The Telegraph has a piece about the LibDems deciding to ally with the Conservatives, which confirms an earlier piece in the FT in February that they were considering doing this. According to the Telegraph:
Nick Clegg, the Liberal Democrat leader, will support David Cameron if the Conservatives are the largest party in a hung Parliament.
In consultations with senior members of the party, he said he was prepared to take the necessary steps that would enable the Tories to form a minority administration.
..........Before now, it had been thought likely that Mr Clegg would wait until after an election to embark on negotiations with both of the main parties in the event of a hung Parliament.
But The Daily Telegraph understands that he has decided that the public would not forgive him if he propped up a Labour administration that they had voted to throw out.
Of course Clegg leaves out of his calculation that many of the seats the LibDems hold are by virtue of Labour voters voting tactically to keep the Tories out. He seems to think that people vote LibDem because they are LibDem fans.
There are 63 Liberal Democrat MPs in parliament, and they won their seats in 2005, under Charlie Kennedy, who was palpably left-of-centre and indeed promised such things as a 50% top rate of tax (attracting many old labour voters in the process) and an anti-Iraq stance. If these Labour voters vote LibDem in the next election simply to deny the Tories a majority,and then find that their LibDem MP has crawled into bed with those same Conservatives, they would be horrified especially as Cameron and co were more gung-ho about Iraq than most Labour MPs and he is certainly not interested in progressive taxation as his recent comments attest.
So what should Labour do about this? The current position is a legacy of the 1980's, when the Labour party destructively split into Labour and the SDP. Many voters opted for the SDP/Alliance because they didn't like the Tories but were afraid of the way the hard-left seemed to be taking over the Labour party in the absence of the moderates, who had gone SDP. By 1997 however, Millitant and Michael Foot were decisively vanquished. There was no reason for Labour voters to have to continue voting LibDem in certain parts of the country - except expedience. In the run-up to 1997, New Labour didn't want to spend time re-claiming these areas when they needed to concentrate their fire-power on Labour-Tory marginals. So Blair famously wooed Ashdown, so that Labour voters felt comfortable voting LibDem in places like the south-west "to keep the Tories out".
But what on earth is the point of Labour voters going LibDem if it results a conservative government? No point at all.
The first thing Labour should do is publicise this new alliance between the Tories and LibDems. Many people are unaware of it, and still assume that the LibDems are to the left of Labour. The next thing we need to do is start re-claiming our lost territory. The next election is a straight up fight between Labour and the Conservatives. The LibDem vote is the softest of the three parties and should be squeezed. The only question is who gets those votes. We must make it clear that a vote for the LibDems is a vote for the Conservatives, who are Thatcherites maskerading as "compassionate conservatives" in the manner pioneered by George Dubya Bush.
Tuesday, May 20, 2008
Sunday, May 18, 2008
The Poison Pill Strategy
The opinion polls continue to look dire, with YouGov in the Times showing the Conservatives on 45%, Labour on 25% and the Liberal Democrats on 18%. These may of course just be the mid-term blues. But it is possible that Labour will lose the next general election.
Before people leap out and call for Gordon Brown to step down and make way for someone else, all polls (including the YouGov one) show that changing the leader wouldn't make any difference. The real damage to the Labour party started with the Iraq war, and as soon as people started regarding us sceptically, it was on the cards that the scepticism would snowball and they would start to blame us for everything and anything they didn't like - sub-prime mess in the USA, it's Gordon's fault for not regulating lending in America; oil price hike, it's Gordon Brown's fault for not controlling world oil demand and so on. There is not a lot you can do about this once people get into this negative frame of mind, especially when it is magnified by a hostile press. Any successor to the PM would face the same problems. We also simply don't have the time to change leaders and in any case potential leaders (my preferred successor is Ed Miliband) need time to develop.
However, the next election won't be till 2010, which means we still have two years to go. If we are going down, we might as well go down as Labour, it won't make any difference to the outcome, but will cheer up our supporters and make things a little difficult for the succeeding government.
What do I mean by this? Well I was thinking primarily about tax and the example provided by Germany. The red-green government led by Schroeder followed a New Labour like strategy, cutting the top rate of tax from 51% to 42%. However, the red-blue Grand Coalition led by Angela Merkel has done something quite different and made the tax system more progressive.
First lets look at the German tax system. As of 2008, corporation tax is 15%, and businesses pay a 14%-17% municipality tax in addition. VAT is 19%. Individuals and employers in Germany pay about 20% each in social insurance and West Germans pay a solidarity surcharge of 5.5%. The income tax regime is as follows:
Tax % Tax Base (EUR)
0 Up to 7,664
15% 7,665-52,152
42% 52,153-250,000
45% 250,001 and over
Using an exchange rate of 1 euro = £0.7962, you can see that the 45% rate kicks in at £199,050.
Obviously some of the German taxes are completely unacceptable to a Labour government (particularly the VAT rates). However the shape of the income tax regime is very attractive. I think we could use the next two years to cut the basic rate to 15% and put in a 45% top rate for those earning over say £180,000.
Of course the high earners in the City will scream blue murder about this. But given that we might lose the next election anyway, we should simply shrug and tell them to take it up with the next government. If the next government turns out to be Labour, we can then point to a mandate for the regime.
We can also point out that in the City of London's main rival, New York City, high earning individuals are subject to 35% federal tax, 3.65% New York city income tax and 6.85% New York state income tax, making a grand total of 45.5%. The highest bracket 6.85% New York state tax kicks in at $40k (approx £20k) and the 3.65% New York city tax kicks in at $500,000 (approx £250k) and the 35% federal income tax kicks in at $357,701 (approx £179). Even if you earn less that $500k, you get clobbered because New York state has a highly progressive tax regime with five tax bands starting at 4% for low earners. New York city also has a lot of bands starting at 1.9%. And strangely (or not!) you don't see New York financial people decamping to low-tax Georgia. New Yorkers are now thinking of a millionaire's surcharge, and Americans don't have a non-dom system - if you are a citizen, you pay tax regardless of where on earth you live. Also note that the likely incoming Obama government will raise federal taxes on the highly paid.
How would this affect a possible incoming Tory government? In my opinion they will struggle to reverse the tax regime. If abolishing a 10p rate which applied to £2230 of income caused people to get upset, then raising the basic rate back to 20% from 15% (affecting income on the £34k above the personal allowance) in order to pay for a cut in the top rate will cause riots. They could try to raise VAT, but will find it has a knock-on effect on inflation and interest rates. (Mrs Thatcher managed this in the early 80's, abolishing the 25% initial rate of tax and doubling VAT in order to cut the top rate - but she only got away with it because the Labour party had split into Labour and the SDP. That's not going to happen again.) They could try to cut spending, but oops they have pledged to keep to Labour spending for three years, and in any case David Cameron has made much about how he will spend more than Labour on the NHS, defence, and whatever takes his fancy depending on the day of the week.
This strategy means that even if Labour loses the next election, Labour people can go to their beds happy that they've cut tax for the poor and made the high earners contribute more.
Before people leap out and call for Gordon Brown to step down and make way for someone else, all polls (including the YouGov one) show that changing the leader wouldn't make any difference. The real damage to the Labour party started with the Iraq war, and as soon as people started regarding us sceptically, it was on the cards that the scepticism would snowball and they would start to blame us for everything and anything they didn't like - sub-prime mess in the USA, it's Gordon's fault for not regulating lending in America; oil price hike, it's Gordon Brown's fault for not controlling world oil demand and so on. There is not a lot you can do about this once people get into this negative frame of mind, especially when it is magnified by a hostile press. Any successor to the PM would face the same problems. We also simply don't have the time to change leaders and in any case potential leaders (my preferred successor is Ed Miliband) need time to develop.
However, the next election won't be till 2010, which means we still have two years to go. If we are going down, we might as well go down as Labour, it won't make any difference to the outcome, but will cheer up our supporters and make things a little difficult for the succeeding government.
What do I mean by this? Well I was thinking primarily about tax and the example provided by Germany. The red-green government led by Schroeder followed a New Labour like strategy, cutting the top rate of tax from 51% to 42%. However, the red-blue Grand Coalition led by Angela Merkel has done something quite different and made the tax system more progressive.
First lets look at the German tax system. As of 2008, corporation tax is 15%, and businesses pay a 14%-17% municipality tax in addition. VAT is 19%. Individuals and employers in Germany pay about 20% each in social insurance and West Germans pay a solidarity surcharge of 5.5%. The income tax regime is as follows:
Tax % Tax Base (EUR)
0 Up to 7,664
15% 7,665-52,152
42% 52,153-250,000
45% 250,001 and over
Using an exchange rate of 1 euro = £0.7962, you can see that the 45% rate kicks in at £199,050.
Obviously some of the German taxes are completely unacceptable to a Labour government (particularly the VAT rates). However the shape of the income tax regime is very attractive. I think we could use the next two years to cut the basic rate to 15% and put in a 45% top rate for those earning over say £180,000.
Of course the high earners in the City will scream blue murder about this. But given that we might lose the next election anyway, we should simply shrug and tell them to take it up with the next government. If the next government turns out to be Labour, we can then point to a mandate for the regime.
We can also point out that in the City of London's main rival, New York City, high earning individuals are subject to 35% federal tax, 3.65% New York city income tax and 6.85% New York state income tax, making a grand total of 45.5%. The highest bracket 6.85% New York state tax kicks in at $40k (approx £20k) and the 3.65% New York city tax kicks in at $500,000 (approx £250k) and the 35% federal income tax kicks in at $357,701 (approx £179). Even if you earn less that $500k, you get clobbered because New York state has a highly progressive tax regime with five tax bands starting at 4% for low earners. New York city also has a lot of bands starting at 1.9%. And strangely (or not!) you don't see New York financial people decamping to low-tax Georgia. New Yorkers are now thinking of a millionaire's surcharge, and Americans don't have a non-dom system - if you are a citizen, you pay tax regardless of where on earth you live. Also note that the likely incoming Obama government will raise federal taxes on the highly paid.
How would this affect a possible incoming Tory government? In my opinion they will struggle to reverse the tax regime. If abolishing a 10p rate which applied to £2230 of income caused people to get upset, then raising the basic rate back to 20% from 15% (affecting income on the £34k above the personal allowance) in order to pay for a cut in the top rate will cause riots. They could try to raise VAT, but will find it has a knock-on effect on inflation and interest rates. (Mrs Thatcher managed this in the early 80's, abolishing the 25% initial rate of tax and doubling VAT in order to cut the top rate - but she only got away with it because the Labour party had split into Labour and the SDP. That's not going to happen again.) They could try to cut spending, but oops they have pledged to keep to Labour spending for three years, and in any case David Cameron has made much about how he will spend more than Labour on the NHS, defence, and whatever takes his fancy depending on the day of the week.
This strategy means that even if Labour loses the next election, Labour people can go to their beds happy that they've cut tax for the poor and made the high earners contribute more.
Friday, May 16, 2008
The Confucian State
Many commentators have expressed surprise at how well China has coped with her earthquake, dispatching aid, help and the Prime Minister Wen Jiabao. China, the story went, was a military/communist dictatorship akin to Burma's. It's taken two disasters, in Burma and China, to demonstrate the difference.
It's easy to see why the misunderstanding arose: under Mao and his extremist wife, and the Cultural Revolution, China was a brutal communist dictatorship. But starting in 1979 with Deng Xiaoping, China abandoned economic communism and seems to have abandoned social communism too. But they are clearly not a democracy, so how to define the Chinese state?
It's becoming increasingly clear that after flirting with western ideas in the 20th century (a corrupt version of democracy before WW2 and communism after), the Chinese have reverted back to the system of government that worked best for them for several millenia - the Confucian state.
