Tory NI Tax Pledge - Protecting at least 150,000 jobs.

Recently, we've heard that the Tories are not planning on putting through Labour's proposed NI tax increase if they win the election.

Somehow this has been portrayed by Labour as a "Tax Cut", although it's clearly not. Apparently, by "cutting taxes" the Tories have shown their true colours and are obviously trying to help their "Rich Friends in Business".

What they are actually trying to do is cut the cost of employing people.

National Insurance Tax isn't a nice fluffy way of sustaining the NHS, it's a direct tax on employment. And, like all things in life, if you make something more expensive (say, employing someone) the amount of that something that is bought drops.

Economists have a funky tool for measuring this effect, it's called Elasticity. Simply, this just reflects what the change in the number of units of something are sold if the price changes.

For an Elasticity of 1, a 5% increase in price leads to a 5% reduction in units sold.
For an Elasticity of 2, a 5% increase in price leads to a 10% reduction in units sold.

Take a tin of beans. Tesco are selling a 415g tin of beans for 64p. Assuming the Elasticity of Beans is 1.3, if they raise the price to 70p (a 9.4% increase) they will sell 12.2% fewer tins of beans than they did previously. Obviously, as volume is falling faster than the price is increasing, this will mean their revenues drop and their shareholders get very angry (Obviously, Tesco's shareholders are actually interested in profit, not revenue, which changes the picture somewhat. This is irrelevant when it comes to jobs though).

We can use this method to look at what happens when the wages a company has to pay for a given job change.

Obviously if wages increase, employment will decrease. Effectively, this Tax Increase says that employers have to pay more to each employee. This will lead to a reduction in employment, which even the Chancellor has admitted.

What is quite interesting is that he's completely failed to say how many people will be made unemployed by this Tax rise. However, we can use the calculation shown above to provide an estimate:

There are 28.86 million people employed in this country, according to the latest ONS figures.

If the Elasticity of Jobs is 1, then for each 1% rise we will lose 1% of the workforce. Darling says this is manageable. 1% of the workforce is 288,600 people. Over quarter of a million productive, tax paying workers will be fired. These people generate approximately £1,700 million in Income Tax, £700 million in National Insurance. Their companies pay just over £700 million to employ them. If they all sign up to Jobseekers Allowance, that's another £1,000 million each year to cover all these job losses. We're looking at a total of about £4 Billion pounds, just to pay for the fall-out of these Tax rises.

If the actual Elasticity is 0.5, we're looking at "only" 144,300 people unemployed and £2Bn of costs reflected in this. If the Elasticity is 2, it's double, with 577,200 people losing their jobs and £8Bn of costs.

The problem we have (and probably the reason Darling hasn't admitted to how many jobs will be lost) is that we don't actually know the Elasticity of Jobs. It's bloody hard to measure. It changes based on which country you're in (some are more likely to keep you around even if you cost more: Japan for example) or how much you earn (Those who earn the most turn out to be quite elastic).

Estimates vary from 0.5 to about 1.5 (looking at people who are highly paid).

What this means is that among the 288,600 people fired (assuming an Elasticity of 1) we'd actually expect a lot more of the high earners to lose their jobs (afterall, an additional £100 per year for someone earning £10,000 is a lot less than the £10,000 for someone earning £1m). This means the estimates above, which are driven by UK average wages, could even be too low.

But, in amongst all these figures, we're missing the important thing, the Human element. Even if we take the low-end estimate of an elasticity of 0.5, if Labour are re-elected they will then condemn nearly 150,000 people to lose their jobs. Do we think these will come from the Public Sector?

This means that the Tories have pledged to protect at least 150,000 productive, private sector jobs. Won't these be the exact people needed to drive the recovery?

A Future Fail for All

What Labour's pledge card should have said...

Government Borrowing "falls" to £5,126 a second

Good News Everybody!

The BBC are reporting that Government borrowing is "only" £12.4Bn in February. Apparently this "isn't as bad as some have feared".

Just to summarise this new debt being forced on us:

• Every second in February, the Government borrowed £5,126
• Every minute in February, the Government borrowed £307,540
• Every hour in February, the Government borrowed £18,452,381 (yes, over £18 Million)
• Every day in February, the Government borrowed £442,857,143

Let's assume that Lord Ashcroft decided that he should now pay UK tax on all his overseas earnings from his entire life (currently estimated at £125 million) then this will cover UK borrowing for less than seven hours!
If the latest UK winner of the Euromillions Lottery decided to give all their money (all £56 million of it), it would account for only three hours of borrowing!

