Self-defeating ritual of ever-higher beer duty must end

Nik Darlington 11.11am

Beer duty has bilged by more than 40 per cent in the past four years, which means when you buy that satisfying pint of ale in your local pub, around 190ml belongs to the taxman.

Meanwhile, more than 5,800 pubs have shut up shop since 2008 at a rate of eighteen per week. Quite frankly, it’s miserable, the sort of news to drive even the most abstemious to drink.

MPs, pub and brewing industry groups and campaigners have made a number of attempts in the past to quash the beer duty escalator, including a successful debate in the House of Commons last November, but to no avail. The Chancellor plans to go ahead with a further increase in next month’s Budget.

Another increase in beer duty would compound the folly of minimum unit pricing and put ever-more pricing pressure on pubs. There’s a semi-plausible argument from some publicans that MUP could chip away at some of the supermarkets’ competitiveness and send punters back through their doors. Yet any gains from that are surely offset by the pain in everyone’s pockets of a dearer pint.

There is a certain silver lining. Politicians have always tinkered with booze taxes, and we can be pleased that Mr Osborne doesn’t wish to follow the lead of his Liberal predecessor Sir William Vernon Harcourt, who in 1895 tried to balance the budget on the back of beer duty alone.

In that November debate, economic secretary to the Treasury, Sajid Javid, hinted that beer duty was simply too lucrative to freeze or reduce, garnering £35 million this year and £70 million the next. Furthermore, it’s Labour’s tax. True, but it would not be the first time this Government had reversed a fiscal act of the previous government.

One gets the feeling that there’s a moralistic streak at play, similar to that driving the MUP policy. I have no truck with being slightly moralistic about alcohol, which is as dangerous a substance as any if in the wrong hands, in the wrong volumes, at the wrong time.

Yet that is why further inflating the price of proper beer in pubs is so self-defeating. Surely it is reasonable to encourage the survival of pubs as focal points of the community, and relatively safe, secure and well-monitored drinking environments. You don’t have a publican withdrawing that second bottle of Buckfast as you slouch on your sofa on Wednesday morning.

So to finish up, register your support with the Mash Beer Tax launched today and request the Chancellor calls time on ever-higher beer prices in pubs.

Follow Nik on Twitter @NikDarlington

4G spectrum failure hardly surprising, but what is Ofcom playing at?

Nik Darlington 9.58am

When George Osborne said the Treasury would raise several billion pounds from the upcoming 4G auction, I along with many others feared (or even expected) that wouldn’t be the case. Some technical and financial reasons for why, but largely an informed hunch.

So it has come to pass. ‘Only’ £2.34 billion has been raised by Ofcom, despite the OBR’s forecast of £3.5 billion.

A couple of observations about the reporting of all this: first, £2.34 billion is still a useful fillip not to be sniffed at; and second, this mini embarrassment has given journalists a perfect excuse to ignore the good employment figures also released today.

Yet a mini embarrassment it is. Perhaps Mr Osborne should not have brandished an outcome ahead of time, but auctioneers tend to set target prices with little impact on bidding behaviour other than to focus it around said target. It isn’t a patch on Gordon Brown selling our gold reserves having already announced to the world his intention to do so.

On the subject of auctioneers, however, something odd happened on BBC Breakfast earlier today. Ed Richards, Ofcom’s chief executive and unsuccessful candidate for BBC director-general (despite being the bookies’ favourite), was on talking about the auction. Mr Richards stated that Ofcom’s priority - as auctioneers - was straightforwardly to hold a fair and proper auction and “ensure that a valuable economic resource was brought into productive commercial use”. Ofcom’s priority - as auctioneers - was certainly not to maximise revenue.

Whether or not this was on instruction from the Government doesn’t matter. It is still odd. Tell auctioneers at Christie’s that the whole point is just to shift stuff and not to maximise revenues, you’ll be laughed out of the room. These are, as Mr Richards also said, “very different times” compared to the 3G spectrum auction, which raised £22 billion in 2000. But it doesn’t mean you shouldn’t at least have a go at it.

