What to expect in the Budget

Dr Eamonn Butler looks in to what may come from the Budget 2009 and what effect it will have for the country and party in power in the long run. 

After a decade of reckless spending, the government’s kitty is bare and its debts are mounting. In November, Alastair Darling said the economy would shrink just 2%, but predicted, Micawber-style, that it would turn up in mid-2009. Well, the economists’ consensus is that it actually shrank 3.7%, and that it’s hardly going to turn up this year at all.

Unemployment’s already 2 million, heading for 3.2 million. That’s a lot more people drawing benefits and not paying taxes. And there’s those expensive bank bailouts to pay for. So the Chancellor is borrowing wildly. Again, the economists’ consensus is that he borrowed £160 billion in 2008-09 and will need another £167 billion this year. That’s a whopping £100 billion more than he anticipated in November. It’s borrowing on a scale not seen since World War II. Then, we were fighting a war. Now, we’re just borrowing to pay off our debts.

The Institute for Fiscal Studies says the national debt could climb to 73% of GDP – 84% if you add the bank bailouts. That’s scary (scarier still if you include the future costs of nuclear decommissioning, PFI schools and hospitals, and civil servants’ gold-plated pensions).

Getting out of debt like that will take years – even if spending is cut back. But with places like Derbyshire putting their council tax up 8.7% and Whitehall’s generous budgets being set until 2011, there’s scant chance of that.

Still, after June 2010 it will be the Tories’ problem, so expect Darling to announce giveaways and gimmicks (like electric cars) now, and large tax rises that bite after the election. But what we really need is to slash regulation and tax on the people who, unlike politicians, can really create jobs – investors and employers.

Dr Eamonn Butler is Director of the Adam Smith Institute and author of The Rotten State of Britain.

Published in the Spectator here

Blog Review 934

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But what if we did leagliase drugs? What calamities might befall us? Erm, it looks like HIV infections would fall, overdoses would fall, crime would fall....can´t allow that to happen now, can we?

Why is it that being a poltician equates to an inability to speak the English language?

Heresy I know, but a cunning plan that might actually make the BBC´s licence fee worth the money.

This is how the lobbying for our money as laundered through government game works.

And this is how the game of that government taking ever more power over our lives game works.

It´s not just Dolly Draper and the emails you know. The lefty side of the blogosphere seems to lack some basic reading comprehension skills too.

And finally, yes, this would work in the US.

Privacy and the state

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David Goodhart's article in the Sunday Times makes me want to throw up. His basic argument is: Let's face it, we don't live in a police state – this isn't Nazi Germany or Stalin's USSR, you know – and giving up a bit of your privacy in return for all the benefits that the state provides you isn't so terrible.

Yeah, right. Well, in the first place, I don't actually want to be part of this 'privacy for state services' exchange. The TV Licensing bunch advertise brazenly that our details are 'all in the database'. Oh, great, so I'm giving them all my details for the privilege of paying £142.50 per year to the government so I can watch the State Broadcaster? They should be paying me. Sure, I hand over my address and my cash to Sky, but I had a choice about that. If I want to watch Sky, or any non- BBC broadcaster, I still have to pay and hand over my info, whether I want Auntie's pompous, skewed, dumbed-down 'news' and 'entertainment' or not.

And there are plenty of other bits of the state services 'bargain' that I'd prefer to opt out of, and keep my privacy. Like the local authority which now only collects my rubbish every two weeks, and if I sort it into some arcane categories. Frankly, I'd prefer to hire a private firm. But of course I'd get thrown in jail if I refused to pay the state for its 'services'. As a liberal, I believe people should have choices, and that sort of coercion sickens me. I have the choice of telling Sky to get stuffed, I'm not going to give them my address and bank details. I can't do that with the BBC or my council refuse department.

Meanwhile, under a new EU ruling (which the UK supported and promoted, of course) internet carriers now have to keep all our emails and internet visits in case the authorities demand them. And, of course, they will. They just have to run a search program on our data log and it's an easy cop. They won't be able to resist. They'll pick you up for dropping an apple core, and – just in case this is a sign of much more malicious intent – take a fishing trip through your electronic records. That's the sort of 'privacy must be sacrificed for utility' arrangement I find terrifying.

Eamonn Butler's latest book, The Rotten State of Britain, is available to buy here.

The “revenue stream” of alcohol

Email sent to the Treasury

I am writing to express my extreme concern that you wish to raise the price of drinks in the Budget, by increasing tax on alcohol.

During these economic times an extra tax on those who are dealing with increased prices, from basic necessities to those nonessential items, is the wrong answer.

Furthermore, given the potential jobs which can be targeted by an alcohol tax hike, it is appalling to think that the government wishes to place nearly 75,000 jobs at risk for a profit from this particular tax. In fact, your own Angela Eagle has stated that the government sees this tax increase as a "revenue stream", however there are more wise approaches to the budget which should be addressed. These approaches can include, but are certainly not limited to: public workers and government taking pay cuts, as many citizens have been forced to do; or correcting the unfair welfare state and requiring individuals work for part of their welfare - saving Britain money whilst preventing the loss of jobs to foreign workers. Following the smoking ban, which has already hurt the British pub institution, increasing taxes on alcohol will further drive the knife into the local pubs and lead to more closing on a daily basis.