At the bottom of the linked article, the BBC journo states that: "Moody's agency said the UK's top rating was secure."

Actually, what Moody's said was that: “On balance, we believe that the ratings of all large Aaa governments remain well positioned, although their ‘distance-to-downgrade’ has in all cases substantially diminished”

I.e.: The longer Labour are in power and continue to borrow our grandchildren's money, the more likely we're going to find ourselves stuck in a spiral of debt we'll be unable to control.

Labour Rats Abandoning the Sinking Ship

Following on from the list here showing all Labour Donors (who've donated a total of more than £100k since 2001). I decided to have a look through and see how donations to Labour have changed over time.

The following graph shows donations in 2008 compared to 2009 from Trade Unions, Individuals and Companies.

• Donations from Companies have fallen from over £1 million to just over £750k, a drop of 25%
• Donations from Individuals have fallen off a cliff from £6.6m to £3.7m. This is a massive fall of 45%
• Whilst Donations from Unions have risen by 4%, this is hardly enough to counteract this massive shortfall in Labour's funding

Whilst in 2008, private individuals may have supported Labour to the tune of nearly £7m, these people have all realised what the true chance of Labour winning the election is and have chosen to take their money elsewhere. Rats off a sinking ship, anyone?

Taxpayers are Bankrolling Labour!

Following on from this list of Labour Donors, I noted how frequently Unions were appearing on the list.

Recently, a PQ has detailed the cash Unions have received from the Union Modernisation Fund, written about by Iain Dale here. I've decided to not just focus on Unite, but see how much each union has given Labour and see how much they've received.

Whilst these figures do not include FY06-07 where Unite apparently received over £4m they do provide a little colour to show how Taxpayers money is being given to the Unions, who hand it straight back to Labour.



(If the image is unreadable, just click on it for a larger version).

The RMT recieved £194k and managed to scrape together £276k to donate.
The Communication Workers Union donated £151k and were given £166k.
Even the Musicians Union (who donated £281k) got in on the act and were given £47k.


As we can see, the government have given these Unions nearly two million pounds over the last few years. These are the people who have provided a massive proportion of Labour's Finances. In effect, Millions of pounds of Taxpayers money has been directly channeled from the Treasury to Labour's pockets.

Does anyone really believe that if this money hadn't been given to the unions by the government, they wouldn't just have donated a little less to Labour?

EDIT: Updated 17th March to reflect error in donations - caused by not counting donations from Mid-2007

Sources: The above PQ for the union funding by year and the database of party donors from here