Follow Nik on Twitter @NikDarlington

Gay marriage vote is very simple: forget the politics, vote for what you believe in

Nik Darlington 8.42am

There is a lot for Tories - or even just any sensible observer of politics - to be unhappy about over the Government’s same-sex marriage reforms.

No mention in either Coalition parties’ 2010 manifestos. No mention in the Coalition Agreement. Neither perceived nor existential agitation for it from homosexual people or otherwise. Manifesto commitments pertaining to marriage - such as recognising marriage in the tax system - that probably ought to take priority.

So any sensible observer of politics (and there are many insensible observers giving voice) can understand why grassroots Tories are protesting and writing literally thousands of emails and letters to MPs, why there is talk of deselections, and why scores of Tory MPs intend to vote against the Bill today.

It is, therefore, an upsetting and destabilising time. One old-timer I consider to be largely sensible about these things phoned me up yesterday to bemoan politicians spending so much time fussing over it when there are more important matters at stake, whatever the merits of the policy itself (they were in favour of it). This is partially unfair, given that the Government is so sweatily ram-rodding the issue through Parliament (just one bone of contention). Though sensible observers could be forgiven for thinking this is all MPs have been doing lately, given the corybantic manner in which the media are covering it.

Yet these difficulties notwithstanding, there remains a simple, unalterable fact that for me - and I’m sure for many others - makes voting down this proposal impossible. David Cameron maybe should not have chosen this moment to pose the question. Though now the question is posed, I could not sensibly oppose it. We cannot ignore it, or wish it would go away.

It is said that some MPs couldn’t really care much for the policy, but believe the Prime Minister to have been a clod for pushing it and shall vote against (or abstain) to spite him. There are many who genuinely and deeply believe the policy to be inherently wrong - whether out of religious belief or traditional social mores. I am comfortable with it according to my own Christian faith; yet in the same vein, I must respect others’ interpretation. It is a tricky one this, to put it mildly.

The Conservative party cannot gain from this, if ever that was indeed the leadership’s intention. Thus let us forget for now the party political ramifications, even if the media refuse to. 

It is a free vote. MPs should vote according to what they believe, not whether they will gain or lose personally from it, or how it makes their party look, or whether they think they should even be having to cast a vote. Above all, let us not in the heat of the moment, with passions high, make this a more difficult matter than it is.

Follow Nik on Twitter @NikDarlington

Autumn Statement 2012: A lot of Balls and a bleak midwinter?

Nik Darlington 2.57pm

I was on BBC Radio Scotland earlier talking about the Autumn Statement and just before I was due on air with the Daily Record’s political correspondent, the weather report told tales of snow drifts, icy condition and road closures - painting a generally bleak midwinter picture.

In isolation, that report could’ve been about the British economy. Those heady summer days of Olympian achievement and a return to growth seem ever-more distant. This is the backdrop to what the Chancellor had to say to Parliament today, and the inclement economic weather should never be forgotten.

Indeed, Mr Osborne is set to break his own fiscal rules. Yet Gordon Brown also did that, but in the boom years - a symptom of the budgetary misbehaviour that characterised the Treasury under the feckless oversight of Mr Brown and Ed Balls.

The former Prime Minister might have lost a stick insect, but his former lieutenant was not grieving. Cheeks puce and puffed out, he berated, bewailed, gloated and tore into the man who’s office he might have had if only Alistair Darling were a lesser man.

When Ed Balls is good, presentationally at least, he is very, very good. Yet George Osborne is rarely better than when sparring with his opposite number (one gets the impression they enjoy it). I’m as unconvinced about the ‘blame Labour for all the economy’s ills’ line as I was at the time of the 2011 Budget, however Mr Osborne continues to play the card strongly, persistently and - judging by the looks on the faces of Eds Miliband & Balls - effectively. How well it plays with the public is another matter.

