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Douglas Carswell's Blog

01 MAR 2015

Watch the Conservative candidate calling for 12,000 extra houses

The Conservative candidate has made it clear that he is in favour of 12,000 extra houses in our area. 


26 JAN 2015

Greece suggests Mr Cameron cannot get a meaningful renegotiation

How different it all seemed when the Euro was launched a decade and a half ago. It was meant to mean a new era of prosperity. A single currency would, we were told amid much fanfare, strengthen the free market and underpin the liberal order across Europe.

Not much sign of that in Greece right now.

The ultra-leftists, Syriza, have been elected to office on the back of a popular revolt against the Troika. An assortment of odd balls and extremists could now hold the balance of power.

Alex Tsipras, Greece's Prime Minister elect, will now attempt to tread a fine line. On the one hand he is committed to negotiating a new deal for Greece, based on debt reduction. On the other hand, he does not want to be so demanding that he gets Greece thrown out of the Euro.

In other words, Alex Tsipras is in a not altogether dissimilar position from our own Prime Minister, David Cameron.

Like Tsipras, Mr Cameron wants a new deal, but does not want to get thrown out of the club. In fact, he's made it pretty clear he is keen to stay in.

Like Tsipras, the Prime Minister has made a lot of pre-election noise about a new deal.

It will be interesting to see what new deal, if any, Tsipras gets.

Bizarrely, given that Britain is a net contributor to the EU budget and one of the largest economies in the world, Greece stands a better chance of getting the concessions it seeks than David Cameron.

For a start, Tsipras been consistent and clear about what he wants; debt cancellation, continued bailout support and a looser fiscal policy. David Cameron has given all manner of vague and contradictory hints. Indeed, his officials have almost given the impression to their EU counterparts that Mr Cameron is not that serious about his new deal.

One of the curious features of the European Union is the way that it exports public policy failure from one state to another. Countries that manage their finances sensibly get punished. Those that run up reckless debts get rewarded. Those economies that grow get fined by Brussels. Those that flounder receive ever large hand-outs.

The Euro system will be far more willing to make concessions to a Greek Prime Minister wanting the re-write the rules in order to prop up a dirigiste state, thereby deepening its dependence on Brussels, than it would concede anything to a UK Prime Minister seeking less Europe.

If Tspiras does not get more than paper concessions, it further undermines the credibility of those in Downing Street who want the British electorate to think they are serious about change.

Perhaps the key difference between Britain and Greece is that if Greece leaves the Euro, it will be because the Brussels elite call time on membership. If Britain quits, it will be because the people say enough.


21 JAN 2015

The case for wind is running out of puff

A Ten Minute Rule Bill to outlaw public subsidies for wind farms has just been voted through the House of Commons. It squeezed through with 59 MPs in favour, and 57 against, the support of UKIP's two MPs proving decisive.

This wasn't just a victory for UKIP in the Commons. It was a defeat for the subsdised scam otherwise known as the wind energy industry.

Generating electricity from wind is an inherently costly thing to do. Unlike solar energy, which thanks to technology is becoming vastly more efficient, wind is - and will remain – a far more costly way of producing power than the alternatives.

Nor is it reliable. The other day, as Allister Heath points out, as UK electicity demand hit 52.54 gigawatts (GW), wind contributed just 0.573GW. That is to say about 1pc of the total. It was left to good old gas and coal to contribute the lion's share of 71 percent.

If wind is not an effective way to generate electricity, why have so many wind turbines been built? Because of the subsidy. Billions of pounds have been deliberately diverted away from more efficient ways of generating energy into wind farms.

Why did politicians and experts decide to plough so much into such a duff way of generating power? Partly it is because they failed to foresee technological change. Policy makers plumped for wind because they assumed that oil and gas would become more expensive. They failed to see the shale gas revolution coming.

At the same time, UK policy makers subscribed to the whole renewable energy shtick. Wind, they persuaded each other, had to be the answer in order for us to meet our renewable energy targets.

This has been a disastrous way of deciding energy policy. We need to scrap the renewable targets. Allow capital and technology to find innovative ways to generate energy. And scrap those subsidies.

Today was a step towards that.


