Politics And Polls

[andrewducker]

Just looking at an interesting set of polls here, following up Ed Milliband's election as leader of the Labour party (that's the leftest of the three major parties we have in the UK, when it comes to financial things).

Thankfully, I'm glad to see that AV is now back as more popular than FPTP, thanks to him throwing his weight behind it. I hope that sticks. There are an awful lot of don't knows though. Interesting to see that the only part of the population who are strongly anti-AV are the over 60s and Conservatives. I wonder what the age profile for the different parties looks like. Anyone got stats? Also interesting that the mass of the don't knows are in Social Grade C2,D and E - 39% of them have no opinion. I wonder if that will stick, or if they'll develop an opinion as the voting gets closer.

But I'm more interested to see that 2/3 of the country think that people at the higher end should pay more in taxes - including 53% of Conservative Party supporters (the rightest of the three major parties we have in the UK). I was expecting Labour and Lib-Dem members to be in favour of higher taxation, but I wasn't expecting the Conservatives to also have a majority in favour to.

Also, 72% in favour of higher minimum wage, including 59% Conservatives, and 74% in favour of a higher levy on banks, including 71% of Conservatives.

It seems that the Conservatives have been shifted leftwards when I wasn't looking, at least over some matters. Which is good, in many ways.

In other news Nick Clegg has come out and said something that I've seen on a variety of smaller blogging sites about the spending review:
"Even after all the decisions that we have to take which are difficult ones, we'll still be spending more money at the end of the period than we are now."
Because it seems that the majority of the "cuts" are cuts to proposed spending increases, and not cuts to current spending. Anyone got anything further on that?

Oh, and I'm broadly happy with the stuff that Ed Miliband has been saying. Distancing himself from the Iraq War, ID cards, and other anti civil liberty stuff from the previous governments agenda and coming back with a left-wing liberal agenda. While his voting record doesn't agree with his stated opinions, I'm hopeful that his future actions will line up better with what he's now saying. I shall keep my fingers crossed.

Comments

[elmyra.livejournal.com]

It seems that the Conservatives have been shifted leftwards when I wasn't looking, at least over some matters.

I wonder if their backbench MPs were/are looking...

[andrewducker]

I doubt it. One of the reasons that I'm grateful for the coalition is that it seems that we've effectively ended up with the liberal side of the Conservative Party and the Lib-Dems crowding out the nasty side of the Conservative Party. I know there are a chunk of very unhappy Conservatives at the moment, because they have power for the first time in 13 years, and they can't do all the nasty things they want to :->

[elmyra.livejournal.com]

I think the combined efforts of David Cameron and the coalition have definitely pulled the Conservative party (leadership) out of right-wing wingnut territory. Doesn't mean that they're not doing a hell of a lot of damage to the country and the economy though.

The thing that worries me is that they are cutting things which are valuable investment and key drivers of the economy, e.g. science funding, and in other areas they are redirecting spending in an extremely harmful and divisive way, e.g. funding free schools and new-style academies out of the abolished BSF proframme.

So even if they're "nice" Tories, they're still Tories, and the values and ideology behind what they're doing is still there and still harmful.

(I'm actually not that convinced that they're "nice" Tories either - the Big Society is pretty much what Thatcher meant when she said there was not such thing as society.)

[andrewducker]

I'm not too worried about free schools, so long as they're monitored and subject to the same controls as other schools with regards to core curriculum, etc. At least, I haven't seen anything that worries me about them, yet.

I object to lowering science funding, of course.

[elmyra.livejournal.com]

Two things to worry you about free schools (well, one thing really, with two examples of how it could go wrong): they are not subject to proper controls with regards to the core curriculum; they can specifically choose to opt out of the national curriculum.

You're a relgious wing-nut who believes that the earth was created in 6 days, 6000 years ago? Get your own school, funded by the state, to teach that! (Yeah, those people exist, and IIRC there was already some controversy about some of the academies under Labour teaching questionable science on religious grounds.) The other one is of course sex & relationships education, another thorn in the side of the right that can easily be avoided if you run your own school kindly funded with my taxes.

[andrewducker]

Which is why I specifically said that I would only be happy with them if they are created with proper controls. Free schools without basic standards are something I'm definitely against.

[matgb]

Some of them are, Redwood and a few others are fuming. Whenever I get depressed about how "right wing" it seems at times, I go look at an actual right wing blog and cheer myself up by reading their complaints about how left wing the whole thing is.

Andrew it seems that the majority of the "cuts" are cuts to proposed spending increases, and not cuts to current spending. Anyone got anything further on that

Yes, except it doesn't quite work like that. Spend on pensions is going up, regardless, spend on NHS pretty much has to go up, regardless, education spend is determined by number of kids, and that's at a high point.

So in order to continue those services at essential levels, which'll cost more, you need to actually cut elsewhere.

