Wednesday, August 06, 2008

You changed, oh Guardianistas

Aaro, writing in the Times.

More to follow.

Later: 17:37. Wow. That was easy. 22 comments for a link! And no one seemed to care what Aaro meant by "oh Guardianistas". He's really not daft enough to address Guardian readers via the Times. It just doesn't seem worthwhile to me. It's a bit like writing "Arsenal fans support wrong team" in a Man United fanzine, but not as amusing.

Some long while ago, far away in the vast, misty caverns of time, there was a by-election in Glasgow that Labour lost. It may be hard to recall the debates in the Labour Party of the last weekend but one, yet historical research uncovers a subsequent period of media stories based almost entirely upon the utterances of anonymous sources.


Maybe I missed it, but no one seemed to bother to ask the voters of Glasgow East why they voted Labour out. Despite the assertion by 'Paulie' on Chris Brooke's site (where all the commenters from here go when we're quiet): "Tory voters (with their reluctance to pay taxes)", I suspect that many former Labour voters were rather surprised by the abolition of the 10p tax rate which affected "Around 5.3 million households – roughly one in five - [who] will be left worse off, mostly in the poorer half of the population." Labour voters don't like paying taxes either. No one does. The party hasn't debated this enough, and it can expect another spanking whenever a the occupier of a safe working class seats pops his clogs.

I have often wondered what would happen if newspapers and broadcasters were to sign a self-denying ordinance, refusing to print or repeat anything supposedly said by an anonymous source...


It can't be that hard to imagine, Dave, you used to work for the Independent. But of course they should.

Some columnists I can think of, on other newspapers, make me blush with their weather-vane “we thought Gordon was marvellous but he has proved us wrong” schtick, as if, somehow, the man whom they had so praised for the decade of his slow premiership campaign had grown unexpected hair and teeth on a full-moon night last autumn.


I think this is mostly a dig at Jackie Ashley. See JA last year This Brown-bashing, like the Gordolatry, is far overblown. Both DA and JA seem to say "other journalists get things wrong because they get much to excited like the dizzy little tarts they are; I however, am a rock." I did like (from October last year) this:

We have had ancient journalists rumbling away like exhausted volcanoes, and Blairite columnists croaking happily like frogs in a rainstorm, but in fact the "Tony Blair says Brown a bag of wet nappies" briefings were swiftly rebutted by a Blair spokesman, and all the trouble probably goes back to a single discontented ex-cabinet source, who just can't help briefing sympathetic journalists.


Ahem.

Polly Toynbee has been consistent in her ambiguity toward Brown. (Link goes to a menu of her articles between May and September last year. Her enthusiasm was distinctly curbed.) Her predictions (September) were equally good:

On Monday Brown needs to show exactly why he has been so impatient to take control. The party faithful will celebrate him with huge warmth, but they need to know what he thinks Labour is for after 10 years in power, beyond merely hanging on to it.


I had not known it was so hard to tell the difference between a poke in the eye and being "celebrate[d] with huge warmth".

The thing about Aaro, Toynbee, and Ashley is that none of them can manage to say "I was wrong."

Insofar as I am a Guardianista, I hold Andrew Rawnsley in much higher esteem than his colleagues and he says "There is no doubt about it, this is a full-frontal assault".

It was, and Brown should sack Miliband. Or resign. He can't tolerate this, and last.

84 Comments:

Anonymous Anonymous said...

July 13th: Nick Cohen returns to the Observer with an article described by Capitain Cabernet as "a barely coherent rumination on the xenophobia and isolationism of the Tory party" (a good description of the article). In it Nick gives a name check to Denis MacShane, and some Aaro-watchers (in the comments) surmise that Nick got his talking points from Denis himself.

July 30th. Denis MacShane has a piece on CiF in which he praises the above mentioned article by Nick Cohen. Quelle surprise!

http://www.guardian.co.uk/commentisfree/2008/jul/30/labour.davidmiliband

Denis' theme is that Milliband's article in the Graun shows that "Labour has got its mojo back" because he attacked the Tories. He praises Nick for mentioning Tory appeasement of Milosovic and goes on to praise Brendan Simms for doing the same thing in another Guardian article. Denis seems to be suggesting that the Guardian ought to be printing more articles about Douglas Hurd and Malcolm Rifkind in the
mid-1990s and then the Labour Party would be soaring up the opinion polls! Denis uses these examples to claim that "for the first time this summer one can sense some grip and some focus on the enemy not ourselves".

August 5th. Aaro's article in the Times, with a number of talking points in common with the MacShane article. "Labour needs to finds an argument to put to the voters".

So should we expect something from Cohen or Aaro or MacShane or Simms attacking actually existing Tories like Gove or Willetts or Ancram? Something tells me we won't.


Moussaka Man

8/06/2008 08:51:00 AM  
Anonymous gastro george said...

Aaro criticises "Guardianistas" for their wishful thinking about Brown, and a wilful misreading of Miliband's article. OK we all do our fair share of building them up and then knocking them down, but this is hardly the preserve of Guardianistas, and the media in general has jumped onto the idea of Miliband's leadership challenge.

Lest we forget (and the Blairites would prefer that we did), Brown's "popularity" dates back to the last election, when Blair was floundering in the polls, and the campaign had to be rescued by attaching Brown to his hip.

Putting aside Brown's inability to manage the government in the way that Blair did, would he be so unpopular if we didn't have the multiple whammies of the credit crunch and oil price rise? Which would make anything in Aaro's column irrelevant.

What's more relevant is that these whammies are the culmination of years of Blair/Brown policies. Blair was just lucky to get out in time.

As an aside, what's the background to the Telegraph article about Milburn coming in as Miliband's Chancellor? I can't think of a worse candidate - he's such a lightweight with the attention span of a gnat and ideas straight out of the loony end of the spectrum [viz. Byers plan to give money to council tenants to buy private housing].