15 JAN 2015

Can Britain be more prosperous than America? Not if we are run by cartels

"There is no reason why Britain cannot be the richest major economy in the world" George Osborne has declared.

In a sense, the Chancellor is absolutely right. Britain ought to be booming.

We are witnessing the emergence of a global middle class around the globe. Each year, tens of millions of people join a sprawling network of innovation and exchange. Britain, with our global ties and outlook, ought to be thriving as never before.

Yet for all that, there is one central, thudding reason why Britain is definitely not the richest major economy in the world: government policy.

With an election looming, Mr Osborne wants to "talk up" the economic mood, with heady suggestions that Britain might become richer than the United States within the next fifteen years. For that to happen, we will need to see some fairly radical changes, and fast.

Over the past decade, governments of all three parties have deliberately increased the cost of energy. Why? In pursuit of various "renewable targets". Yet burning fossil fuel remains the cheapest way of generating energy. Shale gas technology means that the costs are likely to be even lower.

While Mr Osborne's government has been pricing British businesses out of world markets by pushing up energy costs, the United States – awash with cheap shale gas – has been re-industrialising (In 2012, gas prices were 55 percent lower in the United States than in Britain).

If the Chancellor wants us to be richer than America, we will need to be as productive as the Americans. Yet on Mr Osborne's watch, the opposite has happened. In the United States productivity has risen. In the UK, it has deteriorated. Why? Perhaps it has something to do with a tax credit system that subsidises low wages at public expense and provides disincentives against productivity gains.

Since the advent of the European Single Market in 1992, Europe's economic growth has been slow in both relative and absolute terms. North America's NAFTA has created many more jobs, attracted more investment, and raised the living standards of hundreds of millions of people ever higher.

Why the difference? Because Europe's Single Market does not mean more free trade. On the contrary, it means that an entrepreneur can only produce and sell something if they do so in compliance with what the regulator permit. Why else do you imagine that a supposedly free market block requires an endless blizzard of regulation and red tape.

Perhaps the real reason why Britain is unlikely to be as prosperous as we could be is down to politics. Again and again, our sclerotic political system fails to offer us a broad range of public policy answers. Instead we get the same cliché-addled politicians and their Westminster group-think.

Imagine how we might flourish if we changed that?


13 JAN 2015

George Osborne's budget irresponsibility

Today the House of Commons debates the Charter of Budget Responsibility. Had MPs been doing their job properly, perhaps they might like to impose a bit of real budget responsibility on ministers instead of merely taking about it.

Having meekly given the power to control what government spends to Treasury officials, MPs will this afternoon pay lip service to balanced budgets without lifting a finger to make it happen. Successive Parliaments have approved budgets that have been anything but responsible.

First under Gordon Brown, then George Osborne, the ratio of public debt to GDP has increased from 40 percent to 90 percent. Under the past four years alone, debt has almost doubled to £1.4 trillion.

Ironically, it is the Office of Budget Responsibility that helped make this fiscal car crash happen.

Initially, the OBR made a series of overly optimistic growth forecasts. Once the economy had bounced back to 3 percent growth, they seemed to suggest, lots of extra tax revenue would come flooding in.

"No need to cut spending significantly, Chancellor" they seemed to suggest. "More growth means lots of extra tax, which will balance the books".

Except of course the Chancellor's conjuring trick has been a bit of flop. There has been less growth and lower tax revenues. With less budget restraint than was wise, the deficit remains stubbornly high, and debt has doubled. The inappropriately named Office of Budget Folly helped make this happen.

Instead of simply talking about budget responsibility, MPs might actually do it. How? Cutting overseas aid by £9 billion would eliminate the deficit by a tenth. Ending the renewable energy scam would cut the total extra energy subsidies by another £9.8 billion by 2020.

Instead, I suspect MPs will prefer to preen, posture and talk.  As MPs talk in the three hour debate, public debt will increase by another £23 million.


08 DEC 2014

We need an honest energy market

UKIP will be triggering their first ever House of Commons debate this week.

Our Westminster Hall debate this Wednesday won't be on Europe or immigration. Instead we will be discussing something of immediate concern to thousands of people up and down the country: energy bills.

