UK election: All three parties to thieve some more

The Institute for Fiscal Studies has published a presentation outlining its conclusions on the plans of the three main parties for tax and spending. The conclusion?

ALL of them propose more tax.

The Liberal Democrats propose on average an extra £760 per household in tax, Labour £610 and the Conservatives £390.

So vote Conservative for more tax? Hardly the choice if you want LESS government. Indeed, the Conservatives are better for low to middle income earners than Labour, as their tax rises hit the wealthiest the most.

So since I wont be voting Labour or Liberal Democrat (what do you think I am?), is it Conservative as the least worst of the parties likely to hold power, or do I go for the only other option in my constituency that isn't about more government - UKIP?

The NZ$ vs the £ Sterling... correction time?

The NZ$ is at a record high against the British Pound. Travelex are currently selling NZ$2.05 for £1. This is almost a record low for the Pound against the dollar.

City AM is arguing that a long run correction will be on the way, and the right thing to do is long selling of the kiwi vs the sterling. In other words, the Pound is likely to rise after the election (assuming the uncertainty built into the price is corrected), and that the NZ$ will be on a track to fall because of pressure from the Reserve Bank of NZ.

What does this mean for kiwis in the UK? Bring your money here. The pound is unlikely to ever be this cheap against the NZ$. The NZ$ strength is driven in part by the relatively high interest rates, but also naive belief by some currency traders that the NZ$ has parallels with the $A. City AM dismissed this link a few months ago, as the A$ is driven by rising commodity prices around minerals. The NZ economy is not driven by this, and in fact has a tourism sector being hit by the drooping Pound, Euro and Yen.

Meanwhile, kiwis wanting an overseas holiday should book trips now - it will never be this cheap to visit the UK and Europe, whilst the pound remains low and the Euro gets damaged by the PIIGS (Portugal, Italy, Ireland, Greece, Spain). Unless, of course, you believe in reducing CO2 emissions in which case keep yourself on NZ soil or else you can be readily accused of blatant hypocrisy.

Gordon Brown's latest gaffe

Bigot.

It is what he muttered under his breath about a woman who asked why so many eastern Europeans had been let into the UK. A former Labour voter she now is. Now it isn't so important that she doesn't like eastern Europeans, as she used to vote Labour it is not hard to figure out how well developed her views may be.

What is important is that the Prime Minister says such things about the average voter/taxpayer. Gordon Brown may well have just helped accelerate the loss of votes from Labour to other parties.

Lord Mandelson, ever the slimy spindoctor has tried to grease Gordon out of it by saying "you may say something in the heat of the moment that you should not do but, more importantly, that you don't believe. Gordon Brown does not believe what he said about her. But he said it because people do sometimes say things on the rebound from a conversation like that. That's what makes him a human being, as well as a politician" according to the Guardian.

The Guardian continued that Mandelson defended Gordon Brown on the BBC "It is not something be believes. He does not believe it publicly or privately."

This prompted the interviewer to ask if Brown often said things he did not believe. At that point Mandelson turned distinctly frosty and said he had already addressed the point.

Given Labour's likely strategy in the next week is to frighten Britain into thinking only a vote for Labour will keep the scary mean Tories out, I would have thought another whole series of voters will just have decided that the race may well be between the Tories and the Liberal Democrats.

UPDATE: He was so scared of the fallout, he went to her house to apologise profusely, off camera.

UK election: A battle for the left

With the rise of Cleggophilia, the potential has been raised as to whether this election will actually be a lot more than just a hung Parliament, but a seismic shift in the fortunes of the two major explicitly leftwing political parties.

Almost all polling in the last two weeks shows Labour coming third in opinion polls of voter preferences. Notwithstanding the vagaries of polls (and the possibility that respondents may be less likely to admit to voting for the encumbents under the current circumstances), if translated into votes it will be a devastating blow. Given the allocation of current support across constituencies, and the UK having a first past the post electoral system, it would still mean the Liberal Democrats would come third in terms of number of seats.

In 2005, Labour received 36.1% of the vote and 349 seats, the Conservatives 33.2% of the vote and 210 seats, the Liberal Democrats 22.6% of the vote and 62 seats, whilst a bunch of smaller parties received 8% of the vote and 29 seats, in a Parliament of 650.

The latest poll of polls puts the Conservatives on the SAME proportion of the vote as in 2005, with around 33%, the Liberal Democrats skyrocketing to 30% and Labour slipping to 28%.

However, what this means is, with the swing spread evenly among current constituencies Labour STILL has the plurality of seats with 276, the Conservatives only increase to 245, and the Liberal Democrats increase to 100 (others have 29).

Under that scenario, Labour would have the right to form a government BUT being third would mean its moral authority to do so would be highly questionable. The Liberal Democrats would almost certainly demand electoral reform in exchange for support to either major party, but LD leader Nick Clegg has said that if Labour came third in popular vote, it would not support Labour led by Gordon Brown for government, as it would be clear that the vast majority of voters would have rejected his government. So there may be the spectre of the Liberal Democrats backing the Conservatives as the party with the highest plurality of vote, whilst Labour with the highest number of seats is in Opposition. The price of Liberal Democrat support will be clear though - it would mean a change in the electoral system (although almost certainly not to MMP like New Zealand was led to do by the hard left).

