Less is More

The last post was somewhat short and interesting…this one is going to be long and dull and worthy.

The Beeb loves to quote Balls and the Labour Party mantra that Osborne has robbed the poorest in society in order to pay for a tax cut for his millionaire chums by lowering the top rate of tax.

The BBC may or may not have done an in depth analysis of the top rate tax cut to 45%….and may have declared it a wizard wheeze….whether they have or not is irrelevant as it is pretty much now ‘conventional wisdom’ for BBC presenters to suggest that the cut is unfair and ruinous for the economy.

Just how true is that?

And just how much of the UK tax revenue is generated by the top 1% so often pilloried by the Occupy scallywags?

The IFS says: In fact, it is not clear whether the 50% rate will raise any revenue at all….. at some point, increasing tax rates starts to cost money instead of raising it…..a revenue-maximizing tax rate corresponds to an income tax rate of 40%. So, according to these estimates, the introduction of the 50% rate would actually reduce revenue.

But setting top tax rates is not just a matter of maximising revenues….. It also reflects society’s attitude to extreme affluence.

“The significance of the 50 per cent income tax rate is less the paltry sum it might raise (or cost) than the substantial hit on high earners it represents.” 

In other words it’s all about appearances and politics not monies generated…and a Labour friendly BBC seems not too inclined to dispel the myths.

In 1978 the top 1% paid 11% of the income tax total.

In 2012 the top 1% paid 27.7% of income tax.

1% on a 50% tax rate paid £47 bn….27.7%

34% on a 40% tax rate paid £57 bn….34%

50% on 20% tax rate paid £17bn….10%

(There is also an anomalous 60% rate for income between £100,001 – £114,890)

So 1% on a tax rate of 50% will pay £47bn…whilst 1% on a tax rate of 20% only pay £0.34bn….in other words the top 1% pays 138 times more tax than people on 20% pay.

Not only that but once National Insurance contributions are taken into consideration the top rate of tax is 58%….one of the highest in the developed world. 

One of the favourite bug bears of Balls and the concerned BBC presenter is VAT…..as we all ‘know’ VAT hits the poorest hardest doesn’t it?

Well no not in fact so says the IFS……

‘VAT in fact is a smaller share of expenditure for poorer households in the UK, since goods subject to zero or reduced rates of VAT are mostly necessities such as food and domestic fuel. So, if lifetime income and lifetime expenditure are equal, as they will tend to be (the main difference being bequests given and received), VAT must actually take up a smaller share of lifetime resources for lifetime-poor households, and in that sense it is progressive.’

So that is another BBC/Balls myth that bites the dust.

Victoria Derbyshire was today banging on about tax avoidance…is it immoral? etc…however she would have been better to spend her time looking at the rates of income tax levied on us than the dodgy accounting schemes dreamt up on the Channel Islands……What does the HMRC have to say about the schemes?….

Changes to tax planning/avoidance/evasion

2.7 Behavioural responses are also expected around tax planning, avoidance and evasion. It is useful to sub-divide these behavioural responses into three groups:

The impact of these types of behavioural effects on other tax revenues is smaller than in the case of labour supply responses as they have much less effect on productivity and consumption.

The impact on the level of GDP

2.13 The impact of the behavioural responses on the level of GDP vary by type of response: labour supply responses such as reduced hours or effort will have a direct impact on GDP as they reduce the amount of economic activity in the UK. The impact of increases in tax planning and avoidance on GDP will be much smaller (than loss of GDP due to higher taxes) as they do not necessarily impact on economic output. 


To answer the question as to whether Osborne’s proposed cut in the top rate of income tax to 45% will be more effective at raising revenue than the 50% rate we can look at the HMRC study into this…..some of which has been cherry picked and is spread out below for you to digest at your leisure…enjoy……but it basically says the cut is the right thing to do….the tax yield from the 50% levy will be less than predicted….and possibly negative…ie making less revenue than before the rate was raised to 50% by labour.


The Exchequer effect of the 50 per cent additional rate of income tax

The 50 per cent additional rate of income tax was introduced on 6 April 2010. It was the first increase in the highest rate of tax in the UK for over 30 years, and was expected to yield around £2.5 billion.

The evidence contained in this report has also been used to inform the Exchequer estimates for the Budget 2012 measure to reduce the additional rate of tax from 50 per cent to 45 per cent.

The analysis shows that there was a considerable behavioural response to the rate change, including a substantial amount of forestalling: around £16 billion to £18 billion of income is estimated to have been brought forward to 2009-10 to avoid the introduction of the additional rate of tax.

The modelling suggests the underlying behavioural response was greater than estimated previously in Budget 2009 and in March Budget 2010, decreasing the pre-behavioural yield by at least 83 per cent. This result is also consistent with that contained in the Mirrlees review, and suggests the additional rate is a highly distortionary form of taxation.

The conclusion that can be drawn from the Self Assessment data is therefore that the underlying yield from the additional rate is much lower than originally forecast (yielding around £1 billion or less), and that it is quite possible that it could be negative.

