Tag: State-Interventionism

European-Union, UK-Current-Affairs, UK-Politics

Brexit-Watch: Saturday 21 March 2020

Note: article originally published at The Conservative Woman on Saturday 21 March 2020

A weekend update on some recent key Brexit-relevant story headlines, choosing four which, while not necessarily meriting a full-length article, nevertheless warrant two or three paragraphs of comment, rather than merely a couple of lines.

(NB: (£) denotes article behind paywall.)

 

Far from requiring delay, coronavirus strengthens our hand in post-Brexit talks – Daily Telegraph (£) 

Former Brexit Party MEP Ben Habib is right to say Britain enters its COVID-19 emergency response in a stronger position than the EU. Not only do we embark on it with lower unemployment and lower public debt than the main EU member-state economies.  Having, correctly, not joined the Euro, we also retain our own currency and thus control over both interest-rate and monetary policy, giving us the independence and flexibility to cut rates and launch a monetary expansion quickly, as seen this past week.

When the EU bloc emerges from the Coronavirus crisis, it is likely to be in a weaker state, economically, than the UK.  To re-stimulate its economies, it will need more urgently a trade deal with the country with whom it enjoys a substantial trade surplus, and also be in far less strong a position to go on insisting on its shamelessly protectionist ‘level playing field’ regulatory equivalence.

We should, therefore, be pressing home our advantage, not to exploit, but either to try to conclude a Canada++ style Free Trade Agreement or, if rebuffed, to declare exit on WTO terms, on 31 December 2020.  We have the leverage, and we should use it, ruthlessly if need be.  There is no room for All-England Tennis Club etiquette here.  We are in a hard-nosed negotiation with an uncooperative foreign power, not a genteel game of mixed doubles where you wait politely for your opponents to recover before continuing.

 

The Budget, The Virus, and Post-Brexit Britain – Briefings for Britain

Assuming, firstly, that Britain’s overall Coronavirus approach, a mix of mitigation and suppression strategies rather than one or the other, actually works, and secondly, that the Brexit Transition is not extended, our first year fully outside the EU should see faster than normal growth. Paradoxically, the fastest growth should, all other things being equal, occur in the sectors which have taken the biggest hit from the virtual shutting-down of the economy, like the travel and hospitality industries.

However, since Professor Gudgin’s piece was written, the Chancellor has announced his £330 billion business assistance package, and the Bank of England has launched a further £200 billion of quantitative easing. The former will overwhelmingly be funded by additional borrowing, which eventually means increased debt servicing costs to be paid by individual and business taxes.  This makes it even more critical to secure a post-Brexit trade deal which doesn’t impose ‘level playing field’ regulatory cost burdens on British business.

 

Britain and EU exchange Brexit Agreement drafts – Reuters

In a welcome counter to the multiple calls for a formal postponement of the Brexit trade talks, and consequently, of the date of full-Brexit itself, Johnson this week published a draft Trade Bill, whose effect would be to expedite and facilitate Britain’s ability to trade with other countries outside the EU. In addition, draft legal texts were also exchanged between Britain and the EU itself on how the two parties would conduct business after the end of Transition.

From the texts, it looks unlikely that a delay would be productive in terms of any softening of Brussels’ intransigence.  Britain fundamentally wants a sectoral agreement under which some issues would be wholly excluded from it, whereas the EU wants an all-encompassing deal from which almost nothing would be excluded.  With the two sides as far apart as this on basic principle, it is hard to see what a delay would achieve.

 

We must question suggestions the transition period should be extended – Brexit-Watch.org

Given that European responses to the Coronavirus crisis are primarily being directed by member-states’ national governments acting individually, rather than centrally from Brussels, it increasingly looks a weak excuse for deferring full-Brexit. Apart from that, every extra month we stay in Transition means a continuing financial contribution to the EU’s coffers, taxpayers’ money which, one suspects, taxpayers would rather see being spent domestically in Britain on healthcare.

On Friday morning, former MEP David Campbell Bannerman raised a further powerful reason for not extending the implementation period.  Late on Wednesday evening, the European Central Bank unexpectedly announced a €750 billion stimulus programme of bond purchases, after its €120 billion big-bank stimulus package of only six days earlier had signally failed to reassure volatile sovereign debt markets.

If – or perhaps when? – the Eurozone collapses, suggested Campbell Bannerman, if still in Transition, Britain is in real danger of having to pay hundreds of billions through European Investment Bank liabilities and/or EU Commission decisions on EU ‘solidarity’. 

When Britain is already borrowing another £330 billion to prop up our coronavirus-hit economy, that prospect alone should be enough to rule out any extension.

