Blog 2023 Malcolm Blair-Robinson

Lib Dem Conscience

Opposition politicians should never sign pledges in election campaigns, even if it does not look as if they will be in government. Thus the Lib Dems signed up to a  pledge to vote against an increase in tuition fees, not least because the party is against fees of any kind. Now they are in government. The money has run out. Fees are going to have to go up. Even Vince says so.

This Blog believes that higher education should be free to all. It also knows the money has to come from somewhere and in the current state of financial penury, there is nowhere for it to come from, other than borrowing which this blog is absolutely against. Sadly therefore, until the economy is sorted out to a sound basis, a better model and with better defined priorities, not only do these fees have to remain, but they have also to go up.  The Browne report does offer a fair way forward, essentially geared to ability to pay, which, after consultations and with tweaking, is an improvement on the current deal, both for students and the universities.

The Lib Dems would be wise, if Vince advises it, to support the government of which they are members. To vote against would be just the kind of tokenism which got them into the mess, by signing the ‘pledge’, in the first place.

Celebrations in Chile

Everything about this extraordinary human drama is remarkable, as it is heartwarming. It is one of the most astonishing feats, first of human survival and then of rescue. What makes it so special is the mobilisation of resources by a small country for a common purpose, aided by the best science,  technology and engineering the world, especially the United States, has to offer.

What a pity it is that human ingenuity and determination, which can do so much good, can also be harnessed to do so much harm. What a contrast between Chile and Afghanistan. There is a message for humanity here. We should heed it.

Cost of University Education

There is something not right here.The generation writing reports and recommending higher tuition fees were the beneficiaries of free higher education. They have managed to screw up the economy, run up the national debt and run out of money. First high profile casualties were the children of the higher earners. Now come students, upon whose education in a competitive world a great deal in the future depends. 

It is perhaps early days yet, because we have only headline figures in a report, not a White Paper of government policy, so the workings of any plan are not clear. It does point up, once again, that not only are our tax revenues out of kilter with our expectations and, more important, too much money is being spent on things we do not need and cannot afford and too little on things upon which national prosperity will in future depend. 

At the opposite end of the educational scale, those whom society needs to maintain civilisation and who require practical skills on top of basic education are being failed dreadfully, let down by the current education system. Comprehensive schools have been blamed for failure and for eclipsing the Grammar schools. In fact it is the practical contribution of the old Secondary modern that is now most lacking and causing most harm.

We cannot have a country operating a sucessful economy with a closing gap between rich and poor if all we do is churn out corporate lawyers, bankers and and market researchers.

Afghan Tragedy

Such terrible news when a rescue mission goes wrong and worse when friend kills friend. I have heard various officers defending the very sad outcome as a risk inherent in a dangerous mission. There are some questions to answer nevertheless. Two in particular:

Why was the mission launched against the advice of local tribal elders and Mullahs, who were trying to negotiate the hostage’s release?

Why were hand grenades thrown in the proximity of the hostage?

One can only imagine the suffering and grief, made even worse by today’s news, of this brave woman’s family and friends.

This should be a moment of quiet reflection and sympathy for them.

Graduate Tax

Apparently this is no longer on the cards. There are certain unavoidable truths. University have to be paid either by the taxpayer or the student. If the decision that all or part should be paid by the student, as the majority do not have the ready cash, either they must be lent the money, to repay when they earn, or they must pay in higher taxation on their earnings.

The financial effect to the student of these two approaches is broadly the same, since whether money is taken from their later pay in extra tax or loan repayments; money is money whatever you call it. This whole question does, with other current problems of matching expenditure by government to its incoming revenues, pose an interesting question. It is this.

There is an obvious fact that people do not pay enough tax to meet all the demands they make upon the state and the deficit is evidence of this. The gap can be narrowed by increasing economic activity and thus tax revenue, or by raising tax rates, or any combination of the two. There is an accepted wisdom that excessive tax rates drive down revenue, so tax increases are generally avoided if possible. Nevertheless I have for long thought that the basic rate of income tax (at 22% basic rate and 20% lower rate) under the last Conservative government was about right,  and subsequently pushed down too low by New Labour, to balance the national books.

Add to that the fact the  New Labour built economic prosperity on debt;  its own and the consumer’s. This created an economy which generated from the working population huge revenue, in the form of interest payments on debt, to the banks, thus reducing the available margin to go to the government in tax, without hitting economic activity.

If we can now build an economy less reliant on borrowing and if households have to pay less for it, a margin will develop to restore, safely, a basic rate of income tax which pays, with other taxation, the bills of the government. In other words move back to a more realistic rate of basic rate tax. Fundamentals, like higher education, might then go back to being free to all.  As it was before New Labour came to power in 1997.

Israel and Middle East Peace

Once again this hangs by a thread because of Israeli settlement building. This aggressive policy, without foundation in international law, is condemned by almost every government across the world including all Israel’s allies. It also offends countless Jewish people, integrated into countries in the West.

Nobody seems to be able to make the Israeli government see reason, not even the country upon which they depend for support, the United States. Essentially Israel holds all the cards. It can bully, oppress and occupy as much as it likes; this produces a terrorist reaction. That it turn is taken as licence to be even more obdurate and inflexible. This cannot go on.