This conclusion is supported by wider academic literature which generally suggests a greater behavioural response than was included in the Budget 2009 and March Budget 2010 estimates. Evidence from the U.S. suggests the behavioural responses could be even higher, with an even lower yield.

The conclusion is also consistent with the view that international labour mobility has increased in the last 15 to 20 years as both legal impediments and general migration costs have been reduced, which means the adverse affect of high rates of personal taxation on both inward and outward migration to the UK and tax revenues can be significant.

The report also describes how the impact of introducing the additional rate may extend well beyond the direct Exchequer impacts. In particular, other things equal, high tax rates in the UK make its tax system less competitive and make it a less attractive place to start, finance and grow a business. The longer the additional rate remains in place the more people are likely to consider it a permanent feature of the UK tax system and the more damaging it would be for competitiveness. This suggests the negative impact on GDP may increase over time, and therefore the direct yield (and revenues from other tax bases) might fall over time toward or beyond zero.


The impact of the additional rate on behaviour

2.2 Understanding the behavioural response to the introduction of the additional rate of tax is particularly important as it is generally accepted that individuals with higher incomes are more responsive to changes in tax rates,

There are two main types of labour supply responses:

1. A reduction in the number of hours people work or the amount of effort they make

. A higher tax rate reduces the reward for working. This means individuals have an incentive to work less and take more leisure time (the substitution effect). It also impacts negatively on entrepreneurship as it reduces the incentive to start, finance and grow a business.

The overall effect of a tax rate increase on labour supply is negative.


2. A reduction in UK labour market participation

. An increase in marginal tax rates and average tax rates can impact on UK labour participation decisions, including migration (both inward and outward), and retirement decisions. …

Those affected (i) operate in an internationally competitive labour market so are more likely to leave the UK in response to high tax rates; and (ii) are over 55 (the minimum age at which pensions can be withdrawn) so are more likely to retire.


A reduction in real income is usually associated with a reduction in expenditure and corresponding indirect tax revenues.

2.6 It is also worth noting that the Exchequer impacts of changes in migration can be considerable as the Exchequer loses the tax on the individuals‟ entire income rather than just the income subject to the additional rate.


The impact on economic growth

2.16 In addition to their impact on the level of GDP, changes in tax rates can have an impact on economic growth. Other things equal, high tax rates in the UK make its tax system less competitive and make it a less attractive place to start, finance and grow a business. Entrepreneurs and high-skilled workers may find it more rewarding to implement their ideas in other countries. The prospect of less reward for their work effort may also deter top managers of both foreign and domestic firms from investing in the UK. An international comparison of tax rates is contained in Chapter 4.

2.17 The relationship between tax and growth has been extensively studied in research undertaken by the OECD… Their analysis suggests that corporate taxes are the most harmful type of tax for economic growth, followed by personal income taxes and then consumption taxes, with taxes on immovable property being the least harmful tax.


2.18 The OECD’s analysis also highlights that high top rates of income tax may be harmful for economic growth.

2.23 Modern theories of economic growth highlight that higher levels of human capital raise the productivity levels of the workforce both directly and indirectly.

. The indirect effects come through the greater capacity of more highly skilled individuals to raise productivity through “learning by doing”, and through the spillovers that are achieved by passing their knowledge on to their colleagues. More highly skilled workers are more likely to be quicker to identify the potential of new technologies, and to adapt them successfully to the needs of their own business.

2.24 Empirical studies confirm that higher levels of education facilitate the development and diffusion of new techniques and products, thereby boosting economic growth.  One study that surveyed results from over twenty other studies concluded that “there is compelling evidence that human capital increases productivity”. 

Another study that takes account of educational attainment and on-the-job skills acquisition estimates that a 1 per cent increase in human capital raises the level of productivity (output per worker) by between 0.07 percent and 0.19 per cent.7


2.25 High tax rates may affect the amount of human capital available through two channels. One is that they reduce the post-tax returns to human capital, and therefore individuals may invest less in education and training than they might otherwise have chosen. The second channel, already mentioned, is that part of the skilled workforce may opt to live and work in a country where taxes on income are lower.


Empirical estimates of taxation and growth

2.31 Empirical studies provide some evidence that high marginal rates of tax can act to depress rates of economic growth.


Summary of dynamic effects on growth

2.33 High marginal rates of income tax risk weighing on the growth potential of the economy by deterring the most highly productive individuals from living and working in the UK, and through deterring the foreign direct investment that can be an important element in the diffusion of new technologies and techniques. These effects are likely to be modest if those who are liable to pay the additional rate of tax expect that it will be temporary.


2.34 However, if the rate were to remain at 50 per cent for an extended period, there would be a risk that the effects on growth could become more material.



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BBC or Wikipedia….Who’d You Trust?

Some bits and pieces to chew on….

