I thought that two of the key problems in a recession is rising unemployment, due to companies going bust. So how exactly does bribing companies to take new staff on who have been unemployed for longer than 3 months actually help?  If Cameron was serious about tax cuts, then he should offer help to companies to not fire people or some sort of insolvency protection, rather than trying to tackle to long-term unemployment problem that this country has. If you really want to help, Dave, help stop businesses going bust in the first place by either giving them a big tax cut (e.g abolishing employer NI) or increasing the money in people’s pocket by reducing VAT (to 10% and bugger the EU), dramatically increasing the lower rate tax threshold or reintroducing the 10% lower rate. Timid tax cutting policies will only have the opposite effect to that desired - by not having enough impact because they are of too limited scope. One must be bold, and if you are worried about “fiscal responsibility”, cut the vast public sector budget in Labour’s client state.

But of course, he was only pushed into this “tax cutting” agenda because of the media - everyone knows that in politics, the first to announce tax cuts is the one that actually gets the most political advantage (that was what happened with Obama, for example). And that’s why Dave tried to pre-empt the budget report this week, by pre-pre-pre-announcing his policies before the weekend (some 3 or 4 days before the first of a string of announcements), trying to out-smart the Labour media machine at their own game.

In fact, one such cost-cutting measure to pay for a decent tax cut could be to abolish all of the media studies university courses and public sector paid (whether directly or indirectly) media advisors. That’ll save billions. Otherwise, we will end up with pre-announcements of an announcement of a meeting to decide when to announce a date to announce a new policy.

My wife has a new blog. Enjoy.

According to Channel 4 News, tomorrow the Government will announce their new policy on energy efficiency. Sorry for being stupid, but if they are announcing it tomorrow, why was it covered on the news today?

Perhaps my stupidity has something to do with not being in PR?

A rather abrasive title for a post, perhaps, but it comes from a conversation that I had with someone on the train this morning. An individual who works for a FE college in Essex (both shall remain anonymous) was telling me of some courses that he teaches in. Or rather, talking about the students who are studying for qualifications in the department in which he teaches - performing arts.

Apparently, most of the students are unable to perform and have little commitment to any eventual career in the performing arts. Only a few go on to study performing arts at university, fewer still at the well renowned ones. Those who do not go on to study to a higher level, yet stick with a career in performing arts, invariably end up in Butlins or on a cruise ship. A significant number of the students end up selling insurance, working in sales or admin, factories or agriculture - jobs where a qualification in the arts would at best offer no advantage, and at worse hinder the chances of employment. 

Many of the students arrive thinking they will be famous, most via shows such as X-Factor. The tutors, teachers and course managers know that the students are arriving with this false hope. They know that the vast majority of students will leave with a “vocational qualification” that will make them no more employable than one in strawberry picking. They know that the majority of the students are wasting their time. Yet the FE colleges are funded by the government to offer these courses. The college managers are perfectly happy to accept the country’s hard-earned cash in exchange for a qualification that offers very few tangible benefits. How the teaching staff keep motivated, given the person that I spoke to was so up-front about the shortcomings of the course, is beyond me.

But, after this conversation, I have some questions.

How many other courses are funded by the government, all in the name of keeping people off the official unemployment statistics? How much money is being wasted on training our teenagers in skills they will never use in their adult lives? How many schools are feeding teenagers with false hopes when they advise them to start these “vocational” courses? How much intrinsic bias is there in the education system, whereby education of any description is better than a job, regardless of the consequences? Would it not make more economical sense to have vocational qualifications that are taught ‘on the job’, perhaps by day release to FE colleges, rather than ones based solely at FE colleges?

As someone with the greatest respect for education, I believe in educating oneself for the sole purpose of personal development. But I have to question the effectiveness of the government’s policy on vocational education.

I have recently criticised Brownian economics in two different posts. They involve government subsidising particular services for particular ‘target’ groups, normally politically identified. One of the main criticisms that I had was that the level of waste and increasing bureaucracy. Instead of entering “shared ownership” schemes with first time buyers, reduce red tape and taxes on house builders. Instead of taxing energy companies to subsidise energy bills for families, simply lower taxes on gas companies or the families themselves.  

So let’s get this straight. If you are a pensioner, then you can claim some fuel payments:

If you are aged 60 to 79 and you are entitled to receive a Winter Fuel Payment, this year you will get either £125 or £250, depending on your circumstances in the qualifying week (15 to 21 September 2008).

If you are aged 80 or over and you are entitled to a Winter Fuel Payment, this year you will either £200 or £400, depending on your circumstances in the qualifying week.

In 2006, that corresponded to 9.5 million people getting the allowance. That’s a cost of £2bn per year.

Only last week, there could be a further £150 for families taking the credit, but thank goodness it seems this this is wrong. Instead, the government now proposing that the payment should only be £100 for 6 million families - so just another £600m, making the grand total £2.6bn.

It seems that in 2006-7 the DWP spent £120bn on benefits and £6bn administering those benefits. Assuming the same ratio of benefit to administration, we have a grand total of £2.75bn. 

Wouldn’t it just be much simpler to give the pensioners an extra lump of pension that they could spend on what they choose? Would it not be simpler to give the ‘poor’ families a tax cut, so that they can spend the money on what they choose? The total comes to £175 per person per year, whatever their situation. 

Why does the government insist on taxing people to give the money back to them, via a complicated vouchers system? Would it not be simpler to not tax people in the first place?

The same can be said for tax credits. We hear that they cost £1.5bn per year just in fraud and incompetence! The actual benefit that was paid out is £15bn. Leaving pensioners aside (lots do not pay tax, although some do), we could increase the personal tax band (currently £5,435) by £3000! Just think about it. That’s £600 in every working person’s pocket - every working person. And you might just take a few 10’s of thousand people out of tax all together.

