Day 4932: You Can Prove Anything With Statistics Part Deux

Thursday:

This time it’s Tom Clarke writing in the Gruaniad to assert:

“How the Tories chose to hit the poor”

http://www.theguardian.com/commentisfree/2014/jul/02/tories-poor-george-osborne-inequality-conservatives

(and just look at all those buzzwords in that URL!)

“George Osborne claims to have cut inequality,” adds the sub-editor. “But look behind the figures and it's clear the Conservatives can't take any credit.”

To summarize: the existing data points do not agree with his thesis so he says that they don't count and makes up what next year's figures will say instead.

It seems Iain Drunken Swerve isn’t the only one for whom denial is a preferred tactic.


The implications of the piece are that the CHOICES of the Coalition are bad ones, and therefore that any beneficial outcome is accidental. To come to that conclusion it is necessary to downplay, ignore or indeed run away and hide from the contribution of the Liberal Democrats to Coalition policy.


Inequality, measured by the Office for National Statistics figures for 2011/12, FELL in the UK under the Coalition, and the new 2012/13 figures show that fall has not reversed.

As Lib Dem Voice reports, the Institute for Fiscal Studies have commented that inequality is now lower than since before Tony Blair brought Labour back into government in 1997.

This is a fact.

A startling one but indisputably a fact. Startling not just because this is the first fall in inequality for nearly three decades, but also because it is unique among Western nations.

Is this a beneficial outcome?

What has happened has happened in the worst way. I – and I think most Liberals – would prefer to reduce inequality by raising everyone up, not grinding the richest down. Making the rich pay, that’s Labour’s way. In this recession, everyone has had to take a hit, including hitting some of the least well off, but proportionately the better off you were the more you’ve been asked to pay – from each according to their means, as it were. And it must gall Labour and the left that this Coalition has been more socialist than the socialists ever were.

But if, as Labour do, you subscribe to the “Spirit Level” thesis that more equal societies are happier, healthier and better then you would have to say this is a beneficial outcome. Even if you don’t subscribe, you would have to accept that the cost of the Crash had to be borne by someone, and these figures show that the better-off have shouldered their share of the burden. Those better able to pay have paid and as a result there has been a slight rebalancing of income after tax and benefits.

So is this just by accident or does it down to the choices we have made in government?

It is not difficult to see how it’s happened. Salaries were frozen or even reduced, whereas, at the insistence of the Liberal Democrats, benefits continued to be increased*, and with a triple lock pensions – more than half the Social Security budget – were and still are increased by even more.

(*Full disclosure: for the period covered by these figures, benefits were increased in line with inflation. For 2013/14 benefits were still increased, but we could not stop George Osborn capping many increases, but not pensions, at 1% – a cut in real spending power as it is below the rate of inflation. Because pensions increase by more than inflation, the impact of this is uncertain, but it does, of course, form the basis of Mr Clarke’s speculation that inequality will rise again in next year’s official figures.)

Add to that the effect of the flagship Liberal Democrat tax policy of raising the personal allowance, a tax cut directly aimed at the less well-off earners.

And the Liberal Democrats also required, in the price for Coalition, that Capital Gains Tax – a tax largely paid by the well-off – be increased from Labour’s inequality-creating low level of 18% to a more reasonable 28%.

Furthermore, the Lib Dems would not let Master Gideon reduce the top rate of tax from 50% to the 40% rate that it was under Labour.

Remember when Labour raised the top rate to 50p… for a MONTH. The Coalition because of the Liberal Democrats has a rate of 45% that is still higher than under any budget presented by Gordon Brown.

Remember when Labour DOUBLED the tax paid by those in the lowest band, and how Mr Balls still wants to reintroduce the 10p starting rate? The Coalition because of the Liberal Democrats gave those people a ZERO starting rate and took them out of paying income tax altogether!

You can see the theme here: Labour under Mr Blair and Mr Brown – who, if you recall, were in the words of Mr Peter “Prince of Darkness” Mandelson: “intensely relaxed about people getting filthy rich” – saw inequality rise like a rocket. The Coalition, because of Liberal Democrats’ fair tax policies, has seen a remarkable fall.