Former Tory whip Michael Fabricant relayed to the Chancellor the instantaneous thumbs-up from the bond markets, stating “it is the markets that matter”. Apt, to the point and certainly good news - though what voters think cannot be taken lightly either. I know what someone as acutely political as Mr Osborne will be thinking about first thing he wakes up in the morning.

Conservative MPs will be pleased with the scrapping once again of a 3p rise in fuel duty. Harlow’s MP Rob Halfon has led backbenchers on a spirited and tireless campaign against the duty, though one has to question how much gas is left in that tank. Can fuel duty rises be fought forever?

The lower threshold for income tax continues its rise towards £10,000, as expected. The personal allowance shall be £9,440 come next April.

Also to be welcomed is the further cut in corporation tax to 21 per cent. Let us not forget that it was as high as 28 per cent when the Coalition took office. Businesses can invest a greater proportion of their profits into the likes of expansion and employment. This is very good news.

The hit on working-age benefits will not play well, of course. Shrieks of unfairness can already be heard around the tenured ranks of social policy think tanks, the opposition and the like. And indeed it doesn’t look good. However, there is also the moral argument that at a time when wages are struggling to keep up with inflation, if rising at all, should welfare handouts continue to outpace? It’s a tough call, but I think it is the right one. It shall save nearly £4 billion. We can slice and dice this, that and t’other bits of public expenditure but until welfare payments are properly addressed, that ruddy old deficit shan’t budge much.

Those are my two-pennies’ worth. Plenty of ink shall be spilt and trees felled elsewhere in pursuit of explaining today’s Autumn Statement. I shall just finish with a brief thought on shale gas. I’ve had my concerns in the past about fracking for shale gas. I’m still not convinced of the safety record but I’m open to being so; and if it is the energy panacea some claim it to be, then by all means it should be pursued. Though not at any environmental cost.

Follow Nik on Twitter @NikDarlington

Hezza’s magnificent mixed bag and other riveting news

Nik Darlington 10.03am

It is “thought-provoking” and “bursting with ideas”, even “good ideas”, so say Downing Street and the Treasury. There shall be a response in the Autumn Statement, so we’re told. Of course there will, Georgie; and I think last night’s EU budget rebellion was a fine old ruse too.

Lord Heseltine’s independent growth and competitiveness review has garnered a mixed bag of reactions among Westminster’s chattering class. Sky News calls it a “radical plan for growth”. The FT calls it a “radical overhaul”. The Independent describes at as a “highly critical report” that will “just provide succour to the Government’s critics”. The Guardian, always able to locate the grey lining, says it has the look of “a pamphlet produced by an enthusiastic amateur” and full of “reheats of discarded Labour policies”. It is, so one of their journalists writes, “destined for the long grass”.

Granted, the cartoon front-cover does give it the air of something released by one of those kill-joy, bumbling, tenured right-wing think tanks. Though behind the cover there are rich seams of thought and policy. The Times (£) lauds Lord Heseltine’s “ambition and action”, his “elixir of urgency”, particularly on aviation capacity, which does indeed need to be resolved more quickly, albeit not at Heathrow in my view; that newspaper also calls the review “an important step in flushing out a broad narrative for Britain’s future”.

Even ConservativeHome, setting aside their own ideological scruples, found a few bits of the review they liked.

Whatever you deem Lord Heseltine’s review to be (and many cuds have been chewed in the past 24 hours), consider it mainly as this: a classic ruse to create a space within which Downing Street and the Treasury can operate. By daring Tarzan to reach for the stars, George Osborne may hit the moon. This much is obvious.

Elsewhere, it has been a busy couple of days for politicians from this stable. The Sun reports Alistair Burt, foreign office minister, warning of the “real threat” of a nuclear dirty bomb being deployed against Britain. This at a time when concerns are resurfacing about Iran.

