"Can you please tell me who will stop this happening and I will vote for them."

So says Mr Tony Nicholls in a comment under Christopher Booker's latest ST column today.

Booker (along with Richard North) has made another valiant attempt to unravel just how much of our tax money is being flushed down the bog of the global warming industry. It's not easy, as regular BOM readers will recall from our own attempts. Indeed, there is every indication that government departments deliberately mislead us.

For example, Booker describes how Defra paid £1,436,000 to fund the international working group that produced the last IPCC report - the one that included such lies as the melting Himalayas. Yet they later claimed in a report to Parliament that the cost was only £543,816 - only around one-third of the true cost.

Indeed, as Booker points out, when it comes to tax funding for the increasingly discredited global warming industry, official behaviour bears all the classic hallmarks of money laundering:

"Her Majesty's Revenue & Customs... lists 26 "suspicious indications" which should attract attention to the possibility that a financial transaction might need investigating. These range from "checking identity is proving difficult" or "reluctance to provide information requested" to "unnecessary routing of funds through third parties" and "transactions having no purpose" or "which seem to involve unnecessary complexity".

It's clearly outrageous, and not at all what any of us want. But as Mr Nicholls' comment highlights, we don't seem to have much choice. All three of the mainstream Westminster parties are committed warmists, pledged to go on with Operation Barbarossa however bonkers it may be, and whatever the catastophic impact on our prosperity.

Which brings us to the conversation Tyler is having with increasing frequency round the leafy glades of Surrey. It goes like this:

The Major (or Mr Scott, or Mrs Fitzgerald): "But why should I vote Tory when they're going to be just the same as Labour? Why shouldn't I stay at home to show what I think of them all?"

Tyler: "Well, because if you do that, the LibDems will get in all round here, and we'll either end up with Brown scraping back or a hung parliament. And if that happens, the markets will tank within weeks, there'll be the emergency budget to end all emergency budgets, taxes will go through the roof, and you'll end up in an even worse situation than now. Is that what you want?"

The Major (or Mr Scott, or Mrs Fitzgerald): "No of course not, but it may be we just have to go through it. I mean we never got Maggie until Heath had gone down and the country had experienced some serious pain. Right now we seem to be wandering around in a daze... nobody seems to understand what a grave situation we face, and Cameron isn't prepared to stick his head above the parapet to tell us. And even if he gets in, do you seriously imagine he'll get a grip? He'll be just like Heath... drifting along until we hit the rocks."

Tyler: "Hmm... well... Cam and Osborne are bright boys. They must know what happened back in the 70s, and they won't want to preside over a replay. Once they're in - assuming they can get a majority, that is - they'll have 5 years to sort things out. And whatever they say or don't say ahead of the election, they know they'll have to get a grip right away in order to give the economy the best possible chance of returning to growth by 2015. They're not dumb."

The Major (or Mr Scott, or Mrs Fitzgerald): "You think so, huh? And do you believe in fairies as well? Frankly, it isn't just the economy that worries us about Cameron, it's the whole deal - from hugging hoodies right through to this global warming nonsense. I mean, whatever happened to the traditional Tory party? Whatever happened to Tory values?"

Mr Farage (rudely butting in): "They all went off and joined UKIP."

*****

It's very difficult all this, isn't it. The horrible fact is, there isn't actually anyone we can vote for who will stop this happening. Sure, there are people we can vote for who will promise to stop it, but that's a different thing - under our grotesquely unfair first-past-the-post Westminster system of government, such people will never get the chance to actually implement their promises. Tyler's constitutional reform package includes separation of the powers and a directly elected President, but absent that, our real world choices are indeed very limited.

Which is why we will be out campaigning for the Tories again this time. They sure ain't perfect, and we share many of the Major's concerns, but in terms of forming a government to replace Brown's disaster, they're all we've got.