Confucianism, which first developed in around 400 BC, is a system of government based on technocrats. Confucius was distrustful of aristocracy and inherited power, and instead was the first to come up with the idea of government by a permanent civil service, which was entered into by examination, and which wielded power while the Emperor remained a figurehead (hence our term "mandarin" for civil servants). You could be the son of a nobody and yet wield huge power if you were clever enough to pass the examinations to get into government. Confucian government was also deeply conservative, keeping detailed historic records so the government could search for precedents before enacting any law. "Documents, conduct, loyalty and faithfullness" were his four key rules of government. In addition he believed in the traditional Chinese reliance on clans and family ties.
And despite his conservatism, Confucius believed that although rebellion was wrong if a true king reigned, a government that provoked it and could not control it ought to be replaced, as it had proved itself illegitimate. Hence confucian governments paid great attention to the prospect of trouble brewing, as they did not want to make themselves illegitimate by messing up. (You could also say that the rebellion that led to Mao's government after WW2 was justified by ordinary non-ideological Chinese people at the time as being in accordance with their traditional Confucian values, as the previous government had failed to defend them from the Japanese and had hence made itself illegitimate).
And so we come to modern China. They have reverted to a Confucian system par excellence - a government of technocrats, very conservative, always worrying about potential uprisings (hence the move by the government in recent years to rapidly increase rural incomes to forestall unrest, and the related moves in Tibet to quell demonstrators) and very much concerned with "face" or conduct. And anyone who has done business in China can attest to the power of the clan system in controlling commerce. Some modern Chinese scholars have even gone so far as to propose the government introduces an upper chamber of deputies, Xianshiyuan, that is entered into by examination rather than election, which would complete their reversion to Confucianism. It's a complete contrast to the values of the Cultural Revolution, which imprisoned intellectuals, rather than revered them as in the Confucian system.
In this context, the speedy response of the Chinese government to the earthquake, including the presence in the area of the Prime Minister, is easily explained. According to Confucian thought, the government would become illegitimate if it failed to do it's duty and respond properly to the disaster, and would open itself to replacement. So of course they are doing everything they possibly can to demonstrate good government to the people in the affected regions.
It's easy to see why the misunderstanding arose: under Mao and his extremist wife, and the Cultural Revolution, China was a brutal communist dictatorship. But starting in 1979 with Deng Xiaoping, China abandoned economic communism and seems to have abandoned social communism too. But they are clearly not a democracy, so how to define the Chinese state?
It's becoming increasingly clear that after flirting with western ideas in the 20th century (a corrupt version of democracy before WW2 and communism after), the Chinese have reverted back to the system of government that worked best for them for several millenia - the Confucian state.
Confucianism, which first developed in around 400 BC, is a system of government based on technocrats. Confucius was distrustful of aristocracy and inherited power, and instead was the first to come up with the idea of government by a permanent civil service, which was entered into by examination, and which wielded power while the Emperor remained a figurehead (hence our term "mandarin" for civil servants). You could be the son of a nobody and yet wield huge power if you were clever enough to pass the examinations to get into government. Confucian government was also deeply conservative, keeping detailed historic records so the government could search for precedents before enacting any law. "Documents, conduct, loyalty and faithfullness" were his four key rules of government. In addition he believed in the traditional Chinese reliance on clans and family ties.
And despite his conservatism, Confucius believed that although rebellion was wrong if a true king reigned, a government that provoked it and could not control it ought to be replaced, as it had proved itself illegitimate. Hence confucian governments paid great attention to the prospect of trouble brewing, as they did not want to make themselves illegitimate by messing up. (You could also say that the rebellion that led to Mao's government after WW2 was justified by ordinary non-ideological Chinese people at the time as being in accordance with their traditional Confucian values, as the previous government had failed to defend them from the Japanese and had hence made itself illegitimate).
And so we come to modern China. They have reverted to a Confucian system par excellence - a government of technocrats, very conservative, always worrying about potential uprisings (hence the move by the government in recent years to rapidly increase rural incomes to forestall unrest, and the related moves in Tibet to quell demonstrators) and very much concerned with "face" or conduct. And anyone who has done business in China can attest to the power of the clan system in controlling commerce. Some modern Chinese scholars have even gone so far as to propose the government introduces an upper chamber of deputies, Xianshiyuan, that is entered into by examination rather than election, which would complete their reversion to Confucianism. It's a complete contrast to the values of the Cultural Revolution, which imprisoned intellectuals, rather than revered them as in the Confucian system.
In this context, the speedy response of the Chinese government to the earthquake, including the presence in the area of the Prime Minister, is easily explained. According to Confucian thought, the government would become illegitimate if it failed to do it's duty and respond properly to the disaster, and would open itself to replacement. So of course they are doing everything they possibly can to demonstrate good government to the people in the affected regions.
Tuesday, May 13, 2008
Alistair Darling's statement
Never let it be said that Labour does not cut taxes. Not only has the basic rate of tax been cut from 22% to 20%, effective this April, but in a statement in the commons this afternoon, Alistair Darling announced that he was raising the personal tax-free allowance as well. This means that the allowance will have increased from the £5225 in the 2007/8 tax year to £6035 in the 2008/9 tax year, an effective increase in the allowance of 15%. Some 22 million taxpayers will benefit (far out-weighing those who were disadvantaged by the abolition of the 10p rate). Plus the increase in tax credits for people with families, announced previously, will continue to go ahead.
Some commentators have likened this to the tax rebates the US government is giving to their citizens, but the US tax rebate is a one-off, they won't get it next year. Whereas Darling's increase of the personal allowance will not only be permanent (the personal allowance will not be reduced next year - not going into a general election!), but it will continue to increase in succeeding years in line with inflation to comply with the Rooker-Wise parliamentary amendment, passed in the 1970's, which requires governments to increase the personal allowance in line with inflation unless they have a good reason not to. The only budget since the 70's that froze the personal allowance was the vicious Thatcher/Howe budget of 1981, during which he also abolished the 25p lower rate of tax that Labour had introduced in 1978, so that these low tax-payers suffered an increase to the then 30% basic rate of tax. And it all happened when the inflation rate was over 10%. The other Thatcher/Howe masterpiece was the 1979 budget when they raised VAT from 8.5% to 15%. (Tories who dare to criticize Labour on tax have very short memories indeed).
Perhaps Labour should develop this theme, and continue to increase the personal allowance/decrease the basic rate of tax and increase the higher rate to compensate. I can't see our opponents trying to reverse this in order to pay for inheritance tax cuts.
Some commentators have likened this to the tax rebates the US government is giving to their citizens, but the US tax rebate is a one-off, they won't get it next year. Whereas Darling's increase of the personal allowance will not only be permanent (the personal allowance will not be reduced next year - not going into a general election!), but it will continue to increase in succeeding years in line with inflation to comply with the Rooker-Wise parliamentary amendment, passed in the 1970's, which requires governments to increase the personal allowance in line with inflation unless they have a good reason not to. The only budget since the 70's that froze the personal allowance was the vicious Thatcher/Howe budget of 1981, during which he also abolished the 25p lower rate of tax that Labour had introduced in 1978, so that these low tax-payers suffered an increase to the then 30% basic rate of tax. And it all happened when the inflation rate was over 10%. The other Thatcher/Howe masterpiece was the 1979 budget when they raised VAT from 8.5% to 15%. (Tories who dare to criticize Labour on tax have very short memories indeed).
Perhaps Labour should develop this theme, and continue to increase the personal allowance/decrease the basic rate of tax and increase the higher rate to compensate. I can't see our opponents trying to reverse this in order to pay for inheritance tax cuts.
Saturday, May 10, 2008
Is Cherie inadvertently helping Gordon by attacking him in her book?
Cherie Blair's book is being serialised in the Times and all the papers are full of details about it, including the Daily Mail which dwells on it at some length. In particular the Mail gives prominence to a passage about Cherie's attitude to money and MP's salaries, with quotes from the book:
"When the move to Number 10 became a probability the accountant looked at our income and expenditure exercise. The results weren't encouraging. It showed that while Tony's income would go up, mine would go down.
"We'd been told that living in Downing Street would be taxed, yet we still had a big mortgage to pay, plus the overdraft I'd taken out. I didn't know how long Tony would be Prime Minister. On the plus side I knew MPs and ministers would be about to get a 26% payrise."
........She said she was furious with Mr Brown after he told Labour's first Cabinet meeting in 1997 not to take a 26 per cent pay rise.
Mrs Blair - who said she had taken a pay cut when her husband became PM - revealed: "Tony told me as soon as he got back to the flat. I couldn't believe it as the Tories were taking it. It meant Tony would be earning less than William Hague.
"I remember sitting at the table at the kitchen at No 10 with my head in my hands and staring at the now completely redundant financial breakdown as Tony tried to calm me down, but I wouldn't be calmed down.
"How dare Gordon do that? What did he know about financial commitments? He was a bachelor living on his own in a flat with a small mortgage."
Cherie also says that Blair is helping Brown with his election strategy.
The comments on the piece (and there are loads of them) indicate that people dislike Cherie more than they dislike Gordon Brown. One person, Terry Stride from Tamworth writes:
Well now we know why Mr Brown is making such a mess of things, he is taking advice from Quisling Blair, you could not make it up if you tried.
There's tons more in that vein. To read the whole thing, click here.
"When the move to Number 10 became a probability the accountant looked at our income and expenditure exercise. The results weren't encouraging. It showed that while Tony's income would go up, mine would go down.
"We'd been told that living in Downing Street would be taxed, yet we still had a big mortgage to pay, plus the overdraft I'd taken out. I didn't know how long Tony would be Prime Minister. On the plus side I knew MPs and ministers would be about to get a 26% payrise."
........She said she was furious with Mr Brown after he told Labour's first Cabinet meeting in 1997 not to take a 26 per cent pay rise.
Mrs Blair - who said she had taken a pay cut when her husband became PM - revealed: "Tony told me as soon as he got back to the flat. I couldn't believe it as the Tories were taking it. It meant Tony would be earning less than William Hague.
"I remember sitting at the table at the kitchen at No 10 with my head in my hands and staring at the now completely redundant financial breakdown as Tony tried to calm me down, but I wouldn't be calmed down.
"How dare Gordon do that? What did he know about financial commitments? He was a bachelor living on his own in a flat with a small mortgage."
Cherie also says that Blair is helping Brown with his election strategy.
The comments on the piece (and there are loads of them) indicate that people dislike Cherie more than they dislike Gordon Brown. One person, Terry Stride from Tamworth writes:
Well now we know why Mr Brown is making such a mess of things, he is taking advice from Quisling Blair, you could not make it up if you tried.
There's tons more in that vein. To read the whole thing, click here.
Tuesday, May 06, 2008
Wendy Alexander on a Scottish referendum - "I don't fear the verdict of the Scottish people - bring it on."
Yay! Go Wendy! I hope Westminster takes notice of what she's saying and gives the referendum the go-ahead.
I don't believe that the Scots want independence from the UK. They are not that stupid, and the ties (including family ties and business ties) with England bind tightly and run far too deep, as people have moved freely back and forth over the centuries, settling all over the place and inter-marrying. Compare the UK to Germany - England has been united with Scotland for 300 years, German unification only happened after Bismark united them in 1871 - and then they split apart again in 1945, coming together again in 1990. The ties between east and west germany are far weaker because they were separate so long (the myth held in the UK that german families were split by the cold war applies only to Berlin where a city was divided). Yet despite their unification being recent, Germany stays together.
The only reason the SNP have gained sway in Scotland is because the Tories and LibDems have failed in their democratic duty to provide opposition to Labour everywhere in the UK. Therefore if Scots want an alternative to Labour they have had no choice but to turn to the SNP. It's no accident that the seats the SNP hold - Angus, Perth, North Perthshire, Moray, Banff, Galloway and Upper Nithsdale - are the wealthy Tory seats of old. SNP success is about Tory failure.