The abortion row shows no sign of abating as new health minister Anna Soubry signals no intention of changing laws or guidelines on abortion counselling. The Daily Mail is not amused, nor, for her two pennies worth’, is Nadine Dorries.

On Tuesday, new energy minister John Hayes unilaterally opposed the Government’s wind farms policy. The Telegraph’s Peter Oborne writes today that he has “never come across anything quite like it in 20 years reporting politics”. Embarrassing, amateur, or just plain odd: call it what you will, Mr Hayes’ hysterics may have pleased some people, but it sends out a stupidly senseless hodge-podge of mixed messages to investors. This is the scenario spelled out by Mr Hayes’ predecessor, Charles Hendry, as reported today by the Times (£). A group of twenty Tory MPs has quite rightly written to the Prime Minister to complain.

And to finish, a little note of welcome and good luck to new Tory group, Blue Collar Conservatism.

Chaired by the MP for Carlisle, John Stevenson, and led by a broad-based advisory group consisting of Esther McVey (Wirral West), David Nuttall (Bury North), Martin Vickers (Cleethorpes), Philip Davies (Shipley) and Matthew Offord (Hendon), Blue Collar Conservatism aims to foster debate and generate ideas to ensure that blue collar voters remain at the heart of the Conservative party’s agenda.

The new group draws on the support of sixty-three Tory MPs, including the Chief Whip, Sir George Young; the new secretary of the 1922 Committee, Robert Buckland; and others including Damien Green, Laura Sandys and Robin Walker.

If the Conservative party is and always has been a coalition of parties itself, then Blue Collar Conservatism is an admirable cross-party initiative and I wish it well.

Follow Nik on Twitter @NikDarlington

George Osborne’s credit is running out

David Cowan 2.00pm

The Osborne brand has been heavily devalued since George Osborne’s politically disastrous budget. It initiated the ‘omnishambles’ of the past few months which was then followed by a ridiculously long set of U-turns over taxes on pasties, caravans, charities, heritage, and petrol. After weeks of government ministers loyally defending the budget these policies were swiftly and unceremoniously ditched with little or no notice. Often these announcements came within days of each other with the consequence that loyal ministers and MPs had been made to look incredibly foolish.

Just think of Chloe Smith on Newsnight after George Osborne announced that the autumn increase in fuel duty would not go ahead. Even the Secretary of State for Transport, Justine Greening – a loyal Osbornite by all accounts – was kept in the dark about the change of policy. The U-turn over fuel duty was perhaps the most misjudged as it still managed to backfire on George Osborne as that very same morning Ed Balls had called for such a change of direction in The Sun. As a result it looked more like a victory for Ed Balls and another wobble from George Osborne. Many in the Conservative party now see him as “too damaged” to be a credible successor to David Cameron.

Last week Osborne made his bid to regain some of his credibility as de facto Chief Strategist of the Conservative party with a provocative interview in The Spectator where he claimed that Labour aides were “clearly involved” in the Libor scandal, but without mentioning names. When it resulted in a clash in the House of Commons debate that very same day Ed Balls exclaimed “He has impugned my integrity in The Spectator!” It was a very partisan performance delivered in order to boost Conservative MPs’ confidence in him. George Osborne may appear to have done this by securing a parliamentary inquiry into the banking industry, instead of a judicial one, which will undoubtedly question Ed Balls and the other architects of the faulty regulatory system which helped precipitate the financial crisis in 2008.

But to many Conservatives the parliamentary exchange between George Osborne and Ed Balls looked like a sordid display of petty politics- not statesmanship. While it is of course important that Ed Balls et al are made accountable for their disastrous policies, there is still a feeling that George Osborne is far too focused on playing politics instead of doing his job. If this perception dominates how the electorate see him at a time when Britain has gone into a double-dip recession, the Eurozone crisis is engulfing the continent, 2.61 million people still unemployed, and the Bank of England printing money like there is no tomorrow, then the Osborne brand will continue to decline in value.