Apparently, Labour is about helping poor people. My arse. It’s about building a client state and interfering in people’s lives.

The swing doesn’t matter and neither does the fact that Labour lost. The key to understanding how bad it is for Gordo is the number of ministers that come out fighting. So far on the BBC Radio 4…..

8:15 Des Browne, who is apparently fighting to keep his cabinet position. Doesn’t look good so far for Gordo…

12:00 The next Labour MP to be quoted by Radio 4 is….. Graham Stringer. ‘Who?’ I here you ask…. Quite. And what is more, he isn’t even supporting the PM…. “We need a new start and that can only come from a debate around the leadership. I hope those discussions will take place.”

13:10 Brian Iddon, Bolton, on the World at One… wasn’t pleasant listening for Gordo

13:20 Finally… someone who is actually important (if puppets can be defined this way)…. we have… Alistair Darling! He discusses economic policy, the problems we are facing (credit crunch and oil prices), trying to make things sound positive (extra tax allowance, 2p petrol tax freeze…). Then onto future things he can do (e.g availability of mortgages). Aaaah now he brings in how terrible it was under the Tories… harking back to 1997… Labour has been a government you can all trust. And after a 5 minute interview, we finally have support for Gordo - but only briefly (less than a minute), as we are now back to how great Labour is. And that is it! Goodness me, the 30 seconds “Gordo is great” 2/3 of the way through a 7 minute interview was far from convincing.

This is was a ‘live’ blog post, updated every time someone speaks spoke about ‘that result’, as it will be known in time, I am sure. I have now got bored and decided to do some work instead… I might be back for PM.

Faced with the following:

“Yet listen to this figure - if you are a woman working part-time you get 40 per cent less per hour on average than a man working full-time.”

You would think that Harriet Harman was onto something. That women earn 40% less than men is astonishing. Indeed, she goes on to say

“Do we think she is 40 per cent less intelligent, less committed, less hard-working, less qualified? It’s not the case. It’s entrenched discrimination.”

Quite.

But a day or so ago, I argued that it is not so easy to compare full-time employee wages with part-time employee wages, since the wages due should be calculated on outcomes and not on inputs. Effectively, just because someone has the same job description does not mean that they should earn the same, and in my mind (and it seems employers) there is a significant difference between the outcomes of a full and part time employee.

So rather than comparing apples with pears, as Harriet likes to do by comparing full time men with part time women in order to come to some conclusion about women/male inequality, let’s compare apples with apples.

In the year to April 2007, according to the Office for National Statistics, weekly median gross earnings for a woman working part-time are £145.60 and for a man, £137.80. If you compare women who aren’t married or cohabiting with men who aren’t married or cohabiting, hourly pay for the women is £8.82 and for men £8.72.

So if part time women 40% earn less than full time men, you know what, part time men learn even less! Where is the outcry on that statistic Ms Harman? Do you think men are less intelligent, less committed, less hard-working, less qualified? Is it also entrenched discrimination? Or could it be that employers use a mechanism called the market to decide who should earn what, and that full time employees are more valuable assets than part time ones?

Of course, there is a gender pay gap and some of this is due to discrimination, but rather than comparing apples with oranges, or taking specific examples as I have done above, let’s look into the figures in more detail. According to the ONS from a few years ago, full time women earned 82% of the pay of full time men and the gap is widening over time. Again, this looks damning. But rather than making an emotive speach about how unfair it is on women, let’s continue with the analysis. Indeed, according to the ONS, the widening of the gap is

“largely the result of differences at the top end of the earnings distribution where the growth in men’s earnings has outstripped that of women.”

One must therefore look across the distribution of earnings and compare the mean average for men and women at each point on the cumulative distribution. When one does this, one finds that in the lowest 75% of the earnings, the pay gap between men and women is actually narrowing. Indeed, by 0.5%! But of course, there is always a disclaimer. If one reads the statistical reports, rather than listen to some dippy politician (and trust me, Harman is) then we find out

“Although average hourly pay excluding overtime provides a useful comparison of men’s and women’s earnings, it does not reveal differences in rates of pay for comparable jobs. This is because such averages do not highlight the different employment characteristics of men and women, such as the differing proportions in higher or lower-paid occupations and their length of time in jobs.”

So rather than worrying about absolute pay differences between men and women from the whole employment market, which is still comparing apples with oranges, one should compare how much men and women earn in the same job. And that is the subject of another post.

First post in a while. I am off to bonny wie Scotland today. Saturday morning I need to be in Oxford. Given the choice of flying Friday evening (no drinking with friends), flying Saturday morning (1st flight of day + 5am start= no drinking with friends) or getting the sleeper (11:30pm start = can drink with friends), which one do you think I choose? Yup, you guessed it.

Apart from the fact that Scotrail should be renamed Shitrail! You see, the problem is, in order to get tickets you need to register. When registering, you are asked the country in which you live. Perfectly logical, until you realise that a postcode address search is mandatory and that the only database that is searched is the UK one! Why do Shitrail not realise that Switzerland does not fall into the remit of the UK postal code system? Glad to see nothing has changed since moving.

There is a reason that British Rail (along with BA) are the laughing stock of the rest of the world, you know.  

Back from blighty. All in all, a good trip - lots achieved (both work and family matters). Am very tired after the 1000km drive, so more posts tomorrow.

As seems to be the trend in the last year, I have managed to completely ignore my blog. I truly hope that this will be the end of the long absence. Part of this has been due to technical difficulties (some of which I am still experiencing), some due to work commitments and the rest is simply apathy. Well the first and last are soon to be gone - I am fixing the technical problems and Boredom Brown has really got my back up. As for the work commitments, I am afraid I cannot comment.