I ask you to protect ordinary people like myself, who are already struggling with rising prices in this downturn. Also, I would ask for your support in protecting businesses in Britain, many of which may suffer unnecessarily if drink prices are raised further.

All of us are aware that there are a small minority who misuse alcohol but it is not fair if all of us are punished.

I ask you to put pressure on other Government departments to ensure that existing laws to crack down on problem drinkers are enforced. This is far better than pushing through a blanket measure that will only sting ordinary drinkers and do nothing to tackle alcohol misuse.

I look forward to your reply.

Thank you.

Generated Response

Thank you for your email.

The alcohol duty increases announced at Budget 2008 and in the Pre-Budget Report were not designed to tackle problem drinking but they will play their part in ensuring we can continue to fund the Government’s spending priorities.

Alcohol duty is an important revenue stream for the Government and there are currently no plans to change what was announced in the Budget and Pre-Budget Report 2008, though as with all taxes, alcohol duty rates will be kept under review.

Your email also mentions enforcement of current policies to deal with irresponsible drinkers. Whilst the vast majority of people consume alcohol responsibly there are undoubtedly some individuals who cause problems. The Government takes the problems associated with alcohol misuse seriously and has an important role to play: in making sure people are able to make informed choices, and encouraging drinkers to drink responsibly; in making sure businesses sell alcohol responsibly; and in making clear that individual choice is never an excuse for causing harm and distress to others, and that the police, local authorities, and others have the powers to stop this and are encouraged to use them.

regards

Enquiry Unit

H M Treasury

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This week, I was sent an email from Drinker’s Alliance, reminding me of the upcoming Budget which Mr. Darling will release on 22 April. In the past, Drinker’s Alliance encouraged people to write to their MPs in favour of scrapping an increased alcohol tax, sign petitions, spread the word, and more. This time, however, they included direct links to both a pre-drafted email to the office of Alistair Darling, (which you can modify if you wish) as well as the phone number to the office (with a form to report back the office’s retort).

As I am opposed to this rise in taxes, I sent an email (highly modified from the form), and the next day received a generated response from the ‘enquiry unit’. I was told the alcohol duty increases “were not designed to tackle problem drinking" and instead were “an important revenue stream" for the government. Finally they finished off their response with “the police, local authorities, and others have the powers to stop [those abusing the right to drink] and are encouraged to use them." What exactly they mean by ‘powers’ for ‘others’ I am quite unsure of, and am inclined to ask for further clarification. The justification for their increase the alcohol duty is tenuous, rude, and most of all – unfair. The government should be looking for ways to decrease wasteful spending and stop punishing the citizens of Britain for the government’s mistakes. [Click 'Read More' to view the email exchange]

Brown’s Britishness

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In case your ears have glazed over since he came to power, Gordon Brown has been talking about Britishness quite a lot.

On Britishness, Brown has said: "being British is, in a sense, about subscribing to these values that have endured." His government compels; we do not subscribe. The latest move to be framed in the verbal diatrbe of British values is his adoption of a policy the ‘nudging’ Conservatives were mulling over in 2007. It amounts to signing our youth up to part-time slavery.

The rulers of countries have had an impact on national values. Almost always this has been to the severe detriment of the people. On the rare occasions when the state has had a positive contribution in this area, it has been through breaking down the ties that bind the people’s liberty to the state.

Unlike Blair, Brown has built his political philosophy on the works of thinkers on the left. As such, he is unable to think outside of a world in which the ruler distributes private property for the ‘public good’. With the triangulation that came with the creation of New Labour, Brown is left with little of substance on which to stand. As such, his digression into the world of British values is unsurprising if faintly ridiculous. Blair and Obama can somehow be forgiven by the public at large for speaking with vigour on meaningless platitudes, from Brown it just doesn't work.

Brown’s premiership will be noted for its lack: its lack of leadership, direction and policies. Despite his exhaustive efforts, he will never pin down the values of Britishness; this is because such talk is was best discussed over a couple of pints, a pack of cigarettes and a couple of packets of crisps in your local pub. The Heresiarch over at Heresy Corner hits the nail squarely on the head:

All that the state should require of its citizens is that they pay their taxes and obey the law. Beyond that we are in the realms of propaganda and indoctrination, neither of which strikes me as being particularly "British".

Farewell for now: Back to the US of A

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Today will be my final day as an intern for the Adam Smith Institute. Working here has been an enlightening experience in allowing me to expand my understanding of economics and British policy through independent research, meetings, and events. Since I started in mid-January, through the excellent events and meetings I met Lionel Barber, Guido Fawkes, and many members of parliament. But in the meantime I kept myself busy researching everything from tax policy to bailout plans. I have written a slew of blogs and a report that will be out later in the year.

But besides the allotment of knowledge on policy I have procured, I also learned a few other useful tidbits regarding British culture. For instance, that drinking cold tea is “borderline criminal" and that travelling south of the Thames is a risky business.