Resource: Labour Donors over £100k

Donor	Number of Donations	Total Donations
Unison	1005	16,260,087
GMB	798	12,924,364
Union of Shop Distributive and Allied Workers	377	8,471,326
Amicus	450	8,386,751
Transport and General Workers Union	284	6,721,215
Lord David Sainsbury	5	6,061,808
Unite - AMICUS Section	258	5,258,720
Communication Workers Union (CWU)	534	5,193,968
Unite - TGWU Section	85	2,662,979
Lord Sainsbury of Turville	2	2,505,000
Nigel Doughty	9	2,305,201
Sir Ronald Cohen	10	2,300,000
AEEU	97	2,210,829
Lakshmi Mittal	2	2,125,000
Lord David Sainsbury of Turville	5	2,016,000
Lord Sainsbury	1	2,000,000
Lakshminiwas Mittal	1	2,000,000
TGWU	107	1,574,543
Unite - AMICUS	37	1,531,477
USDAW	74	1,396,824
UNITE - Transport and General Workers Union	13	1,329,160
Amicus AEEU	100	1,311,486
Lord Paul Drayson	2	1,005,000
Sir Christopher Ondaatje CBE	2	1,000,250
Lord Paul Hamlyn	2	1,000,000
Jon Aisbitt	4	1,000,000
Joanne Rowling	1	1,000,000
Mr William Haughey OBE	3	990,000
Communications Workers Union (CWU)	158	953,445
Community	102	891,462
Mahmoud Khayami	4	830,000
MSF	116	786,909
Union of construction Allied Trades & Technicians	68	742,057
Communications Workers Union	93	693,361
TBWA London Ltd	35	692,763
Sir Christopher Ondaatje	2	600,000
Graphical Paper & Media Union	56	587,454
Transport Salaried Staff Association	89	582,252
Sir David Garrard	2	552,278
The Co-operative Party	280	534,768
ISTC	88	503,696
Saatchi & Saatchi Group Limited	4	446,037
Sir Sigmund Sternberg	22	427,633
Derek Tullett CBE	3	400,000
UCATT	26	376,558
ASLEF	80	357,554
Co-operative Party	197	356,915
Amicus MSF	16	356,532
Communication Workers Union CWU	37	341,942
Sir Gulam Noon	6	323,826
KPMG LLP	23	314,266
Muslim Friends of Labour	8	312,000
Lord Sushantha Bhattacharyya	10	306,594
Transport & General Workers Union	11	303,591
Sir Frank Lowe	12	300,000
Mr Nigel Doughty	5	288,000
Musicians Union	62	280,719
Mr William Bollinger	3	260,725
Mr Michael Watt	2	260,000
William Bollinger	1	250,000
Ronald Cohen	1	250,000
GPMU	45	244,800
Union of Construction, Allied Trades and Technicians	22	208,317
Sir Alan Sugar	1	200,000
Derek Tullet CBE	2	200,000
Bill Kenwright	1	200,000
Pricewaterhouse Coopers LLP	2	184,193
Sir Maurice Hatter	3	176,000
Thompsons Solicitors	74	172,399
Unite - AMICUS Section - Sponsorship	22	171,207
Sterling Capitol Plc	1	160,000
Fire Brigades Union	46	158,948
RMT	18	154,655
The Co-operative Group	11	153,508
Mr David Abrahams (originally reported from John McCarthy)	4	152,125
Communication Workers Union	11	150,551
Mr Peter Coates	2	150,000
Mr Mahmoud Khayami - Sponsorship	1	150,000
Mr Derek Tullett CBE	2	150,000
Charles Peel	2	150,000
Bet365 Ltd	2	150,000
Mr David Abrahams (originally reported as from R. Ruddick)	4	147,850
Mr David Abrahams (originally reported as from Janet Kidd)	6	147,000
Picture Production Company Ltd	2	136,400
BECTU	29	135,395
KPMG UK Ltd	4	135,000
National Union of Mineworkers	54	132,129
The Video Meeting Company Limited	1	131,930
Tait Communications	9	131,112
Croydon Labour Group	30	126,960
Denise Gleeson	2	126,750
Communtiy	5	122,165
Steve Lazarides	1	121,600
Rail, Maritime, Transport	40	121,454
Peter Thompson OBE	2	120,000
Connect	22	117,660
Haringey Labour Group	34	111,114
Mr Amin Hemani	2	110,200
Gulam Noon	5	109,000
Transport and Salaried Staff Association	22	108,640
Ceramics & Allied Trades Union	20	105,359
River Front Properties Ltd	40	104,073
Mr Christopher Ondaatje	3	102,500
Vera Archer	1	100,000
Thomas Marsoner	1	100,000
Sir Gulam Noon MBE	1	100,000
Mr William Archer	1	100,000
Mr Tom Hunter	1	100,000
Mr Derek Tullett	1	100,000
Mr Charles Peel	1	100,000
Hillside (New Media) Limited	1	100,000
Dr Paul Drayson	2	100,000
Bob Murray CBE	1	100,000

Gordon is lying - again!

I'm getting pissed off with Gordon constantly prattling on about how Defence Spending has risen under Labour. So I decided to have a look at the reality of his claims.

The best measure of Defence Spending has always been looking at total cash spend as a percentage of GDP. For the US and China this is quite high (some claim up to about 10% for the latter). For Belgium it's pretty damn low (about 1.3%). Countries that actually want to have an influence in world affairs tend to be spending more than 2.5% (which is what France spends).

So, lets have a look at how Defence Spending has changed under Labour.

To no-one's surprise Defence Spending has fallen dramatically for nearly every year Labour have been in power. The only occasion Defence Spending managed to actually rise was when they were simultaneously spending on a large war in Afghanistan whilst watching the economy tank (It's more a case of GDP falling than Defence Spending growing).

