Breakfasts and holidays

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Economics in the real world is hard, and one of the things that economists often do is to simplify things. As an exercise in explaining a theory, it’s perfectly fine; but in the hands of politicians who have understood the theory but not the extent to which it has been made simple, it’s potentially disastrous. For an economic purist, humanity is an economic animal and all decisions should rationally be taken by analysing the best economic outcome for the individual. To use an extreme example, in deciding whether to have cornflakes or toast for breakfast, I should cost all the ingredients, all the costs involved in purchasing, transporting and preparing them, and the opportunity cost of the time it takes me to prepare and eat it. “Breakfast means breakfast”, to coin a phrase, and the two options are considered entirely fungible. Preferring the taste or the texture of one over the other is to use irrational factors in the decision-making process. Real life doesn’t work that way, of course (which is not to deny the fact that there are far too many people in the world for whom the decision to eat breakfast or not is very much an economic one). And fungibility is a difficult concept.

A better and more current example of this sort of over-simplistic thinking is the Tory reaction last week to the idea of a tourist tax or levy in Wales. Imposing such a tax is, in their view, a disastrous policy which will lead to the overnight complete collapse of the tourist industry in Wales, as visitors avoid the tax by going elsewhere. Even in their own terms, it’s wrong; if the tax were indeed to have that effect, it wouldn’t be the fact of the tax that did the damage, it would be the impact of that tax on the relative prices of a visit to Wales and a visit to another part of the UK. It would be higher prices that people would be avoiding, not the tax per se. Nevertheless, from their hopelessly over-simplistic perspective, “holiday means holiday”, and people will go to the railway museum in York, or the beach in Bournemouth, instead of visiting Zip World in Gwynedd. But real life isn’t like that. People really don’t decide between a museum, a beach, and a thrill ride on the basis of price. ‘Irrational’ factors such as personal preference play a major role. And it isn’t only about deciding between one type of holiday or another – in deciding where (and whether) to go on holiday, people also make choices about whether to spend the money on other things; competition for the spend on a holiday in Gwynedd isn’t limited to the range of holidays available elsewhere. All of these factors are ignored in search of a doom-laden headline from Tories who are basically averse to all taxes in all circumstances but unwilling to be honest about it.

Whether the proposed levy will impact the number of visitors coming to Wales is an open question to which no-one really knows the answer (and the fact that no-one knows the answer is a much better ground for examining the proposals very carefully). The extent of any impact will also depend on the amount of the levy; there’s a huge difference on the overall price of a holiday between a levy of, say, £1 per night and one of £100 per night. To further complicate things, any imminent introduction of such a levy would be coming at a time when the UK government is deliberately setting out to reduce people’s ability to spend as well as their living standards. Sorting out which change actually caused any reduction in visitor numbers would be far from straightforward. The Tories did get one point almost half right though. Some places have indeed used a levy or tax in an attempt to reduce the number of tourists. That doesn’t necessarily mean, as the Tories claim, that such will always be the effect, but there is no doubt that it is one potential effect. Whether that’s a good thing or a bad thing is another question – the Tories assume the latter, but for people living in areas with high numbers of tourists, ‘over-tourism’ is a real concern. I hope, though, that that forms no part of the Welsh government’s thinking in relation to the proposed levy, and that they genuinely are going to ensure that any revenue is used to reduce the impact of tourism on local services rather than fund other expenditure. Not because I dismiss the problems which over-tourism can cause, but because using pricing mechanisms to control numbers pushes even the cheapest holidays beyond the reach of even more people and makes holidays the preserve of a smaller number. I somehow doubt that that issue even crossed the Tories’ minds.

Silly assumptions and silly celebrations

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Unionists are celebrating their supposed ‘victory’ in the Supreme Court earlier this week, with a ruling which establishes very clearly that, under UK law, there is no legal route for Scotland (and the same would obviously apply to Wales) to determine its own future which does not involve being granted permission by the UK Government, and that there is no requirement for that government to give – or even have – any reason other than they don’t want a particular outcome. Scotland is, it seems, trapped in a curious version of Catch 22: the country has an absolute right to leave a ‘voluntary’ union of ‘partners’ if it chooses, there is just no legal way of exercising that right. Asked the question, specifically, one of the unionists in chief, ‘Keith’ Starmer said that it wasn’t for him to explain how Scotland could exercise that right, it was for those seeking independence to set out how they intend to proceed. They have, of course, done so, several times, even complying fulsomely with the route set out by Thatcher decades ago (who said that, if a majority of Scottish MPs were elected on an independence platform, Scotland would become independent). It’s just that, every time they set out a route, Labour-Tory politicians – backed up by the courts which are bound by the principle that absolute power stems from the Crown and resides in the UK parliament, whatever the acts of union might have said – conspire together to change the unwritten rules.