So there are a lot of actual cuts, even if the net spend still goes up.

[sigmonster.livejournal.com]

Plus I believe the values Clegg was using are nominal figures, not inflation-adjusted. With inflation above 3% that makes a big difference very quickly. (I'd appreciate the correction if I'm wrong.)

[elmyra.livejournal.com]

Whenever I get depressed about how "right wing" it seems at times, I go look at an actual right wing blog and cheer myself up by reading their complaints about how left wing the whole thing is.

I read Conservative Home on a daily basis (because I'm a masochist like that) and one of the things I find hilarious on there is that the section called "Centre Right" from my point of view looks like "Right-wing loony central". There are some truly strange and crazy people on there.

[matgb]

Yup, Tory Home has always been a home for the Cornerstone Right of the party, Montgomerie's "close personal friendship" of Dorries is amusing, but Cameron's never called them on the masquerade as being for mainstream grassroots opinion for some reason.

They are a very scary group, and a nice reminder that, in comparison, Iain Duncan Smith is relatively sane. I never, ever, thought I'd find myself glad that IDS was in chart of the benefits system.

We live in interesting times.

[elmyra.livejournal.com]

Yeah, ageeing with IDS worries the hell out of me. (Except, if he wants to make work pay he should be pushing for a living wage of course.)

[matgb]

Problem with the living wage stuff. Raise the income tax threshold to being at the same rate as minimum wage full time now, and we're very close to there.

But raising the minimum wage a lot and still taxing the resulting income will increase unemployment, and it's very hard to predict whether that'll be a small increase or a bigger one, it'll also slow employment growth.

And the more I learn amount economics, the more scared I get at the implications of a lot of stuff I take for granted as Good Things under normal circumstances.

[elmyra.livejournal.com]

But raising the minimum wage a lot and still taxing the resulting income will increase unemployment, and it's very hard to predict whether that'll be a small increase or a bigger one, it'll also slow employment growth.

Say more on why?

And the more I learn amount economics, the more scared I get at the implications of a lot of stuff I take for granted as Good Things under normal circumstances.

I have a degree in economics and I learned two things from that:

1. Economics is not so much as science as a dark art. Anyone who claims to know what they're doing in economics is probably lying.
2. We spent one out of a three-year degree course on how markets work, and the rest of the time on the failure modes. I'll let you draw your own conclusions from that. ;-)

andrewducker, do tell us to continue this conversation off your LJ if so inclined. ;-)

[andrewducker]

Oh Good Lord No. Comment discussions like this are the reason I make posts. More please!

[matgb]

Oh, figuring out market failures is something economists need to talk more about, Cable's speech got him plaudits as "Red Vince" when it was pretty much entirely "orthodox economics 101".

Anyway, marginal employment costs. Increasing the min wage increases the cost of employing people. If you increase the cost to above the level that the work is worth, then employers will have to make cutbacks.

Two concrete examples. In my old job, we used to employ office cleaners, frequently from a local social agency that employed people with learning difficulties. But as minimum wage went up, the company couldn't afford to employ them as much, so we were told we had to keep our own offices clean, wipe our monitors regularly, etc.

Overall, the work they were doing was stuff we could do ourselves, but it took us time that could've been used elsewhere.

Second example, pub glass collectors, where miss_s_b works used to, years back, employ people on peanuts, when they were busy, to go around and collect glasses. Now, they have to pay minimum wage, so they can't justify the expense.

At the margins, increasing the cost of employment will decrease the number of jobs worth paying people to do. That's pretty much unarguable.

The questions are by how much, and whether that's a price worth paying. I think having a basic minimum wage is worth it, paying people £20 per day, or £2 per hour (one of my old jobs) was crap. But putting it up to £7-£8 is going to make some jobs not worth doing.

SB earns less than that, but pays tax on her income, quite a lot. Stop that tax bill and we're at a livable income level, but increase the cost to her bosses of employing her and her colleagues, they're going to have to cut back and do more themseleves, tehy've already cut back on cleaning and similar.

It only affects people at the margins, but it will affect people. What I don't know is how many and whether it's significant.

[marrog.livejournal.com]

So are you saying that you'd propose raising minimum wage by less, but hiking the income tax threshold higher so that the poorest make money back on less tax rather than on more wages, shifting the burden of cost to the government rather than employers?

(I'm not arguing with this btw, just making sure I'm clear on the logical end-point.)

[matgb]

Exactly what I'm saying. Defining a "minimum wage" as being the lowest we should be paying someone, and still taxing them substantial sums, strikes me as utterly wrong.

Lib Dem policy is to increase the threshold to £10K as a start, with the objective of raising it even higher medium to long term. You can pay for the cost to the govt by putting more taxes on the wealthy (not necessarily the highest incomes, wealth and income are separate).