Ah ha! I hear you say! Gordon actually meant that Defence Spending has risen in "Real Terms". GDP is irrelevant, just look at how much the Defence budget was, correct for inflation and you'll see that Defence Spending has gone up in every year. Afterall, Gordon wouldn't lie to us!

Well, lets see what that gets us.
This picture looks much rosier. In real terms Defence Spending has generally risen . However, there have been four occasions since 1997 where Defence Spending has fallen in real terms. To make these clearer, I've coloured them red.

Gordon is clearly wrong when he says that the Defence Budget hasn't been cut whilst Labour has been in power (it's even been cut since he was PM). It has whether you're looking at percentage of GDP, or in terms of 2008 cash. Time for an apology to the house?

The interesting thing isn't actually that Gordon has been caught lying. Afterall, that can hardly shock anyone now. Look at the time of the two most recent cuts. These are in 2002-2003 and 2007-2008. This is where Brown's testimony to Chilcot was "disingenuous". As the military were gearing up for an inevitable war in Iraq (for all the "right reasons", remember) the core MoD budget was being cut in real terms. As our troops were increasing (remember, the initial deployment was only supposed to be less than 5,000. Now there's about 10,000 troops in theatre) involved in ever-escalating warfare in Afghanistan the budget was cut again.

Whilst Brown is factually incorrect to say that Defence Spending has consistently risen, it's the fact that he's chosen to slash Defence Budgets exactly when our troops need more funding that shows how he really views the Military.

EDIT: A reader has suggested I make it clear in this analysis that we're looking only at core Defence funding. Obviously, this does not include spending on wars, which should be funded entirely from the central reserve. This should also include all UORs, which are Brown's favorite counter-argument whenever Defence Spending is bought up. However, it should be noted from this PQ in March 2009 that even UORs are sometimes part of wholely funded from the core Budget:

"UORs are normally funded from the reserve and not subject to repayment. There are however occasions when an urgent capability will also bring long-term benefit to the MoD, and it is therefore appropriate for the MoD to contribute to the cost of the UOR. Equally, existing funded programmes in the MoD’s forward equipment plan may be brought forward for urgent operational reasons, and if reserve funding is provided to meet the urgent requirement, it may be subject to repayment. Exact proportions of any cost-share will vary according to the particular projects and final costs and are not held centrally. An exact breakdown of costs to the MoD and the reserve for all UORs could only be provided at disproportionate cost."

If the MoD are having to spend their core budget on UORs, then the effetive reductions we've seen above could be even larger than these figures above show.

Exclusive! Antique Photograph of Gordon Brown

Today Gordon Brown has landed at Heston Aerodrome. He has with him a piece of paper, promising "No Return to Boom and Bust!"

We thank him from the bottom of our hearts!

Labour is talking bollocks on Crime!

I've been pretty cheerful recently, so it's actually been quite hard to find something to get angry about. Luckily, with Labour in power, you never need to wait long until they do something so aggravating it should be added to the cost of running the NHS.

Today's entertaining ditty claims that the Tories are weak on Crime. This should be a fun one. Afterall, the Tories didn't start a policy of releasing convicted and sentenced criminals just because they needed the extra space. Let's not forget that this scheme released over 11,000 people who the law said should be behind bars in just the first four months.

Anyway, the point of Labour's new attack on the Tories isn't that they're Strong on Crime (which they're clearly not) but that the Tories are weak.

Alan Johnson's statement provides two key points.

1. Tories want to limit the use of DNA by the police
2. Tories have campaigned against CCTV

Clearly these Tories are mad! Everyone knows that CCTV and DNA are essential tools in fighting the crime waves we're facing!

Except, as we all know, Crime is actually pretty static (it's only fear of crime that's up and you can hardly say that Labour have reduced the need for 'fear' in this country). So let's just look at how effective CCTV and DNA actually have been.

DNA first. The Tories actually voted against proposals to introduce mandatory DNA collection for "Recordable Offences". Wikipedia tells me these include: "drunkenness, poaching, public order, begging, failing to provide a specimen of breath, and taking a pedal cycle without consent." Does anyone really think that these are the sort of offences that should dictate mandatory DNA capture? Are they really on a par with Rape, Murder or other more serious offences? It's worth noting that for Rape and Murder, crimes were DNA evidence should be a vital tool, the database was only able to solve less than 30% of cases where they already had a DNA match (source). That means even when they were able to find a match to the criminal on the database, they still only had a 30% chance of actually using that to solve the case!