Whether their celebration is justified or not is another proposition entirely: it looks more like another example of the short-termism which dominates UK politics, and is based on the assumption that support for independence (and the SNP) is a temporary phenomenon which will go away if denied loudly enough for long enough. After all, every promise and policy they themselves put forward is regarded as nothing more than a short-term fix to get elected, and many do not survive election day, let alone detailed parliamentary scrutiny. Why would they expect the SNP to be any different? Perhaps they’re right; perhaps the desire for independence will fade away in the light of stubborn refusals to countenance it. The evidence to date suggests otherwise, though. And trying to present the whole debate as nothing more than some sort of personal campaign by Nicola Sturgeon contains more than a hint of traditional imperialist misogyny, to say nothing of contempt for the mass of the Scottish population.

They are right, of course, in legal terms (and in terms of normal English politics) to say that the SNP (and other pro-independence parties) cannot simply turn the next general election into a plebiscite on independence. But normal English politics has ceased applying in Scotland, where a different political reality rules. Have the unionists really thought through what happens if (and I’ll accept it’s a big ‘if’, although within the range of currently credible outcomes) 60% of the electorate votes for parties who have declared that their only policy for that election is independence, and every MP from Scotland belongs to a pro-independence party? They seem, instead (the Tories as much as Labour), to be putting their hands over their eyes and ears and clinging to the assumption that people will be so keen to get rid of the Tories and replace them with a Labour government in London that the SNP will be defeated electorally and replaced by Labour MPs. And they’re betting the house on that outcome.

There are those independentistas in Scotland who have been critical of Nicola Sturgeon, suggesting that she has been too slow, too cautious. It’s a difficult call, but I suspect that she’s as aware as anyone that moving too fast and losing would be the biggest setback of all. The issue really would be off the table for a generation. Indeed, one of the surprising things to me has been the unwillingness of the unionists to allow a referendum at the point at which they had their best chance of winning it. Looking at the support for independence across the age demographic, the simple fact is that young independentistas are entering the electorate and older unionists are leaving it. A Scottish parliament along with a Scottish contingent in Westminster, both filled with independentistas, and enjoying overwhelming electoral support (the only bit of the puzzle still missing) should be the unionists’ worst nightmare, yet they seem determined to bring it about. The unionists can and always will win the legal arguments, because the absolute sovereignty of the Crown trumps all else. But all the Supreme Court decision has really done is to emphasise that it’s a political issue, first and foremost – and it will ultimately be determined by the voters of Scotland. The assumption that a territory and its people can be held in a union indefinitely against the clear will of those people because the monarch's ancestors declared themselves absolute rulers is a very silly basis for celebration.

Overpaid comics

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Living former Prime Ministers – a species of which the UK currently has a glut which is bigger than ever before in its history, the size of which is projected to rise again shortly – can command handsome fees for giving speeches based on their experiences and the wisdom it has allegedly given them. We know, for instance, that Boris Johnson was paid £276,000 (plus expenses) for one speech in the US (whilst also being paid for being an AWOL MP). We also know that he has since given another speech in Singapore, although the fee for that one will probably not become public until the next update of his declaration of interests. The host for the second one has had to apologise to those present to hear it, some of whom felt his robust remarks about China were inappropriate and offensive. The words used by Bloomberg in delivering the apology were that “…the presentation was meant as after-dinner entertainment rather than serious discussion of important controversial and complex issues”, implying that, whatever the fee was, it was being paid not for any expertise or enlightenment, but for a very expensive – and not particularly amusing – stand-up comedian. Overpaid, unfunny and offensive stand-up comic may be one of the fairest descriptions of Johnson ever, but it is surely not what people think they are getting when they pay an exorbitant price for a guest speaker.

It’s also interesting to read precisely what Johnson said that so aroused the ire of those in attendance. He accused China and Russia of being “… states that have been traditionally hostile to immigration and that are becoming increasingly nationalist in their attitudes”, of being “… willing to show a candid disregard for the rule of international law”, and of having demonstrated “… the immense limitations of their political systems by the disastrous mistakes they have made”. There’s not much to disagree with in any of that, but any objective observer would recognise that those same traits have recently been on display a lot closer to home – and especially under the so-called leadership of Johnson himself and his successors. It is that curious English exceptionalism which enables him to see dangerous nationalism everywhere except in the mirror. Paying the pot to criticise the kettle is obviously lucrative from the perspective of the pot, but it provides little in the way of meaningful political analysis. Just as well that one host, at least, recognises that he was overpaying a bad comic rather than employing any sort of expert.