Or is this Milburn punting himself? In which case he's probably killed the idea himself.

8/06/2008 09:04:00 AM  
Blogger Matthew said...

I made the same points today in a post - except you can link them together. Brown's popularity from rescuing the election campaign in 2005, was that he rescued it from Milburn's terrible management.

If Brown's allies had showm a minimal amount of competence I would suggest that they had leaked this story, simply to discredit the Milliband/Milburn combo.

8/06/2008 10:23:00 AM  
Anonymous dsquared said...

Aaro appears to believe that the policies of "ultra-Blairism" are electorally popular. Since these are:

1. Neoconservatism in foreign policy

2. Deregulationism in industrial policy

3. Tax-and-spend in economic policy

4. Outsourcing and marketisation in administrative policy

I am rather struggling to work out which one is the popular one.

8/06/2008 10:46:00 AM  
Blogger Matthew said...

I found a book I wasn't aware I owned yesterday by Joe Klein (of Primary Colors fame) on the Clinton Administration. It's very New Democrat, which I don't think is necessarily Decent as they were't too concerned about foreign policy. Nevertheless it contains this paragraph on pre-Cliton Democrats, which struck me as a beautiful example of Decent-think, or maybe it's just an example of how the US policial establishment sees Latin America.

"The Democrats also suffered from a near absolute belief in the immorality of almost every sort of American military activity abroad in the post-Vietnam era, from the placing of Pershing missiles in Europe to various (in fairness, almost always dubious and very often criminal) crusades against indigenous villiains in Latin America.."

Damn those old Democrats and theiir distate of criminal overseas adventures!

8/06/2008 11:35:00 AM  
Anonymous gastro george said...

I listened to parts of Aaro's radio program on '68 and it seemed to me to be inconsequential in the extreme. Are Kim Howells, John Birt, Bruce Anderson and Sheila Rowbottam the only people he could get to talk to him?

I lost concentration part way through, but I seem to recall Anderson wittering on about his concerns that some of the NI civil rights protesters having "hidden agendas", i.e. Republicanism. Apparently this was just as important as thugs attacking the protests with nailed cudgels.

I can't wait for next week's episode.

8/06/2008 11:59:00 AM  
Blogger ejh said...

Tsk. I have just been engaged in a long - and continuing - discussion on the economy on an Oxford United forum (don't ask why, just think of the generals in Simon and Garfunkel) in which I have attacked the term "tax-and-spend" as being part of the discourse of political abuse rather than economics. I am therefore most disappointed to find a liberal economist employing it.

8/06/2008 12:23:00 PM  
Anonymous Anonymous said...

"Guardianistas" is as much a strawman as "postmodern, European, moral realtivist, liberal elites". Who is Aaro referring to? Ashley? Kettle? White? The people who appear on the letters' page? A man in Hampstead who had the Guardian under his arm?

There was a very mixed reaction in the Guardian to Brown when he became PM. At best it was hoped that, although he was part of the New Labour project, he wasn't so emotionally atached to it so he could manage a process of thinking through its weaknesses. That hasn't happened. Popularity has gone down even further, because it would appear that Labour is incapable of doing any kind of re-thinking.

MacShane thinks the answer is more soundbites about what the Tories did 12 years ago; he thinks that this is shooting at the enemy. It looks to me more like shooting in the air or shooting at shadows.

Moussaka Man

8/06/2008 12:38:00 PM  
Anonymous dd said...

I don't see what the objection is to "tax and spend" - it is probably used quite often as a term of abuse, but I don't think that's intrinsically the case. Brown hung his reputation on the combination of "prudence" (via the fiscal policy rules) and "more money for public services". The second means "spend" and the first ensures that it can't be done any way other than "tax".

In fact, I'd probably argue that the tax-and-spend policy is probably the only popular one on that list. It's the only one that Cameron and Osbourne are careful about attacking - they're pretty much committed to the overall public sector spending budget and have gone very softly-softly on tax cuts because of that. Whenever they talk about tax cuts, it's always through rhetorical attack on policy 4 in the guise of "wasteful spending".

8/06/2008 12:48:00 PM  
Anonymous Anonymous said...

"Tax and spend" has become a term of political abuse, though there's nothing intrinsically wrong with it if there is clarity about who is being taxed and what the spending is for: it's what Governments have been doing since Ancient Babylon. I would say that the problem with New Labour has been that it has spent without taxing and has hidden the borrowing in things like PFI.

Moussaka Man

8/06/2008 01:13:00 PM  
Anonymous bubby said...

New Labour has been a busted flush for a long time. I have looked very closely at all the research on public attitudes to the main parties around election time 2005 and it was very clear that Nu Lab wasn't at all liked. Iraq, spin, and a host of other factors had badly tarnished its image. However there were 2 key factors which stopped people voting Tory.

1) Howard (like IDS & Hague) was seen as not a serious prospect as PM (he was disliked by many), and his party's focus (i.e. 80% on immigration) was seen as too negative and too narrow.

and

2) There was a perception that Nu Labour had done a reasonable job on the economy and the Tories still had a credibility deficit in this area from Black Wednesday.

Now that the economy had gone tits up the last thing that counted in Labour's favour has evaporated.

Like a car's sills rusting from the inside, fondness and support for Labour has been constantly rotting away over many years. Its only now with the economy falling apart that
its become obvious how unloved they really are.

What's really odd is the idea that if someone else (Blair!!??) were at the helm there would be a recovery.

Nae chance. Nu Labour is dead. Good riddance.

8/06/2008 01:33:00 PM  
Anonymous Anonymous said...

Oh, Aaro is a fan of David Miliband. Quelle surprise.

8/06/2008 01:34:00 PM  
Anonymous organic cheeseboard said...