If a referendum defeated the independence drive, the SNP would then have to start to define what they are really for. And if the other unionist parties had any sense, they would seize the chance to regain their foothold in scottish politics.
Another consideration. Many Scots say that if there is a Tory administration at Westminster they will definitely go independent, because this generation of Scots hates the Tories. What a stupid short-term reason to break up a 300-year relationship and what a stupid way to decide the next 300 years. Looking at this from a long-term point of view, the Union will be best served if we have a referendum in Scotland before the next general election and win it convincingly. Then even if Labour loses the next general election (and it's still not clear we will, despite the local election results!), the Union will stay intact as the incoming administration can point to the referendum and say that it was the settled will of the Scottish people.
I don't believe that the Scots want independence from the UK. They are not that stupid, and the ties (including family ties and business ties) with England bind tightly and run far too deep, as people have moved freely back and forth over the centuries, settling all over the place and inter-marrying. Compare the UK to Germany - England has been united with Scotland for 300 years, German unification only happened after Bismark united them in 1871 - and then they split apart again in 1945, coming together again in 1990. The ties between east and west germany are far weaker because they were separate so long (the myth held in the UK that german families were split by the cold war applies only to Berlin where a city was divided). Yet despite their unification being recent, Germany stays together.
The only reason the SNP have gained sway in Scotland is because the Tories and LibDems have failed in their democratic duty to provide opposition to Labour everywhere in the UK. Therefore if Scots want an alternative to Labour they have had no choice but to turn to the SNP. It's no accident that the seats the SNP hold - Angus, Perth, North Perthshire, Moray, Banff, Galloway and Upper Nithsdale - are the wealthy Tory seats of old. SNP success is about Tory failure.
If a referendum defeated the independence drive, the SNP would then have to start to define what they are really for. And if the other unionist parties had any sense, they would seize the chance to regain their foothold in scottish politics.
Another consideration. Many Scots say that if there is a Tory administration at Westminster they will definitely go independent, because this generation of Scots hates the Tories. What a stupid short-term reason to break up a 300-year relationship and what a stupid way to decide the next 300 years. Looking at this from a long-term point of view, the Union will be best served if we have a referendum in Scotland before the next general election and win it convincingly. Then even if Labour loses the next general election (and it's still not clear we will, despite the local election results!), the Union will stay intact as the incoming administration can point to the referendum and say that it was the settled will of the Scottish people.
Saturday, May 03, 2008
The Local Elections
Local elections are the great safety valve of British democracy. They offer voters a cost-free way of venting their feelings and sending a message to government without risking anything more important than who does their bin collection (London obviously is the exception).
The last time Labour did this badly was in 2004 when people furious about the Iraq war vented their feelings. I was one of them and it was immensely satisfying watching the seats fall. I felt good for days afterwards and revelled in how anguished the government was about it. I imagine that the people who voted against Labour in the 2008 election are feeling the same. In fact I wouldn't be at all surprised if beer sales shot up this weekend as people celebrate showing the government who is the boss of them.
However Labour won the 2005 election, despite the 2004 local drubbing. How did that happen? Part of it was down to general elections being about long-term decisions about the future, while local elections are usually verdicts on the past year (though there are some truly local local elections). Part of it was that the 2004 vote was carthartic. After metaphorically punching the government on the nose, the anger was mostly spent and it was hard to re-stoke it.
But a big part of it was that Labour addressed the central complaint, which was Blair and Iraq. He announced in late 2004 that he was stepping down, and the polls immediately started to improve. The 2005 election was fought as "Vote Blair, get Brown" with the explicit promise that one man would step down and the other take over. And in 2007 when Blair did finally depart, there was a surge of approval for Labour. Part of that was down to people having been intensely irritated that Blair was swanning around refusing to admit he'd made a mistake, when in real life people lose their jobs for lesser misdemeanours. Natural justice demanded his head. Since Blair has gone, the program of withdrawing troops from Iraq has accelerated and the Brown government has made it clear that it won't go to war again without an iron-clad UN mandate (see Gordon Brown's speech in New York last month).
As a result Iraq wasn't mentioned at all on the doorstep this year - problem solved. Only we seem to have acquired a whole new set of problems. What were people giving us a bloody nose about this time, and what can we do to address their concerns?
In my opinion the public is very nervous about the economy (fed by a hysterical press) and for the first time they are unsure whether the Labour government can protect them from global headwinds. That was what they were protesting about - what they perceive as the government's loss of grip over the economy. Commentators point to the US government sending out tax rebates and claim that by contrast the UK government is ham-strung and is doing nothing. In reality, the basic rate of income tax got cut by 2% this April - and the key beneficiaries, people who earn between 18k and the upper earnings threshold, are the very people who have mortgages, and need the tax cut. But none of this is being communicated. Maybe if we hadn't bothered to cut the base rate and had sent out one-off tax rebates people would have been happier. It's certainly something to think about for the future as it is less expensive in the long run and people seem to notice one-off rebates more than permanent income-tax cuts.
In addition, many people seem to believe we are in recession, when instead we grew at a fair 0.4% in the first quarter, stronger than the growth going into the 2005 election and stronger than growth in the USA (which posted growth of 0.15% in the quarter, the annual equivalent of which is 0.6%). The USA itself seems to be hanging on and not contracting, and that too is a good sign for the world economy. But that is not being communicated either.
Some people are worried about house prices - but again, housing slowed sharply in the run-up to the 2005 election and people didn't really bat an eyelid. But then again the press wasn't as hysterical about it in 2005 either.
I think the main failure of the govt is in reassuing people about the economic side. We are not doing enough to challenge the rubbish written about recession and "meltdown". We should be agressively challenging the misconceptions. We should be saying up-front that we believe that the Tories are wrong about the economy and that events will prove it. And when events do prove it, we should bang on endlessly about how they got it wrong. Alistair Darling is a bit too soothing when he talks on TV and some of the people think the lack of bite means that he doesn't really believe that the economy is holding up. He needs to assert his points with more oomp, or get someone from his department to do it on his behalf.
And then there is Gordon. He's the same man he was in 2005 when people endorsed him on the "vote-Blair-get-Brown" ticket. Everyone knew he was more about substance than style, and that he liked to think about things rather than make off-the cuff decisions like Blair. But Brown is being attacked relentlessly for it and in a very personal way. However the attacks on Brown are no worse than the attacks Hillary Clinton has been taking (and she's been taking them for 16 long years). Her response is to keep smiling and to fight back, as feistily as possible, whereas our Gordon tends to look a little hurt.
Gordon is not the punch-back type (unlike Blair and Prescott), but he should work on not looking upset when someone has a pop at him. I've noticed that he's much more cheerful and relaxed when Sarah Brown is around and that the two of them together project a very good image. My solution - he needs to take Sarah with him everywhere he goes and perhaps Sarah should start raising her profile.
Finally, under Blair, whenever there was trouble, a whole phalanx of ministers was deployed to take to the airwaves - Blair himself only came out on the second wave, mainly at press conferences. Under Brown, Brown seems to be doing most of the lifting (apart from Yvette Cooper who seems to be on TV a lot). The cabinet need to start pulling their weight a bit more and all turning out to defend the govt. Labour stands or falls together.
I must say something about Ken Livingstone - the first and greatest of London mayors. London will regret his departure. It was heartening to see turnout for him in Inner London - it bodes well for the seats Labour holds there. When there is something real at stake the Labour vote does respond - and that's the silver lining.
The last time Labour did this badly was in 2004 when people furious about the Iraq war vented their feelings. I was one of them and it was immensely satisfying watching the seats fall. I felt good for days afterwards and revelled in how anguished the government was about it. I imagine that the people who voted against Labour in the 2008 election are feeling the same. In fact I wouldn't be at all surprised if beer sales shot up this weekend as people celebrate showing the government who is the boss of them.
However Labour won the 2005 election, despite the 2004 local drubbing. How did that happen? Part of it was down to general elections being about long-term decisions about the future, while local elections are usually verdicts on the past year (though there are some truly local local elections). Part of it was that the 2004 vote was carthartic. After metaphorically punching the government on the nose, the anger was mostly spent and it was hard to re-stoke it.
But a big part of it was that Labour addressed the central complaint, which was Blair and Iraq. He announced in late 2004 that he was stepping down, and the polls immediately started to improve. The 2005 election was fought as "Vote Blair, get Brown" with the explicit promise that one man would step down and the other take over. And in 2007 when Blair did finally depart, there was a surge of approval for Labour. Part of that was down to people having been intensely irritated that Blair was swanning around refusing to admit he'd made a mistake, when in real life people lose their jobs for lesser misdemeanours. Natural justice demanded his head. Since Blair has gone, the program of withdrawing troops from Iraq has accelerated and the Brown government has made it clear that it won't go to war again without an iron-clad UN mandate (see Gordon Brown's speech in New York last month).
As a result Iraq wasn't mentioned at all on the doorstep this year - problem solved. Only we seem to have acquired a whole new set of problems. What were people giving us a bloody nose about this time, and what can we do to address their concerns?
In my opinion the public is very nervous about the economy (fed by a hysterical press) and for the first time they are unsure whether the Labour government can protect them from global headwinds. That was what they were protesting about - what they perceive as the government's loss of grip over the economy. Commentators point to the US government sending out tax rebates and claim that by contrast the UK government is ham-strung and is doing nothing. In reality, the basic rate of income tax got cut by 2% this April - and the key beneficiaries, people who earn between 18k and the upper earnings threshold, are the very people who have mortgages, and need the tax cut. But none of this is being communicated. Maybe if we hadn't bothered to cut the base rate and had sent out one-off tax rebates people would have been happier. It's certainly something to think about for the future as it is less expensive in the long run and people seem to notice one-off rebates more than permanent income-tax cuts.
In addition, many people seem to believe we are in recession, when instead we grew at a fair 0.4% in the first quarter, stronger than the growth going into the 2005 election and stronger than growth in the USA (which posted growth of 0.15% in the quarter, the annual equivalent of which is 0.6%). The USA itself seems to be hanging on and not contracting, and that too is a good sign for the world economy. But that is not being communicated either.
Some people are worried about house prices - but again, housing slowed sharply in the run-up to the 2005 election and people didn't really bat an eyelid. But then again the press wasn't as hysterical about it in 2005 either.
I think the main failure of the govt is in reassuing people about the economic side. We are not doing enough to challenge the rubbish written about recession and "meltdown". We should be agressively challenging the misconceptions. We should be saying up-front that we believe that the Tories are wrong about the economy and that events will prove it. And when events do prove it, we should bang on endlessly about how they got it wrong. Alistair Darling is a bit too soothing when he talks on TV and some of the people think the lack of bite means that he doesn't really believe that the economy is holding up. He needs to assert his points with more oomp, or get someone from his department to do it on his behalf.
And then there is Gordon. He's the same man he was in 2005 when people endorsed him on the "vote-Blair-get-Brown" ticket. Everyone knew he was more about substance than style, and that he liked to think about things rather than make off-the cuff decisions like Blair. But Brown is being attacked relentlessly for it and in a very personal way. However the attacks on Brown are no worse than the attacks Hillary Clinton has been taking (and she's been taking them for 16 long years). Her response is to keep smiling and to fight back, as feistily as possible, whereas our Gordon tends to look a little hurt.
Gordon is not the punch-back type (unlike Blair and Prescott), but he should work on not looking upset when someone has a pop at him. I've noticed that he's much more cheerful and relaxed when Sarah Brown is around and that the two of them together project a very good image. My solution - he needs to take Sarah with him everywhere he goes and perhaps Sarah should start raising her profile.