1. I think it was Rachel Burden on 5Live yesterday who claimed that the Greeks voting to keep austerity and the bailout package was an illustration of their belief and confidence in the Euro itself and the European Union. Really? It’s not the runt of the European litter clinging desperately to the German milch-cow’s teat and hoping to do so for life then?…which is what will happen…can anyone see these ‘loans’ being paid off?

2. Victoria Derbyshire states boldly today that austerity has definitely caused growth to stop and asks a Government minister to explain himself…..however you define growth and GDP spending borrowed money is not growth…there might be more money in the economy…for now…but it has to be paid back…with interest later. Stick to English Lit. Vicki. No idea why we have to have austerity and who caused that problem in the first place?

3. How about the timing of the GP’s report on hospitals delaying operations because of ‘cuts’? Rather fortuitous timing with the GP ‘strike’ this coming Thursday…not saying it was timed to try and make the Coalition look bad but the BBC seemed happy to grasp the proffered opportunity that it gave to talk a great deal about cuts and the ‘disappearing’ NHS. Maybe the GPs will get a more sympathetic hearing from the Public….they hope.

4. Niall Ferguson gave his first Reith Lecture today…..the only time during the lecture that the audience reacted was when he said that the best thing American youth could do was to join the Tea Party….large intake of breath from audience….how many work for the BBC?


5.  I just know someone will comment on the Iron Cross….Life’s too short to photoshop something else in….and the BBC are happy to tell you that should the Euro fail the Fascists are going to take over….so in a way it’s appropriate…the BBC’s careless pro Euro talk has helped keep the Euro afloat and now it could sink us all.  Ironic really….that it is the über Liberal BBC which has laid the foundations for a Right Wing coup…apparently.

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Never a Frown with Gordon Brown

 Gordon Brown’s BBC Mafia hitmen have mobilised again drawing a veil of silence over his malevolent reputation….silence is Golden Brown.

Last week the Today programme burst into action when Alistair Campbell made his three line disclosure that Rupert Murdoch had phoned Blair and ‘may’ have urged him to speed up the drive to war in Iraq….though he hadn’t heard he call himself. The BBC made a big splash with that little comment..regardless of its veracity.

How different is the treatment of this story  in which it is revealed in Campbell’s Diaries that Blair thought Brown was ‘bonkers’, a malign force and intent on destroying him.

Not only that but there is a clear contradiction of Brown’s ‘evidence’ at Leveson where he claimed he had never plotted against Blair. The BBC were quick to point out that they thought Murdoch had lied when he claimed never to have asked a Prime minister for anything…not so quick to point out discrepancies in Brown’s delusional account.

The BBC seem intent on protecting Brown….if they can burnish his reputation and rebuild him in the eyes of the Public then that will also revitalise Labour’s reputation and by osmosis Miliband will benefit from the rewriting of history in which Brown was purely a victim of bad luck, bad timing and bad Murdoch Press coverage.



Just remember there’s never a Frown with Golden Brown.

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Forgotten Voices

The BBC once again fails to pay due respect to the men and women who sacrificed themselves to ensure that the freedoms, values and beliefs that are the bedrock of civilisation live on.
However extended coverage of the Notting Hill Carnival, the Muslim Eid or Glastonbury are guaranteed.

BBC criticised over Bomber Command live coverage failure
The BBC has come in for further criticism of its national events coverage after it refused to broadcast the unveiling of the RAF Bomber Command Memorial on its main channels.
Instead of the showing the event attended by the Queen, eight members of the 7,000 veterans and families the BBC will be showing repeats or live tennis.
The move has been condemned by campaigners who have worked tirelessly to raise the £6 million for a fitting tribute to the 55,000 airmen killed during the Second World War.
The BBC says in a statement it was “aware of the significance of this story, both for the veterans and for our audiences” and that a special programme on Bomber Command will be shown later that day.

If I was a veteran of Bomber Command I wouldn’t watch it….the BBC will certainly praise those young men for their bravery ‘forced’ to do terrible things by ‘Bomber Harris’ who ‘wrongly’ assumed he was doing them for the best.

The programme will slowly morph from respect and gratitude, honouring the bravery and sacrifice into a saga of guilt about the raids on Hamburg and Dresden…there may even be a ‘talkinghead’ making comparison with the guards of concentration camps.

These men in the BBC’s eyes, are ‘tainted’ by what they had to do….and so get only a ‘qualified’ Hurrah and Thankyou and are shunted into the backwaters of 24 hour news..

How different of course to the BBC’s treatment of Al Qaeda terrorists and wannabe terrorists like Mozzam Begg. No ‘qualified’ welcome for them…the red carpet was rolled out and the airwaves practically turned over to them to state their cases….as was it for the IRA who could always rely on a ready platform at the BBC and a good Press.









I will restrain myself and not put into writing my total contempt for the BBC types who are so ready to dishonour brave men, the 55,000 who died for the freedoms and human rights so ‘valued’ by the BBC, whilst always being ready to excuse murderers and fanatics.