And what we can say is that from Tyler's personal knowledge, a good number of the new Tory candidates who will hopefully become MPs in May do share our belief in small government. Yes, they are all susceptible to the murky compromises that condemned souls make for power, but they are at least starting out on our side.

What we must do - all we can do - is to carry on campaigning outside of Westminster for the things we believe in. Believing that one day, when the tide of public opinion has turned far enough, our once and future king/queen will again step forward to wrench that sword from the stone.

It may not be much, but right now my friends, I'm very much afraid it's all we've got.

Labels: 2010 Election, eco wibble, electoral reform, politicos

As you will know, shadow Home Secretary Chris Grayling has been rapped over the knuckles for misusing official statistics by the head of the UK Statistics Authority, Sir Michael Scholar.

Sir Michael wrote to Grayling:

"I must take issue with what you said yesterday about violent crime statistics, which seems to me likely to damage public trust in official statistics."

Grayling's offence was to claim that official stats show violent crime has been increasing under Labour. In reality they don't show that - or indeed anything - because of changes in recording methodology since Labour came to power.

Now, as we've blogged before, we have the greatest respect for Sir Michael. He's one of our few remaining mandarins of the old school: those Oxbridge men of myth and legend who believe duty to country always trumps duty to some here-today-gone-tomorrow politico. So if he raps someone, we must accept it's a fair cop.

Which is why the Prog Con is so jubilant. Alongside Rev Easton's sixpennyworth, the Independent whoops:

"The humiliating slapdown adds to doubts about how credible the Conservatives are as a potential government, when they appear to be only three months away from taking office."

Strange we can't recall them making any comparable point when Sir Michael read the riot act over Jacqui's shocking abuse of knife crime stats (see this blog).

But whatever the Prog Con says, the Big Truth here is that for judging long-term crime trends the UK's crime stats are next to useless. We've blogged this many times, but the key points are:

1. Recorded crime statistics - supposedly the hard measure of crime that is serious enough to report to the police - have been through two changes of counting/recording methodology since 1997; Labour's criminal record is therefore conveniently masked (the latest Home Office report is here).
2. Recorded crime stats come from the police who are heavily conflicted. Under Labour's tractor production regime, police performance is judged against targets based on these very stats, so naturally they are heavily gamed and distorted (eg see this blog, including Inspector Gadget's account of how "threatening behaviour" - a recorded crime of violence - gets downgraded to "drunk and disorderly" which does not show up in government stats; and see this blog for Her Majesty’s Chief Inspector of Constabulary confirming that a third of violent crimes don't get recorded, probably in order to meet government targets).
3. The government's own preferred measure of crime - the British Crime Survey - is no more than an opinion poll on people's perceptions and experience of crime (how you feeling now love?). It is entirely voluntary, and it suffers from all the usual flakiness of such polls. When we looked at it, we found it claiming to have a 75% overall response rate, but much lower in high crime urban areas (62% claimed). It reckons to have a +/-3.5% statistical confidence interval around its estimate of total crime (an uncertainty margin that rarely gets mentioned by ministers). But that is not the sum total of the uncertainty, because we have no idea whether people with high experience of crime are more or less likely to respond. In Tyler's humble opinion, as a measure of actual crime it ain't worth the paper it's expensively printed on. 
4. None of these stats are produced by the independent Office for National Statistics, but outrageously are still under the control of the Home Office - ie the very people who are most interested in persuading us that crime is falling. Sure, they now say they adhere to the National Statistics Code of Practice, but come on.

The fact is that the official crime statistics do not need Chris Grayling to damage public trust in them - they are doing a great job all by themselves.

All of which leaves us with a problem. Because if the official measures of crime are useless, how do we tell if Labour's record is good or bad?

Yup, we have to conduct our own crime counts. And here's Tyler's.

Since Labour came to power, Tyler Towers has suffered two assaults from burglars - including this one - against none previously. The houses on both sides have suffered as well. In the next road there has been an apparent contract killing. Prior to 1997 there were no such events.