Finally, under Blair, whenever there was trouble, a whole phalanx of ministers was deployed to take to the airwaves - Blair himself only came out on the second wave, mainly at press conferences. Under Brown, Brown seems to be doing most of the lifting (apart from Yvette Cooper who seems to be on TV a lot). The cabinet need to start pulling their weight a bit more and all turning out to defend the govt. Labour stands or falls together.
I must say something about Ken Livingstone - the first and greatest of London mayors. London will regret his departure. It was heartening to see turnout for him in Inner London - it bodes well for the seats Labour holds there. When there is something real at stake the Labour vote does respond - and that's the silver lining.
Tuesday, April 29, 2008
The Virtues of being a Fighter not a Quitter
Barack Obama's campaign is in grave danger thanks to his pastor the Reverend Wright. Just as the whole pastorgate thing looked like it was dying, up pops Wright on national TV and according to the Washionton Post
Wright praised Louis Farrakhan, defended the view that Zionism is racism, accused the United States of terrorism, repeated his view that the government created the AIDS virus to cause the genocide of racial minorities, stood by other past remarks ("God damn America") and held himself out as a spokesman for the black church in America.
It wouldn't have been so bad if Obama had denounced Wright in no un-certain terms when the pastor problem first arose. Instead, Obama tried to explain the pastor and said he could no more denounce him than his own grandmother (who is white). The speech was very elegant and won many plaudits for it's prose, but from a political point of view many wondered why Obama didn't simply dump the pastor (who is clearly bonkers). He might as well have, as Pastor Wright seems to be speaking out now in revenge because he's ticked off that Obama didn't praise him to the skies in the speech. His behaviour would have been the same if Obama had denounced him, but at least moderates would still be onside. As things stand Obama, by hedging, has upset everyone.
Why did Obama not grasp the nettle earlier? Did he believe that denouncing the pastor would hurt him with the African-American community? He's surely wrong - African-Americans must be horrified that the pastor is stereotyping them so negatively on national TV just at the point they had thought they'd beaten back this sort of profiling.
Thank goodness Hillary is still in the race! If this gets worse, the superdelegates have the option of choosing Hillary as the least damaged candidate, whereas if it had been all over in February, they would have had the horrible prospect of watching a trainwreck, powerless to do anything about it. She's in the race simply because the people of New Hampshire, California, Ohio, Pennsylvania and other places were determined not to make the mistake they had made in 2004, when they chose too early before the candidates had been properly vetted (the 2004 race was practically over after New Hampshire). This time they've gone for a proper trial by ordeal to see what skeletons will surface (as they always do).
It's also a credit to Mrs Clinton herself that she's still there. She started off the campaign with the reputation of an ice-queen, distrustfully masking her thoughts. She got attacked relentlessly and viciously by everyone, being called a witch, a b*tch, the terminator, and worse and was repeatedly told to give up and step down. But she decided to fight and as she did so, the real Hillary broke through the mask, and she's proved herself feisty, full of nerve, un-expectedly warm and completely shameless in her determination to win - not only throwing the kitchen sink but boldly announcing in advance she'd do so. The only thing she didn't throw at Obama was Pastor Wright - he did that to himself.
It's hard not to smile and be charmed by this shameless, bravura and up-front display of guts. You know exactly where you stand with the Clintons. In a fight you'd want them on your side. People have criticised her chaotic campaign, forgetting that Bill Clinton's campaign (and indeed his entire white house administration) was equally chaotic. It's not always the case that disciplined campaigns such as that of Obama (and George W Bush before him) produce the best presidents. On the contrary, an atmosphere where people feel free to argue the toss prevents group-think, shows up flaws in arguments and in the end makes for better decision-making.
By holding firm, she's put herself into a position where she can now profit from Obama's mistakes. All eyes will now be on North Carolina and Indiana. The Wright thing can only hurt. They say you should never write off the Clintons. The last time they lost an election was in 1981. Since then they've been winning everything they contested, governorships, the presidency, the senatorship, now possibly the nomination to be the Democratic candidate for president again.
Even if she doesn't pull it off, the Labour party should take notice of how she's handled herself, because she's far more popular now than she was at the start of the contest. No-one likes people who pathetically give up and "resign themselves to losing". Everyone likes people with the gumption to fight because it implies you believe you have something worth fighting for.
Wright praised Louis Farrakhan, defended the view that Zionism is racism, accused the United States of terrorism, repeated his view that the government created the AIDS virus to cause the genocide of racial minorities, stood by other past remarks ("God damn America") and held himself out as a spokesman for the black church in America.
It wouldn't have been so bad if Obama had denounced Wright in no un-certain terms when the pastor problem first arose. Instead, Obama tried to explain the pastor and said he could no more denounce him than his own grandmother (who is white). The speech was very elegant and won many plaudits for it's prose, but from a political point of view many wondered why Obama didn't simply dump the pastor (who is clearly bonkers). He might as well have, as Pastor Wright seems to be speaking out now in revenge because he's ticked off that Obama didn't praise him to the skies in the speech. His behaviour would have been the same if Obama had denounced him, but at least moderates would still be onside. As things stand Obama, by hedging, has upset everyone.
Why did Obama not grasp the nettle earlier? Did he believe that denouncing the pastor would hurt him with the African-American community? He's surely wrong - African-Americans must be horrified that the pastor is stereotyping them so negatively on national TV just at the point they had thought they'd beaten back this sort of profiling.
Thank goodness Hillary is still in the race! If this gets worse, the superdelegates have the option of choosing Hillary as the least damaged candidate, whereas if it had been all over in February, they would have had the horrible prospect of watching a trainwreck, powerless to do anything about it. She's in the race simply because the people of New Hampshire, California, Ohio, Pennsylvania and other places were determined not to make the mistake they had made in 2004, when they chose too early before the candidates had been properly vetted (the 2004 race was practically over after New Hampshire). This time they've gone for a proper trial by ordeal to see what skeletons will surface (as they always do).
It's also a credit to Mrs Clinton herself that she's still there. She started off the campaign with the reputation of an ice-queen, distrustfully masking her thoughts. She got attacked relentlessly and viciously by everyone, being called a witch, a b*tch, the terminator, and worse and was repeatedly told to give up and step down. But she decided to fight and as she did so, the real Hillary broke through the mask, and she's proved herself feisty, full of nerve, un-expectedly warm and completely shameless in her determination to win - not only throwing the kitchen sink but boldly announcing in advance she'd do so. The only thing she didn't throw at Obama was Pastor Wright - he did that to himself.
It's hard not to smile and be charmed by this shameless, bravura and up-front display of guts. You know exactly where you stand with the Clintons. In a fight you'd want them on your side. People have criticised her chaotic campaign, forgetting that Bill Clinton's campaign (and indeed his entire white house administration) was equally chaotic. It's not always the case that disciplined campaigns such as that of Obama (and George W Bush before him) produce the best presidents. On the contrary, an atmosphere where people feel free to argue the toss prevents group-think, shows up flaws in arguments and in the end makes for better decision-making.
By holding firm, she's put herself into a position where she can now profit from Obama's mistakes. All eyes will now be on North Carolina and Indiana. The Wright thing can only hurt. They say you should never write off the Clintons. The last time they lost an election was in 1981. Since then they've been winning everything they contested, governorships, the presidency, the senatorship, now possibly the nomination to be the Democratic candidate for president again.
Even if she doesn't pull it off, the Labour party should take notice of how she's handled herself, because she's far more popular now than she was at the start of the contest. No-one likes people who pathetically give up and "resign themselves to losing". Everyone likes people with the gumption to fight because it implies you believe you have something worth fighting for.
Sunday, April 27, 2008
GDP grew by 0.4% in first quarter
According to the ONS, GDP grew by 0.4% in the first quarter, which is a slowdown from the previous quarter, but still higher than the growth we had going into the 2005 general election. It came as a disappointment to those who were claiming that we were "in recession", but still some papers tried gamely to spin this as "Economic Growth lowest in three years".Looking at the figures, as expected, business and finance had lower growth than in the previous quarter (0.4% compared to 0.6%) and contruction also grew more slowly (0.5% compared to 1.1% in the previous quarter).
Retail held up nicely - but there is evidence that customers are deliberately shifting to the low-priced end of the market - Primark is doing a roaring business for instance. Online sales are also doing better than high street sales and supermarkets like Sainsburys have launched a 25% off sales push to try to wrest customers from their rivals. All of this is a normal response given the way consumers have reacted to the headlines in the press. Retailers will have to cut prices if they want people to buy - not so good for margins but good the customer.
Friday, April 25, 2008
The Awful YouGov Poll
YouGov have produced a poll which puts the Conservatives on 44%, Labour on 26%, LibDems on 17% and others on 13% (others broke down as follows: SNP/PC 4%, Green 3%, BNP 3%, Respect 0, other 1%).
This gives the Conservatives a huge 18% lead, which comes as a surprise as the ICM poll just three days earlier put the Conservatives on 39%, Labour on 34%, Lib Dems on 19% and others on 9%, giving the Conservatives a 5% lead.
One or both of these poll is a rogue, (there is a huge difference in the reported Labour party figures).
The divergence is interesting because both YouGov and ICM weren't too far off about the 2005 election:
General Election result: Con 33.2%, Lab 36.2%, LibDems 22.6%, others 8%
YouGov May 3-4 2005: Con 32%, Lab 37%, LibDem 24%, others 7%
ICM May 1-3 2005: Con 32%, Lab 38%, LibDems 22%, others 8%
So both pollsters were pretty close to each other and to the final result. So why the current sharp divergence? The two pollsters use different methodology, ICM telephones people randomly and weights by certainty to vote, YouGov relies on a panel of voters on their database and doesn't weight by certainty. It's possible that as politics has moved out of the holding pattern of the last ten years, one of the methodologies has an underlying problem that is giving a skewed answer.
Both methods have vulnerabilities. ICM is vulnerable to the spiral of silence where people are embarassed to admit their affiliations because of the human desire not to be judged, even by a stranger on the phone - this could take the form of people who remember John Major's govt being shy to admit they are Tories, people who are shy to admit they like Gordon in the face of the bashing he's receiving and people who are shy to admit they are BNP.
Because YouGov's polls are on the internet, the spiral of silence problem is eliminated (as data is sent back anonymously). However they are vulnerable to people setting up multiple accounts (as they pay per poll done) and being swamped by activists joining en masse to try to move the polls.
Both pollsters are vulnerable to people mis-remembering who they voted for in the last election (eg people who voted LibDem and let in a Tory might want to conveniently "forget" this and people who are Labour to the core but voted LibDem to "keep the Tories out" might simply answer "I'm Labour" to the question). YouGov tried to get round this by polling their entire database on election day in 2005 to get a record of how they voted (and given how close their pre-election polls were, it's fair to say that most of their database would have answered truthfully). However, they are vulnerable to new panellists joining since 2005 giving the wrong information about how they voted in the last election.
Looking at the data for the recent YouGov poll, I'm struck by the BNP figures - can they really be polling roughly the same as the SNP and PC combined? Given how popular the SNP is? Or have a whole bunch of BNP supporters joined the YouGov panel to bump up their count (the BNP phenomenon is largely a post 2005 one)?
There is an easy way for YouGov to resolve this. They know that the panellists on their books at the 2005 election were sound and they also have the exact details on how they voted in that election. This group can therefore be used as a control. All they need to do is run three opinion polls, one sampling the pre-May2005 database, one sampling the post-May2005 database, and a third poll run based on the whole database. If there are sharp differences in the results, they can conclude that the post-May2005 panel has been corrupted and take action to sort this out. If there are no differences, they should conclude that their methodology and panel are sound, publicise the findings and stand by their polls.