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All Good Men Must Come to the Aid of The Tea Party

There must be a subversive at the BBC, a Right winger who likes to throw the odd spanner in the works of the Leftwing steamroller that is crushing all opposition before it.

The BBC have booked Niall Fergusson as its Reith Lecturer….The first of Prof Niall Ferguson’s 2012 Reith Lectures will broadcast on BBC Radio 4 on Tuesday, 19 June at 09:00 BST.

In an article in the Sunday Times (pay up or miss out) he tells us that ‘The Empire was built on borrowing, but now our (Brown’s?) profligacy has created a timebomb that threatens to ruin future generations’.

He attempts to explain the West’s decline by looking at the reasons for its past success. Personally I believe Socialism is the root of the decline….an ideology which seeks to feather our nests but without paying the cost in terms of work…..they demand more pay but do not in return produce more goods…there is no efficiency, no rise in productivity….it has priced us out of the manufacturing market.

That is by the by, what is interesting in terms of the BBC and its attitudes is what else he says in a BBC ‘Viewpoint’…..

If young Americans knew what was good for them, they would all be in the Tea Party.

In the good, but less likely scenario, the proponents of reform succeed, through a heroic effort of leadership, in persuading not only the young but also a significant proportion of their parents and grandparents to vote for a more responsible fiscal policy.

[We must] alter the way in which governments account for their finances.

The present system is, to put it bluntly, fraudulent.

Public sector balance sheets can – and should be – drawn up so that the liabilities of governments can be compared with their assets.

Here I disagree slightly…it should also take into account realistic forecasts of future growth, either up or down…Brown based his spending on optimistic growth projections….he failed to take into account ‘events dear boy, events’.

But there is also this little aside from a BBC author, note the last bit:


Defining Government Deficit

A government deficit occurs when it spends more money than it receives in income.

Cyclical deficit occurs when the economy weakens during a recession and government income falls because of shrinking tax revenues and increased welfare spending.

When the economy improves, the cyclical deficit turns into a cyclical surplus.

Structural deficit is different from cyclical deficit as it occurs no matter how strong the economy is.

It is debt that has come about as a result of government borrowing. Countries are judged on their ability to pay off this debt on the basis of national debt relative to GDP.

If a country’s debt-to-GDP ratio gets too high, investors will worry that the government will default on the debt. However, it is debt governments can try to control through lower borrowing, spending cuts and higher taxes.


It seems somebody didn’t get the BBC memo….‘Plan B for Borrow’ is to be sold to the Public.

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Three Line Whip

Murdoch’s Leveson statement that Brown phoned him and declared war on his company has been derided by the BBC who like to suggest he is lying….and claim John Major’s statement backed up Brown.

Whatever the phone records show Mandelson says there definitely was a phone call…and other calls Brown often made to ‘vent his feelings’….

Mandelson: ‘There would have been a number of [phone calls]— I mean, Gordon did not hold back in talking to Rupert Murdoch. He did telephone him, he had every right to do so, and when he thought that he was being traduced, as he did, by the Sun, he wanted to give vent to his feelings about that.’

Jay: Okay. You say in your book that Mr Brown was stunned by the news that the Sun had shifted allegiance, and that this grew greater, as it were, over the forthcoming weeks. Was it your assessment that Mr Brown was personally embittered by this?

Mandelson: I think he was greatly upset by it. I don’t think he should have been surprised, but he took these things very personally.


And as for John Major it seems even he may not be quite as honest as he is portrayed…apparently Truth is a grey area for Major

Why mention all this? Because the BBC, happy to call Murdoch a liar, has taken to its bosom its old enemy, the arch political spinner who used to be the ‘liar who took us into an illegal war’…step forward one Alistair Campbell.

The Today website has Campbell as its main story highlighting his claim that Murdoch rang Blair to urge him to go to war quickly….

‘Tony Blair’s former director of communications, Alistair Campbell, has said Rupert Murdoch telephoned Downing Street before the invasion of Iraq, in 2003, to warn of the dangers of delaying Britain’s involvement.

Mind you he says he did not actually hear the call himself but he did see Blair’s irritated reaction to the call.

The BBC were happy to take his word that Murdoch made such a call and said such a thing.

It was therefore Murdoch’s fault that we went to war.

Ignoring the fact that it was Blair’s policy to be a ‘Liberal interventionist’…ie go to war to impose democracy on ‘tyrants’ and that it was Blair himself who persuaded Bush to go down this road and not be isolationist…. Blair was already totally convinced about the need to go to war and had already committed Britain, subject to Parliamentary approval, to go to war in Iraq….remember the ‘Downing Street Memos’?

Text of the Christopher Meyer Letter – March 18, 2002 memo from Christopher Meyer (UK ambassador to the US) to David Manning (UK Foreign Policy Advisor) recounting Meyer’s meeting with Paul Wolfowitz (US Deputy Secretary of Defense).

‘1. Paul Wolfowitz, the Deputy Secretary of Defense, came to Sunday lunch on 17 March.