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Economics, Political-Philosophy, UK-Current-Affairs, UK-Politics

The Tories Don’t Deserve To Win – Labour Deserves To Lose

Neither the Tories, with their statist, triangulating Manifesto, nor Labour, with its destructive socialist vision, deserve victory in this General Election

In a few hours, this General Election will be all over bar the results and their consequences.  Yet the usual anticipation of Election Night is muted by an almost palpable sense of relief at the approaching end of a campaign offering such a lacklustre, uninspiring choice.

For Theresa May and the Tories  it was supposed to be the Brexit Election: where, wanting both a bigger Parliamentary majority and her own popular mandate to implement it, she would offer a vision of a Britain mitigating the risks but also exploiting the advantages from recovering political and economic sovereignty.

Both, paradoxically, dictate some loosening of State and regulatory shackles on the economy, a facilitation of innovation and entrepreneurship: especially as the economy inevitably goes through a period of uncertainty and flux as powers are repatriated and trading relationships either reset or forged from new. But that isn’t what we’ve got.

The first intimations were reasonably heartening, But then came the Manifesto.

2017 Manifesto on Core Beliefs

Disparaging talk of “untrammeled free markets”, belief in “the good that government can do”, and abhorrence of “inequality”. The context leaves little room for doubt that the offer to voters is one of an interventionist State, concerned not so much with opportunities, but with outcomes.  

Further on, we are promised an Industrial Policy, a National Productivity Investment Fund, worker representation on boards, and a commitment to continue spending 0.7% of GDP on virtue-signalling foreign aid.

Finally, we get to this Greenery-gullible horror. Yet it accompanies a pledge to give British voters “the lowest energy costs in Europe”, notwithstanding that those two aims are mutually incompatible.

Worse still, it’s to be achieved, not by slashing Green taxes and encouraging more competition among energy providers via supply-side measures, but by capping prices: the same policy that, as recently as 2015, the Tories rightly damned as economically-illiterate when included in Labour’s election manifesto by Green-Left Red Ed Miliband.

So, in aggregate, a largely social-democratic policy programme, advocating a version of active-state Rhenish corporatism that would not look out of place in the manifesto of any milquetoast European Christian-Democratic party.

One can speculate endlessly on the reasons why. Possibly they lie in the fact that May is an instinctive paternalist (should that be “maternalist”, I wonder?) technocrat who’s unconvinced of, as Martin Durkin puts it, the potential of free markets to liberate and enrich.

Perhaps, because Labour has gone so far Left, she was persuaded that a Clinton-Blair style triangulation, with the Tories parking their tanks on “moderate” Labour’s lawn, would work electorally. Maybe she was afraid of frightening off the 2 or 3 million Labour voters who voted for Brexit and want to see it happen, and also the One-Nation tendency in her own party still looking for any excuse to derail Brexit. Who knows?

Then there’s been the campaign itself. May  – and it has been almost exclusively May, from battle-bus, through campaign literature, to media, and all points in between – has come across as by turns either robotically evasive, or uncomfortable and unconvincing when pressed on detail.

The forced U-turn on Social Care brought her campaigning deficiencies into sharp focus, but combine that with her natural somewhat leaden, flat-footed demeanour, plus a requirement to face an inquisitorial public & press far more often than she’s ever had to do before, and the result has been, not failure, but certainly sub-par performance.

Both she and her Party, have emerged from the campaign diminished, and not just in opinion-poll ratings, either. “Strong and Stable” has become something of a stick to beat her with. The whole thing has been rather insipid, disappointing, and very far from enthusing.

Consideration of Corbynite-Labour’s hard-Left manifesto need not take us as long. “Insipid” isn’t a description that could remotely be applied to it: “terrifying” or “economically-catastrophic” hardly begins to cover it, such is the red-in-tooth-and-claw programme that unrepentant socialist Jeremy Corbyn has in mind for the country.

The appalling consequences of a Corbyn-led Labour government have comprehensively dissected, with this by Andrew Lilico being merely one of the latest.   

As Lilico points out, fiscally and economically Labour would impose on Britain the highest level of taxation since World War II: the nationalisation, almost certainly without compensation, of the most important industries: a return to widespread (and excess) unionisation: deliberately punitive taxes on financial services designed specifically to deter private capital: and the effective collectivisation of private business property through imposing public interest duties inimical to both private property rights and commercial interest.

Moving from the general to the particular, just one example can suffice to show hard-Left Corbynism’s economic wrong-headedness. Despite favouring continued uncontrolled mass immigration, Labour proposes to deal with the housing shortage by a price-cap on new houses.  

All that that is likely to achieve is a shortage of new houses. If Labour really wanted to boost the supply of low-cost new houses, it would pledge to ease planning restrictions, not threaten to impose State price and even purchaser – priority to State employees, naturally – controls on builders. 

Non-economically, a Corbyn-led Labour government would see restrictions on the police, the reduction of the Army to a notional force only, and the withdrawal of Britain from its role in international security.

