Thursday, May 21, 2009

Should the taxpayer be buying ginormous houses for MPs?

A Tory MP who has been forced down over expenses has claimed that people were jealous of his big house. Of course there might be some envy flying around - but in general people accept that if you pay for things yourself you can have as large a house as you like. It's only when you get ordinary taxpayers on low incomes to pay for it through their taxes that it becomes a problem.

The second home allowance was designed to help MPs conduct their parliamentary duties and look after their constituents as well as attend Parliament. They can have as large a main house as they like, as they are paying for it themselves, but do they need a massive second home? Wouldn't a modest three-bed or four-bed in the constituency do to enable them to conduct their constituency duties?

And we come to David Cameron's £750,000 second home in Oxfordshire. The Daily Mail, actually raised this issue last year. It's worth having a look at the photo of Cameron's house.

Does he really need something that large to carry out his constituency duties and should he have charged the taxpayer for it?

Cameron bought the second home when he got elected in 2001. Here's what Cameron has claimed on his second home alowances since then (mostly mortgage interest):

2001/2: £18,009
2002/3: £19,722
2003/4: £20,328
2004/5: £20,902
2005/6: £21,359
2006/7: £20,563
2007/8: £19,626

Total: £140,509

No doubt Tories will swarm on here accusing me of class envy - but he's welcome to have as big a house as possible as long as I don't have to pay for it. It's not clear to me that he needed such a large house to do his constituency duties, he clearly bought the biggest one he could at the taxpayers expense and clearly intends to make a profit from it by selling after he has left parliament whenever that is. Thus he is as guilty of taking the taxman for a ride as some of the other cases we have heard.

Tuesday, May 19, 2009

Looking at how different approaches to the recession have produced different results

Eurostat published Q1 GDP figures on the 15th, and they were all but ignored because of the expenses scandal. But it's worth looking at to see how different approaches to the crisis have affected economic performance

All the following figures for GDP are growth per quarter. Eurostat also show American GDP stated per quarter, for comparison.

Country Q208 Q308 Q408 Q109

France -0.4% -0.2% -1.5% -1.2%
Germany -0.5% -0.5% -2.2% -3.8%
Italy -0.6% -0.8% -2.1% -2.4%
Spain 0.1% -0.3% -1.0% -1.8%
UK 0.0% -0.7% -1.6% -1.9%
USA 0.7% -0.1% -1.6% -1.6%

All the countries that stimulated have mitigated the bad effects of the recession.
The Americans in particular have applied several stimuluses to their economy. Their growth was positive in Q208 because the Bush stimulus bill signed in Feb 2008 released $178bn in tax rebate cheques in May 2008, then $300bn for distressed homeowners in July 2008, and then Obama signed a $787 billion package in Feb 2008. No wonder the American economy is doing less badly than everyone elses.

Elsewhere the centre-left Labour govt of the UK and the centre-left socialist govt of Spain also stimulated in the fourth quarter of 2008. The Germans didn't bother and the Italians under Berlusconi were also slow.

Germany belatedly started to take action earlier this year. But the delay has been costly - some economists reckon that the cost to fix things will be more than the cost of re-unification. The real cost of recessions is the drop in tax revenue - and the longer and deeper the recession is, the worse that cost is. Germany has now admitted that it will experience it's biggest budget deficit since WW2. It's actually cheaper to go for a stimulus early to mitigate the recession and ensure it is short-lived than to let it run and run. Tories like George Osborne cheered Germany to the rafters when they were making their idiotic comments last Sept about "crass Keynesianism". But they are strangely silent now.

It's not fashionable to say this, but we in Britain were lucky to have Gord at the helm in Sept 2008. No one else would have had the sense to take the right course of action.

Why Hazel Blears is a crap communicator

I was trying to work out what bothered me so much about Hazel Blears appearing on TV waving her cheque for £13k which she will repay to the taxpayer. Why was this so much worse than other MPs like Margaret Moran, and David Davis merely saying that they were repaying money?

It came to me that there was a touch of "loads-of-money" about Blears actions. Waving cash at people, waving cheques implies you have got a lot of money on hand. Essentially she was saying with her body language, I'm rich, I can write a cheque for £13 grand just like that (imagine smug click of the fingers). Which makes things so much worse.

The median income in Britain is about £25,000, which implies that about half the workforce, 14 million, earn less than that. They don't have £13k on hand to be able to write cheques to wave in people's faces. And if you've got lots of money on hand, why do you need to nick from the public purse?

Hazel Blears has been making a big fuss in recent weeks about how she is a better communicator than Gordon Brown. It's perfectly true that Gord doesn't know how to do anything but serious. Put him in front of a camera and ask him to smile and he struggles. But he has never been known to wave cheques in the faces of people either. If Hazel Blears was really the great politician and communicator she claims she is, she wouldn't have done it. Instead she'd have been contrite and apologetic. If she's such a useless politician, should she be an MP?

Today's NEC meeting has provided some guidelines of what will happen. There is going to be independent scrutiny of every claim made by every Labour MP in the last four years. The people breaking the spirit of the rules will be made to return the money. An NEC panel will recommend the deselection of the worst cases regardless of whether they have repaid or not (i.e. repaying will not save you). I hope Hazel Blears is one of those given the chop.