One of Tyler's sons has been decked by a thuggish Balkanese (?) minicab driver, against no such deckings pre-1997.

Tyler's brother and his family have been subjected to an armed robbery in their own home, against no such robberies pre-1997.

From where we sit, the record looks all too clear.

Labels: crime stats

When we started BOM back in 2005, identifying government waste was still a minority sport. True, we'd had Gershon Mk I and the Tory James Review, but on the other side there were plenty of Big Government types arguing that overall, the public sector did a pretty good job at a very reasonable price.

We are now in very different times. Our fiscal crisis is concentrating minds all over. The world and his wife now agree that the public sector is bloated and inefficient, with huge scope for efficiency savings. Or to put it another way, we could cut public spending with no appreciable decline in the delivery of public services.

How big are the potential savings? Regular BOM readers will be familiar with some of the key evidence.

First, we have the international studies comparing public sector efficiency in the UK with that overseas. The best known study is that published by the European Central Bank (eg see this blog), and that suggests we could save 16% of total public spending, or around £110bn next year.

Second, we have the analysis of public sector productivity published by the Office for National Statistics (eg see this blog). The ONS says that since 1997, public sector productivity has been falling by between 0.3 and 0.9% pa (depending on whether you adjust the output figures for so-called quality improvements). Yet over the same period, private sector productivity has been rising by 2.2% pa. Over a decade that kind of difference mounts up to a total public sector efficiency shortfall of well over 20%.

Third, we have the various studies that are now underway in Whitehall itself. They are largely secret, but Tyler understands that several big spending departments are currently going through their programmes and identifying a considerable margin of duplication and inefficiency. Just last week, we got the results of one such exercise - 15% waste on public service spending in London (see this blog).

And on the detail of possible savings, Hammersmith and Fulham councillor Harry Phibbs has just posted this excellent analysis showing precisely how Mayor Boris could save £93m and cut his precept on London taxpayers by 10%.

Drawing it all together, we can quite reasonably assume that 15-20% of public spending is wasted - and it may well be more.

The real question though, is how do we put it right?

As the ludicrous deckchair rearranging Gershon "efficiency" programme has shown only too vividly, we cannot do it through "better management". We've been trying that for decades, and it hasn't delivered. And neither is it any good having yet another slice and dice Whitehall reorganisation. We have to reform the public sector far more fundamentally than that.

But how? What reforms exactly?

We have always believed that the critical reforms are those that make our public services much more directly accountable to their customers: school vouchers and many more independent schools; the NHS broken up and replaced by competing social insurers; and local authorities made to raise the bulk of their own funding from local taxpayers (ie fiscal decentralisation).

Such reforms would give public service suppliers the kind of incentives that private service suppliers already have. And that's a key point - a point that's so obvious it often gets overlooked. Reforms that don't link the public sector's incentives to customer satisfaction are most unlikely to deliver improved efficiency. There has to be a direct pay-off in order both to stimulate new thinking, and to persuade managers to take the tough decisions on things like staff numbers and working arrangements.

Just one small problem - reforms like that mean breaking the power of Westminster and Whitehall. They mean reversing an entire century of centralisation.

Absent military defeat and occupation by a foreign power, HTF do we do that?

PS Tyler finally found out that BOM's comments provider, Haloscan, is heading for the scrapheap. So we've had to switch to a new provider called Echo. We'll see how it goes.

Labels: localism, public service reform

Everybody now agrees that public spending has to be cut significantly. But not everyone agrees on when. And despite what we may sometimes suggest on BOM, not everyone who says we can put it off is an out-and-out scoundrel.

For example, the FT's Martin Wolf is a virtuous man, and he has repeatedly argued the case for delay. Today he writes:

"What needs to be done depends on the state of the various economies, with the case for continued stimulus strongest in Europe... That point was made by Dominique Strauss-Kahn, managing director of the International Monetary Fund. He also made another one: if we exit too late, we waste resources in excessive public deficits and debt; if we exit too soon, we risk the devastating shock to confidence of a “double dip”. Given this asymmetry, we should not withdraw stimulus early."