2. On Iraq I opened by sticking very closely to the script that you used the Condi Rice last week. We backed regime change.’

And…Blair and Bush ‘agreed’ on Iraq regime change in private April 2002 Crawford Ranch meeting.

So Blair was fully committed already…and Murdoch phoning sometime in March 2003 could hardly have been influential as the war began on March 20th. It can be assumed the decision to go to war was already pencilled into Bush and Blair’s diaries long before then.

In other words it perhaps could be suggested with some confidence that Campbell’s claims are merely an extension of Labour’s war against Murdoch and an attempt to smear him by association with the Iraq War….note Justin Webb’s attempt to tie Murdoch in with the ‘Neo Cons’ and US Republican Party….‘was he doing someone elses work…lobbying for the ‘Right’?


Campbell says ‘I am not saying remotely that there was anything like collusion.’…but he is just ‘putting it out there’…no smoke without fire….the Spinner knows how minds work.

Not only is this a piece of black propaganda but it illustrates the mendacity of the BBC who opt to call Murdoch a liar but present the slippery tongued Campbell’s word as Gospel when it suits their agenda.

A three line comment in Campbell’s diary has been spun into a major story about Murdoch’s attempting to influence government policy (and thereby lying  at Leveson about never asking politicians for anything), and being in league with US Neo-Cons and lobbying on their behalf.


A more ridiculous story it would be hard to find….unless you listen to the Today programme regularly…..though the recent ‘Royal Jubilee Bus Farce’ still must top the bill for most ridiculous story ever to have graced a prime time current affairs programme.







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Set Frasers to Stun

The BBC’s favourite ‘turbulent priest’ Giles Fraser has said something that might be construed as islamophobic in the corridors of the BBC…
“A week before the Occupy thing started I preached at St. Paul’s about violence,” said Fraser. “I’m very exercised, and always have been, by the way the Church justifies violence to itself.
That sermon is really about [the French anthropologist] René Girard. He argues that religions are sublimated forms of violence—and religion is a bad word for him. Scapegoating the one who’s different unites the community, and it’s the priest who sanctifies this, who launders society’s violence. For Girard, Jesus is the supremely anti-religious figure, because he sees the violent secret that binds people together. Above all he sees the role that religious professionals play in concealing and reinforcing it and that is why they hate him. Jesus is saying, in effect, ‘Those ones you’re telling to go home, those ones you’re pushing around, those ones you kill—they are me. That old person who natters on, the gay boy, the foreigner. The one who’s different.’ ”

From that you could take it that ‘Christianity’, the religion of Jesus Christ, is a religion of Peace, turning the other cheek and the meek inheriting the earth and all that good stuff.

Islam of course may well be the religion that is a classic example of sacredly endorsed violence sanctified by the supposed Revelations of a ‘merciful and forgiving’ God…..

Could any Muslim argue with that description? It seems they are unlikely to, in fact some revel in the violent nature of Islam…..

‘We are not a pacifist religion. We don’t turn the other cheek. We hit back.’
Dr. Kalim Siddiqui, director of the Muslim Institute in London

Surely the BBC will not be happy that their latest anti-Establishment poster boy has been so Islamophobic?

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You’re a Racist….Go Back to Where You Belong!

The Today programme yesterday wished Enoch Powell, on the occasion of the 100th anniversary of his birth, a happy birthday.

Well, nearly.

Justin Webb says…‘We’re going to wish him, well, a qualified happy birthday.’

…because you know what a racist hate monger he was….

Justin Webb was very insistent that Powell was a racist.

No he wasn’t….Powell made the clear and powerful point that ‘multi-culturalism’ doesn’t work….not because he had antipathy or hatred of any other race but because it is an inevitable consequence of human nature that people of similar background, culture and race will look to group together…and then seek to further their own group interests, and that cannot be denied.

It is fact and anyone who states that fact should not be labelled ‘racist’ ….. Webb has so easily taken on the language of the race ‘hustlers’ probably because that suits his own outlook on life rather than rigorously asserting the evident correctness of Powell’s argument.


Immigration is about race, culture and identity but in the main it is about numbers and the affect mass immigration has on the native population…who have not been given the opportunity to say whether this is what they want…and now post-effect…they are still denied a voice, being branded ‘racist’ by the likes of Webb for raising legitimate concerns.

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Behind the Scenes

Over the course of the Leveson Inquiry we have been gravely informed of the deleterious effect of the Murdoch’s malign influence on, and easy access to, politicians.

What the BBC seems reluctant to admit is that all media outlets have access, and demand that access, to the Government in order to lobby in their own interests.

Here is just one (I’m sure there must be many, many more) example of that:

‘Former Beeb boss Greg Dyke says the BBC never curried favour from politicians. ‘I took a decision to stay as far away from them as possible,’ he declared on Question Time. Funny that, as I recall his office begging for a meeting with then Tory leader William Hague during a rough patch for him at the BBC, which was reluctantly agreed to. At the end, the DG asked me if there was a back door he could use to avoid being spotted. What a roaring hypocrite.’


