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BBC Newcastle: Tom Clougherty discusses 'buying British'

15 January 2009

15 January 2009

Click here to listen (you will need to fast-forward to 3:20:33).

Sky News: Dr Eamonn Butler on the car industry

15 January 2009

14 January 2009

Click here to see the video.

Telegraph.co.uk: Labour plans 'class war' law to narrow the gap between rich and poor

14 January 2009

By James Kirkup (13 January 2009)

Published in The Telegraph here

Social class could be put on the same legal footing as race and gender under new Government plans to narrow the gap between rich and poor.

A new law will be drawn up to put public bodies including schools, hospitals and local councils under a binding obligation to work to improve the prospects of disadvantaged youngsters.

 
The suggestion was made in a package of new Government measures intended to make it easier for children from low-income households to rise up the economic ladder.

It has led to renewed accusations that Labour is resorting to the politics of class war.

The package also includes a new initiative encouraging the best universities to target the brightest children from poor schools.

There will also be more taxpayer-funded childcare for the parents of two-year-olds in poor families, career-development loans for middle-class professionals who want to retrain and £10,000 "golden handcuffs" payments to lure the best teachers to the worst-performing schools.

Another initiative will see affluent parts of Britain "twinned" with sink estates and other deprived areas, with poorer children encouraged to visit other areas in order to "expand their horizons and their experiences".

The most politically controversial aspect of the package however, is likely to be the planned "class law," which is being promoted by Harriet Harman, the Labour deputy leader.

Miss Harman will introduce a Single Equalities Bill later this year, and has already signalled that the legislation could allow employers to engage in positive discrimination to favour female and ethnic minority job applicants.

In a White Paper published on Tuesday, the Government signalled that the planned law could go further, effectively telling the public sector to consider social class as a factor equal to race, gender and disability when deciding how money, services and even jobs should be allocated.

The White Paper suggests imposing an "over-arching requirement on public authorities to address the inequalities people face associated with where they live, their family background or the job they do"

Officials said the law would "embed" social class in the day-to-day work of public officials and civil servants, making them consider the economic circumstances of individuals, groups and areas in the same way they currently consider sex and ethnicity.

The White Paper directly compares class with race and gender, saying: "We have already legislated to require public authorities to tackle the inequality that arises from race, gender, or disability. But we know that inequality does not just come from your gender or ethnicity, your sexual orientation or your disability. Co-existing and interwoven with these specific inequalities lies the persistent inequality of social class."

As a result, ministers may legislate to make clear that "tackling socio-economic disadvantage and narrowing gaps in outcomes for people from different backgrounds is a core function of key public services."

This could take the form of a new "strategic duty" on Whitehall departments and public services to "address the inequality that arises from socioeconomic disadvantage and place this objective at the core of their policies and programmes."

If that "duty" were extended to cover employment policy, it could raise the prospect of unsuccessful job applicants suiing employers for discriminating against them because of their class.

Officials said the final form of any legislation would be subject to consultation with unions, business groups and others.

But ideas under discussion in Whitehall could have significant impact on the way public bodies deliver services.

In healthcare, for instance, NHS trusts could be obliged to focus resources on issues like anti-smoking campaigns, because poor people are more likely to smoke than their middle-class counterparts. And police forces could be pushed to concentrate manpower in poorer areas.

Miss Harman is said to harbour ambitions to succeed Gordon Brown as Labour leader and was elected the party's deputy leader in 2007 with strong support from grassroots members. She has sought to consolidate that popularity by appealing to left-wingers with frequent references to social class in recent months.

She is expected to focus on class again in a speech to the Fabian Society on Saturday, pledging to fashion "a new social order" in Britain. "We want to do more than just provide escape routes out of poverty for a talented few. We want to tackle the class divide," she will say.

Theresa May, Miss Harman's Conservative shadow, accused her of political posturing. "Harriet Harman's attempts to play up to the left wing gallery look like a return to the class war," she said.

She added: "Harriet Harman's legislation would lead to bureaucrats ticking extra sets of boxes on forms but none of the real changes that are needed to improve social mobility. This law shows ministers are completely missing the point about the action needed to extend opportunity across society."

Tom Clougherty of the Adam Smith Institute, a free-market think-tank also criticised the Government approach.

He said: "It is patronising and dehumanising to treat people as a member of a class rather than looking at them as individuals and assessing them on the unique characteristics and abilities they have developed."

"Legislation is likely to be counterproductive -- the way to get away from these divisions is to stop thinking about people as groups and start looking at them as individuals.

Sunday Sun: Should the rich pay more tax?