For that fall in inequality to come about because “the Tories chose to hit the poor” IS. NOT. POSSIBLE.


Remember Labour’s COMPLICITY in the Great Crash of the Twenty-Nothings. It wasn’t ALL down to a few “rogue bankers”. I’ve written before of how Labour’s “borrow and spend” economic policy buoyed the bubble, how their “let the good times roll (on tick)” philosophy cheered on many millions of small borrowers to risk more than they could afford on the (fictitious) promise of a never-ending supply of cheap money lent from China – how often did Gordon Brown say “no more boom and bust”? What did he think he was encouraging people to do?

Remember how Labour were taking bungs and favours from everyone from Bernie Eccleston to Rupert Murdoch. They were deeply entwined with the really filthy rich.

Remember the facts of what Labour really DID, not the fairy story of good times that they want you to believe in.

Labour, even when they nationalised a bank or two, were only ever socialist by accident; we have achieved this by design.

In this crash (which, whatever the causes, you have to admit happened on Labour’s watch) everyone has done worse. But Liberal Democrat choices have made good on the Chancellor’s promises of being “all in this together”.

And that’s important to us because we CARE about a Fairer Society as well as a Stronger Economy.

The impression from his article is that Mr Clarke appears not to care that Labour never really cared at all.

"…so when the truth finally outs, what will be the response?"

Practically an admission there that he doesn't know that either. So he’s just making that answer up too. Not necessarily an unreasonable prognostication – Mr Drunken Swerve has form – but still not in fact fact.

The 2013/14 data – when it comes out next year – may (or may not!) undermine the Chancellor's current statement, but at least Mater Gideon is basing his words on the facts as they are known now. Mr Clarke and the Graun are not.

And the confirmation bias of 450 below the line CiFers nodding and saying “he’s right you know” does not count as supporting evidence.

Mr Clarke touches their G (for Grauniad) spot again by referring to the 2008 crash as “Lehman Brothers' implosion” pinning the blame on the bank and definitely not the profligacy of any governments that might have supposedly had oversight of the economy at the time.

And again we have the lazy accusation against the Coalition of “a government that has lurched to the right”.

Then there is this:

"This week's data only takes us up to this point, the financial year that began in April 2012"

This is such a weirdly constructed sentence that I have to wonder if it's deliberate. If you are talking about the point that the data takes us to, then surely it only makes sense to talk about the *end* of that Financial Year, so April 2013.

By using 2012 (whether by accident or design) it conveys the impression that the data is even more out of date and only covers maybe a year or so when the Coalition were in charge, rather than 60% of the current Parliament.

If you are going to criticize the use of statistics by others, then you must take the greatest care that no distortion creeps into your own version – that he has failed to do so critically undermines his argument.

I realize Mr Clarke has a book to sell – it’s actually advertised right there in the article (or “advertising feature” as these things used to be called) and "oops I have no evidence" doesn't help with that, but really this is just hiding from the facts.

Inequality has fallen. This is not because the Tories chose to hit the poor. It’s because the Liberal Democrats chose to defend the poorest-off where we could and to raise fair taxes from the rich.

Day 4931: Most Right-Wing Government Evah…

Wednesday:

Number One in a series of lazy clichés that need stamping on…


Again and again you see this snide little assertion slipped into an article or among the comments. It’s a nasty little code phrase for sneaking around Godwin’s Law (for who would the Coalition have to be more right wing than?) Rather than addressing why a policy might be bad, it’s used as a “joker” to declare any policy simply to be bad because of its authorship, rather than outcome.

And of course it’s just not true!

This isn't even the most right-wing government of the last TWO!

In the last 30 years…

The Coalition gave us Equal Marriage; the Thatcher Government gave us Section 28, and you think the Coalition is more right wing?

The Coalition gave us cash back with a tax cut for basic rate taxpayers, and the first fall in inequality in 30 years; Maggie gave us the Poll Tax and Major gave us Back to Basics and Cash for Questions, and you think the Coalition is more right wing?