Within the wider context of the various deficiencies in George Osborne’s economic and financial policies, this run on his credibility is only going to continue. His plan for growth is far too heavily dependent on a policy of cheap credit from the Bank of England and fiscal stimulus from the Treasury (see my article on last year’s Autumn Statement) and clearly is not working. Another problem is that his deficit reduction plan has so far been implemented through tax rises while spending cuts will not actually start to bite until the eve of the next general election and will continue into the next parliament. It is now very likely that on polling day in 2015 the electorate will still be feeling the pinch of meagre growth, rising cost of living, and harsher spending cuts.

A wealth of radical policies for growth has come from across centre-right politics. Conservative MPs have set up groups like the Free Enterprise Group, 2020 Conservatives and The Growth Factory in order to formulate new policies to liberalise the economy. Numerous think tanks have delivered fascinating reports on boosting growth, like the Institute of Economic Affairs’ ‘Sharper Axes, Lower Taxes’, the Centre for Policy Studies’ ‘Small is Best’ publication and helpful infotoon, and the TaxPayers’ Alliance’s 2020 Tax Commission Report. They are all calling for the same spirit of Tory radicalism which has been advanced by Michael Gove and Iain Duncan-Smith, with a clear economic plan based on larger spending cuts, lower taxes, deregulation and sound money.

It is of course difficult for Osborne to recalibrate his economic and financial policies more firmly in this direction because of the Liberal Democrats. But this then begs the question of what happened to ‘Orange Book liberalism’ which was so superbly articulated by David Laws? The coalition seems to baulk at every opportunity of providing a more robust plan for growth. Instead we have seen streams of micro-initiatives put forward while radical policies, like the Beecroft Report’s proposal for making it easier for employers to hire and fire employees, get side-lined. Policy making has become a zero-sum game in which decisions are prevented from happening whilst civil servants are left to their own devices with disastrous consequences, like in this year’s budget. The coalition simply cannot function without an effective policy machine with both parties contributing to new economic radicalism.

George Osborne is undeniably a political animal. He has had numerous political coups like in 2007 when his inheritance tax cut pledge helped spook Brown into bottling the election, but there is a serious job to be done. If we are going to see an effective plan for growth based on spending cuts, lower taxes, deregulation and sound money which has the support of both coalition parties then George Osborne has to focus, otherwise the blood of electoral failure in 2015 will be on his hands.

Follow David on Twitter @david_cowan

House of Lords reform is a risible Lib Dem distraction from getting proper things done

Craig Barrett 10.16am

I wrote last week about how Ed Balls and Ed Miliband have correctly gauged the public mood on bankers and are setting the running on the way in which banks should be investigated.

The Labour party’s amnesia about its past behaviour appears to be contagious, at least as far as the public at large is concerned. That party’s poll ratings continue to soar, yet just one senior figure seems to be trying to take the fight to them.

George Osborne should be commended for his valiant attempts to paint Ed Balls as the villain of this piece, even if it now seems doomed to failure. On Sunday morning, Andrew Marr allowed Mr Balls virtually free rein to give a party political broadcast; more worryingly, Marr’s tendency to savage in the manner of a dead sheep allowed Balls to become almost credible. Perhaps he has digested the results of those opinion polls about why the public dislike him. Not even Mr Balls is financially illiterate enough to fail to understand the logistical nightmare but his simple idea of keeping one’s account number when shifting banks is a neat little soundbite. Gone is the man of “neo-classical endogenous growth theory”, and all credit to him for that. It is vote-winning stuff. But again, George Osborne aside, nobody seems willing to take Labour on..

There exists a worrying complacency in the Government. This is most evident in the unedifying spectacle of House of Lords reform.  After their failure to convince the population at large of the benefits of PR, the Lib Dems seem hell-bent on saving something from the wreckage of their failed flagship policy. Worse, they are attempting to blackmail their Tory colleagues by putting at risk the proper equalisation of parliamentary constituencies.