13 January 2009

By Phil Doherty (11 January 2009)

Published in the Sunday Sun here

RECENT research has found the public’s attitude to the “undeserving" rich is hardening and that more people than ever think they should pay more tax. But does it make sense in the middle of the huge economic downturn facing Britain? PHIL DOHERTY reports . . .

“TAX them until the pips squeak . . . " goes the old adage on making the rich pay more to the public purse.

But, in the last decade, neither Labour nor the Tories have advocated raising the higher threshold of tax for the rich.

And neither party saw a vote winner in closing tax loopholes that allow the rich to evade their present tax responsibilities with the help of their creative accountants.

In recent years there has been no political clamour to make examples of tax-evading rich people . . . yet some sections of the media at times seem obsessed with outing poorer benefit cheats.

But research by the left-wing think tank the Fabian Society and pollsters YouGov — on behalf of the Joseph Rowntree Foundation — shows that the public’s attitude to the well-off has changed . . . thanks to the credit crunch.

And when, in his pre-Budget report last November, Chancellor of the Exchequer Alastair Darling announced his intention to introduce a new higher top rate of tax of 45 per cent for those earning £150,000 a year, protests were muted. In fact, many want it to be higher.

Louise Bamfield of the Fabian Society said: “Our work suggests there is a growing public mood for rich people to contribute more.

“Three quarters of respondents to our poll supported the Government’s proposed new higher top rate tax of 45 per cent for people earning over £150,000. Meanwhile, almost seven in 10 respondents expressed support for a new top rate of 50 per cent for people earning over £250,000.

“Poll data also gives some clues as to why people think the rich should contribute more, with 70 per cent of respondents agreeing that ‘Those at the top are failing to pay their fair share towards investment in public services’.

“There was also incredibly low support for the business case for low taxation, with only 19 per cent of respondents agreeing that taxes on high earners should be kept low so that ‘British companies can attract the talent they need to succeed’.

“As the threat of unemployment spreads more widely than at any point over the last decade, there is sympathy and support for people affected by the downturn and, temporarily at least, greater empathy and understanding towards people who have been laid off."

But the right-wing Adam Smith Institute believes it would be madness to tax the rich more at a time of economic meltdown as it would destroy the entrepreneurial spirit at a time Britain needs wealth creators.

They believe the best way to help the poorer sections of society is to lift the very poor out of the tax system altogether by raising the point where an individual starts paying tax up to £12,000, instead of the present £6035.

Spokesman Tom Clougherty said: “Higher taxes for the rich might make for good envy politics, but higher tax rates do not necessarily mean that more tax is paid, or that more revenue is collected. Often, the opposite is true.

“Higher tax rates discourage work, discourage investment and discourage production. Less wealth is created as a result, and both the economy and the exchequer suffer. That’s the last thing we need in a recession.

“Higher taxes also give people an incentive to avoid tax, either by hiring accountants to find loopholes or by moving somewhere else. Given that the top one per cent of wage earners in the UK pays 23 per cent of its income tax, that’s a real problem.

“A better way to make the tax system fairer is to take the poor out of income tax altogether, by raising the personal allowance to at least £12,000.

“Raising taxes on the UK’s wealth creators is just counter-productive."

Telegraph.co.uk: It's inefficient and unfair to make poor people pay income tax

7 January 2009

By Alex Singleton, (7 January 2009)

Published in The Telegraph here

The Prime Minister is considering raising the tax-free allowance to £10,000, John McFall, a prominent Labour MP, has claimed. A dramatic increase in the allowance, which the free marketeers at the Adam Smith Institute have been advocating, would help liberate people from the benefits trap (where it is economically rational to live off the state, rather than work). Personally, I think the allowance should be a bit higher, set at half average income and increasing automatically each year.

It is inefficient to collect direct taxation from those people whose earnings are low, and it is unfair to grab income tax from those poor people who make morally virtuous choice to work, rather than take from society, before they've even had an opportunity to pay for vital items like food and rent.

Unfortunately, there's a big difference between Gordon Brown considering something and actually implementing it. Given his ill-conceived abolition of the 10p tax band, his preference for complexity, and the alarming levels of public spending that he is wedded to, I'd be surprised if he implements the idea.

FT: Do not tie the markets – free them

6 January 2009

By Vaclav Klaus, Adam Smith Institute International Fellow (January 6, 2009)

Published in the Financial Times here

Daily Telegraph: Dr Eamonn Butler on the bank bailout

5 January 2009

5 January 2009

Published in the Daily Telegraph here.

SIR – The Government will get no more joy out of another bank bailout (report, January 3) than it did with the last, because its policies are contradictory.

