Nationalising the labour market

First nurses and degrees, now bankers' contracts are being controlled by the state. In a piece of short-termist populism, Labour have potentially sounded death knells for the City.

London needs the City. Britain needs the City. Without the City, who are we? It all goes back to the comparative advantage we have in finance, a theory that Adam Smith talked about a couple of hundred years back. I complain that the minimum wage is an undue interference on the freedom of contract between employer and employee, so this potential maximum wage is horrendous. What right does the state have to stop a bank using its profits to pay its bankers? Perhaps instead the state should stop supporting irresponsible practices, by bailing out and guaranteeing everything, and by making credit far too easy for far too long. If the shareholders don't like the bonuses, shares will drop. That is deterrence in itself.

Gordon Brown keeps saying he wants to "change the banking sector" and suchlike. The market will reallocate and change the banking sector, not the government, who don't have a clue what's needed. In the meantime, sort out the regulation as to minimise the size of credit bubbles.

The Budget: death throes of this government

The Budget this afternoon is an utter mess. The government think that they are helping, but they aren't. It shows so many reasons why governments, especially when left-wing, should not get involved.

The message of the tax rises is that if you are a wealth creator, stay well away. The 50% rate is just going to send our top businessmen, etc, to Switzerland, Monaco, Andorra..... In short-termist electioneering, the government has put short-term gain over long-term growth. They borrowed to the extremes, and now they want to please their core voters.

The real change should be a tax CUT, and a corporation tax cut to make our economy competitive and to give entrepreneurs an incentive. I certainly hope that Cameron and Osborne oppose this political rent-seeking.

As for the car scrappage scheme, it will help foreign economies not our own (BMW, Mercedes, Audi et al) and will cost a huge amount to the taxpayer.

Then the news that they are putting half a billion towards those noisy monstrosities that tend to end up where local people don't want them. Let private companies supply the demand (which is very low) and don't waste taxpayers' money on them.

He's also optimistic in his predictions. They are confident, but we aren't. Do you know what will make me confident? A change of government, with policies that give me confidence in the future. Cameron, sort it out.

The Budget and fuel prices

Since fuel prices have started going up (and have gone up at least 10p from where they were lowest), are the government going to abandon the 2p fuel tax rise?

Obviously not since the government just wants more of our money, but it would be the sensible thing to do, unless they want more hauliers going out of business, and higher supermarket prices, etc etc.

I suppose their excuse will be it will pull us out of deflation. But weren't they printing money for that?

New Labour are probably as confused as I am.