Isn't this very similar to Aaro's recent 'point' about people who have expressed enthusiasm about Obama? ie, if you said anything good about Brown this time last year, then no matter how his performance has changed those initial impressions, and no matter how circumstances have changed over the past year, if you say anything negative about him now then it's actually you that's 'changed'... and thus you are a guardianista and unserious, or something.

8/06/2008 01:53:00 PM  
Blogger Matthew said...

Has the economy gone 'tits up'? I think that is a bit of a Tory talking point. You can argue that the economy has major problems for a host of structural reasons, but those structural reasons I don't think have changed in the last year, or probably ten years. On the other hand it's not as if there is a clear-cut superior economy out there (as there was in the 1970s-mid 1990s, and of course that didn't stop the chatter the other way).

In the short-term things don't look exactly rosy, but it's hardly 1991 again, whatever the Daily Mail will have you believe.

8/06/2008 02:15:00 PM  
Anonymous gastro george said...

Has the economy gone 'tits up'?

Not in comparison with any other outcome that could be anticipated by the policies of the Tories (and also the Lib Dems now that Clegg is in charge).

But, IMHO, the upping of tits was inevitable in an economy based on a credit boom, PFI, low taxes and the demands of the City. Brown didn't abolish the business cycle, he just spent the profits of globalisation on tax cuts, much as Thatcher did with the oil money. It feels good - and despite the criticisms of the Tories about not putting money away in the good times, I didn't notice this appearing as one of their policies at the time - but all bubbles end.

While the economies of other European countries are suffering from the downturn in the global economy, they are nowhere near our situation.

Maybe DD has an opinion on this, as he's much closer to the metaphorical coal face.

8/06/2008 02:41:00 PM  
Blogger ejh said...

Point about Blair - one thing said about him by admirers is true, which is that he's good at communicating with the electorate. Now I think he's good at it in the way that a televangelist is good at it, but he is good at it. And so he was consistently able to be more popular than his policies. Brown does not have the same advantage.

8/06/2008 03:07:00 PM  
Anonymous Anonymous said...

But would Blair be still considered to be good at communicating with the electorate? After the "WMD will be found in Iraq" phase didn't the electorate stop believing him?

Moussaka Man

8/06/2008 03:29:00 PM  
Anonymous Anonymous said...

Has the economy gone 'tits up'?

Considering the fall in house prices - which in the UK is pretty much all the economy seems to amount to as far as winning elections is concerned - it's a 'tits up' of potentially Russ Meyer proportions.

[redpesto]

8/06/2008 03:46:00 PM  
Blogger ejh said...

After the "WMD will be found in Iraq" phase didn't the electorate stop believing him?

For a while. But I treat that as the phase in which the televangelist is found knocking off his secretary's daughter on a mattress filled with contributions from the viewers. If he repents on TV with enough of a show of tears, they normally forgive him soon enough.

8/06/2008 03:57:00 PM  
Anonymous Anonymous said...

So if Blair came back (either as himself or disguised as Milliband) and started attacking the Tories about Europe or appeasement of Milosovic, then Labour would win the next election?

Moussaka Man

8/06/2008 04:03:00 PM  
Blogger ejh said...

I doubt it. But he might lose by less than Brown. (I should observe, lest there be any confusion, that I advocate neither this strategy, nor that advanced by Mr McShane.)

8/06/2008 04:08:00 PM  
Anonymous Anonymous said...

Although I like the Blair as televangelist image, I don't remember Blair crying on TV and begging for forgiveness.

Moussaka Man

8/06/2008 04:24:00 PM  
Blogger Matthew said...

I suspect house prices are overegged as a political good. They create winners as well as losers. In fact more winners given the housing stock is exactly the same. I think the economic concern at the moment is probably interest rates.
-----
Nick today in the Standard is talking about SATs, and doing some theatre reviews.

8/06/2008 04:44:00 PM  
Blogger ejh said...

I don't remember Blair crying on TV and begging for forgiveness.

Bet you remember him promising to "listen", though. He pulled that trick off several times.

8/06/2008 05:15:00 PM  
Anonymous dd said...

Check out the exchange at the bottom of the comments to this post. I seem to remember that Nick Cohen's on Facebook, but I guess Oliver Kamm isn't, hence the need to do their "pokes" in a slightly less convenient medium.

8/06/2008 05:28:00 PM  
Blogger ejh said...

Conceivable that Nick Cohen isn't Nick Cohen, of course.

If he is, though...I wonder. Has he writen before about Hiroshima and Nagasaki, and what did he say? Is it likely to be anywhere close to Oliver Kamm's views, for which I struggle to find a tolerable adjective?

8/06/2008 05:33:00 PM  
Anonymous dsquared said...

I was, by the way, totally wrong, and will soonish write a long article about what a fucking idiot I was. I genuinely believed in Brown, and even worse, I did so for the worst reason - I sort of knew, via friends o' friends, one of his inner circle, who promised me that he was a real egalitarian socialist, just waiting to let 'er rip. I totally forgot the old stock market proverb "a friend in need is a friend indeed, but a friend with a tip is a fucking liability". And it's taken me a year and a whole load of embarrassment (see this comments thread for a toe-curling piece of apologism, whereby I manage to convince myself, if nobody else, that Brown's drift-and-inertia in Iraq is part of a grand and cunning rope-a-dope scheme to exit the Atlantic Alliance) to wake up.

also:

He's really not daft enough to address Guardian readers via the Times. It just doesn't seem worthwhile to me. It's a bit like writing "Arsenal fans support wrong team" in a Man United fanzine, but not as amusing.

hahahaha! Of course! Aaro is the Denis Law of British journalism; he's playing for the Times but you know exactly where his heart and loyalty are. I am 100% sure that on the day that DA backheels the Guardian into the second division, he'lll turn away disconsolate and shrug off the celebratory embrace of Danny Finkelstein.