Sunday, May 10, 2009

Labour should move swiftly to deselect MPs who have abused the expenses system

It's hard to overstate how shocked Labour members have been over the revelations about MPs expenses in the Telegraph and other newspapers.

Members after all join parties for idealistic reasons - and they then proceed to give money, give up spare time to attend meetings to select candidates, give time delivering leaflets and canvassing, give time defending the party online, give, give, give, in an act of civic altrusim without which we would have no democracy. And to find that we've been betrayed by the MPs who were solely focused on their own profit and who then have the gall to traipse around the TV studios trying to defend the indefensible...

MPs may bleat that "all parties are at it" or that they are underpaid compared to GPs or they are victims of the press, but none of this washes. To your average voter, MPs arn't underpaid at all. To your average party member who gives so much for free, the MPs sense of entitlement is shocking.

There is only one response to this - the MPs with the worst abuses must be deselected. To use the GP analogy, if doctors are found to be incompetant or have brought their profession into disrepute, they are struck off. The job of a politician is to understand what voters are thinking. Barbara Follet and Margaret Moran to name two MPs, appear to have no political nous whatsoever. So what is the point of having them as MPs?

There is also the issue of the reputation of the Labour party - this must come above the needs of individual MPs. In the 80's, Labour was constantly attacked over letting extremists hijack the party. It wasn't till Neil Kinnock publicly took on Derek Hatton and other Militant extremists at the party conference that the tide started to turn and the public began to see that Labour was serious about putting it's house in order. Indeed Kinnock took the whole issue so seriously, he actually missed Prime Ministers Questions, in order to attend Hatton's disciplinary meeting in 1986, which was scheduled at the same time. He prevailed and Hatton was expelled.

By contrast, the Conservatives did not deal with Neil Hamilton in the 1997 election. They foolishly allowed him to represent them, so the story became "Conservatives back MP who receives money in brown bags". They should have protected their party and forced him to step down.

Labour musn't make the same mistake. The MPs with the worst abuses cannot be allowed to contest the next election representing Labour. But how to force the rotton MPs out is exercising many. As seen by the way they seem to be defending themselves, they clearly mean to fight to stay on. And because we are so close to a general election, many sitting MPs will have already been reselected for their seat. There are several ways the CLPs can act. They can put pressure for the MPs to stand down and they can start disciplinary proceedings. Under rule 2A.8 of the Labour party rule book, "No member of the party shall engage in conduct which in the opinion of the national constitutional committee (NCC) is prejudicial, or in any act which in the opinion of the NCC is grossly detrimental to the party." To any reasonable person, MPs engaging in property speculation at the taxpayers expense is "grossly detrimental to the party".

It's always hard for individual members to stand up at constituency party meetings to question the MPs. But they must do it if the Labour party is to survive with it's reputation intact. The public won't be happy till MP's have been punished and brought to heel. If we dont act, the voters will act, by choosing "anyone but the incumbant", and as we have the most incumbants, we have the most to lose.

Sunday, May 03, 2009

On fanciful talk of defections from the LibDems

Paddy Ashdown created a bit of a stir when he claimed that some Labour MPs might defect to the LibDems.

This is so off-base, where to start? First of all the searing memory in the Labour party is of the split in the early 80's when the SDP broke away. It's not just about the fact that the Labour party dislikes disloyalty above all things. It's also about the fate of the MPs who defected to the SDP - 28 Labour MPs left to join the SDP, along with loads of PPCs and activists, and they thought they were leaving a Labour party that was "finished" and going on to form the next government. Actually, they were trashing their careers and going nowhere.

By contrast, parliamentary candidates like Tony Blair, standing for election in 1983 for the first time, stuck with the Labour party, fighting from within to make it electable. He then became leader of the Labour party and Prime Minister for 10 years. If Vince Cable had stayed put, he would now be chancellor, but instead has to content himself with appearances on TV when they need a third voice. The lesson is clear - stay and fight your corner and you eventually prevail. Flouncing out pays no dividends. Politics is a long, long game.

In addition Ashdown and others who believe that Labour will lurch left have absolutely no understanding of the make-up of current Labour activists nearly 30 years after the SDP was formed. The party is a different animal.

It's not just the Labour party that has changed of course. The entire political landscape has changed. The Tories are now further to the right than they've been in 60 years. They are also more euro-sceptic than they've ever been, more isolationist, more fearful of the rest of the world. This closes off options.

It's a cliche to say that the left of the Labour party has nowhere to go - it was true in 1996 and is true now. But what is new is that the right of the Labour party also has nowhere to go. If like me you are centrist in the grand scheme of things (which means on the right of the Labour party), believing in and engaged in commerce, and understanding that globalisation needs rules and safety nets, and that the EU supplies these in Europe and that we have to be in the EU; if you rather like the world and it's peoples, instead of fearing and hating it, there isn't anywhere else to go apart from Labour.

Pro-europeans like Peter Mandelson and Charles Clarke need the Labour party as much as Dianne Abbot and Dennis Skinner do. That's why no MPs have crossed the floor away from Labour since Gordon Brown became leader in 2007, and why there won't be any coming up in the next few months. We are all locked together in mutual need and must help each other to get anywhere.