And this before even considering the implications of Corbyn’s 30+-year record of not only sympathy but vocal backing for all manner of anti-British, anti-Western groups, including those engaged in active terrorism, even on British soil.

And thus we come to the end of a singularly uninspiring campaign on what should have been the most important election in Britain for decades. The great issue for which it was ostensibly called to reinforce has been barely discussed beyond trite soundbites and banal generalities.

Hard-Left Labour certainly deserves to lose this election, and lose it heavily: but the Conservatives, on their manifesto and especially on their stuttering and lacklustre campaign, really don’t deserve to win it, either.

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Civil-Liberties, Economics, UK-Current-Affairs, UK-Politics

Tax-Havens: Also A Force For Good

Far from being solely amoral, piratical facilitators of crime, kleptocracy and evasion, so-called tax-havens in fact also play a valuable role in promoting economic efficiency and curbing State-predation  

Tax havens Panama CitySo-called tax-havens have a bad reputation. In public and political minds, influenced almost wholly by the clamour of either wilfully-ignorant or Leftist-populist media and political hacks, they’re all, without exception, places solely where unsavoury associates of autocrats and plutocrats soak up the sun in between furtively stashing suitcase-loads of ill-gotten gains in anonymous numbered accounts.

As we’ve recently seen all too starkly. Because one of the main features to become glaringly obvious in the Panama Papers leaks, and in the domestic political furore in the UK which has followed it, is a self-evidently widespread inability (or possibly unwillingness) of the politico-media class and commentariat to differentiate the few truly-nefarious tax-havens from the more numerous well-run and properly-regulated offshore financial centres (OFCs) – they are decidedly not the same thing: or to distinguish illegal loot-hiding, money-laundering and tax-evasion, by corrupt despots, criminals and others, from the entirely legal use of OFCs in perfectly legitimate investment and tax-avoidance.

As so often, reality is both more complex, and more nuanced, than media-driven populist perception.

For a start, on the basic issue of definitions. The OECD lists four criteria which a territory or jurisdiction must fulfil in order to qualify as a tax-haven, as opposed to an OFC:

  1. Imposing no, or only nominal, taxes, even domestically
  2. Lack of transparency
  3. Laws and practices that discourage or even prevent automatic exchange of [tax-purposes] information with other governments on the beneficiaries of its tax regime
  4. No stipulation that the activity domiciled in its jurisdiction be substantive

On these criteria, there are relatively few true tax-havens: even the OECD lists only four, and, on its Automatic Exchange Of Information criteria, a mere two.

Tax havens Waterfront Grand CaymanMoreover, and more importantly, the vast majority of the Crown Dependency and British Overseas Territory OFCs, which Labour leader Jeremy Corbyn incorrectly labelled as tax-havens and proposed arbitrarily supplanting their democratically-elected governments to place them under direct rule from Westminster, don’t even fall into the “tax-havens” category at all.

So when no-one seriously opposes measures to prevent, detect and punish both those who undertake criminal tax-evasion, money-laundering and loot-concealment and the few residual disreputable genuine tax-havens which do facilitate them, the real objections by governments, commentators and so-called social-justice campaigners to the legitimate use of OFCs or any low-tax jurisdictions must originate from elsewhere.

Those objections arise from two principal, and unsurprising, sources. Firstly, the misunderstanding, derived from popular fallacies, of the economic good that low-tax jurisdictions promote: and secondly, the competitive threat they represent to the otherwise-unconstrained power of high-taxing, high-spending states to extract taxes from their economies and populations almost ad infinitum.

To address one of the most popular fallacies – that money deposited in OFCs or low-tax jurisdictions is somehow irretrievably “lost” to the global economy. This is just arrant nonsense.

First, it wrongly assumes there is a fixed amount of global capital whose geographical distribution creates a zero-sum game, where any partial deployment of it to Location A must automatically reduce that available in Locations B-Z. In fact global capital is both dynamic, and fungible, and continues being created in those parts of the so-called “losing” mainstream onshore economies that aren’t sensitive to geographically-differing tax rates.

Tax Havens BermudaSecond, it assumes that all capital deployed to low-tax jurisdictions stays there, static. This isn’t necessarily the case – small islands generally don’t have much potential for domestic infrastructure investment or large-scale economic activity – and it’s especially not the case in a period of low or even negative real interest rates. Although the total of assets located in an OFC may change only slowly, that ignores the stock-vs-flow issue, where many of its components parts may be being directed into other forms of investment in other locations, and subsequently repatriated, on a regular basis.

Inasmuch, too, as the location of capital and/or assets in the low-tax jurisdiction encourages their investment to generate a return not achievable if based in a higher-tax jurisdiction, the OFC is actually promoting more FDI in the investment location. In this way, the availability of low-tax OFCs makes them conducive to an increase in overall international investment and in global capital, not its depletion. They are not “poaching more than their fair share” of international capital, but acting as a conduit for its more productive and optimal investment back into mainstream onshore economies.