In addition, there are 28,625 people on the database who volunteered their DNA. These people are mostly victims and third parties who could have been legitimately present at the crime scene. Once they have given consent for their DNA to be added to the database "it cannot then be withdrawn". Their data will be saved for 6 years. It was only with a serious fight this was reduced from 12 years! Even the bloody EU thinks this is illegal!

Currently there's over 5 million unique entries on the DNA database. Roughly that's one for each ten people in the country. Does anyone really believe that there are 5 million criminals in this country (and I mean real criminals, not people who drove at 33mph in a 30 zone)? Still, the size of the database is no reason to dismiss it. Maybe it is solving thousands of otherwise unsolvable crimes? Actually DNA helps (so, this includes many cases that would have been solved anyway) a mere 0.36% of crimes. Maybe it would solve more if everyone was on the database, but if that's the intention then Labour should be clear about this, rather than trying to get DNA records for every possible "crime". How long before speeding, or littering is added to the list of offences that require DNA capture?

CCTV is much easier to dismiss as a crime fighting weapon. This is even more useless than DNA evidence. We have over one million cameras in London. They were reported to require '1000' cameras to solve a single crime. Whilst the DNA database costs a 'mere' £4million or so. CCTV has had £500m "invested" into it nationwide. The cameras are nearly bloody useless and cost a fortune. At least the DNA database is relatively cheap!

Labour have picked DNA and CCTV as sticks to beat the Tory party with. Both of these solve very few crimes and have massive civil liberty issues attached to them. If I were a Labour voter I would be very concerned that a party that has traditionally stood up for Civil Rights is now doing it's best to trample these in the dust and is smearing any party that is trying to stand up to them.

In other news...

Read this story this morning.

"The Ministry of Defence has been accused of giving "misleading" answers to MPs scrutinising its budget. ..."Witness denials at that time of the existence of such a gap now appear disingenuous." "

In other news this man is a Catholic!

Detailed spectrographic analysis has proven that when clear, the sky is blue!

The sea has been found by scientists to be overwhelmingly wet!
Many people are coming forward to claim that this man is a bully in the workplace:

OK, maybe that last one wasn't such a surprise..

Joke of the Day

Sorry for the lack of posting - Have been quite busy recently. Shall attempt to resume previous behaviour shortly.

In the meantime, here's a joke:



An Aussie truckie walks into an outback cafe' with a full-grown emu behind him. The waitress asks them for their orders.

The truckie says, 'A hamburger, chips and a coke,' and turns to the emu, 'What's yours?' 'I'll have the same,' says the emu.

A short time later the waitress returns with the order 'That will be $9.40 please,' and he reaches into his pocket and pulls out the exact change for payment..

The next day, the man and the emu come again and he says,'A hamburger, chips and a coke.'
The emu says, 'I'll have the same.' Again the truckie reaches into his pocket and pays with exact change.

This becomes routine until the two enter again. 'The usual?' asks the waitress.

'No, it's Friday night, so I'll have a steak, baked potato and a salad,' says the man. 'Same,' says the emu.

Shortly the waitress brings the order and says, 'That will be $32.62.'

Once again the man pulls the exact change out of his pocket and places it on the table.

The waitress cannot hold back her curiosity any longer. 'Excuse me, mate, how do you manage to always come up with the exact change in your pocket every time?'

'Well, love' says the truckie, 'a few years ago, I was cleaning out the back shed, and found an old lamp. When I rubbed it, a Genie appeared and offered me two wishes. My first wish was that if I ever had to pay for anything, I would just put my hand in my pocket and the right amount of money would always be there.'

'That's brilliant!' says the waitress. 'Most people would ask for a million dollars or something, but you'll always be as rich as you want for as long as you live!'

'That's right. Whether it's a gallon of milk or a Rolls Royce, the exact money is always there,' says the man. The waitress asks, 'What's with the bloody emu?'

The truckie sighs, pauses, and answers, 'My second wish was for a tall bird with a big arse and long legs, who agrees with everything I say.'