8/06/2008 06:12:00 PM  
Blogger Matthew said...

I think you might be being too harsh on yourself. You are right about the MOD budget, which is stands at about 95% of the US budget per personnel, and surely no-one believes that is unfunded? And I thought your argument about Brown also allowed for the fact that it's not really that simple for anyone to extricate the UK from its long-running military relationship with the US?

8/06/2008 08:24:00 PM  
Blogger Matthew said...

In answer to EJH's question, Nick's only given a view on Hiroshima once and that was to describe it as "crimes against humanity". It must have been Oliver's arguments that made him change his mind.

i.e.

WHEN THE GOVERNMENT meets those who question America's cack- handed 'war' with Hilary Armstrong's brilliant: 'It was people like you who appeased Hitler in 1938', we must get back to basics. I'm sure even Ministers will concede that it was possible to support the fight against the Axis powers while protesting that the bombing of Dresden and the atomic obliterations of Hiroshima and Nagasaki were crimes against humanity. You can applaud the ends while deploring the means. You can suspect that degraded means may make worthwhile ends unobtainable.

8/06/2008 08:34:00 PM  
Anonymous Anscombe said...

But Kamm's argument re: Hiroshima is at worst confused and at best incomplete, so Cohen should not be endorsing it (if that is what he is doing). Kamm's argument purports to be a refutation of G.E.M. Anscombe's claim that the bombings were an act of murder because they were carried out with the intention to kill the innocent. But Kamm proceeds to argue against a different claim, namely that the bombings were an act of murder because they were carried out in the firm belief that they would kill the innocent. Why are these different claims? Because someone who acts with the intention to kill the innnocent will be disappointed if by some fluke they fail to do so, because their aims will not have been realised, whereas someone who acts with the firm belief that they will kill the innocent but not with the intention to do so will not be disappointed if by some fluke they do not kill the innocent - indeed, they will more than likely be pleased.) The distinction is crucial to Anscombe's argument, but Kamm simply ignores it.

This was pointed out to Kamm, and to his immense credit he printed an e-mail from the person who pointed this out, which sets out the distinction I have set out above. To the best of my knowledge (which, on the matter of Kamm's blog, is not great) Kamm has not returned to the topic to try to explain why the above distinction does not destroy his argument. So I don't think people should take what he says on this matter as conclusive - quite the opposite, in fact.

8/07/2008 09:19:00 AM  
Anonymous Anonymous said...

Polly Toynbee has been consistent in her ambiguity toward Brown.

At the risk of going off-topic, I beg to differ. The tone of Toynbee's articles has been something along the lines of: 'Gordon's going to be brilliant, just you wait, he's got A Plan - though he hasn't revealed what it is yet - now he'll show us what Labour really stands for...won't he....come on Gordon, release your inner social democrat...please...pretty please...honestly, readers he will be bold, just be patient a bit longer...that David Milliband, OMG! He's hott! He's the one for me!'

I exaggerate, but not by much.

Toynbee's inability to realise she's dealing with New Labour, and not the SDP-lite in her head, has been a feature of her columns for years now. Hence her leaping to conclusions about Labour's future prospects with barely an acknowledgement of how she got it so wrong in the first place. Like DA and That Bloody Prediction, there's a refusal to acknowledge error.

[redpesto]

8/07/2008 09:20:00 AM  
Anonymous Phil said...

I think getting rid of the 10p tax band was an astonishing mis-step. It's not as if the government had never favoured the lower middle classes over the genuinely needy before, but they'd never actually announced they were doing it. And that Budget was supposed to be a vote-winner for Brown - an election-winner, even:

This was Mr Brown’s last Budget before the impending Labour leadership election. But on Wednesday his mind was not on the events of the next few weeks. The chancellor knows he has the Labour leadership in the bag – and nothing that happens at Westminster will change that.

Instead, his focus was on developing a strategy for the permiership – and, in particular, for fighting the next general election.

What he came up with, as one close ally put it on Wednesday night, was a Budget which appeals to “that mythical thing called middle England”. As this ally put it: “This is one of those moments when you need to remind your readers that average incomes in this country are not £40,000 a year but £20,000 – and it is people with families in those income brackets who will end up better off.”
...
the chancellor wanted to recognise the “cost of living pressures” on disposable incomes. His dwindling reputation for economic competence has much to do with the fact that, while the economy is growing, real disposable incomes are not.

Mr Brown therefore boosted incomes for a married couple with a family on around £20,000 to the tune of around £500 a year. The Conservatives argue, of course, that the complex set of income tax changes will penalise single people on lower incomes. But Mr Brown’s allies recognise this – indeed they have no problem with it. In their view, this group can bear a little more of the tax burden.

As one ally puts it: “Nobody aspires to be a single person on £12,000. Everyone in this group wants to get married, have kids, get into a higher paid job. And they know from this budget if they make it, the highest brackets are not hit.”


I'd love to meet that 'ally' now. (Full disclosure: for the last year I've been on rather less than £12,000. Yes, I aspire to get into a higher-paid job. No, this doesn't somehow make me indifferent to a drop in my current personal income.)

8/07/2008 11:19:00 AM  
Blogger ejh said...

That's fantastic, isn't it? You can take money off people who haven't got much, because they won't mind.

After all, they'll be thinking they'd like to be making much more than they've got. So they'll be much more concerned that they wouldn't be taxed more if they did.

Who are the people who think like that? Who are the people who think that other people think like that?

8/07/2008 11:47:00 AM  
Anonymous gastro george said...

But hasn't it always been part of the neo-liberal mythology that taxes for the middle-classes (and upwards) have to be kept low because, if not, then people will not have any incentive to work harder?