Third, international systems of taxation don’t always cope well with avoiding the dangers of double-taxation. If you’re an investor (and remember, you may well be, even via an ISA or your employer’s pension scheme) in a fund set up in a country that levies a withholding tax on redemption payouts, but those redemption payouts aren’t taxable domestically in your own country, then recovering the tax that’s been wrongly withheld from you is going to be difficult. By providing a tax-neutral environment, low-tax OFCs perform a valuable role in making sure that your investment, even an indirect one, isn’t taxed twice. That benefits you.

Tax havens Mossack Fonseca PanamaFourth, the fallacy assumes the “losing” country is automatically forced to raise its own domestic tax-rates to replace the tax-revenue “lost” when assets are relocated to a low-tax OFC. Countries, however, don’t operate in isolation from their international environment: lower tax-rates in other jurisdictions act as a restraint on mainstream onshore governments’ own tax-rate policies. Both firms and workers in those economies therefore benefit in purely micro-economic terms from overseas low-tax OFCs, in the form of lower taxes domestically than might be levied otherwise.

Next, low-tax OFCs also fulfil a vital function in providing a safe harbour for wealth legitimately created and held, against the tendency of inherently corrupt, dictatorial  & kleptocratic regimes to predate on it.

Depending on the definitions chosen, there are approximately 170-190 countries in the world: but only a minority are full democracies where the government is subject to the rule of law and scrutiny by a free Press. The Economist Intelligence Unit’s Democracy Index 2014 in fact lists a mere 24 as full democracies and a further 52 as flawed, out of a total of the 167 rated, leaving over 90 regimes described as either hybrid or (the majority) authoritarian. Perhaps not surprisingly, there’s a correlation between the latter categories and the Transparency International Corruptions Index 2015’s assessment of the most corrupt countries.

Most & Least Corrupt Countries 2014

These are countries where even if, against all the odds, an honest entrepreneur, investor or businessman manages legitimately to amass capital and assets, they are liable to be arbitrarily seized at any time by the regime, either unashamedly or via a quasi-criminal or complicit judiciary, and confiscated. By existing at all, low-tax OFCs furnish a safe refuge for such assets. In this role, rather than encouraging or facilitating corruption, they are in fact operating so as to thwart it.

Benefits of Tax CompetitionLastly, low-tax OFCs form a valuable macro-economic brake on the overall ability of excess-spending, excess-taxing governments to otherwise levy punitively-high taxes without restraint. In the absence of the tax-rate competition provided by lower-taxing jurisdictions, it’s unlikely that governments, viscerally-disinclined on both ideological and electoral grounds to curtail State intervention and largesse, would not take the opportunity to impose economically-damaging higher taxes generally. 

It’s primarily for this reason that the member-states of supranational political unions like the EU are so enthused by the prospect of cross-border harmonisation of taxes, or centralised democracy-proof pan-European fiscal control, as the corollary to curbing the legitimate activities of low-tax offshore financial centres. 

The vocal but unthinking critics of low-tax OFCs, in their haste to condemn what they see as the obvious, miss a point – that they are also a force for good. The existence, and legitimate activities, of low-tax OFCs both promote greater economic, capital-allocation and investment efficiency, and indirectly benefit employers, employees and consumers in the mainstream onshore economies by protecting them from excess State predation.     

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Civil-Liberties, Climate-Change, Economics, European-Union, Political-Philosophy, UK-Current-Affairs, UK-Politics

Why The Red Lights All Show Green

In theory, Environmentalism ought to be a conservative, or at least apolitical, philosophy: but, in its politicised Climatism mutation, it’s been captured and exploited by the Left and Centre-Left, as a means to pursue Leftist ends 

Between small-“c” conservatism, especially in its classical Burkean tradition, and environmentalism in that word’s true, literal sense, there should, on the face of it, be a natural philosophical affinity.

Burkean conservative thought holds that society makes better progress, and simultaneously better preserves its legacy for future generations, not by the tearing-down of its structures and customs in orgies of radical, revolutionary fervour: but by preserving and perpetuating, though also adapting, established social, political and cultural institutions that have stood the test of time.

Englands green & pleasant landIt contends that the environment in which we find ourselves, not only the social, economic and cultural but also the physical, is not ours exclusively to re-make afresh solely out of desire to indulge the narcissism of the immediate, or even just to satisfy present needs; that we are not its absolute, unfettered owners, but trustees, stewards and custodians: that the corollary of societal betterment is an obligation to safeguard for those who have gone before the inheritance which they bequeathed to us, and in turn to pass it on as our legacy to generations yet unborn.

On this argument, then, environmentalism – in that word’s true, literal, sense – should be primarily a concern of philosophical conservatives – even its “conservation” synonym suggests as much.