It demanded that banks plug their financial holes. When they strove to do so, by curbing their lending and raising their charges, the Government complained that they were putting their own prudence over the country's needs. Then, the Government cut interest rates, trying to promote more borrowing, despite having told us two months earlier that too much borrowing was the cause of our crisis.

Now, their plan is to drive interest rates down to zero, which will completely discourage the savers on whom both the banks and the economy depend to provide the finance needed for recovery.

The Government won't rest until it has completely nationalised them and is churning out more of the easy credit that created the disastrous Brown boom in the first place. Taxpayers can't win either, because we will end up paying for it all.

Dr Eamonn Butler
Director, Adam Smith Institute
London SW1

 

Melbourne Herald Sun: Novelists shine light on world's cash woes

1 January 2009

by Christopher Bantick (January 1 2009)

Published in the Melbourne Herald Sun here

DID you get a book for Christmas?

I did.

If it was a novel, it just might save you the angst of having to wrestle with the economic downturn.

"How?" I hear you say.

Well, according to researchers at Manchester University and the London School of Economics, fiction and - get this - even poetry, should be taken as seriously as facts-based research when seeking an insight into the issues of a modern world.

Dr Dennis Rogers, of Manchester University, believes fiction may help us understand these bleak economic times.

"Despite the regular flow of academic studies, expert reports and policy position papers, it is arguably novelists who do as good a job - if not a better one - of representing and communicating the realities of international development," he said recently.

The latest Man Booker Prize winning novel, The White Tiger, by Aravind Adiga, comes in for special praise by the researchers for "its passionate depiction of the perils and pitfalls of rampant capitalism in contemporary India".

The miserly Scrooge, famous in Charles Dickens' A Christmas Carol, who even refused to burn coal because he was so tight-fisted, nonetheless gives a message as relevant today as it was in Dickensian London.

That's the view of Robert Douglas-Fairhurst, a fellow of Magdalen College Oxford who is writing a biography of Dickens.

"For Dickens himself, money meant far more than the power to buy and sell," he said.

"Money brought people together and split them apart; it turned ordinary people into models of generosity or monsters of greed; it kept the world moving and was forever threatening to make it spin out of control."

Sound familiar? We only have to think of the collapse of the American sub-prime mortgage market, which pitched the world into its present sorry financial mess, to see the sense of what Dickens imagined to be a danger of money.

But if "literature is a luxury and fiction a necessity", as G.K. Chesterton suggested way back in 1901, the lessons and the insights fiction may offer still have detractors.

Tom Clougherty, the policy director of a conservative think tank, the Adam Smith Institute, thinks novels have their own dangers.

"There is a problem. Fiction works by appealing to people's emotions, not their intellect or rationality," he said.

"Fiction absolutely can't replace factual evidence-based analysis."

So could that novel you've been promising yourself to read when on holiday help you understand the changes and chances of this fleeting world? Maybe.

But what is clear is that books have defied all market predictions that they would suffer in the economic downturn.

Dave Fenlon, managing director of book chain Angus & Robertson, had this to say on why people were buying books in large numbers before Christmas when all the predictions were for a retail tsunami.

"We think that books are quite a resilient category," he said.

"People find them accessible, they're still a relatively cheap form of personal entertainment - and they are also somewhere you can escape."

That's something to think about as you lie back on the sand, watch your investments crumble and read about a fictionalised world that just might be closer to reality than you think.

Christopher Bantick is a Melbourne writer and social commentator.

Business Standard: Global Financial Crisis II - Is Protection Next?

30 December 2008

By Deepak Lal, Senior Fellow in Globalization (December 30, 2008)

Published in The Business Standard here

Sunday Telegraph: Dr Eamonn Butler on fixing schools

28 December 2008

28 December 2008

Published in the Sunday Telegraph here.

SIR – That parents in Clare, Suffolk, have been refused permission to start their own rural state school is entirely typical of how decisions are now made in this country (report, December 21).

The Government, in 2006, was trumpeting a new law to allow just such parent-led start-ups. Just months ago, Ed Balls was calling for “active parents" because they would “know best what is needed in their area".

Now it’s clear that this was all spin rather than substance. The legislation stands exposed as simply an attempt to undermine the Tories, who were picking up votes with their promise of Swedish-style education.

In Sweden, local parents who are fed up with state education can create their own schools and still get the money that the state would have spent on their children’s education anyway. This has led to the creation of hundreds of new schools, funded by the state so nobody is excluded, but run by parents, teachers, voluntary groups and even private companies. Parents are hugely pleased.

In Britain, by contrast, only one parent-promoted school has yet been created. Many more have been thwarted by ministers or local councillors who do not like the idea of parent-led schools competing against their own bureaucrat-run education authorities.

Dr Eamonn Butler
Adam Smith Institute
London SW1

 

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