If Labour gets less than 27.6% of the vote, it will its worst result since before the Great Depression, as it managed to grab 27.6% in 1983 when it promised a hardline socialist manifesto (and the Liberal/SDP Alliance, precursor to the Liberal Democrats grabbed 25.4% of the vote).

Yet, it could be far worse for Labour. The Conservatives have shifted targets to a range of what were previously seen as "safe" Labour seats, where the Conservatives are second, on the basis that if the Labour vote seriously collapses, it could mean a significant sea change. The Conservatives implicitly see Liberal Democrat seats are unlikely to be winnable. The Liberal Democrats are also targeting Labour seats, with leader Nick Clegg saying in the Times that he wants to be Prime Minister and that "Liberalism has replaced “Labour statism” as the driving argument of the Centre Left". Of course what he means is liberal with other people's money and socially liberal, not classically liberal.

What is most important is that the Liberal Democrat leader has admitted he leads a party of the left, and he is seeking to supplant Labour as the centre-left force in British politics. While it would be a brave person to predict this will happen at the election, it would be a crucial blow to Gordon Brown and the Labour Party to find large numbers of their supporters switching to the Liberal Democrats.

The last time such a shift occurred was in 1924, when the Liberals lost a third of their vote and over two thirds of their seats, cementing Labour as the Opposition party (even though the Conservatives won most of the seats).

Such a shift would thrill the Conservatives, as they are left without major competition on the side of those who want less government and taxation (as limp wristed as they are in being committed to this), as shifting support from Labour to the Liberal Democrats increases the seats the Conservatives pick up along the way.

Personally, I doubt it will quite happen like that, but it is highly likely the Liberal Democrats could beat Labour on share of the vote, and the Conservatives may get less seats than Labour.

Oh and before the shrill self-righteous head counters (not head examiners) of the electoral reform left start shouting, the simple truth is that this is NOT an issue in the UK for anyone, besides the Liberal Democrats and a small handful. Most voters accept that the seats in Parliament won't actually be proportionate, and work within that system.

After Greece?

Portugal? Not yet but the Wall Street Journal reports "Its overall public debt is close to 80% of GDP, while's Greece's surpassed 110% of GDP last year.

The Portuguese government is slated to borrow around €20 billion to €22 billion from bond markets this year, less than half of Greece's borrowing needs". However, give it a few months and a lack of fiscal discipline.

Spain? Now that's a far bigger economy, but it has public debt at lower rates compared to GDP than the UK and France. Its problem is going to be prolonged stagnation, and unemployment at a destabilising 20%. However I wouldn't see it falling before any of the others.

Italy? As the third biggest economy in the Eurozone, this would precipitate a crisis that makes Greece look like a sideshow. Italy has serious problems, as the billionaire halfwit running the place continues to be willfully ignorant of the need to upset people by cutting spending. Italy has public debt proportionately similar to Greece, at well over 100% of GDP. Its most recent sovereign debt issue was only barely adequately covered by subscribers, meaning the next one will have to be at a higher interest rate. It has one saving grace, in that private debt levels are low as Italians have a savings culture stronger than other Eurozone countries. It is this, and the fact Japanese continue to "invest" in their government's sovereign debt, that has saved Japan from collapse (but meant the economy has been zombie like.

Ireland? It has bitten the hard pill of budget cuts, so should be safe but it still has the largest budget deficit of them all, because it decided to nationalise banks. Its recapitalisation of Anglo-Irish Bank has been classified as debt, when before the Irish government wanted to treat it as equity.

What's the verdict overall? Socialism doesn't work. It especially doesn't work if governments promise voters who expect something for nothing, and it shows the enormous damage and the costs imposed by constitutionally unrestrained governments. Governments who can overspend, and effectively issue promissory notes for debt that they issue, but have no means to repay. Governments that ever grow, that constantly offer more and more "freebies" to citizens, that grow the welfare state, that grow the bureaucracy of the unproductive, yet employed.

It is a path to absolute ruin, and it is a path that has been popular in much of Europe for some years, and a path that the UK, the US and New Zealand have also been following. Albeit all of them have had the option of devaluing their currency, effectively stealing from the holders of their currencies (in debt and savings) to enable this sovereign debt cycle to be perpetuated.

Who is accountable? No one. Politicians get 3-5 year bites at power, they get paid (and get opportunities to get paid far more afterwards), they promise to spend other people's money to get power, and the masses like children vote for it, and then wonder like imbeciles when governments eventually tell them the "good times" are over.

When government has unrestrained power to borrow on your behalf, demand you pay for its spending on its behalf, imprison you if you fail to do so, and the only restraint you have is to vote along with millions of others to change the teams, who by and large do the same with different flavours, this is what happens.

Reality evasion on a grand scale.