We are being told to dispose of a system which, despite many obvious faults, has proven time and again to work both in terms of its expertise but also its ability to restrain over-enthusiastic governments. All manner of articles are written about the amazing diversity of background and experience in the Lords but it is surely worth pointing out once again that at a time when there is a general complaint about lack of life-experience in our politicians, surely it is folly to remove from the political system those whose unique position means that their experience is the widest? From the academics to the businessmen, from the disability campaigners to the charity workers, from the “luvvies” to the (yes, indeed) retired politicians and civil servants - the House of Lords is a diversity co-ordinator’s dream.

Yet MPs are being asked to replace them with a majority of seasoned party workers, paid less than their lower house counterparts but elected for longer terms. Never mind that parts of our country already have up to eight layers of elected officials, the Lib Dems seem determined to create more.

Sadly, it is very obvious to all concerned that they are acting less out of a genuine desire to make lasting, sensible change but rather out of a determined self-interest to get PR by the back door. Alan Clark described the Lib Dems as “over-promoted local councillors” – if they get their way on Lords reform, that is what our historic House of Lords shall become.

Back to the economy and banking, the further danger is that at a time of genuine concern about the state of our country, to spend time on a policy that the Prime Minister has categorised “third term” risks perpetuating this image that the Tory party is out of touch with people’s desires.  It is a gift to Labour. I urge all Conservative MPs to do all they can to block this Bill.

Follow Craig on Twitter @mrsteeduk

Rhythm is a dancer at PMQs

Jack Blackburn 3.30pm

As Dave and Edward know (both being Oxonians) it is Commemoration Ball season: a time for dancing.

There was an element of that at PMQs today and, in the manner of the modern day ball, the participants were dancing without much discernible sense of rhythm. The music playing at the moment is much more to Edward’s taste than Dave’s, but everyone’s bringing out their own moves. Just don’t call it a U-turn. It’s a volte face.

These days, Edward Miliband has many dances he can trot out, but he chose the fuel duty “U-turn”: the latest contribution to the budgeting omnishambles, made all the more embarrassing by Chloe Smith’s unfortunate “Michael Howard moment” on Newsnight last night.

“U-turn? What U-turn?”, said Dave, claiming that it was a Labour tax they were getting rid of. “Ever since we came to office we have been defusing Labour’s tax bombshell.”

Dave’s major implication though was that the Leader of the Opposition was two-faced. He supports Lords Reform but is against the programme motion. He’s for stopping the increases in fuel duty, but against the Government’s “change of mind” to do so. The line Mr Cameron is trying to lay down by implication is that Mr Miliband is an opportunist.

Even though the Government has so far had an annus horribilis, there is no denying that Mr Miliband has looked more like a scavenger of their misery, than a viable alternative. This is despite a definite improvement in his personal style, most obviously marked in his weekly performances at PMQs. Nevertheless, he still cannot land a knockout blow, or even score open goals. The judges should be giving him nines and tens at present, but Edward’s twinkle-toes often leave himself at sixes and sevens.

Edward’s major problem is his lack of detail; his insistence on repeating debatable, rhetorical points as if they were indisputable facts. Things are going for him at the moment, but he just isn’t producing. What will happen when the fortunes turn, and the government starts getting the rub of the green?

Furthermore, the Government couldn’t be doing more to help Edward out. Today, while defending George Osborne’s alleged “cowardice” in not facing the press yesterday, the Prime Minister said that the Chancellor had faced the Commons, and in doing so had “wrong-footed” Ed Balls. That’s all well and good, but George Osborne’s adroit volte face wrong-footed everyone, to the point that Cabinet ministers were briefing for the increase all through yesterday morning, and poor Chloe Smith was sent up Newsnight creek, without a paddle, or a boat.

With all of this ammunition at his disposal, Edward still failed to score a clear win today. One wonders how he will dance when the music’s no longer to his liking.

Follow Jack on Twitter @BlackburnJA