All our "ally" is doing is to phrase the myth in such as way that it is transparently stupid, exposing the corollary that if those who can afford it pay less tax, then those who can't afford it end up paying it instead.

8/07/2008 01:18:00 PM  
Anonymous Phil said...

GG - I think it's a bit more than that. The argument always used to be that benefit claimants should get less (to give them an incentive to work) and very high earners should get more (to give them an incentive to work *more*). What's new about the 10p/2p proposal is that there's no middle ground - *everyone*'s either being punished for being too poor or rewarded for being rich enough. (I do wonder if that basic inequity, with its quite overt vote-buying message, is part of why so many people have reacted against this measure - people don't like to think they're being bought.)

The other novelty is bringing the "punish the poor to make them less idle" logic into the tax system - but one of the odd things about Brown as a Chancellor is that he really doesn't seem to know where taxation ends and the benefit system begins (see the ghastly mess of tax credits - which incidentally *don't* compensate me for having to pay more tax).

8/07/2008 01:59:00 PM  
Anonymous gastro george said...

What's new about the 10p/2p proposal is that there's no middle ground - *everyone*'s either being punished for being too poor or rewarded for being rich enough.

But isn't the persistent move from direct to indirect taxation the same thing? For example, the poor and low paid pay more VAT in proportion to their income. The difference is the directness and transparency of the argument. Indirect taxation, despite Tory grumblings about stealth taxes, are at least one step removed. The message of the 10% band abolition could not be interpreted in any other way. That's what makes it a turning point. The low paid already knew that they were being taken for granted and that Labour were doing nothing for them. But this was just a kick in goolies.

Agree about tax credits. A complete mess.

8/07/2008 02:32:00 PM  
Blogger ejh said...

It's more than that. It's the barmy notion that the low-paid would be more hostile to tax measures that adversely affected the well-off than to tax measures that adversely affected themselves.

8/07/2008 02:40:00 PM  
Blogger Bruschettaboy said...

A lot of the problem was that Brown and some of his advisers were tax code trainspotters - they invented a Heath Robinson system of credits and tax rates, then every time they wanted to change something, they bolted another few credits and offsetting allowances onto it. Finally they ended up with such a three-headed dog that it's quite plausible that Brown genuinely didn't know what the hell effect his Budget would have, other than through the Treasury revenue impact model. There's certainly at least one reasonably well-sourced account of him totally blowing up at Frank Field because he thought Field was lying about 10p taxpayers being worse off.

8/07/2008 02:54:00 PM  
Anonymous Phil said...

I'm not sure I buy that, BB. If your personal income is in bracket X and your household income is in bracket Y, then you'll pay more in tax and won't get more in tax credits. That much really isn't rocket science.

The scheme as it's developed has had a real Heath Robinson complexity to it - this group won't lose out because of this condition, this group will be compensated by this additional package - but I don't think a love of complexity for its own sake is at the root of the problem. It's almost the opposite - wanting to make a big statement (Lower Taxes *And* A Balanced Budget) and not caring about the details. People will lose out? No, they'll get it back on tax credits. Well, they could do. OK, most of them could do. OK, OK, we'll sort something out - it's not that many people anyway. Come on, it'll be good. Draft the press release.

And I do think the thought process of Brown's 'ally' is unpleasantly revealing - I'd really like to know who it was (Ed Balls?).

8/07/2008 03:11:00 PM  
Anonymous Anonymous said...

Phil: ...but I don't think a love of complexity for its own sake is at the root of the problem. It's almost the opposite - wanting to make a big statement (Lower Taxes *And* A Balanced Budget) and not caring about the details.

I veer towards Phil on this, if only because the idea seemed to be that tax credits would make up the difference, except single people don't receive them. I recall watching Harman on Question Time more or less tell a single male on £13K a year that he ought be so grateful to New Labour for the last 10 years that he could now afford a £20 a month tax hike. If New Labour really believed in redistributive taxation, the cut for basic rate tax payers would have come via an increase/new rate for the better-off. But they regard Lawson's decision to cut the top rate from 60% to 40% as Holy Writ, and the way they won three elections in a row.

[redpesto]

8/07/2008 03:56:00 PM  
Blogger Bruschettaboy said...

The thing was that there was a sort of "gift vouchers" economics going on - IIRC the Treasury model explicitly recognises that the cost of giving away tax credits with a value of £x is more like £0.7x because not everyone takes them up. So you can see how a sort of magical thinking took over.

8/07/2008 03:57:00 PM  
Anonymous Andrew Adams said...

As one ally puts it: “Nobody aspires to be a single person on £12,000. Everyone in this group wants to get married, have kids, get into a higher paid job. And they know from this budget if they make it, the highest brackets are not hit.”

That's an absolutely astonishing statement - it's just wrong on so many levels.

Not everyone wants to get married and have kids. They might not even neccessarily want a higher paid job but even if they do they may not find it easy to get one.

Therefore people trying to improve their lot but finding it a struggle get a further kick in the teeth and those who have a lifestyle which they are content with but does not fit the ideal of Brown's "ally" are punished for it.

8/07/2008 04:40:00 PM  
Anonymous gastro george said...

IIRC the Treasury model explicitly recognises that the cost of giving away tax credits with a value of £x is more like £0.7x because not everyone takes them up.

A cynic would say that this has been government policy (Nu Labour and Tory) for a long time, especially the movement from universal benefits to such means-tested benefits, even though the former are far cheaper to administer.

8/07/2008 05:24:00 PM  
Anonymous Andrew Adams said...

But with tax credits any such savings are surely largely offset by the huge amounts lost through fraud and overpayments.

8/07/2008 07:33:00 PM  
Anonymous Mordaunt said...

There's certainly at least one reasonably well-sourced account of him totally blowing up at Frank Field because he thought Field was lying about 10p taxpayers being worse off.