It's a perfectly reasonable argument, but also a very dangerous one. Because that asymmetry Wolf highlights is much more apparent than real. In reality, it is by no means clear that delaying the cuts keeps confidence intact. Confidence could suffer just as devastating a shock if we delay - as the Greeks are currently discovering. The Greeks are now being forced into a whole raft of emergency cuts precisely because previous delays have undermined the confidence of financial markets.

Confidence is a delicate, little understood flower, and what nobody can predict with any certainty is how far we can go with our borrowing before it cracks (umm... can flowers crack?).

As things stand, the OECD says our official debt will reach 94% of GDP by the end of next year (gross debt). Even setting aside the fact that our official debt excludes all those off-balance sheet Enron items like PFI, 94% is very scary. As we blogged here, the IMF recommends we get that percentage down to 60% as a maximum. Anything higher risks the government finding itself in a position where it no longer has the flexibility to increase its borrowing should a future need arise. Which is where Greece now finds itself.

Unfortunately, far from getting our debt ratio down, our rampant public borrowing is currently adding to it at the rate of 13 percentage points pa.

And as we've blogged before (eg here), that borrowing is now feeding back into an alarming escalation of debt interest costs. By next year debt interest costs will consume nearly 10% of government revenue, up from just over 5% as recently as 2008-09.


Even worse, that escalation is taking place even though the financial markets have so far remained remarkably patient in terms of the interest rate they charge HMG (ie the yield on gilts). What will happen if the markets lose their patience and push those rates up?

As it happens, the IFS has just published some rather scary estimates of how that might play out (HTP Andrew L). They report a statistical analysis with quantified estimates of how government debt and structural fiscal deficits have affected gilt yields historically. They conclude that if our structural deficit is left at current levels - ie there are no substantive cuts - then gilt yields could "easily reach double digits" by end-2011.

Now, those yields are currently around 4% (10 year gilts), so that is one helluvan increase. Translating it into debt interest costs, it would mean that our prospective annual borrowing of £150-£200bn would generate additional annual servicing costs of £15-£20bn pa, rather than the £6-£8bn currently assumed. And of course, such costs are cumulative - three years of borrowing at 10% would add £50-£60bn pa to debt servicing costs. Or, £2 grand pa of additional taxes for the average household every single year.

As the man in the pic meant to say, 'Grant me chastity and continence, and do it now!'

PS The IFS work is part of their always excellent Green Budget. We'll be having a proper read and blogging it in due course.

Labels: cuts, debt

The thing is, we don't have all the time in the world. 13 years of Labour misrule have left our economy holed beneath the waterline, and we need to get cracking on the repairs right now.

Consider what's going on down in the engine room of our long-term prosperity - private enterprise. When Labour took over, the UK was one of the most enterprise-friendly countries in the world: low and stable taxes, a highly flexible labour market, and relatively light business regulation. But over time Labour has chipped away at these strengths, and our relative position in the world rankings of economic freedom has lately been slipping alarmingly.

The best known of the rankings is that produced annually by the US Heritage Foundation. Its latest assessment has us slipping down to 11th position, way behind Australia, Switzerland, and even Comrade Obama's US (htp Ted B and A Reader). Click on image to enlarge:


Now, you may think our position is not a disaster, but the direction and speed of travel certainly is - five years ago we were 7th in the world rankings, and 15 years ago we were 3rd. Yes, 3rd.

And a key factor driving us down is the burgeoning government sector, both in terms of its size and the taxes required to pay for it. As we may possibly have mentioned once or twice before, Big Government squashes enterprise and ultimately makes us all poorer.

But right now, we have a problem. You and I may understand what's going on in the engine room, far below the promenade deck, but most of our fellow passengers don't yet seem to have understood.

