Blog 2023 Malcolm Blair-Robinson

Troublesome Generals

When President Lincoln was urged to get rid of Grant because of excessive casualties, he responded

 ‘I cannot spare this man. He fights.’

President Obama will be pondering on this historical parallel today.

Cuts Debate

The government has signalled that if additional cuts can be found in the Welfare bill, some services may be spared the worst. This Blog would advocate going further on the benefits reform.

When the 1945 Labour landslide heralded the creation of the Welfare State times were different. The poor were to be uplifted to better times and cared for in a way previously unseen. But alongside the traditional working class there was a class of increasingly impoverished gentility, living on shrunken incomes in houses too big to heat, without pre-war servants or domestic skills, struggling to keep up appearances, who were more than happy to accept the benefits of free health care and old age pensions, albeit covertly. I had an elderly aunt who collected her old age pension from Harrods post office (they had one then) ‘because they were so discreet’.

Times are now quite different and the gap between the wealthy and the wealthless is wider than  at any time in the post war period. There is no longer a need to support everyone. Neither is the concept of universal benefits empowering. Child benefit, the state retirement pension, winter fuel allowance, free bus passes etc should be universally available but fade when income from all sources passes £30,000 pa or £40,000 per family.

There is no longer a need to give these things to everyone whether they need it or not. It is right to recognise that the low paid, retired and vulnerable who are living on lower incomes which benefit the whole economy, should receive support. If we paid refuse collectors and health ancillaries enough to afford private health care the country would go bust anyway or taxes would be exotic to create the necessary cash flow.

Moreover there is no need for health care or education to be free across the piece. There could be charges per visit to the doctor, hospital or therapist, paid by those not eligible for free prescriptions, just as we pay for the dentist. Not the full cost but a contribution. Likewise it makes nonsense for children to be dropped off for free education in a £30,000 4×4. A charge of £2000 p.a per child is a lot cheaper than the £10000 to go private or the £20000 plus for boarding. Free education is a must for those whose family budget simply cannot pay, but is not a must for those who actually can.

This is not a right wing agenda, but a practical way forward. Our present system feeds the prosperous and starves the needy. The overall bill has crippled the economy. If we are going to sort it, lets do it properly. Then we will get the budget balanced and the debt paid off much quicker and be on safer path for the future. The economy will be stronger and business and industry will create more jobs. Everyone will be better off.

On the other hand Labour, presently arguing about detail and timing and not about principle, would be able to create an alternative universal welfare package to put to voters, together with an explanation of how to pay for it without running a deficit. This would mean much, much higher taxes. That would give the electorate real choice.

All this presses a further issue. It is time for a single tax rate and a unified tax and benefits system. The piecemeal approach driven by mountains of forms and bureaucratic structures is crazy.

Osborne’s Big Day

Well now we know. This Blog will not dissect the budget as there are so many expert commentators doing this that the market approaches saturation. Some quick points.

What I liked

The increase in capital gains for higher rate taxpayers

The raising of the tax threshold for the low paid

The increase in VAT

The phasing out of tax credits for those earning over £40,000

The start on benefit reform to reduce the bill

The freeze on public sector pay

The setting out that government departments will face an average 25% cut in the spending review

The concessions to business and industry designed to encourage growth

The aim to re-balance the economy with more emphasis on manufacturing and renewal, saving and investment

The reduction in the scope of the State

What I did not like

The Bank Levy is too small in scope to yield much benefit or impact proprietary trading

Freezing child benefit hits the poorest hardest and still pays those who do not need it. It should have been dealt with like tax credits, but remained linked to CPI.

The State Retirement Pension still goes to many who do not need it. Likewise it should have phased out from £40,000 total retirement income.

Point of Interest

It is wrong to assert that a VAT rise hits the poorest. This is because those on low incomes pay out almost all their earnings or pension on essential living costs, most of which are VAT free. What hurts most is income tax. By raising the threshold by £1000 this can put an extra £200 in the pocket of a single person. Very little of that will be clawed back in VAT.Even if all this extra cash went on VAT rated items the increase would only amount to £5, so the least well of really do benefit from less income tax. The lower middle and middle incomes will feel it most but the high incomes who spend will pay the most.

Honey Bees

New research is to be undertaken to try and discover why there has been a marked decline in honey bees, who perform a vital pollinating function in the ecological system. The decline in the number and variety of wild flowers is thought to be a contributing factor by some.

I am fortunate to live in the heartland of a National Park where much of the farming in the area is now organic. The richness of the countryside and the abundance of wild flowers compared to a few years back just goes to show that the benefits of organic farming go beyond just the production of healthier food.

Nevertheless it is important to remember that many people cannot afford to pay the exra for organic and in some parts of the world millions stare starvation in the face because of draught, pests and crop failure. We owe to them the responsibility to ease their plight and this will in part mean resorting not only to pesticides but to genetic modification of crops to create strains which can cope.

There is a balance to be struck between environmental preservation and human suffering and however important it is to cut a better deal with nature, we must also give priority where needed in the world to feed the hungry. If you think your task is done by just promoting organic and opposing every other form of husbandry, look into the eyes of a starving child and think again.

The Budget

It looks as if the scale of cuts will be quite spectacular. This blog remains politically impartial in terms of party, but is in no doubt that the fiscal deficit has to be cut back quickly so that the budget balances, which will still leave us years of debt reduction which may take a generation or more.

Most of the so called boom and prosperity which ended in the crash was a mirage based upon borrowing and asset inflation to the point where even the tax people paid was borrowed. Remember that the total overseas debt of this country and its people is the second highest sum in the world and 450% of GDP or four and a half times the world average. The economy makes far too little real wealth and is totally out of balance. Up to the crash it was based on borrowing, unsustainable asset inflation above true value and shopping, driven by mountainous public expenditure. Such a structure cannot last.