Overall, interning at the Adam Smith Institute has been a great experience and I would recommend it to any student of politics or economics. I hope to contribute blogs from the United States every once in a while, so you certainly haven’t heard the last of me.
 

Blog Review 933

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The coming elections are going to be interesting. We thought we´d got rid of electoral fraud in about 1833 or so didn´t we?

Fraud of a different kind explains the occasional explosion in a gas pipeline. Allegedly.

Sadly, investing in vice seems not to be as profitable as once claimed. More fun though of course.

A couple more reactions to smeargate and bloggers. How some people´s views seem to change and of course bloggers aren´t like real journalists.

Gut feelings really are not the way to make policy. Not in a free country, at least.

Why one person didn´t go to the tea parties.

And finally, a dinner party conversation and the shockingness of porn.

Virginia Tech in retrospect

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Two years ago today I woke up and walked to my Monday morning class, introduction to macroeconomics, and on the way I was informed by a friend about a tragic situation. In my economics seminar we did not discuss fiscal or monetary policy, not even inflation or unemployment, instead we discussed the unwinding events occurring at a school a few hours south of mine, the Virginia Polytechnic Institute and State University, more commonly known as Virginia Tech. Amongst the students and professor, various topics were thrown around from a need for increased security on college campuses to calls for strict gun control, but the connection that most students made in the discussion was to a similar event that happened on our own campus four months earlier.

On Wednesday December 6 2006 a fleeing criminal fired shots on police officers in the suburbs of Philadelphia, and upon escaping from the police he entered the campus of Villanova University to hide. This happened around 3:15 in the morning, and by 4 the entire campus was under lockdown. As students tried to leave their residence halls for early morning classes they were sent back to their rooms by Resident Assistants. By 10:20 AM the university was cleared and classes went on as scheduled. No one was harmed at the university because swift action was taken in response to a threat.

Although the circumstances surrounding both situations were vastly different, it made me realise that it is quite difficult to predict or fully prevent events such as these from happening. What matters more is how people respond to the situations when they do happen. Fortunately, my university was competent enough to respond to the matter in an effective way. Under similar pressure, Virginia Tech was unable to respond to the first shootings that morning as effectively, failing to prevent 30 additional murders. 

Consequently, because terrorist events happen does that mean students want metal detectors at every university door, security cameras staring down their neck as they walk out of class, or administrators reading their e-mails and message conversations to ensure their safety from attacks? I assure you most students would not desire these measures to be taken. I feel much sorrow for the students who were murdered in the Virginia Tech tragedy, but I do not believe any of the above precautions would have prevented the attack. More likely, those measures would be used to arrest intoxicated students, fine them for dropping trash, invade their privacy, and keep them from getting to class on time.

Following the Virginia Tech incident, my university responded by providing a voluntary service that sends text messages to students’ mobile phones with instructions during emergencies. Since setting up the service, one more shooting occurred near our campus by an outsider, but students were immediately informed [via text] of the location and nothing was harmed, not even our personal liberties.
 

Damian Green: The Home Affairs Committee report

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The Home Affairs Committee has reported on the arrest of Conservative frontbencher Damian Green MP. Late last year, police barged into Parliament, and with the – unprecedented – agreement of the Sergeant at Arms (who is supposed to protect MPs from state officials), rifled through Green's office, arrested and held him, and went on to search his constituency office. His home too was ransacked and, say friends, left 'uninhabitable'. Naturally, his computers and phones were confiscated and his email put out of commission.

His crime? Some dreadful terrorist plot? No. He had received information from a Home Office whistle-blower, exposing the embarrassing fact that the Home Office managed to grant security guard licences to illegal immigrants, and even gave one a job. The whistle-blower was arrested in a dawn raid, too.

This jackbooted (or is that Jaqui-booted) thuggery confirms my point in The Rotten State of Britain – that when you give people power, they will use it. Citing 'national security', twenty counter-terrorist police were sent in to rake over the home and offices of a well-liked MP who had merely embarrassed ministers. The Home Secretary says she didn't know the arrests were planned – in which case she should be fired for incompetence, being out of control of her officials and police who organized the raid. If she did know, she should be fired – for a major assault on the integrity of Parliament, which is supposed to protect us from people like her.

The Committee says that the 'national security' excuse for the raid was rather rich. Green was arrested for doing what ministers weren't doing – just telling the truth. And Opposition, Gordon Brown made great use of leaked material to embarrass the government, without having twenty counter-terrorist police unleashed on him.

MPs can't be above the law. But this was just state thuggery against a representative of the people. And the police shouldn't be above the law either. Bullying their way into Parliament without a warrant tore up about 350 years of hard-won constitutional precedent that was supposed to protect our representatives from harassment by the powerful. The last time this happened, it caused a civil war.

Nor can Parliament work if people can't write confidentially to their MPs without other people snooping on them. I don't imagine that the police limited their scrutiny of Green's computers to the few emails he might have had from the whistle-blower. This isn't about MPs or some decrepit rule of 'privilege' – it's about members of the public being protected from the unrestrained power of ministers and officials. The Speaker of the House of Commons should put his foot down. But he can't because at last report he was on a taxpayer-funded junket to Dubai. That's how rotten our state has become.