Reshuffle

Even a mini-reshuffle means moving many people around - the job of a person who has been moved  has to filled. So, a total of four people were moved, and one more will.

1)Liam Fox resigned and is now on the backbenches.

2)Justine Greening moves from Economic Secretary to the Treasury to Transport Secretary

3)Chloe Smith moves from Assistant Whip to Economic Secretary to the Treasury

4)Greg Hands moves from PPS to Chancellor to Assistant Whip

...5)And Osborne will have to find a new PPS.

The next Defence Secretary

OK, Liam Fox resigned. The reasons for his resignation are a bit messy, so let's talk about it when we find out more. What is an important question now is who becomes the next Defence Secretary.

Generally, it has been reported that Cameron and Clegg are wary of reshuffles. The current Cabinet is carefully balanced - between LibDems and Conservatives, and also within each of the parties. Cameron brought some prominent Thatcherites such as IDS and Liam Fox, some very pro-business people like Philip Hammond, some 'wets' like Ken Clarke. Liam Fox leaves a hole; a full-scale reshuffle would hinder the balance in the cabinet.

On of the options is to bring somebody from the backbenches, an experienced backbencher with ministerial experience. Malcolm Rifkind could be the man (he has got experience as Defence Secretary and Foreign Secretary) - but he is much more pro-European than Fox, and his appointment would increase the unrest in the right wing of the Conservative party.

David Davis is also an experienced MP, his views closer to that of Fox's. His appointment would be in some ways a PR success for Cameron - appointing your key opponent could be seen as statesmanlike. But Cameron already fired Davis from the Shadow cabinet once - why would he re-appoint him? Davis was quite rebellious recently, voting against tuition fees increase etc.

What if a reshuffle does happen? As I am writing this, rumours grow that Hammond could be the new Defence Secretary. He can be seen as more or less neutral to the internal balance of the cabinet. Someone will have to become Transport Secretary - but this is not a top job, so it is not that important for Cabinet balance. It is, however, desirable for the government if the new Transport Secretary does not have reservations about HS2, because this policy is already controversial.

There is one final point to be made. Some of the Tory grassroots are very keen on getting David Laws back to government; but he could only return as an additional LibDem minister, which would not be that popular with Tory backbenchers (and a PR disaster - 'Torys can't even find ministers among their own rank').

UPD: According to Sky, Philip Hammond will be the  Defence Secretary, Justine Greening the Transport Secretary. Don't know who the next Economic Secretary to Treasury will be, but I would put my money on Greg Hands.

The 50p tax rate

There is an ongoing debate about the 50p tax rate in the United Kingdom; a lot of nonsense is spoken from the left and some nonsense from the right. I wanted to outline my own view about this issue and also stress the important differences between the UK and the US. In my view, Obama's proposals should be approached in a slightly different way than the 50p tax rate in the UK.

The following issues are important regarding the 50p tax rate:

1)Time-bomb issue. Since the time when Blair became the leader of Labour Party, there was virtually a consensus about the top rate of income tax. Even paddy Ashdown's 1p was, frankly, quite a minor adjustment suggestion. However, the decision to introduce the 50p tax rate was one of those asymmetrical decisions which is easier to introduce than to repel. For over 20(!) years, Britain lived with a 40p top rate of income tax, and somehow everybody was OK with it. Now the very same people are defending the 50p rate. A bit hypocritical, isn't it?

2)Motivation. I myself am a supporter of progressive taxation. However, there are two completely different justifications for it. The first, perfectly acceptable, is that a progressive tax rate is a fair way to raise revenue. The marginal utility of money is diminishing, and from a utilitarian point of view, the total welfare is maximized under a progressive tax rate. The second motivation is taxing the rich for the sake of it, i.e. social engineering. This is why I think that Osborne's approach to it (let's see if it raises any money) is roughly right, but Clegg's (if it does not raise revenue, let's find some other tax to levy on those rich bastards) is misguided.

3)Mobile workforce. Whether we like it or not, UK has a much more mobile workforce than Continental Europe. Financial services industry is the same across the world, and rich bankers can simply move to a country with lower taxes. sad but true.

4)How is it spent? Warren Buffet calls for higher taxes, and so are some European businessmen. Why not British? One might say that UK does not have a proper business elite, that most of the rich people in UK are either wealthy immigrants or 'reckless' bankers. This is partly true, and I wanted to write a separate post about it. But let's be fair - a person on 150000 pounds a year is not a super-rich person, that's upper middle class. Most of these people are very hard-working, they work long hours and sometimes even commute long distances. They pay huge taxes - what are they spent on? Equality officers, council houses for non-working immigrants with seven children, public sector pensions (the kind which is unimaginable for these people) etc.