Yet, because of the well-documented hijacking of the environmental movement by the hard-Left following the fall of the Berlin Wall, it’s now across that part of the ideological spectrum that spans from far/hard-Leftism to Cameroon ‘Liberal’-Centrism where the new politicised Environmentalism predominates.

cover climatism steve gorehamA better name for it than “Environmentalism” is Climatism, after Steve Goreham’s excellent book of the same name, debunking its dubious scientific claims and political prescriptions. It bears little resemblance to Environmentalism in its original, true, conservation-oriented roots: Climatism is its mutation into the more familiar, stridently-collectivist, statist, anti-capitalist, intolerant-of-dissent, authoritarian secular Green Religion – eco-socialism, eco-fascism, eco-communism, or whatever specific eco-variety of Leftism one cares to assign it.

And so, unsurprisingly, it’s politicians ranging from Hard-Left to ‘Liberal’-Centre – perhaps we should just call them Climatists as convenient shorthand, to save time agonising over whether they’re eco-socialists, eco-fascists, eco-communists, or just eco-opportunists – who seem regularly to place the most reliance on it, to justify almost anything. As can be seen from merely a quick selection from the UK political scene in the last month or so.

natalie bennett green party spring conf 2016First out of the traps, as you might expect, are those über-Climatists, the Green Party. In her keynote speech to its 2016 Spring Conference, leader Natalie Bennett employed well-worn Climatism-misanthropic memes to bemoan both the availability of relatively-inexpensive, reliable energy, and the greater mobility and travel opportunities which our 21st century prosperity has brought within the reach of vast numbers:

“The government is encouraging, subsidising, the frackers, the oil-drillers, the destructive open-cut coal miners. It’s promoting new roads and new airport runways”

Not content with that, Bennett went on to propose in effect  State control, not merely of monetary policy, but money creation itself, and also its deployment into the economy:

“We must build a future with a new system of money creation that puts resources into the real economy rather than casino finance”  

Red Ed pro-EU speech Mar 16But here, for example, adducing Climatism to advocate Britain’s continued membership of the EU, is Labour’s Red (or rather, Green-Left) Ed Miliband – progenitor of arguably the most damaging piece of legislation ever passed by Parliament, and written at his invitation by Friends Of The Earth’s deep-Green ideologue Bryony Worthington, the 2008 Climate Change Act – in his recent pro-Remain speech:

“That’s why we need to be in the European Union. Take the most important threat of all: climate change. It just isn’t realistic to think one country can do this on its own. It’s only EU legislation that is forcing any action from this Government”

There are, incidentally, at least three blatant falsehoods contained in those short four sentences, but for the purposes of this argument, we’ll let that pass.

Jezza Corbyn straight talkingHere too, this time enlisting Climatism in the cause of State-directed investment, control of markets, and curbs on business freedom, is Labour’s Hard-Left leader Jeremy Corbyn:

“We need a state that invests. This means we can shape markets and shape the goods they produce. All of this must be driven by democracy in the production of energy.”

Tim Farron Spring Conf 2016Now, also embracing Climatism to justify a vote to stay in the EU, comes Liberal Democrat leader Tim Farron, in his speech to the party’s Spring Conference:

“We face vast international challenges: climate change, the refugee crisis, a global economy. Do we best tackle these together or on our own? We are stronger together. We are Stronger In.”

aileem mcleod snp spring conf 2016Next up, citing Climatism as justification for greater wealth redistribution and overseas aid, administered and dispensed at one remove from full democratic accountability and control, is the SNP’s Scottish Government “Climate-Change” Minister, (suitably-attired in Green, naturally) Aileen McLeod:

“We have doubled the innovative Climate Justice Fund, a global first that is supporting some of the world’s poorest communities to deal with the impact of climate change”

Nicky Morgan 4

Finally, impeccably metropolitan-Cameroon ‘Liberal’-Centrist Education Secretary Nicky Morgan, blatantly and desperately recruiting Climatism as a helper to try and win over the self-appointed trendy and the youth vote in the Government’s increasingly flailing and fear-mongering campaign to keep Britain in the EU, in her pro-Remain speech of 29 March:

“Whether it’s tackling poverty or protecting the environment and tackling climate change, young people know that our voice and impact are magnified by playing a leading role through the EU” 

It’s nigh-on impossible not to be struck by the remarkable, and consistent, similarity between many of the prescriptions advanced by Climatism and the Climatists, and policies that are recognisable Hard-Left, Centre-Left and even ‘Liberal’-Centrist shibboleths, but for which they struggle to gain popular consent if advanced openly via the normal democratic process. To document the main ones:

Democracy-bypassing supranationalism.

Unlike UKIP and the Conservative Right, all the parties referenced explicitly favour removing swathes of public-policy decision-making away from domestic dependency on voter consent to mainly unelected, unaccountable, anti-democratic supranational bureaucracies.