With the colder weather, people have had to turn up the heating, and many are discovering quite how costly energy bills have become. According to consumer group Which? household energy bills rose by over half between 2003 and 2012, from £790 to £1,200 a year.

Rising energy bills, you might think, are just a fact of life. More people plus more industry – of course the costs of energy go up.

Except there's nothing inevitable about higher prices, and certainly nothing inevitable about higher energy prices.

If you stop and think about it, the relative cost of many things keeps falling. Air travel is cheaper today than it was a couple of decades ago. In relative terms, mobile phones, clothing, cars and computers all cost less now than they did in 2003. Where ever capital and innovation are able to meet freely, costs for the consumer tend to fall. So why not with energy?

Actually that is precisely what has happened over in North America. The solar and shale gas revolutions across the Atlantic are pushing down the price of energy, and triggering an industrial revival. While households in Essex, England paid over 50 per cent more to heat and light their home this year compared to 2003, households in Essex, Massachusetts pay relatively less.

It is not that the laws of physics are any different over here. The problem are the rules that govern the energy market.

Instead of an honest energy market, where producers compete to supply customers, UK energy producers have to generate energy to comply with quotas. Government officials have decided the best way to generate energy, and in order
to meet renewable targets they have insisted that companies generate energy using supposedly sustainable sources. It is far from clear how sustainable wind turbines would be without the massive cross subsidies.

The established parties in Westminster both agree on the need to impose renewable targets. They both colluded to pass the laws that are now pricing people out of being able to heat their own homes. It is Ukip that is challenging the cosy little consensus on energy in Westminster.


02 DEC 2014

Gordon Brown's eighteenth Autumn Statement?

Four years ago, David Cameron and Nick Clegg "came together in the national interest". Or so they told us at the time. The dire state of the public finances demanded it, apparently.

How have they been getting on with sorting it all out?

Tomorrow will be George Osborne's fourth Autumn Statement - and by any objective yardstick he has failed get a grip on our public finances.

Debt, the House of Commons library's briefing paper baldly puts it, "continues to rise". Far from paying down debt, this administration has been accumulating ever more of it.

This year, the government will spent £100 Billion more than it takes in taxes. Borrowing in the first six months of 2014 was 6 percent higher than over the same period the year before.

Behind anything else the chancellor might choose to tell us tomorrow lies one undeniable fact; Public sector net debt will increase yet again to almost 80 percent of GDP.

Things are not getting better. That magic money merry-go-round of low interest rates and Quantitative Easing just makes it feel that way.

Tomorrow's Autumn Statement will be full of Brownian-style bluster. Statistics intended to mask the true state of our public finances will be cockily bandied about. Clever wheezes and gimmicks will be scattered in the direction of the press gallery.

But remember, for most of the time he was chancellor, Gordon Brown was seen by many of the pundits as a genius. It is only with the benefit of hindsight that we can see how recklessly he ran this country's finances.

So, too, with George. Osborne's continuity Brown approach to public finances means that the Coalition will incur more debt in five years that Gordon managed in thirteen.

Tomorrow will be George Osborne's fourth Autumn Statement. In many ways, it will be Gordon Brown's eighteenth.


24 NOV 2014

Britain is run in the interests of vested interests

UKIP is to politics what Aldi and Lidl are to supermarkets.

For years, British shoppers have been paying over the odds for everyday groceries. And because most of the retailers were at it, no one seemed to see it.

Then along came Aldi and Lidl. Two decades after they started to show customers what good value looks like, they have reached a tipping point. The established players aren't just losing market share. If they don't adapt fast, there's even talk they may go under.

Cartel politics has not just left us out of pocket. It's a lousy way to run a country.

For decades, voters have never been offered the full spectrum of public policy options. It's a fix. Faux debates rage between the frontbenches, but on the fundamentals, ministers meekly defer to mandarins. Government-by-Sir-Humphrey has led us inexorably towards national decline.

Public debt has doubled in five years. The banks are unreformed. Immigration remains uncontrolled. Opportunities for new trade agreements with Asia and Africa have been squandered. Does our country still have a foreign policy?

So much of Britain is now run in the interests of vested interests. From energy and banking, to politics and PFI contractors, the rules seem to be written by those on the inside, with no reference to the country outside.