In other words, some people simply cannot understand why they must pay those huge amounts of money.
In addition to this, Britain is different from Sweden. In Sweden, you pay taxes, but get a school voucher and a great degree of choice and competition among the state healthcare providers. In UK, anyone who can remotely afford it puts their children into private schools and join BUPA or other private health insurance provider. So - less value for money, you don't get much for your taxes.

5) Why is US different? because the top rate of federal income tax in US is 35%, not to mention a bunch of tax credits and exemptions. It should however be said that Obama could do better by suggesting the abolition of some of the exemptions - not that the Republicans would let him, of course.

6)So what should we do? I think the 50p tax rate needs to be phased out by cutting it by 1% every year and increasing the threshold faster than inflation. It will be an important signal and improve expectations, but revenue would not be lost as quickly. After all, in 1979, the top rate was cut from 83% to 60%, and the further cut to 40% took place only in 1988. But everyone knew that Howe and then Lawson were committed to cutting taxation, so it did not matter that much that the tax was deferred.

of course, i would prefer Osborne to firmly promise that '50p tax rate will be abolished when the fiscal situation permits'. Unfortunately, the left-wing encroachments from the LibDems make such an announcement unlikely in the nearest future.

Leaders' experience

Yesterday, I watched a documentary by Michael Portillo called 'The Lady's Not For Spurning'. In the end of the movie, Portillo briefly said that when Cameron ran for leadership, he was not sure if he could win due to his lack of parliamentary experience. I decided to check when Cameron became an MP, and I was quite surprised to find out that he only entered politics in 2001. Of course, he was a special adviser to Norman Lamont, but let's be fair - that is very different. Many previous leaders not only had a huge parliamentary experience before standing for the Leadership, but also usually stood for a one or two unwinnable seats before actually becoming an MP. This tendency can be observed in other parties too, so let's take a look at postwar leaders of three main parties (I don't take SDP separately because it consisted mainly of very experienced Labour MPs).

Conservative:

Winston Churchill - Leader in 1940-1955; MP since 1900. That's 38 years (with a 2-year gap in 1922-1924) of parliamentary experience by the date of becoming leader.

Anthony Eden - Leader 1955-1957; MP since 1923, first election contested in 1922. 32 years of parliamentary experience by the date of becoming leader.

Harold Macmillan - Leader 1957-1963, MP since 1924 (out in 1929-1931). 31 year of parliamentary experience by the date of becoming leader.

Alec Douglas-Home - became PM from the Lords so cannot be compared.

Edward Heath - Leader in 1965-1975, MP since 1950  - 15 years of parliamentary experience by the date of becoming leader.

Margaret Thatcher - Leader in 1975-1990, MP since 1959 - 16 years of parliamentary experience by the date of becoming leader.

John Major - Leader in 1990-1997, MP since 1979 - 11 years of parliamentary experience by the date of becoming leader.

 William Hague - Leader 1997-2001, MP since 1989 - 8 years of parliamentary experience by the date of becoming leader.

Ian Duncan Smith - Leader 2001-2003, MP since 1992 - 9 years of parliamentary experience by the date of becoming leader.

Michael Howard - Leader 2003-2005, MP since 1983, 20 years of parliamentary experience by the date of becoming leader.

David Cameron - Leader 2005-now, MP since 2001, 4 years of parliamentary experience by the date of becoming leader.

Labour Party:

Clement Attlee - Leader 1935-1955, MP since 1922, 13 years of parliamentary experience by the date of becoming leader (but don't forget that Labour was a relatively small party then)

Hugh Gaitskell - Leader 1955-1963, MP since 1945, 10 years of parliamentary experience by the date of becoming leader.

Harold Wilson - Leader 1963-1976, MP since 1945, 18 years of parliamentary experience by the date of becoming leader.

James Callaghan - Leader 1976-1980, MP since 1945, 31 years of parliamentary experience by the date of becoming leader.

Michael Foot - Leader 1980-1983, MP since 1945 (not MP 1955-1960), 30 years of parliamentary experience by the date of becoming leader.

Neil Kinnock - Leader 1983-1992, MP since 1970, 13 years of parliamentary experience by the date of becoming leader.

John Smith - Leader 1992-1994, MP since 1970, 22 years of parliamentary experience by the date of becoming leader.

Tony Blair - Leader 1994-2007, MP since 1983, 11 years of parliamentary experience by the date of becoming leader.

Gordon Brown - Leader 2007-2010, MP since 1983, 24 years of parliamentary experience by the date of becoming leader.

Ed Miliband - Leader since 2010, MP since 2005, 5 years of parliamentary experience by the date of becoming leader.

Liberal/Liberal Democratic Party:

Archibald Sinclair - Leader 1935-1945, MP since 1922, 13 years of parliamentary experience by the date of becoming leader.