So this morning we have those gloomy chaps at the National Institute forecasting a further rise in unemployment after its current mysterious pause, a renewed fall in house prices, a dip in consumer spending, and yet further over-runs in government borrowing. Yet at the same time, the passengers seem to remain full of consumerist cheer - the Nationwide Consumer Confidence Index rose by three points in January.

Talk about the Titanic.

PS Last night Tyler met up with a whole bunch of Tory Bloggers over a beverage or three. A very enjoyable evening, and as always, good to put faces to names. The high spot for Tyler was winning the prestigious "Thorn in the Government's Side" award. This hand-tooled award parchment will proudly hang alongside Tyler's other awards - his ten yards swimming certificate from 1959.

Labels: cuts, debt

• Spending cuts are preferred to tax rises - "there is broad agreement in the literature that spending restraint is more likely to generate lasting fiscal consolidation and better economic performance than tax increases"
• Cuts should focus most heavily on public employment and welfare payments, which have featured in all major consolidations (eg see this blog).

Here's HMT's summary cuts menu, based on what's worked internationally (click on image to enlarge):

It will all be pretty familiar to BOM readers, and represents the mainstream consensus of what is needed.

Unfortunately, it's one thing to analyse international experience and understand what you have to cut, and quite another to take the all-important next step of actually wielding the scissors.

And on that score, events are taking a very depressing turn. Dave and George are now so rattled by their falling poll lead and Mandy's superbly brass-necked attack on their economic competence, that they're wobbling around all over the road. Apparently, they're even recruiting the utterly discredited Lord Stern to advise on "green growth" - aka taxing and regulating our economy back to the Stone Age.

A hung parliament doesn't bear thinking about. But even if - as still seems likely to Tyler - the Tories win, fiscal policywise it sounds very much like we're just going to have more of the same. Which, as we all know, means drifting along until we hit the rocks of a market panic. By which stage, inflation will be well out of the traps, the management of our most dynamic companies will have relocated overseas, and we'll have to endure a decade of cuts with no prospect of stimulating private sector growth on the other side.

And the next steps? After one stuttering term of Heath Cam, Labour squeak back in again under their new leader Commissar Balls. A fresh start for Britain - squeeze the rich, British jobs for British workers, and state direction of capital. Tony Benn officially installed as HM Treasure to the Nation.

O.M.G.

Labels: 2010 Election, cuts

The man who refused to buy more military helicopters back in the good times is now committing "to billions of pounds of extra defence spending". He's apparently going ahead with the Navy's new £5bn carriers, keeping Army strength above 100,000, and completing the Eurofighter and Joint Strike Fighter programmes.

And where, pray, is the money for all this extra spending coming from?

"A government source said there would have to be “tough decisions elsewhere”.

Ah. Of course. Tough decisions elsewhere.

But not apparently in the area of free personal care for needy adults at home. In a cynical attempt to buy votes among the elderly and their families, Brown announced at the last Labour Party Conference that he was ordering a huge expansion of the personal care programme. Yet according to the Directors of Adult Social Services it will cost around £1bn pa, whereas Brown has only come up with £420m. The rest? That will be down to those tough decisions elsewhere.

Not that Brown is alone. This morning we heard that nice but vacuous Mr Clegg promising to spend another £2.5bn pa on schooling for the underprivileged. £1.5bn will come from scrapping tax credits for all families on above average incomes - clear enough. But the rest will come from er... tough decisions elsewhere on er, quangos and inspection regimes... and stuff.

And then there are the Tories. According to the ever-helpful Mr Darling, they have made around £8bn of new spending pledges, including more single rooms in NHS hospitals and more maternity nurses (see this blog). But once again, the funding seems to be down to tough decisions elsewhere.

