Guess who put in appearance at the UKIP conference today?
Mark Littlewood, the director general of the free market thinktank the Institute for Economic Affairs, is speaking now. He started by telling the audience that he had just got back from the Lib Dem conference and that it was a miserable affair. The Lib Dems two main announcements were a 5p tax on plastic bag and free school meals for the children of middle class parents.
Littlewood used to be director of communications for the Lib Dems. Is he a Ukip man now? I saw him on the way in, and asked him. He said that as head of the IEA he is not allowed to back any party (because it has charity status). But his speech is undiluted economic libertarianism, and it is going down very well with the audience.
Here (taken from the Guardian liveblog
) are some extracts from his speech:
• Littlewood praised Ukip for broadening its agenda beyond Europe to take in small-state libertarianism.
Put simply, the British state is far, far too large and the private, free side of our economy is far too small.
UKIP points out the trivial, petty-minded, meddling, invasive nature of the Brussels bureaucracy. But we mustn't kid ourselves that the corridors of power here in London are awash with free market libertarians, just aching to be untied from the Brussels leash so they can go about slashing red tape, eliminating waste and cutting government spending down to a reasonable size. Sir Humphrey Appleby is not a Thatcherite free market capitalist.
• He said government spending was too high.
For all the talk of savage cuts and austerity, the coalition is reducing government spending in real terms by, at best, 1% per annum. By the time of the next general election, David Cameron will be spending about 97p for every £1 Gordon Brown was spending when he left office. George Osborne will have added about £600bn to the overall national debt – about £10,000 for every man woman and child in Britain and the overall national debt, including our off-balance sheet liabilities, will stand at around £6trn – or about £100,000 for every man, woman and child in Britain. The government will continue to spend money at the rate of over £80m an hour for every hour of every day.
If that's austerity, I dread to think what largesse looks like.
• He suggested state spending should be cut to about 30% of GDP.
And I have to tell you that making those savings – seeking, perhaps, to reduce the size of the state to only about 30% of GDP over the medium term - will require some brave and difficult political choices.
Sure, we can shut down some wasteful quangos. We can stop some of the more egregious examples of preposterous government spending. I also think there are whole government departments that can be closed down entirely. The Department of Culture Media and Sport? Culture, media and sport should belong to the people not to the state bureaucracy. The Department of Business, Innovation and Skills. Business. Innovation and Skills. Surely, the three things governments are worst at. That can go too. But these sort of savings only get you so far.
• He said welfare spending was not working.
To really get state spending under control, you have to tackle some of the big areas. Let me take one. Welfare. Total welfare spending – including state pensions – will stand at about £220bn next year. For that sum of money, you could shove £10,000 in used banknotes through the letterbox of every front door in the country. Yet we still apparently have not solved the poverty. If £220bn isn't enough what is? £250bn? £300bn? £400bn? It's time to admit that the welfare system doesn't work.
Instead the government should focus on cutting the cost of living, he said, through policies such as relaxing planning laws (to lower the cost of housing), pulling out of the common agriculture policy (to cut the cost of food) and abandoning environmental regulation (to cut energy prices).
• He proposed a flatter tax system, with national insurance contributions going into a personal pot.
Why not split the tax system as follows. Every worker would pay a certain proportion of their salary into their own personal national insurance account – not a general pot, their own account. This might amount to, say, 10% of your earnings, up to a certain amount. This would be ringfenced as a personal savings account for you – not a cash cow for the government. If you required support because you were out-of-work, you'd dip into this pot. As you built up the pot over the years, it would pay for your pension and social care when you needed it in old age. This personal savings account would be yours. Part of your estate for you to call upon in times of need.
Secondly, there would be a fairly low level of income tax, perhaps kicking in at around £11,000 or so per annum. This money would be used to pay for the general necessities of society – the armed forces, the police, the judicial system and to top up the monthly contributions into the personal savings accounts of the poorest, those who were unable to keep their own contributions at an acceptable level to guarantee a reasonable future pension and the like.
Such a system would be simple, would encourage personal responsibility, facilitate individual choice and would be a huge leap towards ending the Ponzi scheme which the state system has become. I encourage UKIP to embrace it.
• He said Ukip could make a real contribution to political debate if they focused not just on independence from Europe, but independence from the state.
• He said there was too much regulation, particularly covering public health and financial services.