The Coalition gave us an end to child detention, scrapping of DNA databases, reform of the libel laws (and Nick Clegg blocked the Snooper's Charter); the Blair government tried to give us ID cards and 90 day detention-without-trial, and you think the Coalition is more right wing?

The Coalition acting under International Law and with a UN Resolution used minimal force to defend Benghazi from Muammar Gadhafi’s air strikes; Labour invaded Iraq.

The Coalition gave a triple lock to pensioners; Gordon Brown gave them 50p. The Coalition achieved the Millennium Development target of 0.7% of GDP in overseas aid; the Brown Government gave a massive bailout to bankers, and you think the Coalition is more right wing?


The Coalition were faced with quite simply having a lot less money to spend and has managed this very difficult very painful loss of income without it all ending in a Winter of Discontent or a year-long strike and with only one major bout of rioting.

You don't have to be right-wing to be financially responsible.

Running up a mountain of borrowing means transferring money from future generations to the present bankers. Labour might believe that it is left-wing to throw away our children's money, but that’s probably why they’re still in such a pickle over the economy; where I come from selling kids into slavery is the very worst sort of Victorian values.

And if your response to the above – looking at you, Mr Balls – is “but Master Gideon is still borrowing”, are you really saying that the Coalition has not been “right-wing” enough?! The Coalition has curbed but not conquered the deficit precisely because they are on the moderate and not the extreme right.

Have there been right wing proposals? Sure. Theresa May and Michael Gove can hardly shut up, except to take chunks out of each other. But when they get to the Quad, Nick Clegg says “No” and that’s the end of the matter.

This is the most liberal, centrist government since the post-war consensus ended in the Seventies.

Isn’t that depressing enough?


Coming soon: "30 years of Neo-Liberal consensus – the only Liberal Conspiracy is that there isn’t one"

Day 3734: Robbing Peter to Pay Paul

Wednesday:


Master Gideon's second budget was really quite unexciting. What changes there were were moderate and predictable.

A bit off fuel; a bit more tax on the oil giants. A bit off company tax; a bit more bank levy. Another step towards the £10,000 personal allowance.

Then Mr Potato Ed stood up and read out the speech he'd written a month ago.

"Same Old Tories ," he said, "you're just robbing Peter to pay Paul."

He doesn't seem to understand: ALL government spending "robs" (taxes) somebody to "pay" (spend on) somebody else.

Perhaps Mr Bully Balls has been "explaining" it.


If you WANT to take less tax from one person, or more realistically one GROUP of people, then you have just TWO choices: either you SPEND LESS or you have to take the tax from SOMEONE ELSE.

(Yes, you can BORROW it, but that's only taking it from a "someone else" who just happens to be in the FUTURE, i.e. when they are the someone who will have to pay back your borrowing.)

Last year, in the emergency budget and then in detail in the spending review, we decided how much we would cut spending this year, and so how much we would raise in taxes (and how much borrowing we would need too).

We haven't changed those numbers.

And that's GOOD because last year's budget was quite painful enough already! Cutting spending even more would be AWFUL. But equally, cutting spending less would only PROLONG the AGONY – if you're GOING to take a trip through HELL, swerving from side to side is only going to make it take LONGER!

So Master Gideon's budget was what we call "fiscally neutral" which just means it raises the same AMOUNT of tax but in different WAYS. Or in Mr Ed's language: "choosing to rob different people".

For example, with the cost of fuel rocketing, the Government could hardly fail to curb the fuel tax escalator, and that's what Gideon did. But forgive me if my heart fails to bleed for the oil companies whose super-massive profits will be taxed a bit more to raise the same amount of money from them instead.

What we're doing is moving the tax burden from families who are finding it hard to make ends meet because of the price of petrol going through the roof onto the oil companies who are seeing their profit margins soar because of, er, the price of petrol going through the roof.

When Hard Labour do this, it is called "redistribution"; when the Coalition do it, apparently, it is called "robbery".

Someone clearly slipped Mr Ed a bit of paper at the end of his peroration, pointing out that his reply to the budget speech had not actually mentioned any of the points IN the budget speech, so he tacked on a bit about the 1p cut in fuel to say "ah ha, but you put up the VAT which added 3p to the cost of petrol! Ha!" So, what, Mr Ed would have preferred us to KEEP the fuel escalator price increase and put petrol up MORE? What's that you say? Hard Labour would have reversed the VAT increase? If you were PAYING ATTENTION you would have heard Master Gideon say he'd LOOKED at that and it would have been ILLEGAL.

