Picking Losers

The BBC is in many ways excellent (when you compare the quality of TV and radio in other countries, for example), but is nevertheless a persistent irritant with occasional outbreaks of festering sores. The priority given to football over everything else on Radio FiveLive is a long-term annoyance, as is the English bias of a supposedly British broadcaster (e.g. regularly giving preference to second-grade domestic English football games over Scottish, Welsh or Irish internationals of various sports). Their blatant and boring pursuit of a vendetta on Iraq is another persistent scab, particularly when their talking-up of opposition puts the lives of our troops in greater danger than need be, and drives the country towards more rather than less violence. Their liberal (in the American sense) bias, exposed by Robin Aitken and acknowledged by more independent-minded BBC journalists such as Jeff Randall, Andrew Marr and Jeremy Paxman, is perhaps the most egregious example of the problem that Hayek identified in The Intellectuals and Socialism.

My answer is that BBC1, Radios 1, 2, 3 and 5 and the various digital services should be privatised, leaving Radio 4, BBC2 and the World Service to produce high-quality programming that would not be provided by the market. All the talk of providing what the viewers want and giving them value for their licence-fee is hogwash. The market should provide what people want. If the government is going to tax us to provide something, it should only be for things we need but which will not be provided for by the market. It is quite clear from the various competing television and radio channels that the market can and does provide what BBC1, and Radios 1-3 & 5 offer - often better than they do. The BBC has to decide whether it is a commercial organisation pursuing ratings, in which case it should not be tax-funded, or a public service, in which case it should not pander to the lowest common denominator in the search for ratings. At the moment, they want to have their cake and eat it.

I admit this plan would not remove the bias, but it would dramatically reduce the amount we have to pay to support it. It would retain some of the pockets of individualism, such as can be found in the Newsnight team, to balance a reduced liberal majority. And it would expose most of those who are happy spoon-feeding the public with their sloppy metropolitan chatter to the reality of having to provide the public with what they actually want, rather than what the presenters want to give them.

The latest example of their unconscious bias was yesterday's reporting of the Budget debate on Radio FiveLive. Having suffered a recurrence of my chronic irritation, I was looking for fellow sufferers with whom to share sympathy, and came across a couple of excellent blogs that I have added to our blogroll. Biased BBC is the definitive site for recording examples of dripping-wet, state-funded reporting. Some Stuff is a newish blog with a wider interest than just the BBC or the media, but Ralph clearly shares my irritation with their partial reporting. I recommend them both to you.

Forget about what the BBC, the Government or the Tories say about the impact of the changes to personal taxation and benefits announced by Gordon Brown today. Here is what it really means for people of working age (comparing the current system with the system as it will be in 2009, according to Gordon's announcements, taking 2009 because many of the announcements are delayed or staged).

• Those earning between around £5,000 and £18,000 p.a. get to keep less of their wages than before.
• Those earning over £18,000 keep more of their wages, with the greatest benefit (proportionately) going to those being paid in the £40,000s.
• Couples with one principal wage-earner continue to pay more tax than two-income couples on the same combined household income, thanks to his rejection of any form of joint or transferrable allowance.
• The negative impact on low-earners is to be compensated mostly through increases in the threshold for withdrawal of Working Tax Credits (WTC) and, for those with children, increasing the level of Child Benefit for the first child and of the child element of the Child Tax Credit. Those with one or two children will be best-insulated by these measures from the effects of the changes to income tax. Those on low incomes with many or no children will be the worst hit.
• To avoid these increases dragging too many more people into the means-tested benefits bureaucracy, the withdrawal rate for WTC has been increased to 39%. Because losing benefits has the same impact as paying more tax on a household's net income, this has further increased the effective marginal rates of taxation on poorer households. In some cases, marginal rates of taxation are now approaching 100% - in other words, you barely keep a few pennies of every extra pound that you earn. Marginal rates of taxation determine the incentive for people to work harder, longer or smarter to earn more money, so increases in marginal rates act as a disincentive to work. Gordon announced this change as "further strengthening the incentives to work for families with children and low-income working households". The precise opposite is the case. The disingenuity of this claim marks Gordon as either a knave or a fool.

The BBC's reporting of the Budget debate on Radio Five Live has been fantastically lop-sided. On the most basic measure - air time - they broadcast the whole of Gordon Brown's speech but cut off both David Cameron and Ming Campbell mid-flow.

Instead of hearing their words, we were given John Pienaar's conclusions to save us the bother of making up our own minds. DC had been "outmaneouvred", he was "like a man who had had his legs cut off from under him", he was "floundering" and "drowning", unable to respond to the "magic" of Brown's cut in the basic rate of income tax to 20%.