The SNP knows its peculiar variety of nationalist state-socialism, while presently-dominant in Scotland, has minimal, if any, political traction south of the border. The LibDems and the Greens are psephologically near-irrelevant. Labour, in its post-Blairite iteration and despite its lip-service platitudes, has never really trusted democracy to back its policies since its three successive shattering defeats of the 1980s. The currently-reigning social-democratic, paternalist, ‘liberal’-Cameroon wing of the Conservatives openly disdains the Party’s robust classical-liberal pluralists.

Club of Rome New Enemy quote

To all of these, the attraction of ensuring the implementation of electorally-unobtainable policy, by re-locating its origination and direction well away from vulnerability to democratic rejection, is irresistible. And what better ostensible justification for it could there be than the supranational regionalist or even globalist eco-stewardship they assert is inseparable from Climatism?

Thus, their near-unanimous support for, in particular, Britain’s continued EU membership, with its incipient pan-EU supranational energy-union and emissions-trading scheme which Green campaign groups still insist is not climate-policy at all, but a neo-industrial policy.

Greater State control of monetary policy, economy and markets.

Hard-Left Labour and the Greens are at least quite open about it. Between them, they overtly intend, in the name of Climatism, a much more economically-interventionist and controlling State: one that not only usurps control of monetary policy from an independent central bank, but also inclines towards almost directing producers what to produce and even consumers what to buy. As near to Soviet-style central planning, in fact, as the West has seen since that model’s deserved ignominious collapse in failure in the 1980s.

But they’re by no means alone. All the featured parties favour more State involvement in the economy to some degree or other, and in some way or other. Think of the LibDems’ Green Investment Bank: the Cameroons’ risibly ill-designed and ill-fated Green Deal: and the eco-benefits claimed by Osborne to justify his ludicrously-expensive and crony-corporatist deal with EFD and China over the Hinkley Point nuclear power facility.

Higher Taxes.

Climatism offers ample opportunities with which to justify the increase in the State’s overall tax take, and therefore its share of national GDP, that so beguiles the hard-Left, the Fabian “Progressives”, and the paternalist ‘Liberal’-Centrists alike. Beguiles them, because common to them all are the Left-ish –

  1. assumption of the State as indispensable and irreplaceable enabler:
  2. conviction that the State really does know better than the citizen how his money should be spent: and
  3. innate distrust of leaving wealth, as Gladstone put it, to “fructify in the pockets of the people”.

Higher eco-taxes on petrol and diesel, in addition to excise duty and VAT, which mean that tax of one kind or another accounts for up to 70% of the pump price. Green levies and taxes aimed at “carbon” reduction, to be recouped from domestic consumers, and which load their energy bills by up to 15%. Environmental obligations imposed on businesses, but which inevitably have to be passed on to the purchasers or consumers of their products in higher prices. Air Passenger Duty, supposedly a targeted incentive for reduced “carbon” emissions, but in reality an indiscriminate, scatter-gun, catch-all tax on overseas holidays and business.

These aren’t direct taxes, in the sense that they’re visible deductions from monthly or weekly pay-slips: they’re more insidious, in that they’re indirect, or hidden, secondary-effect, stealth taxes. But here’s the sting – they still come out of the poor taxpayer’s same wallet or bank account, and they still wind up in the same Treasury till for disposing by the State that, remember, knows best. Leftists of all persuasions love that.

Forced Income and Wealth Redistribution.

Climatism’s high apostles make no secret of the redistributive aims of the secular Green Religion. Here, for example, are Ottmar Edenhofer, Co-Chair of IPCC Working Group III, and former Canadian Environment Minister, Christine Stewart: they make no attempt to conceal the true, socialist-redistributive objectives of globally-directed, nation-state democracy-immune Climatism.Edenhofer-Stewart comp 2

It doesn’t require a great leap of the imagination to discern the same sentiments in Bennett’s “putting resources into the real economy”, or the SNP’s “Climate Justice” Fund: as Friedman, especially, shows us, any movement with “Justice” as its suffix is almost unfailingly in reality a campaign for wealth/income abstraction and redistribution via State-coercion. And the universal support among our chosen Party luminaries for Britain’s continuing EU membership is a pointer, too: the EU seeks ever-more control over member-states’ economic and fiscal policies, with greater distribution explicitly included in its aims.

Curtailment of Personal Freedom.

The broad church that constitutes the Left in its widest sense distrusts individual liberty: philosophically, it remains in thrall to the Rousseauian concept of the human born pure but corrupted by his surroundings: to the inherent perfectibility of human society, given only sufficient power residing in the hands of the State. Climatism furnishes myriad openings to justify the extension of restrictions on personal freedom – and in how noble and incontrovertible a cause! – nothing less than the salvation of the planet itself.

