoJo simply sends a certain type mad, might the Archbishop of Montevideo be far behind and finally, simply gloating.

Google might solve energy problems: although it's worth noting that while every inventor of a great breakthrough was at first told he was mad, so have the mad been told so over the years.

Prices are solving at least part of the problem, as markets tend to do.

Environmentalism is of course causing part of the problem as well.

Cuba has lifted its ban on citizens buying certain products: anyone who then buys one faces a tax investigation.

Defending (in part at least) the FLDS and polygamy. A liberal society should indeed have room for such alternative (as long as voluntary) lifestyles.

And finally, no, absinthe does not make you spaced out because of the wormwood. It makes you pissed because of the 70% alcohol content.

Much of Ken Livingstone's historic electoral success has been his ability to put himself across as a man of the people, in touch with the concerns of everyday folk.

Why, then, did he put climate change at the centre of his campaign?

Only 21% of respondents to a March Yougov poll thought that climate change should be in the top three priorities of the Mayor. Respondents considered issues like crime, transport, housing and tax to be of far greater importance.

For most Londoners, it seems, the promises of a candidate with regards to climate change is of marginal importance compared to things that are affecting their lives here and now.

Quite right. After all, is it a sensible use of the Mayor's budget to spend millions of pounds addressing a threat that may or may not impact on the children of our great-grandchildren, when there are pressing concerns that need to be dealt with today?

The people of Peckham, for instance, need better policing far more than subsidised low energy lightbulbs.

Meanwhile, Ken's initiatives to tackle climate change – such as raising the congestion charge to £25 for 'gas guzzlers', and implementing the low emission zone – achieve little except making London even more expensive than it already is.

Moreover, if the economy continues to grow, it is highly likely that future Londoners will be sufficiently rich and technologically advanced to deal with whatever the climate throws at them – hot or cold.

Ken's decision to campaign hard on climate change was a strange lapse of political judgment. He may have won the dubious honour of being selected as the ‘greenest’ candidate by Friends of the Earth, but this has little resonance with the ordinary, cash-strapped Londoner.

Still, Ken will not let electoral defeat stop him from contributing to the climate change cause. His retirement will mean hot air emissions from City Hall will instantly plummet by around 95%.