We are also informed that it is the power of the ‘Press’, ie the Newspapers, ie Murdoch, that has had such a detrimental effect on the relationship between politicians and the media…and therefore what the Public get to hear and read.


However Martin Ivens in the Sunday Times begs to differ offering a different perspective…one that the BBC has noted but failed to associate with its own actions…that of the damaging influence of 24 hour rolling news on political coverage and analysis.


Ivens says:  ‘After Margaret Thatcher was ousted, her Conservative and Labour successors became obsessed with the 24-hour cycle of rolling news, to the detriment of a wider strategic vision.  it is important to keep the newspapers on side, but a sense of proportion is required.  The politicians have got the power.’


That last point is important….because both Brown and Major claimed they were at the mercy of Murdoch and his battalions….a question that needs asking….is that really true?  The BBC won’t be delving too far down that path as the answer will not suit its narrative of an over powerful Murdoch Press that now needs to be reined in and perhaps an Empire broken up.

So it would seem that it is not just the newspapers but in fact 24 hour news services such as the BBC’s that put the pressure on politicians to always have ‘something to say’ and therefore encouraging them to make ever more either utterly inane and anodyne statements or to make some outrageous claim that will be swallowed by a media desperate to fill the time and generating artificial controversies that can be endlessly picked over.


Much like the Leveson Inquiry itself which despite the huge distate about the hacking of Milliy Dowler’s phone is of little interest or concern to the Great British Public who would have happily gone on buying the News of the World had it survived.


Leveson is merely the cumulation of Labour’s, the BBC’s and the Guardian’s ideological and commercial ‘War’ on Murdoch.

Gordon Brown may have been lying through his teeth, along with many others, but he seems to have triumphed….like another Scotsman, Lord Lovat, chief of the Frasers in the 18th century, he has imposed his malign influence upon events and has indeed triumphed because his account has been upheld and broadcast worldwide without challenge or question by the BBC, giving him the credibilty and gravitas that he does not merit…Brown has been lent a ‘Grandeur to his villainy’ by a BBC intent on destroying Murdoch and his media organisation.










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Heart of The Matter

The BBC presents  a fairly unsophisticated picture of this country’s economic state and the debate surrounding it.  It allows them of course to control the debate and what is said more easily….at a basic level it can invite on speakers who it knows may not be very good at getting their views across (probably a Tory)…or someone who is rather good at ‘soundbite’ debating (usually a Labour person).

AA Gill in The Sunday Times a few weeks back said this about the BBC’s TV approach to debate (and I think it is a fair comment on the Today programme):

‘[This raises] a bigger question about how we treat politics and current affairs on television. It is almost always confrontational and rabidly partisan, a four-minute, invigilated slanging match that is  intellectually bankrupt and obtuse. Television’s way of exploring issues is always more about the desire for lively television than illuminating arguments. The cast list of pugilists, hack and thwarted politicians who will turn up at any studio, anywhere, in the early evening has become the constitutional version of Mexican wrestling: shouty and phoney. Question Time, in particular, needs to be seriously reimagined. None of this is about involving the viewers in political debate or thought. It’s thuggish and dispiriting and adds to the general disgust with the whole political caste.’


Even the grand Paxman himself agrees the BBC has dumbed down:

We all remember Paxman telling us all about it in 2007:

“In this press of events there often isn’t time to get out and find things out: you rely upon second-hand information-quotes from powerful vested interests, assessments from organisations which do the work we don’t have time for, even, god help us, press releases from public relations agencies. The consequence is that what follows isn’t analysis. It’s simply comment, because analysis takes time, and comment is free.”

The biggest and most important debate right now is whether the Coalition is making ‘savage’ cuts that are bringing the economy to a grinding halt and whether Labour’s plan to spend more are the only way forward….in other words does ‘Austerity’ work….This suggests it does…but you won’t hear it on the BBC.

Which is why the most important questions are just how much is the Coalition cutting and how much are they borrowing? This is the heart of the matter…the crucial difference between Balls and Osborne, but….

…they are two questions that the BBC singularly fails to ask never mind answer.  To do so would cut the rug from under Balls completely when the Public realise debt is rising now even with ‘cuts’…so imagine how much bigger the debts burden would be under Labour’s profligate ways. 

John Redwood, Tory MP, has been consistently trying to get his point across that there are no real cuts in government overall spending at the moment….the NHS for example is having more money spent on it…but that money is being reallocated within the NHS…so some sectors are losing money others are gaining..but overall the NHS spend is going up.

The fact is debt is going up, just at a slower rate. 

Look at this from the Spectator’s Fraser Nelson who talks about how the truth is being hidden (and Osborne gets some of the blame himself to be fair)

 ‘Like Brown, Osborne’s reaction to economic trouble is to borrow more. He may well be right to do so, but he ought to be honest about it. This matters, because it’s not his money. Every penny of money his government borrows has to be repaid by ordinary people.’