A plague of Hunts

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Poor old Jeremy Hunt. This kind, compassionate Conservative, who set out determined to look after the interests of the poorest, didn’t really want to introduce a lot of the measures he announced yesterday, but he was, sadly, compelled to do so in order to comply with the new fiscal rules introduced by, er, Jeremy Hunt, the cold, uncaring Conservative who is bound by rigid dogma and ideology to look after the interests of the richest in society. New chancellor, new fiscal rules; but the problem with setting a fiscal rule which requires “that underlying debt must fall as a percentage of GDP by the fifth year of a rolling five-year period … [and] that public sector borrowing, over the same period, must be below 3% of GDP” is that the Hunt who set the rules left the Hunt charged with following them with little choice but to introduce measures which will increase taxation, cut public services, and reduce the standard of living of most people by around 7%. (Although, curiously, and I’m sure this is entirely unintentional, it seems that the wealthiest 10% will actually find themselves better off. Who would ever have expected that from a Tory Hunt?)

Whilst the self-styled nice Hunt can only follow the rules, the nasty Hunt didn’t have to set the rules in the way he did. He could, for instance, have set a target that debt must not rise by more than x% of GDP; or that public sector borrowing must not go above 5% of GDP. Either of those would have left him able to properly fund public services and protect the vulnerable. The so-called ‘black hole’ exists only because the fiscal rules have been applied to forecasts; applying different rules to those forecasts could have increased or reduced the size of the so-called hole – or even turned it into a surplus. Setting the rules in such a way as to oblige the Chancellor to impose a new version of austerity tells us only that the rules are doing exactly what the not-so-nice-after-all Chancellor wants them to do – austerity is a political choice, not a necessity.

He claimed yesterday that the alternative was to heap debt on our children and grandchildren, and that this was something that Conservatives don’t do. But in truth, it is exactly what Conservatives (and other governments for that matter) do do, and always have done. The UK has had a national debt since 1692 and has never repaid it all. Individual debts have, of course, been repaid, but only by raising new ones. If we treat a generation as being around 20 years, then in the terms in which Hunts (both of them) describe debt, today’s taxpayers are effectively still repaying the debts of their 14 times great grandparents. And the thing is – it really doesn’t matter; it’s entirely normal. Nobody, as far as I’m aware, is arguing that debt can or should be allowed to rise indefinitely – but neither does anyone, for all their profound statements, know precisely what amount of debt is impossible, and the UK’s public debt as a percentage of GDP is lower than a lot of other countries across the world – including both the US and Japan. The idea that the UK – one of the wealthiest countries in the world – is uniquely unable to provide basic services and standard of living for all its citizens owes nothing to any laws of economics; it is based on a dogmatic view that public spending is always inherently bad. And that’s a view shared by both Hunts, as well as all the other ones in the cabinet. Worst of all is that the Labour Party seems to be hooked on the same dogma, and seem determined to follow a similar set of rules. It seems that nasty Hunts aren't confined to a single party, even if they go under different names.

Fruitful distractions

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Fair play to the Tories – not a phrase which appears often here. When it comes to finding a distraction from the major problems of the day, mostly caused by them in the first place, their creative ability knows few bounds. Thus it was that yesterday, when the newly appointed (and soon to be ex) PM was striding across the world stage doing his best to avoid justifiable criticism for the UK failing to meet its climate targets (to say nothing about its plans to distance itself even further from those targets by exploiting new oil and gas reserves) by staring pointedly at the Russian Foreign Minister (who must, surely, have been absolutely terrified as a result), his team back home came up with an even better distraction technique. They issued a formal denial that the Deputy PM had ever thrown any tomatoes at staff. The other world leaders must have been mightily amused - or, more likely, utterly bemused.

It was a brilliant move, although on closer examination, the denial was somewhat incomplete. There was no denial that tomatoes had been launched on a ballistic trajectory across the room, the denial solely related to the alleged target. During the tomato-related incident – which will surely come to be known as tomato-gate – we are sincerely assured that no persons or animals were in any way physically harmed, although it seems that some of those present might have interpreted it as threatening behaviour, a bit like a shot across the bows of a ship. More importantly, the denial only covered tomatoes, leaving open the possibility that other fruits and vegetables, some with a much greater propensity to wound or injure (imagine the potential damage resulting from hurling a large watermelon, for instance) might have been deployed. For completeness, we should demand a comprehensive list of all the fruits and vegetables which the Deputy PM has never thrown at staff. Tory MPs must also lay urgent questions about which other cabinet ministers may, or may not, be in the habit of throwing fruit around during meetings. Only then will their party realise the full potential of their attempt to use allegations of fruit-throwing as a distraction technique.