Thus the increasing exhortations against flying (remember the Green Party’s Caroline Lucas, equating flying to Spain on holiday with murder by stabbing?), and the public implicit shaming of those whom the self-appointed arbiters of eco-propriety deem to have exceeded their allocated entitlement: the vocal disapproval of food choices on the laughably-flawed “logic” of grazing-space or food-miles: the drive to install smart-meters or third-party control systems into private homes to monitor, and even remotely-curb, energy consumption.

 Intolerance and Suppression of Dissent.

Few political movements have exhibited the vicious intolerance of dissent from the Green orthodoxy for which Climatism is, rightly, reviled – with the possible exception, that is, of those found in totalitarian states.

Dispute the received wisdom, that the mere 3% of atmospheric CO2 that results from human activity is catastrophically dangerous while the residual 97% that results entirely from natural climatological phenomena somehow isn’t, and you will be met, not with an attempted explanation (because there isn’t one, apart from the basic premise being wrong), but ad-hominem abuse, usually including an adverse judgment or three disparaging your moral worth as well as your motives.

Challenge why global average temperatures have been flat for 19 years despite continued rising atmospheric CO2, and you will be called, not an adherent to Popper’s Scientific Method, but the catch-all insult of “denier” – which is quite rich, considering that Climatists, to cling to the Green Orthodoxy, are themselves forced to deny 4½ billion years of more or less constant climate change, ever since the Earth’s formation, and often far more dramatic than any over which Climatism professes to agonise.

Confront the quaint notion that increased floods from (entirely natural) climate change are better prevented, not by improving flood defences but subsidising inefficient, expensive renewables off the backs of the poor’s energy bills, and you will be treated, not with discussion but with ferocious scorn and derision (but little else).

This is pure Leftist technique, the late 20th/early 21st century manifestation of what’s in Alinsky’s Rules For Radicals (from which Obama, incidentally, draws so much of his inspiration). “Your views are so self-evidently morally-repugnant (alternative: “driven solely by greed“)”, goes the Leftist narrative, “that they absolve me from any obligation even to debate the issue with you at all, especially as my aims are noble and altruistic, so that their ends in any case justify whatever means are required to realise them“. It’s called Shutting Down The Argument. Leftists (and Climatists) deploy it routinely.

None of this multi-faceted consistency of aims and policies between Leftism and Climatism should surprise, given the historical circumstances in which they came together. The 1989 collapse of Soviet-style communism and the end of the Cold War deprived the Left almost overnight of the models – economic, cultural, societal and geo-political – which for 70 years it had revered as inspiration for and validation of its state-authoritarian, collectivist, anti-capitalist, anti-Western philosophy.

The nascent environmental movement was the ideal candidate to replace it. It offered, not just an alternative justification for totalitarian-inclined, anti-capitalist, anti-Western, anti-freedom disaffection, but one with an even wider potential: this time, the oppressed victims, deemed to be in need of salvation from exploitation and subjugation by liberty, capitalism and free-markets, were not merely the downtrodden working-class masses: they were humanity in its entirety, and even the Earth itself.

Green New Red 3As described and referenced above, the takeover of the environmental movement by the hard-Left proceeded over the next 10 years or so, and it continues to this day, to the extent that Green and Socialist policies and outlooks are now virtually indistinguishable from each other on the Left of the politico-ideological spectrum.

It’s why the prescriptions advanced by and in the name of the secular Green Religion of Climatism bear such an uncanny, but strictly non-accidental resemblance to what Leftist political-economy has long advocated. Green really is the New Red. The red lights of politics, from the palest tinge of pink to the deepest shade of crimson, are all showing Green.

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Economics, UK-Current-Affairs, UK-Politics

The Heseltine Fascination

Chancellor George Osborne’s enduring deference to Michael Heseltine’s 1970s model of state-crony corporatism will lead to poor policy, regionally and nationally

Osborne budget boxUnderstandably, most of this week’s post-Budget reaction focussed on two things – Osborne’s continuing failure to ameliorate Britain’s worsening structural fiscal position, and the introduction of the illiberal (and almost certain to be largely-ineffective) sugar tax.

Less noticed, however, was how two Osborne announcements reveal, not only his ongoing attachment to the 1970s-style state-crony corporatism epitomised by (Lord) Michael Heseltine, but even his enduring fascination for Heseltine himself.

The first instance came just after Osborne’s reference to the Greater London Authority moving towards full retention of its business rates. He added:

“Michael Heseltine has accepted my invitation to lead a Thames Estuary Growth Commission and he will report to me with its ideas next year.”