To be fair, Cameron had missed the main point - that the cut to 20% had been largely paid for by the replacement of the starting rate (10%) with the basic rate, which Brown disingenuously announced as the abolition of the starting rate - sounding as though tax on income within the 10% band would now be zero, rather than the 20% that is actually intended. This is dangerously close to deceiving the house, but it did seem to have done the job in deceiving DC.

Ming Campbell (whose Treasury team, headed by Vince Cable, have a real understanding of economics, unlike the Tories) was not taken in, and, in his earnestly dull but intelligent way, nailed the point - that the changes to income-tax rates benefited middle-income earners but penalised low-income earners. We were not allowed to hear much more of his speech (in many ways a blessing, but hardly balanced) before the BBC cut back in and Pienaar told us that Campbell must have "mis-read" the announcement, that the effect was not to penalise the poor. This is what we need from the BBC - insightful analysis of the impacts of the budget. So why has Campbell got that wrong, then, John? Because Gordon "would not do that", apparently. What insight!

No wonder the big beast of the political jungle has survived so long, when the elephant guns of the media have been aimed largely at his predators. How strong is the beast really, if he needs that sort of protection?

Only a couple more hours and Gordon will giving his final Budget to Parliament. There will be much patting on the back by his loyal followers, though probably mostly by himself. He will claim the longest period of economic growth in the history of mankind and beyond and take all the credit for it (ignoring the rise of China and the stable global economy and the fact that inflation is rising at a concerning rate in the UK).

Gordon Brown will announce today that the government is to spend an extra £1bn to lift 200,000 children out of poverty as he uses his final budget to help put Labour back on track to meet its target for alleviating deprivation among the young.
http://business.guardian.co.uk/budget2007/story/0,,2038983,00.html

Have Tony Blair and Gordon Brown been reading Picking Losers? Probably not. But there are hints that someone is mentioning the P word over at the Department of Health. But don't get too excited, all is not what it seems.

Has there been a government better at "charging for old rope" than this current one. As I understand, our taxes go, in large parts, to the funding of all things NHS - including their car parks. However, our money that went to towards building these car parks and maintaining them was only taken from us on the premise that we wouldn't actually use them, it transpires. If we actually want to use these car parks, paid for by us, then the NHS is going to make us pay more. Lots more. What better why to make a quick buck than to charge us twice for the same thing?

Gordon Brown has exhibited a "Stalinist ruthlessness" in government, belittling his cabinet colleagues whom the Treasury treats with "more or less complete contempt", according to the man who was Britain's top civil servant until two years ago.

http://www.ft.com/cms/s/db4b60b8-d65c-11db-99b7-000b5df10621.html

 The prospect that the National Health Service might provide only core services, with patients forced to pay for any other treatment or meet it from private insurance, was raised by the government yesterday.

So what can we expect from Wednesday's budget, apart from Gordon Brown boring us all to tears? Well, the buzz word at the moment is green and it's an expensive word at that. It seems the biggest losers on Wednesday will be the evil folk that are deliberately going around doing their best to destroy planet earth - yes, I'm talking about you Mr Car Driver. Mr Brown does not care that you have not got a viable alternative to get to work unless you live in London - in fact the less viable the better. For if these green taxes actually worked the Treasury would be out of pocket, the car industry would collapse and cost of running over crowded trains would bankrupt the country.

The Independent led yesterday with a report on Greenpeace's attempts to prevent BA opening a service from Gatwick to Newquay. Their strap-line in the print version read:

"The battle of Newquay. British Airways faces a showdown with the green lobby over a new daily service from London to Cornwall. The fight may determine whether the booming aviation industry can be brought back to earth."

It is clear where The Independent's sympathies lie. They include an op-ed piece from Emily Armistead of Greenpeace, entitled "Fastest way to damage the earth". Yup, those pesky flights to Newquay will be the ruin of us all.

Just one small problem. Can you see what it is?

Or your children will suffer. Headline in The Times today: University squeeze on children of graduates. Is there any need to say anything more? Can't get a much more obvious example of government picking losers. It's us. All of us (rich and poor alike).

Let's encourage the "right" people to go to university by telling them that they will then become the "wrong" people. Their children will have less chance of going to university than the children of people who were excluded in this generation. If you want the best for your child's education, make sure you marry someone with as little education as possible. Logic problem? Mixed message? Downright stupidity?