And of course it would have been three times as EXPENSIVE. That is, we should have had to raise three times as much tax from somebody else to make up the difference. Or cut spending by ANOTHER six billion pounds on top of all the cuts that have been forced upon us already.

(And that's why Gideon didn't reduce the duty by THREE pence and cancel out the VAT increase – it would have had to come from somewhere!)

NEITHER of these options are in the Hard Labour way of budgeting: they would DUCK the difficult choice and just BORROW the difference.

Which of course is robbing Peter's CHILDREN to pay Paul.

And remember, the WHOLE POINT of this Age of Austerity is so that we STOP DOING THAT!

That's why we've raised more in taxes – VAT, National Insurance, bank levy and others – and why from next month we really start with these awful spending cuts. It's not for a laugh or for ideology or through sheer bloody-minded ignorance of the state of the economy; it's so that we will start to close the gap between what the government gets in and what it pays out.

This, fundamentally, is the difference between the Coalition's position and the one that Hard Labour are espousing (as much as they'll admit to ANY position): WE say that we have to get the country's finances under control in order to achieve economic growth; Mr Balls says that you've got to achieve some growth before you can hope to get the country's finances under control.

This is why he reacts with such GLEE to every new BAD statistic that comes out. He likes to say that the economy was in recovery until the Coalition yanked out the IV drip of continued borrowing.

Don't get me wrong; I'm not saying that the figures are NOT bad; in fact I think they are appalling – inflation is up (again!) to 4.4%; unemployment is up (again!) to a seventeen year high, and, worse, an ALL TIME high for youth unemployment; and in some ways worst of all, Government borrowing, the POINT of the whole thing, after a good month in January is up (again!) in February.

But I do not think that these are our fault. Economies just don't turn around that quickly. We were left with an economy badly damaged from the banking crash that, far from recovering, was in fact screaming out of control just as Labour were ejected from the driving seat. Keynes may be RIGHT that you can kick-start an economy out of recession by investing in public works, but Labour have spent YEARS borrowing money to fund the ILLUSION of economic activity – public sector jobs and construction projects – so much that it's now a busted flush. Like the Wizard of Oz you HAVE to keep beavering away behind the curtain JUST to keep up the illusion, because when you stop, well, THIS happens!

So I think that these figures are a RESULT of a decade of Labour's mismanagement, covered up by borrowing and now revealed as we stop shovelling money into the black hole they've left.

Of course, Mr Balls, contrariwise, says that the figures are caused by US, by the Coalition's plans to bring borrowing under control i.e. caused by the cuts that, er, haven't happened yet, just as December's poor sales were caused by the VAT rise in, er, January.

Of course, Mr Ball's ALSO says that there was NO structural deficit during Hard Labour's time in office. Well, since they clearly DID run a deficit every year, he must be saying that his government presided over an EIGHT YEAR LONG RECESSION. And THEN hit the banking crash!

So if SOMEONE from the Hard Labour front bench tells you that if they had still been in power there would NOT have been a contraction in the fourth quarter last year… you can be sure that it's BALLS.

PS:

You may well think that I've concentrated too much on Mr Potato Ed's REPLY to the budget, but really, Master Gideon just wasn't that INTERESTING.

With not a lot of money left, there were lots of LITTLE schemes – enterprise zones, apprenticeships, support for first time buyers, some stuff with railways – but nothing startlingly major. After all, there are only so many ways he can say: "No changes; economy still rubbish; nothing to see here."

PPS:

Lib Dem manifesto, front cover, pledge to increase the basic allowance to £10,000 by the end of this Parliament; today's Budget, another big step to delivering.

Tory manifesto, big speech by Master Gideon, pledge to cut Inheritance Tax; today's Budget, umm, tax cut limited to charitable giving.

I think that's what we call a LIBERAL DEMOCRAT-Led Coalition.
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