All of which raises the fundamental worry we've mentioned before: despite the direst warnings about the size of our national credit card bill, we don't yet seem to be ready for public spending cuts. Right across the board, our politicos have examined the entrails of their focus groups and private polls, and concluded there's simply no electoral upside in promising cuts. Which is why Brown is still dishing out new spending pledges, and why Cam is back-peddling furiously on his earlier promise of immediate cuts.

So how's it going to play out?

Well, if the politicos don't get a grip, sooner or later we will hit that sterling/gilts crisis we've blogged so often. At which point, we will end up being forced into an emergency package of cuts and tax increases just like back in the jolly old 70s. We'll have no choice.

Indeed, there is now a school of thought that Cam is back-peddling on his cuts promises precisely because of that. He knows the only reason there hasn't so far been a crisis of market confidence is that investors believe he will cut. But in political terms that means voters haven't yet been exposed to the real risks, so he gets no political credit for being tough.

Far better to back off now, ahead of the election, jangle the market's nerves while Labour are still at the controls, let the voters understand the real risks, and let them see Labour totally incapable of handling them.

You know, we hope that is the correct interpretation. Because it implies that Cam and George do understand the real problem.

But if we hit a pre-election market wobble, they'd better be ready with some convincing statements on their true fiscal intentions. The last thing we need is for them to get elected having already lost the confidence of the markets.

A very delicate flower, confidence.

Labels: cuts, markets

According to Climate Commissar Miliband:

"There are a whole variety of people who are sceptical, but who they are is less important than what they are saying, and what they are saying is profoundly dangerous. Every­thing we know about life is that we should obey the precautionary principle; to take what the sceptics say seriously would be a profound risk."

It is the cry of commissars since the dawn of time - do what I say or risk destruction. It is the same profoundly dangerous arrogance that throughout history has unleashed on mankind famines, purges, wars, and even genocide.

Why can't this preposterous little man simply admit he may be mistaken? Surely the evidence is now crystal clear that the so-called settled science of climate change is nothing of the sort. The exaggerations and outright lies are becoming obvious to all. As is the fact that much of what we've been told about global warming has come from a deeply conflicted industry whose financial prospects depend entirely on scaring us all to death.

What we need more than anything is a grown-up discussion about all this. It's simply not good enough for the Commissars to demonise us sceptics as maniacal flat-earthers. And for Miliband to dismiss the excellent and expert Prof Stott as having his "head in the sand" (as he did today on the World This Weekend), is frankly ludicrous (and see Stott's latest post here).

As for the precautionary principle, if that was the no-brainer he claims, we'd all still be living in caves. Progress has always depended on people being prepared to take risks.

Sure, we could slash our carbon emissions by the 80% he has ordained, but - quite apart from the fact that our emissions comprise less than 2% of the world total so would make virtually no difference to global anything - the cost to our living standards would be catastrophic. As we blogged here, the TPA estimates that that existing "green" taxes and energy regulations already cost the average British family nearly £1,000 pa.

Stalin's forced collectivization of agriculture provides a chilling example of where Miliband-style government leads. Despite intense opposition from bourgeois elements (aka the people who actually had to do the work) Stalin and the commissars were absolutely confident that collectivization would hugely expand food supply for the workers. Two years into the programme he boasted that they had "over fulfilled the five-year plan of collectivization by more than 100 per cent", and spoke of comrades being "dizzy with success". They had science and technology on their side, and they were right.

Unfortunately for the Soviet people, Stalin and the Commissars turned out to be wrong. The abolition of private farms led to a collapse in food production, and millions died from starvation. Even Stalin himself later admitted to 10 million deaths, and others put the number closer to 20 million.

That's what happens when commissars decide they're right and doubt is a treasonable act.

PS The rather scratchy vid above is from Russia's state funded English language TV news station, RT, and it's obviously got an axe. But the interesting thing is that RT's axe is to deny the 30s Ukranian famine was an instrument of premeditated genocide, as the Ukranians themselves apparently believe. What nobody denies is that collectivization was a commissar-made disaster of historic proportions.

Labels: doom, profound dangers