How stupid did he have to be? My grasp of these things is largely limited to the couple of months working for my dad, who runs a small accountancy firm, working out PAYE for the local nursing home. So you have the tax code, then you have the lower tax bracket, then you have the higher tax bracket.

So basically you get x amount gratis, then y amount at a%, then z amount at b%. Clearly, if you leap from x to z you are paying more tax. My first response to the announcment was to think "what a C***".

I've been in the position that Phil describes and when you are struggling to make ends meet having the government net yet more of your tax to subsidise the better off is not going to incline you to vote for them. The fact that this seems to have occurred to pretty much no-one among the great and the good including the entire fucking Parliamentary Labour Party doesn't exactly fill me with confidence in our ruling class.

Perhaps we should have a rule that no-one should be allowed to stand for parliament unless they have some experience of being on a low income?

8/07/2008 08:21:00 PM  
Anonymous bubby said...

Perhaps we should have a rule that no-one should be allowed to stand for parliament unless they have some experience of being on a low income?

Nice idea but I can't see it catching on.

The ten pence was so strange and it kind of sums up Brown's seeming inability to see how his policies are seen by ordinary people.

Ultimately though there's so little imagination and so little cojones to actually do anything remotely radical on redistribution. I actually have a sneaky suspicion that redistributing from the seriously well off to those earning up to say 40K, with cuts weighted more toward those at the bottom, could be a serious vote winner, plus of course being economically sensible. Unfortunately fear of the Daily Hate is probably too fierce even if the will were there which lets face it, it isn't.

8/07/2008 09:13:00 PM  
Blogger Matthew said...

The only thing I would say is that the 10p tax wasn't a great idea in the first place, unless you aimed to slowly expand its reach. But when he scrapped it why didn't he simply increase the personal allowance by a thousand pounds, and make up the shortfall elsewhere? As in fact they did in the end, didn't they?

8/07/2008 09:32:00 PM  
Blogger Bruschettaboy said...

But they regard Lawson's decision to cut the top rate from 60% to 40% as Holy Writ, and the way they won three elections in a row.

this is the genuinely fucking incomprehensible one. Every single budget, I grit my teeth going "this is the one where they raise top rate to 42% or something" and every year they don't.

8/08/2008 07:14:00 AM  
Blogger Matthew said...

But isn't it the case that the 40% rate is now levied at quite a bit lower level than it was under Lawson? (which in itself I think is a bad way to go about raising taxes).

8/08/2008 07:43:00 AM  
Blogger ejh said...

Every single budget, I grit my teeth going "this is the one where they raise top rate to 42% or something" and every year they don't.

Quite likely because the entire press corps would scream "politics of envy".

8/08/2008 08:11:00 AM  
Anonymous gastro george said...

It'd be much simpler to remove the upper earnings limit on NI, or at least raise it substantially.

8/08/2008 08:11:00 AM  
Anonymous Anonymous said...

Matthew: But isn't it the case that the 40% rate is now levied at quite a bit lower level than it was under Lawson? (which in itself I think is a bad way to go about raising taxes).

Your parenthesis has it exactly right: there might have been a moment - probably after the 2001 election when Labour crushed the Tories - where Brown could have gone for an increase in the top rate (hell, they broke their manifesto commitment on tuition fees...). He could then have cut the basic rate, over-indexed to take more of the low-paid out of taxation altogether, and used whatever was left over for the usual (kids, pensioners, overseas aid). Under Shelley's principle - 'We are many, they are few' - squealing right-wing journos would be outnumbered by everyone else on typical incomes.

And then I woke up.

[redpesto]

8/08/2008 09:09:00 AM  
Blogger Matthew said...

All that flat tax bollocks has gone quiet recently, hasn't it? I suppose it's because the Conservatives think they will be in power soon and from a government revenue point of view it's an absolute crazy idea (it's crazy from most points of view, but particularly crazy from that one).

8/08/2008 09:13:00 AM  
Blogger ejh said...

One of the (many) wacky things about the flat tax is the claim that it will make collection easier because it will simplify the system. This seems to me to be manifestly false: it's not calculating the percentages that's hard, it's establishing the level of income in the first place.

8/08/2008 09:15:00 AM  
Anonymous bubby said...

What they should do is raise the threshold for paying tax to something like 10K which would massively benefit lots of people at the very bottom. It would be very, very expensive but the shortfall could be made up in various ways.

I really think that discussing income alone, as opposed to income and assets means that we are missing out on the key drivers of inequality.

One of the main reasons we have had such a damaging property bubble in the UK is because the tax system allows speculators to make a killing in property.

This has massively unbalanced the economy and been one of the main factors in increasing levels of inequality.

But I can't possibly imagine any of the parties seriously addressing the situation on property taxes, it would a red rag to the Express/Mail and would require real political guts.

8/08/2008 09:24:00 AM  
Anonymous Martin Wisse said...


but one of the odd things about Brown as a Chancellor is that he really doesn't seem to know where taxation ends and the benefit system begins (see the ghastly mess of tax credits


Tax credits can't be blamed on Brown too much, as it was set up as a dodge around GATTS requirements on reducing the welfare state: stop paying certain benefits and replace them by tax credits et viola, welfare spending slashed.

It's the same reason the Dutch tax agency has taken over or is taking over some benefit roles and why that has also become a huge stonking mess.

8/08/2008 09:29:00 AM  
Blogger cian said...

Martin, that's a really interesting point. I don't suppose you can point to anything on what the implications of GATTs were for the shockingly ignorant (e.g. me).

8/08/2008 10:00:00 AM  
Blogger cian said...

Tax credits are partly a way of subsidizing employers, surely?

On NI, one of the shocking things to me when my pay first entered the higher tax bracket was that taking NI contributions into account, it didn't massively increase my taxes.