This gives the Conservatives a huge 18% lead, which comes as a surprise as the ICM poll just three days earlier put the Conservatives on 39%, Labour on 34%, Lib Dems on 19% and others on 9%, giving the Conservatives a 5% lead.
One or both of these poll is a rogue, (there is a huge difference in the reported Labour party figures).
The divergence is interesting because both YouGov and ICM weren't too far off about the 2005 election:
General Election result: Con 33.2%, Lab 36.2%, LibDems 22.6%, others 8%
YouGov May 3-4 2005: Con 32%, Lab 37%, LibDem 24%, others 7%
ICM May 1-3 2005: Con 32%, Lab 38%, LibDems 22%, others 8%
So both pollsters were pretty close to each other and to the final result. So why the current sharp divergence? The two pollsters use different methodology, ICM telephones people randomly and weights by certainty to vote, YouGov relies on a panel of voters on their database and doesn't weight by certainty. It's possible that as politics has moved out of the holding pattern of the last ten years, one of the methodologies has an underlying problem that is giving a skewed answer.
Both methods have vulnerabilities. ICM is vulnerable to the spiral of silence where people are embarassed to admit their affiliations because of the human desire not to be judged, even by a stranger on the phone - this could take the form of people who remember John Major's govt being shy to admit they are Tories, people who are shy to admit they like Gordon in the face of the bashing he's receiving and people who are shy to admit they are BNP.
Because YouGov's polls are on the internet, the spiral of silence problem is eliminated (as data is sent back anonymously). However they are vulnerable to people setting up multiple accounts (as they pay per poll done) and being swamped by activists joining en masse to try to move the polls.
Both pollsters are vulnerable to people mis-remembering who they voted for in the last election (eg people who voted LibDem and let in a Tory might want to conveniently "forget" this and people who are Labour to the core but voted LibDem to "keep the Tories out" might simply answer "I'm Labour" to the question). YouGov tried to get round this by polling their entire database on election day in 2005 to get a record of how they voted (and given how close their pre-election polls were, it's fair to say that most of their database would have answered truthfully). However, they are vulnerable to new panellists joining since 2005 giving the wrong information about how they voted in the last election.
Looking at the data for the recent YouGov poll, I'm struck by the BNP figures - can they really be polling roughly the same as the SNP and PC combined? Given how popular the SNP is? Or have a whole bunch of BNP supporters joined the YouGov panel to bump up their count (the BNP phenomenon is largely a post 2005 one)?
There is an easy way for YouGov to resolve this. They know that the panellists on their books at the 2005 election were sound and they also have the exact details on how they voted in that election. This group can therefore be used as a control. All they need to do is run three opinion polls, one sampling the pre-May2005 database, one sampling the post-May2005 database, and a third poll run based on the whole database. If there are sharp differences in the results, they can conclude that the post-May2005 panel has been corrupted and take action to sort this out. If there are no differences, they should conclude that their methodology and panel are sound, publicise the findings and stand by their polls.
Wednesday, April 23, 2008
Consequences of the whole Olympic Torch Business
Gordon Brown got severely criticised by all the talking heads plus the Conservatives and the Liberal Democrats for allowing the Olympic torch to enter Downing Street in his presence, and agreeing to go to the closing ceremony, especially as the French announced they would stay away from Beijing unless "certain conditions were met". The Lib Dems indulged in grandstanding to the extent of writing to the PM to advise him to stay away.
Luckily Gordon didn't listen to them and luckily he didn't follow the French line either.
There has been widespread coverage of the protests in the Chinese media (particularly of the way a disabled female Chinese athlete was attacked by a pro-Tibet protester in Paris, which was wrong no matter how you look at it). China had been furious with France for taking such a high-profile attitude over the Olympics anyway, and the incident with the disabled athlete gave them the chance to scapegoat France for all the protests in Europe. There have been demonstrations and protests outside French businesses like Carrefour in China, and boycotts have been organised.
The business implications are so big that President Sarkozy has had to do a public U-turn from castigating China to appeasing them. He has written personally to the disabled Chinese athlete apologising to her, and has dispatched three high profile envoys to China to patch things up. Meanwhile the CEO of Carrefour has publicly distanced himself from the protests in France.
Given the way the Chinese have made the French bend the knee to them, does anyone believe that the French have the authority to make any further protests to them about human-rights?
It makes our Gordon look like a diplomatic genius, because compared to Sarkozy all he had to endure were a few uncomfortable minutes watching the torch in Downing Street. And businesses like Tesco, competing in China against Carrefour and Wall-Mart, are serenely unaffected. And we still retain the authority to express concerns in private and have them taken seriously because the Chinese know we won't play grandstanding games with them.
Of course human rights in Tibet matters, but concerns need to be voiced in private behind closed doors, especially as the Chinese put great store on not losing face. The Chinese have a long history of reacting positively to approaches made in private but very badly to approaches made in public. In the run-up to the expiry of Britain's lease for Hong-Kong, the private negotiations were going well, the Chinese were all set to extend the lease for another century - till Mrs Thatcher couldn't resist opening her mouth and demanding in public that they renew the lease. Then it became a matter of patriotism to get Hong-Kong back - which they did. Britain had been moving towards full democracy in Hong Kong, and had Mrs T kept her gob shut and let the negotiators get on with it in private, the 7 million Hong-Kong citizens would have been enjoying full democracy by now under a renewed British lease. As it is, the shouting delivered them into the hands of the Chinese Communist party. Chris Patten too found when he was governor of Hong-Kong that publicly criticising China did him no favours (to the extent that Sir William Purves, chairman of HSBC at the time, got visibly irritated with the way he was damaging British business).
It's also not clear whether sports is the correct forum to express concerns on human rights as it hurts innocent athletes and make the target of the protests even more stubborn. And while the Chinese were heavyhanded and over-the-top in putting down the Tibetan demonstrators, the demonstrators were disturbingly xenophobic towards the Chinese (imagine if the Spanish rioted because the English have moved there in numbers, or if the English rioted because Scots live in England in numbers).
China is now a de facto superpower, just like the United States, and just as we express criticism to the Americans in private, we need to express criticism to the Chinese in private too. However much our press and opposition parties may like to pretend that we live in a Love Actually world, we don't.
Much better to have a cautious and discreet Prime Minister like Gordon than a "shoot your mouth off one minute, publicly abase yourself the next minute" leader like Sarkozy. And it's lucky we have a Labour govt in power - because according to the Conservatives and the Liberal Democrats, they would have gone the Sarkozy route.
Luckily Gordon didn't listen to them and luckily he didn't follow the French line either.
There has been widespread coverage of the protests in the Chinese media (particularly of the way a disabled female Chinese athlete was attacked by a pro-Tibet protester in Paris, which was wrong no matter how you look at it). China had been furious with France for taking such a high-profile attitude over the Olympics anyway, and the incident with the disabled athlete gave them the chance to scapegoat France for all the protests in Europe. There have been demonstrations and protests outside French businesses like Carrefour in China, and boycotts have been organised.
The business implications are so big that President Sarkozy has had to do a public U-turn from castigating China to appeasing them. He has written personally to the disabled Chinese athlete apologising to her, and has dispatched three high profile envoys to China to patch things up. Meanwhile the CEO of Carrefour has publicly distanced himself from the protests in France.
Given the way the Chinese have made the French bend the knee to them, does anyone believe that the French have the authority to make any further protests to them about human-rights?
It makes our Gordon look like a diplomatic genius, because compared to Sarkozy all he had to endure were a few uncomfortable minutes watching the torch in Downing Street. And businesses like Tesco, competing in China against Carrefour and Wall-Mart, are serenely unaffected. And we still retain the authority to express concerns in private and have them taken seriously because the Chinese know we won't play grandstanding games with them.
Of course human rights in Tibet matters, but concerns need to be voiced in private behind closed doors, especially as the Chinese put great store on not losing face. The Chinese have a long history of reacting positively to approaches made in private but very badly to approaches made in public. In the run-up to the expiry of Britain's lease for Hong-Kong, the private negotiations were going well, the Chinese were all set to extend the lease for another century - till Mrs Thatcher couldn't resist opening her mouth and demanding in public that they renew the lease. Then it became a matter of patriotism to get Hong-Kong back - which they did. Britain had been moving towards full democracy in Hong Kong, and had Mrs T kept her gob shut and let the negotiators get on with it in private, the 7 million Hong-Kong citizens would have been enjoying full democracy by now under a renewed British lease. As it is, the shouting delivered them into the hands of the Chinese Communist party. Chris Patten too found when he was governor of Hong-Kong that publicly criticising China did him no favours (to the extent that Sir William Purves, chairman of HSBC at the time, got visibly irritated with the way he was damaging British business).
It's also not clear whether sports is the correct forum to express concerns on human rights as it hurts innocent athletes and make the target of the protests even more stubborn. And while the Chinese were heavyhanded and over-the-top in putting down the Tibetan demonstrators, the demonstrators were disturbingly xenophobic towards the Chinese (imagine if the Spanish rioted because the English have moved there in numbers, or if the English rioted because Scots live in England in numbers).
China is now a de facto superpower, just like the United States, and just as we express criticism to the Americans in private, we need to express criticism to the Chinese in private too. However much our press and opposition parties may like to pretend that we live in a Love Actually world, we don't.
Much better to have a cautious and discreet Prime Minister like Gordon than a "shoot your mouth off one minute, publicly abase yourself the next minute" leader like Sarkozy. And it's lucky we have a Labour govt in power - because according to the Conservatives and the Liberal Democrats, they would have gone the Sarkozy route.
Wednesday, April 16, 2008
Unemployment Falls Again
Unemployment fell again according to figures out from the Office of National Statistics, and inactivity rates are also falling. The net result is that 74.9% of people of working age are now in work, a total of 29.51 million people, up 152,000 over the quarter and up 456,000 over the year. The number of outstanding vacancies is now 687,600 which is the highest since 2001. This accords with anecdotal evidence - I know several people desperately trying to recruit IT staff and struggling to find people who will respond to adverts let alone turn up to interviews. It explains why the BoE has been cautious and has only cut interest rates by a total of 0.75% from the peak of 5.75%, unlike the US Fed which has cut by 3% to take interest rates from 5.25% to 2.25%.
But you wouldn't have known unemployment had fallen if you had logged onto the Times website this morning. Their main headline screamed Unemployment looms large as crunch bites deep - anyone glancing at it would have shivered and assumed that unemployment had just risen. But their whole article was instead based on an predictive "estimate" put out by JP Morgan - you know those people whose predictive abilities are so notable that they loaded up with sub-prime which resulted in them announcing a 34% writedown in Q4/07 income, followed by an announcement today that their 2008 first quarter profits had dropped by 50%. When the ONS released their figures, the Times removed the article from the front page and published the correct employment figures on the business pages - but couldn't resist spinning with the headline that the rise in employment was "masking" the "crunch".
It's hard not to conclude that the Times is doing it's darndest to frighten the public into staying away from the shops, hiding under the bed and stuffing their money under the mattress - all the better to make people doubt the Labour government and vote Tory. It will be interesting to see how far they take this. You can scare-monger to a certain extent, but when you start to do it persistently and in direct contradiction to the facts you get a reputation rather like the Daily Express when they run one of their interminable "Diana was killed by Prince Phillip" stories.
Thursday, March 27, 2008
The French State Visit
The Sarkozys are in town lavishing extravagant praise on the British. Most Brits will smile but not take it too seriously. But should they? The most interesting comment about the visit comes from Germany's Deutche Welle, which observed that:
Some political analysts have said the French president is reaching out to Brown because he does not get on well with German Chancellor Angela Merkel. Berlin and Paris traditionally dominate the European Union.
