Mike Hosking’s Special Pleading

Mike Hosking’s musings on current affairs usually follow a fairly predictable course.  But his piece in Wednesday’s Herald on the new government’s attempts to help those in need – the children living in poverty, pensioners struggling to stay warm in winter – took a rather different tack.

He seemed to concede that the attempts were worthwhile, and might even work up to a point.  His case against them was that they were poorly directed and not adequately focused – the spending was, he said, “too loose”.   The help would go, he objected, to everyone and not just to the needy.

He had earlier in the same piece drawn our attention to the fact that the help was being funded with the money saved from the tax cuts “we didn’t get” – spending and no tax cuts was, he said, typical of centre-left governments whereas centre-right governments offered tax cuts as a reward for national economic success.  There could be little doubt as to which of these options he favoured, though he didn’t quite get round to conceding that the majority of voters had rejected the prospect of tax cuts in favour of greater spending on better health services and education and on the alleviation of poverty.

Now, Mike Hosking is, as the blurb that precedes his article in the Herald reminds us, one of our most successful broadcasters – and one of the most ubiquitous as well.  He must be presumed at least to know what he is talking about and to have thought through the opinions he offers us. So, when he tells us that directing help to those in need will be ineffective because it is “too loose” and poorly directed, and implies that tax cuts would have been preferable, we should sit up and take notice.

But, hang on a minute.  Isn’t there a pretty obvious flaw in his reasoning?   If a government finds that it has a bit of money to spare, what is more likely to achieve the outcomes preferred by the voters – tax cuts, or spending to boost the incomes of poor families and to improve the level of critical services?

The answer is surely a no-brainer.  There is nothing less well directed than an across-the-board tax cut and, if the criterion that matters is that the help must be properly focussed, the last thing you would offer is a tax cut which would fail that test at the first hurdle.  Offering a tax cut across the board will be so poorly directed that it will guarantee that a disproportionate share of the benefit goes to the better-off, and that the poor, typically enough, have to make do with the leavings.

Those who gain the most from tax cuts are those who pay, usually by virtue of their large incomes and wealth, the most tax.  To use the available money in this way is to ensure that the benefits do not go primarily to those in need but to the well-off – and, in terms of what would most benefit the economy, it is obvious that money in the pockets of the poor will get spent and will boost economic activity, whereas tax cuts for the rich will just end up  enlarging their wealth and the income they can make from it and will do little to stimulate the economy.

Mike Hosking purports to be making a value-free critique of the new government’s commendable efforts to help those in need.  But if we accept his argument that a clear focus and direction should be the cardinal feature of such attempts, then the last policy we should consider is an across-the-board tax cut.

We are forced to the conclusion that Mike Hosking’s conclusion is not the product of careful and value-free reasoning but is rather the confused  product of a lazy manifestation of, at best, gut feelings (aka political prejudices).  We are entitled to expect better from “one of our most successful broadcasters” – and certainly from one who would no doubt benefit particularly from the tax cuts he advocates.

Bryan Gould

14 December 2017