What would the fiscal implications be of raising income tax to 60% on income above 60K, or even 100K? I can't see the latter being unpopular given that a tiny proportion of the population make that much. And its got to be a pretty tiny proportion that make 60K, despite what the Times thinks.

8/08/2008 10:06:00 AM  
Blogger cian said...

Bubby: You do pay capital gains on property that you didn't live in. As far as I can see that bit of the property bubble was driven by a combination of people's distrust of pensions (and fair enough, given that the pensions industry is a huge con) and cheap credit.
I wonder what proportion of the flats built to cash in will remain permanently empty. A friend in the US has recently been wandering through ghost suburbs in Georgia. Can't imagine its going to be much different here, just it will be (tiny) 1 bedroom flats.

Given I'm in wonk mode, a really good idea would be to change taxation on any kind of asset appreciation (but exclude companies run by the owners) so that its part of the income taxation system. Its a disgrace that taxation is so low on something as useless as property speculation.

8/08/2008 10:13:00 AM  
Blogger ejh said...

There are supposed to be three million empty homes in Spain.

8/08/2008 10:22:00 AM  
Anonymous Anonymous said...

Cian: I wonder what proportion of the flats built to cash in will remain permanently empty. A friend in the US has recently been wandering through ghost suburbs in Georgia. Can't imagine its going to be much different here, just it will be (tiny) 1 bedroom flats.

I'd have a look at places like Manchester and Leeds for evidence. On the other hand, they may go for student lettings as a short term solution.

[redpesto]

8/08/2008 10:38:00 AM  
Anonymous gastro george said...

Re GATT, isn't one of the excuses for PFI the EU's debt-as-a-proportion-of-GDP limit?

Or is that a myth?

It doesn't seem to stop other European countries from using government debt, or quasi-government debt (c.f. EDF, SNCF, etc.), to invest in their infrastructure.

8/08/2008 10:51:00 AM  
Anonymous Andrew Adams said...

The EU does limit a country's budget deficit to 3% of GDP in a single year. I haven't heard that being used as a justification for PFI but it wouldn't surprise me if it has.
Certainly the government has pushed PFI on the basis that increasing government borrowing would be irresponsible, as if increasing borrowing but calling it something else makes it ok.

8/08/2008 12:10:00 PM  
Anonymous bubby said...

Cian

Its true that you do pay capital gains on appreciation of second (and more properties) but you are also allowed a certain amount of tax free capital gains on property (approx 5K per year) so if your second investment property rose by value by 30K over 6 years you wouldn't pay any capital gains on your profit assuming you didn't use your allowance on other investments.

There were a number of other factors driving the bubble-

a switch out of equities into property after the dot com crash,

lots of hot money coming into the London financial system post 1999 mainly from Asia and the Middle East. This had to find a home and where it ended up was more often than not was in property investment. This was what drove the mania for city centre new builds across Northern cities.

Historically low interest rates of course played a part as well of course.

Ultimately the Government failed on two counts. One it failed to regulate the mortgage market. It should never of allowed such lax lending. 125% mortgages, self-certification mortgages are utter madness. Secondly it should have set up the tax system to be much more punitive on the buy-to-let sector.

The bubble will leave a massive economic headache for years to come. It has also encouraged people to become ridicuously indebted by borrowing against the paper increases in the value of their property.

Most significantly it has hugely widened inequality. What sort of social message does it send in parts of London and the South East where seven figure houses coexist next to areas of deep deprivation?

Sorry to go on so, but that my humble take on the issue.

8/08/2008 12:22:00 PM  
Blogger cian said...

Yeah, also E and SE London at a guess. I think in a normal market they'd have real problems selling a lot of that stuff, and its probably not built to last.

In the South there are a lot of greenfield "executive estates" that have been mothballed, and towns that are periphery to areas people might want to live in have seen a lot of development (so for Brighton, its places like Shoreham, Worthing, etc). I imagine towns like that are going to crash really hard.

8/08/2008 12:25:00 PM  
Anonymous bubby said...

The EU does limit a country's budget deficit to 3% of GDP in a single year.

Is that the Eurozone rather than the whole of the EU and designed to maintain the stability of the Euro?

8/08/2008 12:26:00 PM  
Anonymous gastro george said...

The bubble will leave a massive economic headache for years to come. It has also encouraged people to become ridiculously indebted by borrowing against the paper increases in the value of their property.

Quite. Like my neighbour who extended his mortgage to buy an MG. With low interest rates, this has been regarded as free money, and it's this that has been a major contribution to the supposedly strong economy.

8/08/2008 12:32:00 PM  
Blogger Matthew said...

"What sort of social message does it send in parts of London and the South East where seven figure houses coexist next to areas of deep deprivation?"

Haven't most houses risen by the same percent, though? And if so surely it makes no difference if a house is worth £400k and its next to a £50k one than if it's a £2mn next to a £250k one.

Also I'm not sure it's better to have all the £m houses behind gates in Surrey or Highgate.

I would say the inequality the housing boom has caused is between home owners and non home owners in the last few years, and the problem that has caused is lots of home owners, voters, etc see that has real savings when it might not be.

8/08/2008 12:36:00 PM  
Blogger Matthew said...

"surely it makes no difference if a house is worth £400k and its next to a £50k one than if it's a £2mn next to a £250k one."

Well obviously it does for new buyers, insofar as wages haven't risen by anywhere near as much. But I think what I meant is if these are just bubble prices then they haven't changed the underlying housing stock.

8/08/2008 12:38:00 PM  
Blogger Matthew said...

The EU has its 'stability and growth pact' which is designed for the euro members but technically does apply to the others and it should limit budget deficits to 3% but the sanctions are weak and not all countries have abided by it.

8/08/2008 12:39:00 PM  
Anonymous dd said...