He goes on to suggest we are being badly served by the BBC who fail to make the debate  understandable and wide ranging enough:

 ‘Osborne ought to be shocked at the opinion polls showing that only about a tenth of the public understand that he’s massively increasing the debt, and that most people think he’s reducing it.’

‘The BBC ought to be the custodians of this, with its role as a public service broadcaster. But the BBC has adopted a Balls-lite narrative of harsh, radical cuts – and won’t back down from it.’

In the comments #88′  links us to this which reveals the effect on manufacturing  employment that Labour’s massive Public Sector ‘national service’ scheme had: 

‘The Keynes vs Hayek debate is at its sharpest on the issue of employment. Can government create jobs (as Balls says)? Or does large public sector employment simply displace economic activity that would happen elsewhere (as Osborne says)? A fascinating study has been released today by the Spatial Economics Research Centre at the LSE showing the damage done by public sector employment to the real economy. Drawing on a huge amount of local-level data over an eight-year period, it’s a serious piece of research that is worth looking into and deserves to impact our economic debate.

1. First, what is seen. In the short term, hiring someone to work for the government means another worker, who in turn spends. As the report puts it, ‘additional jobs may be generated as a result of increased demand for locally produced goods and services’. That is what is seen. In the short term — 2003-07 is the time period looked at — the study finds that for every 100 extra public sector jobs you get 50 additional jobs in the service and construction industries.

2. Next, what is unseen. Namely, the effect on other industries. For every 100 extra public sector jobs, the study finds 40 fewer jobs in manufacturing, because local businesses find it harder to hire people. This essentially cancels out the benefit in the service industry. As the study says, ‘Public sector employment has little effect on total private sector employment in the short run’. Over that four year period, expanding the public sector didn’t crowd out the private sector, but it didn’t help it grow either.

3. In the long-term, the public sector crowds out the private sector. Crucially, over a longer period (1999-2007) the study finds that enlarging the public sector causes even greater pain to manufacturing with no gain in the services industry. In fact, adding 100 extra public sector jobs leads to 100 fewer private sector ones, and leaves the overall employment level unchanged.

What the study does not say, but is blindingly obvious, is that manufacturing jobs are a whole lot more beneficial to the economy than public sector pen-pushers. So the net effect of all this is to make government bigger, but everyone poorer.’


If the BBC are not discussing this study that Nelson has summed up for you above then you have to seriously question the BBC’s professionalism and impartiality and its ability to inform and educate the public about the  most serious and important issues in the public domain.

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Spend, Spend, Spend and ..er..Don’t Tax

Today’s interview by Evan Davis of Ed Balls did neither of them any credit. Davis failed to get Balls to reveal what his actual plans are for the economy and how much they will cost in borrowing, and Balls ignored all the questions and ploughed on battering us over the head with his ‘Plan B’……or ‘Going For Broke’ as you might like to call it.


Nick Robinson ‏@bbcnickrobinson
Think it’s time someone arranged for a re-match in which @edballsmp interviews @EvanHD. One for Children in Need if not @BBCr4?!


Davis became so frustrated that he almost lost his temper at one stage…though he did get a small ‘Grrrgh!’ out of Balls when Davis stated the obvious…that Balls’ plans for more borrowing would merely burden future generations with debt….so why not try monetary policy first?


David Smith ‏@dsmitheconomics
‘I think Ed Balls might be advised to steer clear of Evan Davis for future Today interviews. And Ed needs to brush up on the 1930s’


Balls of course would have none of it…..he had his story and he was sticking to it….the Coalition’s ‘fiscal crunch’ had choked off the economy and growth, monetary policy and liquidity weren’t the answer……because they didn’t answer the fundamental problem…which is…lack of confidence in the future economy by the public and businesses.

Lack of confidence might be a problem…along with lack of cash….but you could ask who caused the confidence shortfall in the first place?

Apart from the BBC itself contributing to the atmosphere of doom and gloom (see also the recent survey on the NHS which bore little relation to the real state of the Service and claimed everyone was deeply worried about it….likely due to the BBC’s relentless doom mongering about the NHS) could it be one E. Balls Esq who likes to shout from the roof tops that we are ‘doomed, all doomed’……

“These are the darkest, most dangerous times for the global economy in my lifetime. Our country – the whole of the world – is facing a threat that most of us only have ever read about in the history books – a lost decade of economic stagnation.”
He said: “This is not a crisis of debt as the government claims, which can be solved country by country, by austerity, cuts and retrenchment, but truly a global growth crisis which is deepening and becoming more dangerous by the day.”

or this….
Ed Balls: ‘Lost decade’ for economy looms if George Osborne fails to act
Shadow chancellor warns of Japanese-style stagnation without plan for jobs and growth.
The British economy risks being plunged into a lost decade of Japanese-style stagnation unless the government tempers its austerity drive with a plan for jobs and growth, Ed Balls warns today.