Seeing no evil

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Recruitment processes vary greatly. In the public sector particularly, great emphasis is placed on fairness and transparency, and recruiters are often advised to discard all previous knowledge of the applicants, even in the case of internal applicants, and to base their decision solely on the application form and interview. This has long struck me as being potentially more than a little dangerous – if there is information which is known which might make a candidate unsuitable for appointment, choosing to ignore that information because it wasn’t mentioned on the application form and didn’t arise in response to interview questions can lead to a silly appointment. The private sector often works rather differently, as a result of which there can sometimes be a lack of transparency.

There is one appointment process which appears to be utterly unique, however, and that is the process by which a Tory Prime Minister appoints his or her cabinet. Apparently, the standard response to a suggestion from a close aide that “There may be a serious problem in appointing X” is not to ask for more information as any rational person would be likely to do, but to say something along the lines of “Tell me no more – I’m going to appoint X anyway, and I want to be able to deny that I ever knew any details of the problem”. What it really tells us is that the biggest problem of all is appointing one of the three brass monkeys to the highest post in the land. And that the Tory Party has an apparently limitless supply of brass monkeys.

Rewarding a rare achievement

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Very few government ministers ever get sacked; they invariably ‘resign’, and almost never entirely of their own accord. Nods, winks, and outright threats combine to make it entirely clear when a letter of resignation is expected, and it would not be at all surprising to find that letters are sometimes written for doomed ministers and handed to them for them to append their signature. Gavin Williamson’s departure yesterday has been presented to the world as a resignation, but it is clear that the ‘resignation’ was preceded by a decision in Downing Street to withdraw the proposed defence of the Minister, making it clear what action was required of him.

Having been given a knighthood to reward his previous failures, this is a superb opportunity for another award of some sort. A lifetime achievement award is surely in order for a man who has succeeded – uniquely, as far as I’ve been able to ascertain – in getting sacked from three different cabinet jobs by three different Prime Ministers, and all in the space of less than four years. Perhaps Sunak’s successor, due to be appointed within the next few months, will give him an opportunity to add to his score. One might think that no PM could ever be so stupid as to appoint him again, but there were those who thought the same thing after his last two sackings. The previous peak of his career – before being elected to parliament in 2010 – was, apparently, to win Fireplace Salesman of the Year in two consecutive years in 2006 and 2007. A third award would look good on his mantlepiece, positioned nicely between the two of them.

A tale of two honourable members

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Once upon a time, there were two ambitious Tory MPs, desperately trying to climb the greasy pole towards the top job. One got as far as being health secretary during a pandemic, during the course of which he managed to condemn thousands to an early death by sending them to unprepared and ill-equipped care homes, whilst doling out lucrative PPE contracts to mates and associates with no previous experience in the field. None of that could stop his inexorable rise which was, instead, halted by some CCTV footage of an illicit liaison with one of his staff. The other actually reached the very top job, and was responsible not only for appointing the first to a job for which he was woefully inadequate, but also advocated that even more bodies should be piled high in the streets. He was also partial to the occasional sexual peccadillo, and equally inadequate for the job in which he found himself, but was shameless and brazen enough to laugh, bluster and lie his way through his own failings. The last straw which brought him down was his inability to be honest about what he knew and when about the sexual peccadillos of another person whom he had appointed to a government job.

Whatever, both men, finding themselves prised out of the jobs which gave meaning to their existence, decided to bunk off from their other job – that of being an MP – and its expectation that they might serve their constituents as well as turning up for the occasional parliamentary vote, and seek their fortune elsewhere. The first signed up for reality TV (so called, apparently, because it bears no connection whatever with what 99.99% of the population would recognise as reality), whilst the other took himself off to give a lecture in the US before taking (another) luxury holiday in the Caribbean.

So far, so similar: but then observe the reaction. The first became the subject of much opprobrium from his former colleagues, even losing the whip, whilst over 100 of those same colleagues (allegedly – the counting skills of a man who appears less than entirely certain about the number of his own progeny must necessarily be treated with considerable caution) welcomed the second back with open arms as some sort of prodigal son. Given that the basic offence committed by both is the same (abandoning their constituents during term time to seek rewards elsewhere), the differing responses of their party seem rather strange. It could be, of course, that ‘Matt’* simply went to the wrong school, which failed to inculcate a sufficient sense of brazen indifference and/or allow him to make all the right connections. Alternatively, it could simply be that his colleagues look down on a man who accepted a few thousand for some pretty degrading activities and prefer the chutzpah of ‘Boris’* who apparently charged $150,000 for giving a 30 minute speech, the basic premise of which was that his chaotic period in office made him some sort of expert in global issues. Perhaps it was neither, and was all down to good old Tory values, under which milking one’s position to extract vast sums on false pretences from unsuspecting Americans is simply more acceptable than the public consumption of marsupial genitalia for a comparative pittance. About the only thing of which we can be certain is that neither response had much to do with lokking after the needs and interests of the men’s constituents.

(*Some names have not been changed to protect the guilty)