Sunday, 31 May 2009

Lib Dems take a hit from expenses scandal

Yesterday's Populus poll in The Times shows a seven per cent hit on support for the Liberal Democrats, i.e., around a third of their declared support. This is quite surprising given that (a) they have not had any real serious cases, the odd bit of interior decoration aside and (b) they are the party which has taken constitutional reform seriously (perhaps too seriously, given that the merits of different systems of PR is a real topic for anoraks).

Presumably voters see them as much a part of a failed political class as the two main parties. What one is seeing is a general anti-incumbency effect, often regardless of the merits of the incumbent. Voters are flocking to UKIP which has been beset with its own expenses scandals.

We are also seeing celebrities trying to fill the vacuum. I am not sure how being a successful television personality qualifies one for dealing with the complex issues that beset modern government, although Esther Rantzen could claim to have tackled some serious policy issues as well as celebrating odd shaped vegetables.

Saturday, 16 May 2009

Is working longer the answer?

Conventional answers to the crisis brought on in the public finances by the recession are some mixture of increasing taxes and cutting public spending, generally more of the latter.

Now in a paper written for the National Institute of Economic and Social Research by Ray Barrell, Ian Husrt and Simon Kirby, it is suggested that each year of additional working life would cut the budget deficit by 1 per cent of GDP after 10 years and in time reduce government debt by 20 per cent of GDP.

Boosting average working lives by three years would pare back the budget deficit by 3 per cent of GDP and cut government debt by 60 per cent of GDP, which the institute estimates is the cost of the current crisis.

Interestingly, compared with earlier recessions, employment among older workers is holding up better than for other age groups. Of course, it may be that the depth of the recession and the impact on their pension pots incentivises them to work longer.