In an interview with the BBC before the trip, Sarkozy, who is scheduled to take over the European Council presidency in three months, said France's European policies would no longer be "reduced to friendship with Germany." He added that "the Paris-Berlin axis is fundamental but not sufficient."
Sarkozy and Merkel have quarrelling almost every month since Sarkozy took over the French Presidency. He's been irritating her on a personal level (eg his tendency to grab her in public, something the reserved Chancellor disapproves of), his tendency to take credit for things Germany has done the work on, and on issues such as EU competition policy and the independence of the ECB (Germany backs the ECB's stern focus on inflation).
This is a massive opportunity for the UK. Sarkozy is looking for another powerful friend and feels that Gordon Brown is the perfect foil (i.e. he won't compete on flamboyance the way say, Blair would have). Plus the UK now has the glamour of a successful economy and any European leader wanting to signal that he is reforming his country's economy does so by claiming alliance to and emulation of the UK. Mrs Merkel is looking for a sober partner who will treat her with respect - and again Gordon Brown fits the bill, given his similar upbringing to hers and similar intellectual bent.
The test of this new alignment might come in the second half of 2008, when France holds the EU rotating presidency, because budget reform will inevitably get discussed. Sarkozy has hinted at CAP reform. The question is whether he can be persuaded to deliver or whether this is merely grand talk in the Sarkozy style. Sarkozy isn't as close to the French agricultural sector as Chirac was, and his personality lends itself to making startling decisions (and for the French CAP reform would be startling), plus he wants to buddy up with the UK. Germany, the long-suffering paymaster of the EU, is likely to be quietly pleased with reform.
Of course we have been here before - Schroeder and Chirac hated each other at first, and both looked to forge a new alliance with the UK, and there were high hopes that the UK could use this position to force through some changes. Unfortunately Mr Blair shortsightedly threw away all chances of realignment by cheerleading for the Iraq War, pushing the French and Germans back into each others arms again. Lets hope Gordon Brown handles things with a little more finesse.
Some political analysts have said the French president is reaching out to Brown because he does not get on well with German Chancellor Angela Merkel. Berlin and Paris traditionally dominate the European Union.
In an interview with the BBC before the trip, Sarkozy, who is scheduled to take over the European Council presidency in three months, said France's European policies would no longer be "reduced to friendship with Germany." He added that "the Paris-Berlin axis is fundamental but not sufficient."
Sarkozy and Merkel have quarrelling almost every month since Sarkozy took over the French Presidency. He's been irritating her on a personal level (eg his tendency to grab her in public, something the reserved Chancellor disapproves of), his tendency to take credit for things Germany has done the work on, and on issues such as EU competition policy and the independence of the ECB (Germany backs the ECB's stern focus on inflation).
This is a massive opportunity for the UK. Sarkozy is looking for another powerful friend and feels that Gordon Brown is the perfect foil (i.e. he won't compete on flamboyance the way say, Blair would have). Plus the UK now has the glamour of a successful economy and any European leader wanting to signal that he is reforming his country's economy does so by claiming alliance to and emulation of the UK. Mrs Merkel is looking for a sober partner who will treat her with respect - and again Gordon Brown fits the bill, given his similar upbringing to hers and similar intellectual bent.
The test of this new alignment might come in the second half of 2008, when France holds the EU rotating presidency, because budget reform will inevitably get discussed. Sarkozy has hinted at CAP reform. The question is whether he can be persuaded to deliver or whether this is merely grand talk in the Sarkozy style. Sarkozy isn't as close to the French agricultural sector as Chirac was, and his personality lends itself to making startling decisions (and for the French CAP reform would be startling), plus he wants to buddy up with the UK. Germany, the long-suffering paymaster of the EU, is likely to be quietly pleased with reform.
Of course we have been here before - Schroeder and Chirac hated each other at first, and both looked to forge a new alliance with the UK, and there were high hopes that the UK could use this position to force through some changes. Unfortunately Mr Blair shortsightedly threw away all chances of realignment by cheerleading for the Iraq War, pushing the French and Germans back into each others arms again. Lets hope Gordon Brown handles things with a little more finesse.
Thursday, March 20, 2008
The Recent Spate of Bad Opinion Polls
I'm a bit late commenting on this (and apologies to those who left pending comments for moderation on other posts, I haven't time to log in much, I usually publish comments just before I write a new post) and I expect everyone and their dog has had an opinion on why Labour sunk in the polls caried out over the weekend.
The budget last Wednesday was generally received well by the public - even in the YouGov poll which gave the worst headline results people broadly agreed with the measures Alistair Darling announced - they agreed by 68% to 28% that tax should be increased on environmentally unfriendly cars, agreed by 63% to 30% that supermarkets should charge for plastic bags, agreed by 45% to 44% that tax on flights should increase, agreed by 78% to 20% with the tax rise on cigarettes and agreed by 77% to 16% that those claiming incapacity benefit should attend an interview to check whether they should continue to claim the benefit. The only thing opposed was the tax on beer and spirits and that was narrow (48% opposed, 46% in favour).
So why the slump in voting intention figures? The US investment bank Bear Stearns required help from the Fed on Friday the 14th, while the polls were carried out, and the news was reported in the most lurid terms possible with phrases like "financial meltdown" being bandied about. The public is properly scared that there will be a recession, particularly because of the way some commentators are claiming that it is "bound" to be worse here than in the US. Robert Peston of the BBC for instance continues to use emotive language - he likes to use the word "scary" in his blog - see here. The folk in the city are scared - which makes them vunerable to malicious and false rumours like the one about HBOS yesterday, which caused their shares to drop 20%.
All this scaremongering has an effect on the public. The YouGov poll showed that 18% were worried about losing their job. 18% unemployment is Great Depression stuff. Only a moment's rational thought will tell you that we are miles from that. Commentators in the media like to talk to talking heads in the City, and because the City is scared they assume that the whole UK is in trouble. But if the City can get it so wrong about the state of HBOS who is to say they are right about anything else? And there is more to the UK than the City. Other commentators like to look at drops in the FTSE 100 as evidence that the UK economy is in trouble - but the FTSE 100 no longer reflects UK PLC. Components of the Index like HSBC, Vodafone and Glaxo get most of their earnings outside the UK, and the mining firms like BHP Billiton and Rio Tinto make their money mining in Australia and South Africa and selling to China - so much of the FTSE100 now reflects international business that movements of the index are useless in telling us what is going on in the UK.
So what is going on in the real UK economy? Retail sales grew strongly in February and January's figures had to be revised up. Food stores did well, as did "non-store retailing" aka online stores. The only retail sector struggling is household goods. Earlier in the month we got news that service sector activity was up.
I wonder if all the doom-mongers in the press will do stories headlined "we were being muppets" when the supposed "worse than the US" recession doesn't materialize. And will they admit they were deliberately trying to talk up a recession to hammer the government? I'm not holding my breath. When we get through this and can point to solid evidence that the recession didn't happen after all, the government should excoriate those who predicted one and they should certainly laugh at those who panicked. Government is no place for panicky people (aka Tories).
The budget last Wednesday was generally received well by the public - even in the YouGov poll which gave the worst headline results people broadly agreed with the measures Alistair Darling announced - they agreed by 68% to 28% that tax should be increased on environmentally unfriendly cars, agreed by 63% to 30% that supermarkets should charge for plastic bags, agreed by 45% to 44% that tax on flights should increase, agreed by 78% to 20% with the tax rise on cigarettes and agreed by 77% to 16% that those claiming incapacity benefit should attend an interview to check whether they should continue to claim the benefit. The only thing opposed was the tax on beer and spirits and that was narrow (48% opposed, 46% in favour).
So why the slump in voting intention figures? The US investment bank Bear Stearns required help from the Fed on Friday the 14th, while the polls were carried out, and the news was reported in the most lurid terms possible with phrases like "financial meltdown" being bandied about. The public is properly scared that there will be a recession, particularly because of the way some commentators are claiming that it is "bound" to be worse here than in the US. Robert Peston of the BBC for instance continues to use emotive language - he likes to use the word "scary" in his blog - see here. The folk in the city are scared - which makes them vunerable to malicious and false rumours like the one about HBOS yesterday, which caused their shares to drop 20%.
All this scaremongering has an effect on the public. The YouGov poll showed that 18% were worried about losing their job. 18% unemployment is Great Depression stuff. Only a moment's rational thought will tell you that we are miles from that. Commentators in the media like to talk to talking heads in the City, and because the City is scared they assume that the whole UK is in trouble. But if the City can get it so wrong about the state of HBOS who is to say they are right about anything else? And there is more to the UK than the City. Other commentators like to look at drops in the FTSE 100 as evidence that the UK economy is in trouble - but the FTSE 100 no longer reflects UK PLC. Components of the Index like HSBC, Vodafone and Glaxo get most of their earnings outside the UK, and the mining firms like BHP Billiton and Rio Tinto make their money mining in Australia and South Africa and selling to China - so much of the FTSE100 now reflects international business that movements of the index are useless in telling us what is going on in the UK.
So what is going on in the real UK economy? Retail sales grew strongly in February and January's figures had to be revised up. Food stores did well, as did "non-store retailing" aka online stores. The only retail sector struggling is household goods. Earlier in the month we got news that service sector activity was up.
I wonder if all the doom-mongers in the press will do stories headlined "we were being muppets" when the supposed "worse than the US" recession doesn't materialize. And will they admit they were deliberately trying to talk up a recession to hammer the government? I'm not holding my breath. When we get through this and can point to solid evidence that the recession didn't happen after all, the government should excoriate those who predicted one and they should certainly laugh at those who panicked. Government is no place for panicky people (aka Tories).
Wednesday, March 12, 2008
How the Spitzer thing affects Hillary
There were two reactions to Eliot Spitzer's prostitute problem - the initial one was pure schadenfreude. People then moved on quickly to pity for his wife who had the painful job of standing next to him while he made his statement.
On the Newsweek site the article on Wronged Wives is the second most popular. People increasingly feel that the poor wives should not be dragged out like this. And of course all discussions of the wronged wife recall the most famous wronged wife of them all - one Hillary Rodham Clinton. She too was sent to defend Bill when the Lewinsky allegations first broke, and she did her best, telling the Today show that it was all one "vast right-wing conspiracy". She probably believed it too, till Bill was forced later to come clean (even Hillary didn't think Bill would be so dumb as to risk his presidency for sex).
It's hard to get wronged wives to talk - who would want the extra humiliation? - but another wronged wife, Dina McGreevey, who was dragged out to stand by her husband (the former Governor of New Jersey) while he admitted that he was a "gay American" in 2004, has come forward and been all over the newspapers, magazines and TV giving her opinions. In her Newsweek interview she says that after her dreadful stand-by-your-man press conference, she consulted Hillary, who told her to look out for herself and to "get your own counsel, don't rely on his advisers". McGreevey took it to heart and has just concluded a spectacular divorce from her husband.
How will these reminders of Hillary's painful past play with American voters? Another Newsweek article points out that voters have repeatedly shown that they don't much like it when they perceive Hillary to be attacked or to be hurting:
For much of 1992, the campaign's internal polling showed Hillary had significantly high negatives. Then a remarkable thing happened—the Republican National Convention. As would be expected, Bill Clinton took much of the Republican assault. But a special scorn, shrill and almost comically over the top, was reserved for Hillary. Almost overnight her negatives dropped, and for the rest of that campaign most voters viewed her favorably. It happened again during the impeachment saga of her husband, and we have since seen it more than once. Nothing helps her more than to be attacked by her enemies (think of the phenomenon as a slightly bizarre twist on FDR's maxim about an unsavory Latin American potentate: "He may be an S.O.B., but he's our S.O.B.").