This has all got to be put right. If it means a double dip recession to fix it, it is a price worth paying. The alternative is to bounce through a boom and bust or two, followed by permanent and irreversable decline.  Keynes never said you could borrow your way out of recession if you were already over borrowed and running a deficit even in the preceding boom. What is important is for the cuts to affect those who may feel pain but can take the hit and protect those least well able to manage even now. Whether the government can do this will not be known until George Osborne sits down at the end of his speech in the Commons tomorrow afternoon.

Afghanistan

A sad but inevitable milestone has passed with the news that the total number of service men and women to lose their lives in Afghanistan has reached three hundred. Meanwhile the scale of violence in that tortured country rises.

Another statistic that shows the heroism of our troops, but is very disturbing, is that the proportion of losses as a percentage of our numbers that we suffer, is much higher than that of our American allies. We really have to face reality now, or very soon. This war is utterly pointless and its objectives are unachievable. We cannot afford to be there and it is morally indefensible to waste young lives to no purpose.

The argument that we are somehow going to ‘defeat’ the Taliban is a empty as saying we will defeat tribalism. Whatever the immediate military outcome the Taliban or their successors with another name will be back, with a good proportion of the newly trained ‘security force’ among their number.

Al Qadea can return at any time and can and are operating all over the place anyway. Afghanistan is neither critical to them nor worth their fighting for directly. They are doing fine elsewhere. Counter intelligence and drones is by far the better military method and sorting out the Middle East is the political imperative. Afghanistan is a symptom, not the cause.

This whole foreign/ military policy is completely flawed and cannot work. Almost every thinking person in the world knows this. Except those with the power to end it.

Trouble in the Camp

News comes in that Anadarko, one of BP’s partners in the ill fated Deepwater Horizon project is now breaking ranks and accusing the oil giant of gross negligence and so forth. A big lawsuit is in preparation. That is more bad news. There are other items of interest. The Russian President thinks that BP may face ‘anihilation’. The Chairman of the company, an expert at saying the wrong thing, has described this calamity as a ‘setback’, before announcing that the Chief Executive after his disastrous showing in Congress, is ceding direction of the relief operation to the Managing Director.

Shareholders who remain optimistic are brave indeed. Speculators buying shares now in the belief the worst is passed may burn their fingers. In the end there is some light however. Even if  BP is forced into Chapter 11 or gets broken up or taken over, this is not like the failure of a retail chain or an auto maker. BP’s business is pumping oil. Oil is like gold of the past. It is money and it is always in demand and sadly the demand grows. So whatever happens there is a future because the world needs BP’s product. The question is whether BP in its current form can retain control of its assets and infrastructure.

The answer to that question will not be known until the leak is stopped, the damage quantified,  the fines totalled and the mid-term US elections are over. A spike in the oil price would be timely but the fragile nature of the recovery and troubles with sovereign debt make that less likely.

England

I have not played football since I was twelve. It is not one of my interests. I do watch the lifestyle of the players, who are paid huge sums and are idolised by youngsters, to whom they are heroes. I know that stories about them sell papers and are an essential feature of tabloid circulation. I am aware that pubs and clubs across the country gain enormous trade from having big screen TV for their customers to watch matches. I am aware that the English football  club and league structure is the richest,  best organised and best supported in the world.

The football World Cup has become  not just a sporting event, but an international event second only to the Olympics. When the tournament opens, the England players cease to be just overpaid footballers with celebrity status and fortunes built on aftershave and underpants. They are team players representing the hopes and aspirations of all the people of their country from the Prime Minister downwards and with people and Princes united in supporting them, rooting for them and cheering them on. This is not just about them. It is about everyone. This is when those players individually and as a team must shine for their Country, to which they owe everything that they are.

What has happened thus far in South Africa is disgraceful. The spectacle last night was unforgivable. Distraught fans who had travelled thousands of miles to support their national team booed. Those boos were echoed across this country in so many public places where anticipation had turned to disappointment then to dismay and on to anger. As they rang in the ears of the shamed players slinking back to their dressing room, they echoed in every English heart.

By next Wednesday Capello’s men have to pull themselves together. The road to glory is still open, but only just. Now is the moment to show their courage and redeem our faith. The alternative is an early arrival home in disgrace and in the knowledge that they have let their country down. They have a lot to play for now. Everything, in fact.

Disappointment in Sheffield

The news that the government was cancelling an £80 million loan to Sheffield Forgemasters has caused natural dismay locally. However, quite apart from the fact that the previous government had no money to back the promise, it should not have had to offer it in the first place. This is what Banks are for. We saved them with taxpayers’ money precisely so they could and would finance valid business expansion. This deal had the taxpayer coming up to the plate twice.

The combined weight of the Treasury and the Business Department and now the Bank of England, needs to bear down on these banks to stop them gambling with the nation’s money or inflating assets by over lending on property. Instead they must be required to get back to their proper business at the heart of the economy. Our business. Our jobs. Our money.

Free Schools

This blog has misgivings about this policy. It does, however have an attraction. For too long politicians have had input into and meddled with what is taught and by what method, often egged on by academics of the worst kind with crackpot theories and daft ideas. Teachers and even parents have seen their responsibilities and freedoms denuded and replaced with processes, practices and manuals.

If these schools are to be free of all this damaging direction from Whitehall they will have something serious to offer as an experiment. The challenge will be whether they can deliver better discipline and better results in an environment in which teachers and parents have all the power. If they do, we will all want education to swing back to operational and teaching independence. If not, they will prove Whitehall meddles with good reason. Perish the thought.