Secondly it should have set up the tax system to be much more punitive on the buy-to-let sector.


the creation of a private sector market for rented accomodation has actually been a policy objective for the last twenty years (to avoid having those horrible councils involved), so this was never on the cards.

(I must resist the temptation to comment on this; I have a huge conflict of interest)

8/08/2008 12:55:00 PM  
Anonymous bubby said...

I think you are missing my point Matthew. What I am talking about is the sociological consequences of having immense wealth existing next to extreme poverty.

There's a big literature on this and all the research suggests that such rampant inequality has very bad social consequences on things like crime, family breakdown, social atomisation and mental health.

8/08/2008 12:57:00 PM  
Blogger Matthew said...

I take the point but the house hasn't changed, it's just got a higher (notional it seems) value.

8/08/2008 01:12:00 PM  
Blogger cian said...

Bubby, with respect but I'm with Matthew. That's bollocks. Most people don't think about how much the house is worth, they think its a nice big house and they have two bloody enormous SUVs, the fuckers (to take a personal example).

Matthew: I would say the inequality the housing boom has caused is between home owners and non home owners in the last few years, and the problem that has caused is lots of home owners, voters, etc see that has real savings when it might not be.

Its not just home owners, but even if you have a home you're kind of stuck on the ladder. If you bought a house for 200K and its doubled in value then on paper you're richer. If on the other you need a bigger house, then the house which used to cost 300K, now costs 600K and you need to find an extra 200K, rather than the 100K you would have needed before. I'm amazed by how many people don't realise this - rising house prices are only a good thing if you're trading down, or you're a bank. For the rest of us its all bad. And essentially the house of prices is largely set by the availability of credit. The banks have made like bandits out of the housing boom, as they've been able to lend far money.

8/08/2008 01:34:00 PM  
Anonymous bubby said...

Respectfully Cian I have to disagree. People on very low incomes have seen those able to get on the property ladder drive away into the distance financially. Having the ability to build up asset worth is enormously important in so many different ways. Apart from anything else it gives you a safety cushion and something to fall back on or borrow against when times are hard.

Its also terrible for social cohesion. When you haven't got a pot to piss in, seeing others in your vicinity engaged in lots of conspicuous consumption is hardly likely to make you feel very socially included or that society gives a toss about you. In other words its very corrosive of the social bonds that encourage humans to act socially and altruistically towards each other.

TV and the expansion of celebrity culture has also been very significant in this respect. It has created a society where the poor press against the windows to gawp at the wealthy. Very unhealthy.

8/08/2008 01:49:00 PM  
Anonymous belle le triste said...

the gap is between those "on te ladder" and those not, isn't it? i live in a bit of hackney where there's less than 200 yards between a notorious sink estate and
a fancy square of houses fetching a million upwards -- people rub along as they always have (it's noticeably less cohesive on the street than it was 20 years ago) but there has to be a pretty constant sense that i. anyone who got on the ladder at least in principle is in the world of the fancy and ii. we on this estate will NEVER be on that ladder

8/08/2008 02:20:00 PM  
Anonymous belle le triste said...

oops sorry i meant it's NOT noticeably less cohesive

8/08/2008 02:22:00 PM  
Anonymous gastro george said...

I'm with bubby as well. As per my last post, the "property rich" have been able to crystallise some of their paper wealth by extending their mortgage, and that has gone into a lot of conspicuous consumption. With cheap credit this has been easy. Like I said, free money.

Of course, they are now suffering a bit as interest rates have risen ...

8/08/2008 02:32:00 PM  
Blogger ejh said...

Oh God, the ladder

8/08/2008 02:37:00 PM  
Anonymous gastro george said...

The concept of "the property ladder" is the spawn of the devil. There's just so much wrong with it. It's hard to know where to start.

8/08/2008 03:13:00 PM  
Blogger pj said...

"Who are the people who think like that? Who are the people who think that other people think like that?"

Tories.

8/08/2008 08:58:00 PM  
Anonymous John Fallhammer said...

Aaro-spot at the end of the Today Programme, talking, and largely agreeing, about "protests" with Mark Thomas.

I guess the money quote would be (paraphrased): "The things I feel strongly about are things nobody organises protests about."

Incidentally, there is some practical basis to the property ladder in that nuclear families tend to get larger (numerically, by individual sizes, and by personal space requirements) between the young adulthood and late middle age of the parents. (Not that that excuses all the rest of the bullshit.)

8/09/2008 08:18:00 AM  
Blogger cian said...

Bubby: Having the ability to build up asset worth is important, but those that you're talking about have for the most part always been excluded, and even when they have managed to buy houses they were far more likely to lose them (or buy houses that were unsalable). Decent rented accomodation at a decent price (and higher salaries) is probably more relevant to their immediate problems.

The property gap has largely been a generational thing.
If you're in mid 30s and lower middle class and above, you probably managed to get a decent house; otherwise, you probably didn't. And the phenomenon of very wealthy living next door to people who are very poor is largely a London phenomenon.

GG: "As per my last post, the "property rich" have been able to crystallise some of their paper wealth by extending their mortgage, and that has gone into a lot of conspicuous consumption."

A lot of conspicuous consumption has been fuelled by people's salaries. Don't forget that there's been a huge increase in inequality. People with SUVs have done very nicely. My suspicion is that an awful lot of extending of mortages has been carried out by people with less money trying to maintain a lifestyle, though I have no data on that either way.

Don't get me wrong, our housing system is fucked. We spend more on houses than anyone else in Europe, and we have some of the worst housing stock. And the housing boom was a disaster. But there are other factors explaining the last 11 years.

8/09/2008 09:23:00 PM  
Anonymous Anonymous said...

I've just found a reference by Mazower to the 'Fascist tax on bachelors'. In relation to the 10% tax, comment is unnecessary.

8/11/2008 05:54:00 PM  

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