First the West (not the U.S. because the Israeli lobby is too powerful for any politician to challenge successfully) must begin to distance itself diplomatically from Israel and make its isolation more obvious to ordinary Iraelis and those with dual citizenship. Next the Holocaust must be decoupled from modern Israel. The whole of civilised history will, till the end of time, look upon that unspeakable event as the worst of crimes against humanity. The suffering of Jews at the hands of the Nazis continues to provoke waves of justified sympathy for a people subjected to inhuman cruelty. The scars will never heal.

But what happened in Germany and Occupied Europe in the war years, has no practical connection with what happens in the territory occupied by both Israel and Palestine in the Middle East today. Only Israel has been given the status of recognition as a nation State and when this was granted it was on the assumption that it would conduct itself according, not to fundamental interpretation of Old Testament writings, but to the principles of International Law and the Charter of the United Nations. Unfortunately Israel is now governed by those who think that the former take precedence over the latter.

They should soon be told that if that approach persists it throws wide open the question, thought long settled, of the legitimacy of  the State of Israel itself.  These people will not listen until they realise they really do have something to lose. This is not anti Jewish, anti semitic or anti Zionist. It is not anti anything or anyone. It is purely an acceptance that in international affairs there has to be a fair basis for the rules which govern recognition, frontiers and friends.

The Taliban, NATO and Afghanistan

The sad news of the death in the midst of a rescue attempt of the courageous British aid worker, brings this torturd region back to the top of the news. Soon all those in authority will have to emerge from denial and face reality. The NATO mission has failed. The military cannot win, the Karzai government is the most corrupt and ineffectual in the world, the Taliban operate at will on the Pakistan border blowing up tankers by the score almost every day.  Within Afghanistan they run a parallel government with police, courts, prisons, schools and medical services under the noses of NATO military.

If the Taliban are driven from one place they pop up in another. Returning correspondents talk of a seriously deteriorating situation on the ground. A retiring official described the Afghan Security Force as of doubtful reliability and the Afghan Police Force as ‘mainly bandits’. Yet every day the craven fear throughout NATO that to admit failure is a no go area, requires more and more troops, mostly British and American, to lay down their lives for a cause which has lost all connection with reality.

The mantra that our streets are safer because of this project is manifestly absurd. The reverse is the case. More terrorists are being recruited every day because of the befuddled strategy of this war, ploughing on deeper and deeper into a bloody quagmire because there is no politician in the West with the guts to stand up and say enough is enough, we screwed up and we are coming home.

What a terrible mismatch between cowardice of Western leaders to accept what has happened and the courage of those they daily send to their deaths.

Alan Johnson

As predicted in this blog earlier, neither Ed Balls nor his wife Yvette Cooper made it to Shadow Chancellor. Both have been given decent high profile jobs, but both would have been easy pickings for the Coalition if either had shadowed the Treasury. Alan Johnson, who I thought months ago would be a good replacement for Gordon Brown, is a good choice by Ed Milliband. AJ is not an economist but he understands that Labour has to have  credible alternatives to the Coalition’s austerity programme and no cuts till whenever cannot be one of them.

Altogether the Shadow Cabinet looks fit for purpose, though the shape of that purpose will not be clear until the results of the Spending Review are known. Not long to wait now.

Lord Hutton  and Public Sector Pensions

Lord Hutton’s interim report is welcome, but may cause anxiety among public sector workers. This is hardly to be wondered at since they have all been living in a fantasy world, which many, but not the majority, helped to create. 

There can be no future system which is based on final salary and it must be met from contributions from the stakeholders and not the taxpayers, who will have their hands full paying off the national debt for at least a generation. Final salary is ridiculous and, once again, favours the few at the expense of the many. Average salary is fair. I heard that in Sweden which took ten years to sort its own pension crisis, over 20% of earnings have now to be applied to pension contributions. This shows what has to be done.

Falling House Prices

The apparently alarming news from the Halifax that in September house prices took a record fall of  3.6%, is in fact a very good thing. While everyone argues about cuts in the part of the economy under the control of politicians, the state sector, there is a real economy rebuilding and reshaping at the behest of the ordinary people. Manufacturing is showing its sharpest rise in fifteen years and consumer debt is falling. Affordable housing is central to everything and the use of inflating property prices as the engine of western economies is the root of all that has gone wrong.

Add to this irresponsible lending to people so that they could buy at prices they could not really afford and you have a disaster. New FSA rules are stopping the irresponsible lending and will force house prices down to the level people can safely finance. A cap on housing benefit will drive down rents. That will drive down prices as well. Houses are no different in this respect to any other commodity.

The elephant in the room which nobody, least of all any politician, is willing to look at, is that most personal wealth is founded on property and is, in fact, an illusion. It can be argued that property is still valued at double its true worth. If that were so, those with a fifty per cent mortgage have no equity and those with higher loans are, unless there are other assets at their disposal, insolvent. Moreover the banks are, and will remain, more at risk than we believe. Certainly they must lend to small business and industry, but they must be very prudent on property lending . Very prudent indeed.

Getting this economy back on track is a much bigger challenge than most people realize.