Iain ‏@Iain_31
Ed Balls really needs to stop smirking with saying the country is in recession


As well as using Japan as a ‘gold standard’ example of why austerity doesn’t work he harks back to the 1930’s to claim we spent our way out of the Depression.

Firstly Japan spent billions to try and dig its way out of recession and famously failed. Secondly Britain implemented far more swingeing ‘cuts’ in the 1930’s  than we have now at present…and only began tax cuts when the economy was on a firmer footing.

‘Myths about the 1930s abound and not just among Labour politicians. Ed Miliband and Ed Balls join many historians, filmmakers, and novelists in wrongly painting Thirties Britain as a
universally hopeless, destitute place, rendered poor and miserable by a heartless, Conservative-dominated National Government. The mood was depressing indeed in 1931, but the economic data is decisive: by the middle of the decade, recovery had come and in much of the country an unrivalled boom was underway.’

‘The cuts of autumn 1931, which were far more immediately fierce than anything put through by the Coalition today. They were felt particularly harshly by ratings in the Royal Navy, some of whom were told they would receive pay cuts of 25%. A few days after the Budget, the North Atlantic Fleet anchored at Invergordon refused to muster.’

‘[The policies] enabled the Bank of England, the commercial banks and building societies to embark on a “cheap money” policy which would henceforth underpin the economic recovery.’

Some lessons from the 30’s…..
First, to stabilize the public finances.
Second, to ensure cheap money was available for
investment by households and businesses to underpin a
Third, to reduce taxes, especially on those with low incomes
and families, once it was safe to do so.

‘This was a sort of proto-Thatcherism, ahead of its time.’

So first…Austerity and balancing the books, then cheap money….today Osborne announced just that, then when economy is recovering some tax cuts.

So pretty much as is occurring.

Now Evan Davis, and nearly all in the BBC who comment on finance also claim Japan was a ‘victim’ of Austerity…not only that but here you can hear Davis going along with Balls and his description of the 1930’s policy…..only trick they missed was to mention the USA and the ‘New Deal’…..but Americas massive spending programme didn’t work in reality…the war saved the US.

Both Balls and the BBC experts, such as Stephanie Flanders, like to say that Britain is not a safe haven, that we would not lose the valued triple A credit rating that allows us to borrow money cheaply if we decided to kick over the traces and start borrowing massively in the style of Gordon Brown again…..not so says….‘Senior German and EU officials [who] have expressed concern that the Socialist policies will bring market turbulence to France and increase French borrowing costs, threatening the country’s long-term credit rating.
“France needs its AAA or else the euro cannot bear the debt burden. Germany cannot do it alone,” said a eurozone official.’

And: John Cridland, the CBI director general, said: “Labour has form spending money it does not really have.”

Just how much is Balls really against the Coalition cuts?

“No matter how much we dislike particular Tory sending cuts or tax rises we cannot make promises now to reverse them.” He added: “I won’t do that and neither will any of my shadow cabinet colleagues.”

Perhaps his attitude informs the Public when they come to assess his character as a ‘untrustworthy opportunist’

or indeed what the Boss of Biased BBC says about Balls:

David Vance ‏@DVATW
Ed Balls praising Eurozone growth and damning UK economy. He has no shame and demonstrates why Labour are unfit to EVER govern our country


And it would seem that even inside the Labour Party ‘machine’ austerity is order of the day:

From: Iain_McNicol
Subject: *Confidential: Message from General Secretary
Date: 14 June 2012 14:17:58 GMT+01:00
To: All_Staff
14th June 2012

In November, I announced a new structure designed to modernise our organisation and address the issues raised through the review. Each of the Executive Directors reporting to me has been asked to work on plans to optimise our organisation, in order to make us more efficient, refocus and re-energise our work in critical areas and to strengthen and professionalise our operations.
All of this must, however, be achieved against a backdrop of the financial challenge we are all familiar with.

The objective of all of us is that the Party should be a “one term opposition”.
To achieve this we need to make changes which are sometimes painful but necessary like those I’ve described above. I know this is not easy, but if we are to show people we are serious about cutting the debts of the country then we must also cut the debts of The Labour Party.

However Balls does have at least one fan….

@ElliottClarkson ‏@ElliottClarkson
Ed Balls is right. Throwing money at banks doesn’t work. I stood outside Natwest throwing 2p coins at the window and now I have an ASBO.


But what to make of this?…..

‘A female contemporary of Mr Balls at Keble said: ‘Eddie was always very ambitious, and he was hardly a sex magnet so I can’t remember him having any interesting girlfriends.

Ouch…bit rough on poor old Steph Flanders!



Shame the BBC can’t find the time or inclination to ‘fisk’ Balls properly…however as Guido says of their Leveson coverage….‘If you have been watching BBC news or reading the Guardian you would think that Brown’s testimony was proven and Rupert Murdoch had made up the whole claim about Brown “declaring war”.’   They clearly have their own little agenda which doesn’t include a Coalition Government lasting any longer than necessary.

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