Michelle Obama has in the past taken a shot at Hillary's marital problems saying "if you can't run your own house, you can't run the White House" - her view is not shared, most people thought it was well below the belt. Sympathy for the Wronged Wives is at an all time high, and while Hillary might feel embarassed at having her past dragged up again because of the Spitzer affair, it might actually help her.
On the Newsweek site the article on Wronged Wives is the second most popular. People increasingly feel that the poor wives should not be dragged out like this. And of course all discussions of the wronged wife recall the most famous wronged wife of them all - one Hillary Rodham Clinton. She too was sent to defend Bill when the Lewinsky allegations first broke, and she did her best, telling the Today show that it was all one "vast right-wing conspiracy". She probably believed it too, till Bill was forced later to come clean (even Hillary didn't think Bill would be so dumb as to risk his presidency for sex).
It's hard to get wronged wives to talk - who would want the extra humiliation? - but another wronged wife, Dina McGreevey, who was dragged out to stand by her husband (the former Governor of New Jersey) while he admitted that he was a "gay American" in 2004, has come forward and been all over the newspapers, magazines and TV giving her opinions. In her Newsweek interview she says that after her dreadful stand-by-your-man press conference, she consulted Hillary, who told her to look out for herself and to "get your own counsel, don't rely on his advisers". McGreevey took it to heart and has just concluded a spectacular divorce from her husband.
How will these reminders of Hillary's painful past play with American voters? Another Newsweek article points out that voters have repeatedly shown that they don't much like it when they perceive Hillary to be attacked or to be hurting:
For much of 1992, the campaign's internal polling showed Hillary had significantly high negatives. Then a remarkable thing happened—the Republican National Convention. As would be expected, Bill Clinton took much of the Republican assault. But a special scorn, shrill and almost comically over the top, was reserved for Hillary. Almost overnight her negatives dropped, and for the rest of that campaign most voters viewed her favorably. It happened again during the impeachment saga of her husband, and we have since seen it more than once. Nothing helps her more than to be attacked by her enemies (think of the phenomenon as a slightly bizarre twist on FDR's maxim about an unsavory Latin American potentate: "He may be an S.O.B., but he's our S.O.B.").
Michelle Obama has in the past taken a shot at Hillary's marital problems saying "if you can't run your own house, you can't run the White House" - her view is not shared, most people thought it was well below the belt. Sympathy for the Wronged Wives is at an all time high, and while Hillary might feel embarassed at having her past dragged up again because of the Spitzer affair, it might actually help her.
The Budget
Nice steady performance from Alistair Darling. I thought he explained things very well - the point that we had the best growth last year in the G7 is one that's not heard much.
Most people will find themselves unaffected by this budget. No one will mind - given world turmoil, people simply want steadiness from government till we know more about how things will pan out. Binge drinkers will hate the budget - but they can always save themselves some money by cutting down, people in city centres will be grateful for it.
Most people will find themselves unaffected by this budget. No one will mind - given world turmoil, people simply want steadiness from government till we know more about how things will pan out. Binge drinkers will hate the budget - but they can always save themselves some money by cutting down, people in city centres will be grateful for it.
Monday, March 10, 2008
Eliot Spitzer - the moral for our times
I had to comment on Eliot Spitzer's woes. For those not following the story, Eliot Spitzer is the Governor of New York, who got caught soliciting a prostitute. As prostitution is illegal in New York state, that's the end of him.
So what? He's just another American politician, right? Well his story is interesting because of the way he tried to set himself apart from "establishment" politicians. He ran on a "change" ticket - he promised to "change the ethics of Albany [the state capital of New York]". Sounds familiar? The great and the good rushed to endorse him, including Bill Richardson (Governor of New Mexico and a possible Vice Presidential candidate) who declared Spitzer was the "future of the Democratic party".
People in New York state lapped it up and elected him in 2006 with a stonking 69% of the vote. Things started to go wrong almost straight away. Apparently he thought "change" meant not consulting or compromising with the state legislature on all sorts of issues big and small, from health-care bills to drivers licences to the budget. He upset Democrats as well as Republicans and his approval rating sank to 33% before the news broke about his links to prostitution.
The moral of the story? Don't believe politicians who say they are "different" and be suspicious when they claim the are above politics and for hope and change and all that good stuff. Not only do they never live up to the rhetoric, they tend to be worse than the usual politician, partly because they believe they are so special/gifted/different they think they can get away with anything.
Your average establishment politician on the other hand, who has worked his way up the ranks, gaining experience all the way about how politics is about compromise, and how political decisions are often about making painful choices between something bad and something awful - they tend to turn out OK. They won't wow you with grand flying rhetoric, and their policy proposals might seem like the most boring things since sliced bread, but they do try to deliver them and you know exactly what to expect. It's time everyone grew up and realised that politics is desperately bread-and-butter, and expecting every politician to be Pericles/The Saviour/Alexander the Great is to doom yourself to disappointment.
So what? He's just another American politician, right? Well his story is interesting because of the way he tried to set himself apart from "establishment" politicians. He ran on a "change" ticket - he promised to "change the ethics of Albany [the state capital of New York]". Sounds familiar? The great and the good rushed to endorse him, including Bill Richardson (Governor of New Mexico and a possible Vice Presidential candidate) who declared Spitzer was the "future of the Democratic party".
People in New York state lapped it up and elected him in 2006 with a stonking 69% of the vote. Things started to go wrong almost straight away. Apparently he thought "change" meant not consulting or compromising with the state legislature on all sorts of issues big and small, from health-care bills to drivers licences to the budget. He upset Democrats as well as Republicans and his approval rating sank to 33% before the news broke about his links to prostitution.
The moral of the story? Don't believe politicians who say they are "different" and be suspicious when they claim the are above politics and for hope and change and all that good stuff. Not only do they never live up to the rhetoric, they tend to be worse than the usual politician, partly because they believe they are so special/gifted/different they think they can get away with anything.
Your average establishment politician on the other hand, who has worked his way up the ranks, gaining experience all the way about how politics is about compromise, and how political decisions are often about making painful choices between something bad and something awful - they tend to turn out OK. They won't wow you with grand flying rhetoric, and their policy proposals might seem like the most boring things since sliced bread, but they do try to deliver them and you know exactly what to expect. It's time everyone grew up and realised that politics is desperately bread-and-butter, and expecting every politician to be Pericles/The Saviour/Alexander the Great is to doom yourself to disappointment.
Friday, March 07, 2008
The Richest Regions in Europe
Eurostat looks at the regions of Europe every year and calculates the GDP per inhabitant of the region based on a Purchasing Power Standard, and then expresses this as a % of the average for the EU 27 nations.
The average for the EU-27 is set at 100. The richest region turns out to be Inner London, with a value of 302.7. The next richest region in the EU is Luxembourg with a value of 264.3. The Eastern European regions came up below average as expected, with North East Romania the poorest with a score of 24.2.
The surprising thing for me was how many regions in the UK are below the EU average, especially as the EU-27 average is depressed by the accession of the eastern europeans countries. Here's the list:
Tees Valley and Durham 85.9
Northumberland, Tyne and Wear 105.1
Cumbria 90.2
Cheshire 132.8
Greater Manchester 110.0
Lancashire 97.2
Merseyside 84.8
East Yorkshire and Northern Lincolnshire 97.6
North Yorkshire 105.8
South Yorkshire 92.7
West Yorkshire 110.1
Derbyshire and Nottinghamshire 109.1
Leicestershire, Rutland and Northants 118.6
Lincolnshire 86.5
Herefordshire, Worcestershire and Warks 108.9
Shropshire and Staffordshire 92.6
West Midlands 112.4
East Anglia 107.9
Bedfordshire, Hertfordshire 136.1
Essex 99.3
Inner London 302.7
Outer London 108.5
Berkshire, Bucks and Oxfordshire 168.0
Surrey, East and West Sussex 123.7
Hampshire and Isle of Wight 120.2
Kent 101.0
Gloucestershire, Wiltshire and Bristol/Bath area 133.9
Dorset and Somerset 102.8
Cornwall and Isles of Scilly 77.4
Devon 92.5
West Wales and The Valleys 79.0
East Wales 115.2
Eastern Scotland 116.1
South Western Scotland 107.1
Northern Ireland 97.0
For instance Cornwall and the Isles of Scilly with a score of 77.4 is poorer than the Algarve (Portugal) which has a score of 79.6. Outside Inner London there are only pockets of success - Berkshire, Bucks and Oxfordshire with a score of 168.0, Bedfordshire, Hertfordshire with a score of 136.1, Gloucestershire, Wiltshire and Bristol/Bath area with a score of 133.9 and Cheshire with a score of 132.8. And Scotland is clearly far from the basket-case that the English like to pretend it is.
We really need to be asking ourselves why places like Cornwall, Devon, Cumbria, Merseyside, Tees Valley and Durham are doing so badly. Durham is an old mining and shipbuilding area that still hasn't found any other industry to replace them. Cumbria, Durham and Merseyside are represented by Labour MPs and they can and should be pressing the Labour government for help as agressively as possible. Cities like Bristol and Manchester have shown how well an effective local Labour government combined with Labour MPs can build up the area's economy. Instead of Frank Field wasting his time writing fanciful pamphlets on how MPs should be selected by primaries (and pray who would pay for these primaries?), he should be concentrating on lobbying business to invest in his area. Perhaps poor performance in these areas is an indication that the MP's haven't been cheerleading for their areas as much as they should, and should be de-selected and someone more effective put in?
Cornwall and Devon are agricultural and tourist areas and have suffered from UK tourists deciding to holiday in the Mediterranean instead. Devon and Cornwall also dominated by the LibDems, which suggests people there have opted out of UK politics in that the LibDems will never be part of any government, and will thus never have the clout to drive investment and regeneration towards their area.
All the areas scoring below 100 are entitled to EU Objective 2 help. (Objective 2 regions are not in as dire need as Objection 1 regions. All Objective 1 regions are in Eastern Europe).
To look at the full EU regional list click here.
The average for the EU-27 is set at 100. The richest region turns out to be Inner London, with a value of 302.7. The next richest region in the EU is Luxembourg with a value of 264.3. The Eastern European regions came up below average as expected, with North East Romania the poorest with a score of 24.2.
The surprising thing for me was how many regions in the UK are below the EU average, especially as the EU-27 average is depressed by the accession of the eastern europeans countries. Here's the list:
Tees Valley and Durham 85.9
Northumberland, Tyne and Wear 105.1
Cumbria 90.2
Cheshire 132.8
Greater Manchester 110.0
Lancashire 97.2
Merseyside 84.8
East Yorkshire and Northern Lincolnshire 97.6
North Yorkshire 105.8
South Yorkshire 92.7
West Yorkshire 110.1
Derbyshire and Nottinghamshire 109.1
Leicestershire, Rutland and Northants 118.6
Lincolnshire 86.5
Herefordshire, Worcestershire and Warks 108.9
Shropshire and Staffordshire 92.6
West Midlands 112.4
East Anglia 107.9
Bedfordshire, Hertfordshire 136.1
Essex 99.3
Inner London 302.7
Outer London 108.5
Berkshire, Bucks and Oxfordshire 168.0
Surrey, East and West Sussex 123.7
Hampshire and Isle of Wight 120.2
Kent 101.0
Gloucestershire, Wiltshire and Bristol/Bath area 133.9
Dorset and Somerset 102.8
Cornwall and Isles of Scilly 77.4
Devon 92.5
West Wales and The Valleys 79.0
East Wales 115.2
Eastern Scotland 116.1
South Western Scotland 107.1
Northern Ireland 97.0
For instance Cornwall and the Isles of Scilly with a score of 77.4 is poorer than the Algarve (Portugal) which has a score of 79.6. Outside Inner London there are only pockets of success - Berkshire, Bucks and Oxfordshire with a score of 168.0, Bedfordshire, Hertfordshire with a score of 136.1, Gloucestershire, Wiltshire and Bristol/Bath area with a score of 133.9 and Cheshire with a score of 132.8. And Scotland is clearly far from the basket-case that the English like to pretend it is.