[elmyra.livejournal.com]

So instead of people on minumum wage doing the cleaning you have qualified people on 10, 20, 30 quid an hour doing it. Except it becomes invisible because we absorb it into our work day. The problem is not the minimum wage, the problem is that employers can get away with making you do the cleaning and still expecting you to do all of the rest of your job - so you end up doing some of it for free.

The problem I have with the solution of having a minimum wage which is below the living wage and then making up for it with benefits/raising the tax threshold, is that my tax money ends up subsidising businesses who don't pay their employees a living wage. I'd much rather pay more for whatever product or service I'm purchasing - which lets me choose which businesses to support.

[matgb]

instead of people on minumum wage doing the cleaning you have qualified people on 10, 20, 30 quid an hour doing it. Except it becomes invisible because we absorb it into our work day.

Exactly, yes, but it takes maybe 5-10 minutes per person instead of several hours for one person. It can be argued it's a false economy, but employing a salaried staffer is a sunk cost, they were going to pay me regardless of whether I did 5 hours productive work or 5 hours plus ten minutes cleaning (because they knew that the 7+ hours I was sat at my desk weren't all productive, any descent employer knows that, and I had decent employers).

a minimum wage which is below the living wage and then making up for it with benefits/raising the tax threshold, is that my tax money ends up subsidising businesses who don't pay their employees a living wage

Except they do. Minimum wage today is £5.80, 40 hour week gives £12K. JRT says the minimum income needed for a basic standard of living is £14400 gross. Take off tax and national insurance and you're down to just over £12K as the minimum needed.

I'd much rather pay more for whatever product or service I'm purchasing - which lets me choose which businesses to support.

I can't afford to make that choice, and many others just won't. A "living wage" as an ideal standard that employers are asked to aspire to is fine, but legislating it will force people out of work, make less people able to make the choice.

I don't think not taxing someone on minimum wage is a subsidy, I think that's basic fairness, increasing the minimum wage by as much as they did, but without increasing the threshold nearly as much, was a nice way of increasing tax revenue to the treasury, in a way that substantially increased marginal withdrawal rates for those on lower income claiming means tested benefits.

That's also a massive problem. We effectively have a living wage, right now, as the minimum wage, but it's taxed heavily. Remove that tax burden, and you'd likely need to tweak it a bit, possibly put it up marginally, job done.

Much more elegent, and easy, than substantially increasing the minimum, keepig tax thresholds as now, and increasing employmeny costs to a level that some low/unskilled people will never get a full time job.

[marrog.livejournal.com]

I can see the argument though, that what you're doing is redressing the balance at a governmental level so that businesses don't have to - their highest paid employees are subsidising their lowest paid employees rather than them having to take responsibility for redressing that balance themselves. It's practical, but it does leave a sour taste in the mouth.

I take it then that you're a fan of working tax credits also, incidentally?

[matgb]

I would rather they weren't needed, and the system is horribly bureacratic (we're eligible, but haven't claimed yet, the forms are offputting to me).

And yes, sour taste, but I'm very much in favour of "stuff that works" instead of "stuff that makes me feel good", if doing something that seems nice is actually counterproductive, but doing something that seems nasty actually helps, and the evidence is fairly conclusive, then I'll go with the nasty thing that works.

FWIW, this is a very similar issue to the National Insurance "jobs tax" thing in the run up to the election, the Tories overstated it, but I did some digging then (National Insurance: are the Tories this useless?) and it looked like just the planned 1% rise in employers NICS would cost about 100,000 jobs by the end of the Parliament. Not a huge number, but it was a tiny amount of money, the proposed "living wage" isn't a tiny number, and I really don't like the idea of 500K+ people unemployed in order to make me feel nicer, even if the idea of it does make me feel nicer.

[marrog.livejournal.com]

But raising the minimum wage a lot and still taxing the resulting income will increase unemployment, and it's very hard to predict whether that'll be a small increase or a bigger one, it'll also slow employment growth.

>>Say more on why?

I'm interested in this too. I can see quite clearly that raising the minimum wage without raising the income tax threshold accordingly is a sneaky bastard thing to do, but I'm not totally clear on how it would actually cause unemployment.

EDIT: Woops, I see you're already all over it.

[ninebelow.livejournal.com]

Because it seems that the majority of the "cuts" are cuts to proposed spending increases, and not cuts to current spending. Anyone got anything further on that?

If you look at Graph 5 here it shows year on year decreases in public spending until 2016-17. These are cuts to current spending and very big ones; the organisation I work for is currently making cuts of 25% and that is not uncommon across the public sector. What is the source for Clegg's quote?

[ninebelow.livejournal.com]

If, as is suggested above, Clegg is not using inflation adjusted figures then that really is incredibly shoddy.

[andrewducker]

http://www.bbc.co.uk/news/uk-wales-politics-11443431

I'm waiting for the final programme of cuts to be announced, and the figures that go with them, before making any judgement. It will undoubtedly be worse than I hope though.