To anyone familiar with the history of Heseltine’s political-economy, this should have rung warning bells. First, the very name “Thames Estuary Growth Commission” itself carries connotations of the semi-bureaucratic, state-interventionist, “Government picking winners” model of infrastructure development that Heseltine has long so admired (and of which more later).

ebbsfleet-map 2014 v3Second, it recalled Osborne’s previous, and underwhelming, foray into Thames Estuary development. In the 2014 Budget, he announced, to the now habitual fanfare, that “Britain’s first Garden City in 100 years”, including 15,000 houses, would be built at Ebbsfleet. Critics, however, soon pointed out that a mere 15,000 houses hardly amounts to a Garden City, plus the inconvenient fact that Ebbsfleet itself, sitting on a flood-plain with an average height of just 2 metres above sea level, bordering the Thames Estuary, might be a, shall we say, less-than-ideal site for a new Garden City.

 Two years later, just 65 of the planned 15,000 houses have been built.

Then, shortly afterwards, Osborne named-checked the National Infrastructure Commission (beginning to sound familiar?) which he’d established under the aegis of the Treasury last year, and proclaimed the following:

“They recommend much stronger links across northern England. So we are giving the green light to High Speed 3 between Manchester and Leeds”

HS3 would, of course, be an extension of HS2, which is itself far from certain to go ahead, being mired in controversy:

  • Its projected cost has risen inexorably from even the risibly-low estimate of £50 billion once peddled unconvincingly by the Government, which, astonishingly, excluded off-balance-sheet costs.
  • It would have to be funded almost exclusively by borrowing, when the National Debt is already £1.5 trillion and rising.
  • HS2 IEA WellingsIts claims for economic regeneration of the North are dubious.
  • It is, and is likely to remain, beset by planning approval disputes and housing-blight claims, for years.
  • Its claimed service improvements could be met by lower-cost alternatives.

HS2’s flaws were comprehensively and forensically exposed by Dr Richard Wellings’ 2014 paper for the Institute of Economic Affairs.

Heseltine Infrastructure CommissionTurn now to Osborne’s National Infrastructure Commission itself. Who does one find adorning the ranks of its Commissioners? Why, none other than ……. Michael Heseltine.

Heseltine was recruited into the Treasury, with Osborne’s approval, to “advise” on infrastructure development and urban renewal, because of his 2012 report “No Stone Unturned In Pursuit Of Growth” that purported to be a putative blueprint for stimulating economic growth.

In its 89 recommendations, however, over 80 of which the Coalition accepted, it presented in miniature a picture of the interventionist-government corporatist state of the 1960s and 1970s: the decades in which Heseltine cut his political teeth, and for which its practitioners could, despite its manifest flaws, conceive no alternative.

It showed that Heseltine remains an unrepentant apologist and enthusiast for Big Government: that his vision for stimulating economic growth is one of national industrial policy, governmental top-down oversight, regional-quango consensus investment, local council-level enterprise partnerships with spending grants. For Heseltine, Adam Smith’s invisible hand must, it seems, be subsumed within multiple layers of statist-corporatist glove.

Heseltine no stone unturnedHis is an approach that instinctively eschews solutions based on economic liberalisation, deregulation and free markets: like regional pay to mitigate any crowding-out effect of nationally-set pay rates, especially in the public sector, on local job opportunity uptake: like encouraging more non-State free schools and academies, with the freedom to adjust their curricula to make them attractive to students who will be seeking employment in the area: and like, above all, unblocking the planning process in which so many developments can get bogged down.

He appears to favour what he termed “growth funds” being allocated through new Local Enterprise Partnerships. But given that the money would come from people and businesses via the tax system in the first place – Government has no money of its own – quite why government and the local quangocracy would be better judges of investment potential than savers, investors and businesses themselves was not explained. Not much of Gladstone’s enjoinder to let money “fructify in the pockets of the people” there.

Heseltine’s recommendations were roundly criticised at the time by a Professor of Economic Geography at the LSE(!), no less, as “a return to policies, many of them not particularly successful, that were developed in different times, to tackle different challenges”. It’s difficult to suggest these words don’t equally apply in 2016.

The FT’s Janan Ganesh wrote in late 2012 that Heseltine’s prescription for encouraging infrastructure development was very much a Gaullist vision. This still resonates: Heseltine’s vision is more akin to France’s state-dirigisme of Les Grands Prôjets: yet it’s in France where the State’s share of GDP persists at an unsustainably-high 50+%, unemployment is at levels not seen for two decades, and competitiveness continues to fall.

osborne delivers budget 16mar16Osborne’s reverence for Heseltine is misguided, and counter-productive. To stimulate the infrastructure growth of the future, Britain needs, not reheated 1970s-style regional industrial policy predicated on state-interventionism, but a comprehensive supply-side revolution. We need a smaller state, lower, simpler and flatter taxes, less-onerous workplace regulation, a freer and more responsive education system, and a major reform of planning law.

Sadly though, while we have a Chancellor of the Exchequer so ideologically in hock to Heseltine’s state-crony corporatism, that will remain an impossible dream.

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