Clement Davies - Leader 1945-1956, MP since 1929, 16 years of parliamentary experience by the date of becoming leader.

Jo Grimond - Leader 1956-1967, MP since 1950, 6 years of parliamentary experience by the date of becoming leader (but Liberals only had 6 MPs so there was little to choose from)

Jeremy Thorpe - Leader 1967-1976, MP since 1959, 8 years of parliamentary experience by the date of becoming leader.

David Steel - Leader 1976-1988, MP since 1965, 13 years of parliamentary experience by the date of becoming leader.

Paddy Ashdown - Leader 1988-1999, MP since 1983, 5 years of parliamentary experience by the date of becoming leader.

Charles Kennedy - Leader 1999-2006, MP since 1983, 16 years of parliamentary experience by the date of becoming leader.

Ming Campbell - Leader 2006-2007, MP since 1987, 19 years of parliamentary experience by the date of becoming leader.

Nick Clegg - Leader 2007-now, MP since 2005, 2 years of parliamentary experience by the date of becoming leader (he was an MEP but, I mean, really...)

The overall tendency is the reduction of the average number of years spent in Parliament before becoming Leader. There were notable exceptions in the beginning of 21st century - Howard, Brown, Campbell. But after them, each of the new leaders was elected with 5 years or less of experience. Makes you think, doesn't it?

YouGov/Sunday Times Poll

First of all, welcome to my blog. My name is Alexander Petrov, and this blog will be mainly about UK politics, but by no means confined to it.

Today, I would like to discuss the newest YouGov/Sunday Times poll. Since the key points are always magnificently analyzed by Anthony Wells, I would like to point your attention to some less important issues.

Nigel Farage has been spreading a lot of optimism about UKIP's performance recently. What is true is that UKIP has been consistently polling above its 2010 result - at 4, 5 and sometimes even 6-7%. So where, according to this poll, does that support come from? What is quite predictable is that there are some disenfranchised Eurosceptic conservatives - 6% of those who voted Tory in 2010 have switched to UKIP; this result is quite predictable, but there are questions regarding its sustainability - some of these voters are in marginal seats, and may think twice before risking letting in Labour or LibDems. A more peculiar result is that 5% of former LibDem voters have switched to UKIP; even more peculiarly, 15% have switched to Torys. To a great extent, this vindicates what Farage has been long saying about them - that a significant fraction of LD voters have no idea about the party's policies and just use it for a protest vote; the high result of LIbDems in 2010 elections did not reflect any kind of a Pro-European swing or a demand for a 'middle way' in economic policy - it simply reflected the existing frustration with the two main parties.

One fifth of Lib Dem voters now intend to vote for more right-wing, more Eurosceptic parties. To me, it only confirms that LD support was inflated, and, whatever happens, there is no way the LibDems will recover by 2015. 4% of LD voters intend to vote Green - also quite plausible given that Greens have finally managed to get an MP. Given the total share of Labour vote will almost definitely recover, Caroline Lucas will need those votes to keep her Brighton seat.

There does not seem to be a clear regional pattern in UKIP support, but there is a clearer age pattern. Whatever Farage says about growing popularity of UKIP among young people, the poll clearly shows that the bulk of UKIP supporters are 60+ or at least 40+. The Conservatives also have the highest support among  60+. People between 18 and 24 overwhelmingly support left parties - 55% labour, 3 % Green, and also the only age group with Respect support different from zero.

While it is considered normal in all parts of Europe that young people tend to support the Left of all sorts and species including and up to various radical Trotskyst groups, I think it is a worrying sign, first of all, of high youth unemployment, and second, of the complete lack of entrepreneurial culture in the UK.

The 40-59 group seems to have a slightly higher support for the Left than 25-39, but they are broadly similar (40-59 a bit more Eurosceptical).

Summing up, relative to the 2010 election,

•  Conservatives stay approximately at the same share of the vote, 86% of their 2010 supporters still ready to vote for them; some voters defect to UKIP, but this is compensated by an inflow of former LibDem supporters
• Labour Party is picking up LibDem voters (up to a third of them); its losses seem to be insignificant, and there is no clear pattern in them
• LibDems are not picking up any votes anywhere but are losing them to all sorts of people - first and foremost to Labour, but also, surprisingly, to Conservatives, to UKIP and to Green Party (also to SNP in Scotland, but the break-up of the poll is insufficient to see that)
• UKIP is gaining Conservative and LibDem votes, to a very little extent Labour, but its main vulnerability is that its support is confined to older age groups
• Greens seem to manage to attract some LibDem voters, and this may be crucial for Caroline Lucas in 2015 election - if she fails to attract enough LibDem voters to secure reelection, her party will lose momentum and will possibly have a limited scope for recovery

This is my first attempt to blog on this topic, so please I welcome any constructive criticism.