Government  

• The chairman of the Commons Treasury select committee has outlined the key themes of Gordon Brown's forthcoming Budget.  John McFall, an ally of the chancellor, said that support for education, families and welfare to work schemes would be central.  
• A timetable for elections to find a new leader when Tony Blair quits is expected to be agreed next week by Labour's National Executive Committee. Mr Blair is expected to announce his retirement as prime minister after the Scottish and Welsh elections on 3 May. There will then be a seven-week contest for the position of Labour leader and deputy leader, the BBC understands.  
•  Nearly £300,000 has been spent in three years on televisions and games consoles for soldiers in Iraq and Afghanistan, the Ministry of Defence has said. MPs were told that, since 2005, the Ministry of Defence had spent nearly £260,000 on TV sets and more than £38,000 on Sony Playstations  

Conservatives  

Don't forget to vote in the "what is Boris anyway?" poll.

Sharp as always, Wat Tyler at Burning Our Money has posted today about the Waste Resources Action Programme or WRAP (how clever - I wonder what came first, the name or the acronym... mmm, I wonder?). Now, as you will have probably guessed already WRAP is a Quango, but what makes them particularly special is they are challenging the British Potato Council for the most pointless use of public money. Indeed, the Quango that gave us National Chip Week is now being challenged by the Quango that gives us its research in to household food waste. Yes it does happen, folks - we throw away 6.7m tonnes of food every year. Incredible. What are we thinking throwing away all that perfectly good food? Well half of it is not perfectly good food, it's waste. Potato peelings, teabags, bones, that sort of thing. Why did they include old bones in this total, the overpaid bunch of clueless goons (see Wat's picture). That 6.7m tonnes statistic is probably the most pointless, meaningless stat of the year so far. And it costs us £80m a year to receive these nuggets of information. Great find Wat - if it wasn't true I'd probably be laughing even more.

So it was finally announced yesterday how much the Olympics is really going to cost us (at least until it is re-calculated in a year or so when they realise they still haven't got it right). After conning the British public and the rest of the world by promising to deliver the Olympics on a budget of £3bn, we're now told its going to be £9bn. I could go on about whether we should have bid in the first place but I think the real issue here is how it has risen so much. Is this another case of the government financial advisers' complete incompetence when it comes to valuing the cost of a project or was it a calculated piece of misinformation to try and get the public onside when the bidding process was in full swing? I fear it is a little of both.

Government

• The government was accused yesterday of losing control of the finances of the London Olympics after it revealed the total budget for the 2012 games has nearly trebled to £9.3bn. There was fury from National Lottery distributors, who will have to contribute £675m - on top of their initial £1.5bn commitment - towards the cost of the Olympics, and a warning that an enduring sporting legacy from the games will be endangered by a £223m reduction in funding for grassroots sport. http://www.guardian.co.uk/olympics2012/story/0,,2035503,00.html
• Private midwives may be forced out of business next year when changes to the medical insurance rules come into effect.
  

In a move that is almost beyond parody, Sir Hayden Phillips - the man who thinks our political parties would be cheap at £25,000,000 a year - thinks £13.50 is good value to tell us what good value the parties are. That's what a copy of his report costs. 45p a page. Of drivel. That's a report we've already paid for, by the way.

To be fair, though, it's been hard work for him. 12 months to produce a 30-page report was a tough ask. Nor can it have been easy to arrive at the conclusion that the big parties should get lots of money, but had better sit down and sort out the details between themselves.

At least we can be sure that the process will have our best interests at heart. After all, the parties are the best people to decide how much of our money we ought to give them. Who else would appreciate the great contribution they make to our democratic process? And lest we suspect them of self-interest, Sir Hayden has guaranteed their honesty by recommending that their private discussions be subject to "independent oversight". Not that this be debated openly, mind you, because too much openness is a dangerous thing.

Perhaps I should try Sir Hayden's magical technique for discovering best value in my business life. When it comes to negotiating new prices with our suppliers, I shall invite them to get together to work out what is the right amount for us to pay them. Our employees will be instructed to put their heads together to work out how much they should get in this year's pay deal. And I have the advantage that our suppliers and employees know that pushing for too much will lead to unfortunate consequences, like taking less of their product, making some of them unemployed, or simply going out of business. If it works for us consumers of the services of political parties, who could take us for all they like so long as they stick together, it is bound to work for me.

Getting a few hits from Boris Johnson's site after JG posted a comment there. I feel we ought to reciprocate and put Boris in one of our blogrolls. But here's my dilemma: should I put him in with the individualists or with the interventionists? It's not easy to decipher the philosophical basis of Boris's views.

Perhaps we should have a vote on it.

Government