A system of crony corporatism has incrementally replaced free market capitalism - which explains why the economy might be growing, but not the living standards of ordinary folk.

Neither of the two established parties can even see this because they are part of the problem. Career politicians in SW1 are another to the vested interests running our country in their interests.

The Conservative party has been run by an out of touch clique for the past decade. Labour has been run that way since Tony Blair's lot took over. One gives us Matthew Parris, the other produces Emily Thornberry.

UKIP stands for fundamental, far reaching change in the way our country is run. We need to bust open the cartels in the energy markets and banking, public procurement and PFI – and yes, politics, too.


18 NOV 2014

Why the Coalition can't fix the public finances

The Coalition came together to fix the deficit. After four years, the deficit is still running at over £100 Billion a year.

Rather than narrowing, the gap between what the government spends and what it takes in tax actually grew in the first half of this year.

Why? Because like every other post-war administration, the Coalition counted on being able to balance the books not so much by cutting back on state spending, but through higher tax revenues.

Fixing public finances on the back of more tax take only works if you are able to take more tax. In the first half of 2014, tax revenue grew less than expected, leaving government borrowing £5 Billion higher than over the same period the previous year.

Lower than expected tax revenue is because of higher tax thresholds, according to some. Although there are more workers, many of the new jobs pay less, suggest others. I don't disagree with any if that.

But might we be seeing something else happening, too? Could the fact that tax revenues are not increasing the way the Treasury assumed herald a more profound change in the nature of the tax base itself?

If a government wants to raise resources, it needs to tax wealth creation. In the last century, wealth in Western economies – to put it crudely – came from factories. So the state tended to tax factories and the vast payrolls of employees who worked in
them.

In the twentieth century, wealth is increasingly a question of intellectual property. And how do you tax that?

A factory in the mid twentieth century was relative immobile.  It was pretty difficult – but not impossible - to relocate a manufacturing operation from one high tax jurisdiction to another low tax jurisdiction. Intellectual property tends to be as mobile as an email.

This year in Britain, almost 30 percent of total income tax revenue will be paid by 1 percent of the population. And rather like IP, that 1 percent tends to be pretty mobile, too.

Could it be that we are starting to see a change in the nature of the tax base? Instead of thinking of the tax base as something solid and dependable, might it be something that can flow across the boundaries of tax jurisdictions?

Governments will, in the short term, respond to this by trying yet more transnational tax arrangements to try to stop the tax base moving. I suspect that in the longer term, we might need to respond to this by changing the way that we tax. Instead of taxing production, we may have to shift the burden of taxation towards consumption.

If we are to balance the books in future, governments might need to rely less on raising the tax take, and instead try to live within their means.


13 NOV 2014

Britain needs a new business model

How is Britain to pay its way in the world? Carry on as we are, and we won't.

Its thirty years since the UK government last ran a balanced budget. Since then our governments have piled borrowing upon borrowing. Public debt has doubled over the past four years, with the Coalition incurring a further £100 Billion this year alone.

Britain today is better at buying things that other countries produce than at producing things others want to buy. Our balance of payments data – the difference between what we import and export – looks dire. Selling off London real estate to balance the books won't work forever.

We need to change Britain's business model.

Hosing cheap credit at the economy might create growth. But it is growth based on over consumption and debt. It means we build lots of shopping malls but not enough factories.

UK plc's business model today depends heavily on importing cheap labour. So much so, in fact, that per capita GDP has been falling.

This cheap credit / cheap labour model is subsidised by the state. Government not only conjures up cheap credit for the banks, they use the tax credit system to publicly subsidise low wages. The government is borrowing billions in order to help big corporate interests keep wages down.

This is not free market capitalism, but crony corporatism.

If we are to maintain our living standards in the years ahead, things need to change. The massive pull of capital and productive output to Asia and elsewhere could be an opportunity for us. It means tens of millions of middle class consumers willing to buy things from us.

Instead of a crony corporatist energy market, we need to allow capital and innovation to cut the cost of energy, as has happened in North America. We need real bank reform and a government willing to take on the vested corporatist interests holding Britain back. Rather than remain inside the world's only shrinking trade block, we need free trade deals with the world.

Our future prosperity depends on it.


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After Osbrown: mending monetary policy

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