We really need to be asking ourselves why places like Cornwall, Devon, Cumbria, Merseyside, Tees Valley and Durham are doing so badly. Durham is an old mining and shipbuilding area that still hasn't found any other industry to replace them. Cumbria, Durham and Merseyside are represented by Labour MPs and they can and should be pressing the Labour government for help as agressively as possible. Cities like Bristol and Manchester have shown how well an effective local Labour government combined with Labour MPs can build up the area's economy. Instead of Frank Field wasting his time writing fanciful pamphlets on how MPs should be selected by primaries (and pray who would pay for these primaries?), he should be concentrating on lobbying business to invest in his area. Perhaps poor performance in these areas is an indication that the MP's haven't been cheerleading for their areas as much as they should, and should be de-selected and someone more effective put in?
Cornwall and Devon are agricultural and tourist areas and have suffered from UK tourists deciding to holiday in the Mediterranean instead. Devon and Cornwall also dominated by the LibDems, which suggests people there have opted out of UK politics in that the LibDems will never be part of any government, and will thus never have the clout to drive investment and regeneration towards their area.
All the areas scoring below 100 are entitled to EU Objective 2 help. (Objective 2 regions are not in as dire need as Objection 1 regions. All Objective 1 regions are in Eastern Europe).
To look at the full EU regional list click here.
Wednesday, March 05, 2008
UK service sector activity accelerates
The FT reports today that UK service sector activity for February accelerated:
The Chartered Institute of Purchasing and Supply and NTC Research said their index of service sector activity rose from 52.5 in January to 54 last month, indicating faster expansion. Analysts had expected the index to weaken to 52.
So much for the supposed "slowdown" that the more excitable parts of the press are reporting.
As I've said before, keep an eye on the oil price. In the absence of a supply shock, a strong oil price indicates strong demand and that the world economy is growing. During recessions, when the world economy contracts, the oil price always drops - because among other things there are far fewer trips made by distributors from warehouses to stores in recessions.
The American services sector also performed better than expected. I think history may judge that the Bank of England and the European Central Bank called it right when they refused to panic by cutting interest rates sharply during last year's credit turmoil. The US Federal Reserve though may have cut rates too much.
The Chartered Institute of Purchasing and Supply and NTC Research said their index of service sector activity rose from 52.5 in January to 54 last month, indicating faster expansion. Analysts had expected the index to weaken to 52.
So much for the supposed "slowdown" that the more excitable parts of the press are reporting.
As I've said before, keep an eye on the oil price. In the absence of a supply shock, a strong oil price indicates strong demand and that the world economy is growing. During recessions, when the world economy contracts, the oil price always drops - because among other things there are far fewer trips made by distributors from warehouses to stores in recessions.
The American services sector also performed better than expected. I think history may judge that the Bank of England and the European Central Bank called it right when they refused to panic by cutting interest rates sharply during last year's credit turmoil. The US Federal Reserve though may have cut rates too much.
Sunday, March 02, 2008
Conservatives using council tax for propaganda purposes?
Southampton has a hung council, with 18 Conservatives, 18 Labour councillors and 12 Lib-Dems. Labour should have formed the administration in May 2007 as they hold the position of Mayor, but one Lib-Dem voted with the Conservatives to put them into power.
In November 2007, the conservative-run council sent out a letter to all the council tax payers stating what their budget proposals would be - a 10% cut for the over 65's. They state in the letter that "At the moment this new discount is only a proposal and the final decision to introduce it will not be made by the city council until February 2008". They intended to pay for the discount with £8 million of cuts, mainly attacking children's services and schools (i.e. the discount for the old was to be paid for by hurting the young), but this was not unveiled till Jan 2008.
The Tories knew that they wouldn't be able to pass the budget which is subject to a full vote of the council - they had only 18 seats out of the 48 (37.5%). So why send out the letter? To publicise their council tax plans, and hopefully to convince some old people that the discount will go ahead if they vote Tory in 2008. It cost the council £100,000 to pay for this mailshot.
The trouble is that it is not clear that it was legal to send out this mailshot. In 1986, Margaret Thatcher passed legislation banning councils from issuing party political literature on the rates. Once a budget has passed it is OK to send out letters explaining changes if they have been substantial. But you shouldn't send out the letter beforehand, knowing that you have absolutely no chance of passing the budget, purely to get party political material out there at the council tax-payer's expense.
I think there should be an investigation into improper use of council tax money, and that the Tories should pay the council back the £100,000.
Some people reading this will be thinking tax cuts? spending cuts? Are these David Cameron's compassionate conservatives or old-fashioned Thatcherite Tories? Well they don't fit in with the touchy feely image the national party is putting about, that's for sure. Maybe the touchy feely stuff is just PR propaganda and the Tories will drop "compassion" just as quicky as Dubya did after being elected in 2000. The local Tories are not even very sensible - the worst decision being to hand two schools to an evangelical Christian consortium to be run, instead of to the trust run by Southampton University (the preferred choice of Labour).
What is becoming clear from the budget choices is that Conservatives are increasingly enagaged in old people v young people politics, where Conservatives = Old People.
In November 2007, the conservative-run council sent out a letter to all the council tax payers stating what their budget proposals would be - a 10% cut for the over 65's. They state in the letter that "At the moment this new discount is only a proposal and the final decision to introduce it will not be made by the city council until February 2008". They intended to pay for the discount with £8 million of cuts, mainly attacking children's services and schools (i.e. the discount for the old was to be paid for by hurting the young), but this was not unveiled till Jan 2008.
The Tories knew that they wouldn't be able to pass the budget which is subject to a full vote of the council - they had only 18 seats out of the 48 (37.5%). So why send out the letter? To publicise their council tax plans, and hopefully to convince some old people that the discount will go ahead if they vote Tory in 2008. It cost the council £100,000 to pay for this mailshot.
The trouble is that it is not clear that it was legal to send out this mailshot. In 1986, Margaret Thatcher passed legislation banning councils from issuing party political literature on the rates. Once a budget has passed it is OK to send out letters explaining changes if they have been substantial. But you shouldn't send out the letter beforehand, knowing that you have absolutely no chance of passing the budget, purely to get party political material out there at the council tax-payer's expense.
I think there should be an investigation into improper use of council tax money, and that the Tories should pay the council back the £100,000.
Some people reading this will be thinking tax cuts? spending cuts? Are these David Cameron's compassionate conservatives or old-fashioned Thatcherite Tories? Well they don't fit in with the touchy feely image the national party is putting about, that's for sure. Maybe the touchy feely stuff is just PR propaganda and the Tories will drop "compassion" just as quicky as Dubya did after being elected in 2000. The local Tories are not even very sensible - the worst decision being to hand two schools to an evangelical Christian consortium to be run, instead of to the trust run by Southampton University (the preferred choice of Labour).
What is becoming clear from the budget choices is that Conservatives are increasingly enagaged in old people v young people politics, where Conservatives = Old People.
Wednesday, February 27, 2008
Elections
I'm currently reading Gavin Esler's 1997 book, The United States of Anger
which brilliantly records the maelstrom of forces building up in that country (and which we now know led to George W Bush and all he stands for). I was particularly struck by a passage about the 1996 general election:
"Outside a polling station in Arlington, Virginia, voters were waiting in a 200-yard-long line to vote... The line moved so slowly everyone was forced to wait for more than an hour to vote, on a workday, in a society which values hard work above all.
... The Arlington crowd was patient and polite, many voters reading books brought for the occasion. A family friend said she waited for more than an hour and then left without voting because she had to pick up her children. Others told of horrible problems working through the entire gargantuan ballot paper, spending twenty minutes in the voting booth, in some areas electing everyone from the president and senator to members of Congress, governors, local representatives, county commissioners, sheriffs, judges and dogcatchers."
Turnout in that 1996 election was just 48% - imagine what would have happened if it had reached French levels of over 85%+.
Esler concludes that the Americans suffer from over-democracy and are over-governed. Paradoxically making voters spend so much time electing so many officials weakens democracy, because some voters can't afford the many hours it takes to vote, and some would-be politicians can't afford the many months they must devote just to fund-raising in order to be heard. Thus potential voters and potential politicians drop out of the system, leaving it in the hands of the activists and extremists.
This is an important point, because from time to time people here think, if only we could have referendums on everything, if only we could have primaries, if only we could elect sheriffs etc, life in Britain would improve. They imagine that voters will be so enthusiastic about all the extra voting that voter-participation would rise, when the evidence from America shows it will probably go down.
In most of England you elect your council, you elect your MEP and you elect your government (who double as your representative in the Council of Ministers), and you delegate to them the power to appoint other officials, and you are in and out of the polling station in five minutes. It's a good system. Participating in democracy doesn't cost a lot of time, and democracy doesn't cost too much money either (compared to the Americans), which means we have money to spend on other things.
It's no accident that when the Berlin wall fell, the fledgling eastern european countries followed in the footsteps of the ex-colonial countries and opted for the type of parliamentary democracies you see across Europe (and of course the parliamentary system was invented in Britain). The US constitutional experts who had hot-footed east hoping to persuade the newbies to copy the American system (and earn fat fees setting it up), were bitterly disappointed. But if they'd thought for a moment, they'd have realised that only daft people would willingly choose a system like the American one.
This November the US turnout will be much higher than in previous years - but only because a toxic combination of Hurricane Katrina, economic woes and Iraq has made Americans desperate. People are so desperate that some will willingly queue for the entire day to vote and get their new saviour into office. I only hope that the polling officials lay out enough polling booths to accomodate them, else we'll have the tragedy of citizens willing to do their bit and the system letting them down.
which brilliantly records the maelstrom of forces building up in that country (and which we now know led to George W Bush and all he stands for). I was particularly struck by a passage about the 1996 general election:"Outside a polling station in Arlington, Virginia, voters were waiting in a 200-yard-long line to vote... The line moved so slowly everyone was forced to wait for more than an hour to vote, on a workday, in a society which values hard work above all.
... The Arlington crowd was patient and polite, many voters reading books brought for the occasion. A family friend said she waited for more than an hour and then left without voting because she had to pick up her children. Others told of horrible problems working through the entire gargantuan ballot paper, spending twenty minutes in the voting booth, in some areas electing everyone from the president and senator to members of Congress, governors, local representatives, county commissioners, sheriffs, judges and dogcatchers."
Turnout in that 1996 election was just 48% - imagine what would have happened if it had reached French levels of over 85%+.
Esler concludes that the Americans suffer from over-democracy and are over-governed. Paradoxically making voters spend so much time electing so many officials weakens democracy, because some voters can't afford the many hours it takes to vote, and some would-be politicians can't afford the many months they must devote just to fund-raising in order to be heard. Thus potential voters and potential politicians drop out of the system, leaving it in the hands of the activists and extremists.
This is an important point, because from time to time people here think, if only we could have referendums on everything, if only we could have primaries, if only we could elect sheriffs etc, life in Britain would improve. They imagine that voters will be so enthusiastic about all the extra voting that voter-participation would rise, when the evidence from America shows it will probably go down.
In most of England you elect your council, you elect your MEP and you elect your government (who double as your representative in the Council of Ministers), and you delegate to them the power to appoint other officials, and you are in and out of the polling station in five minutes. It's a good system. Participating in democracy doesn't cost a lot of time, and democracy doesn't cost too much money either (compared to the Americans), which means we have money to spend on other things.
It's no accident that when the Berlin wall fell, the fledgling eastern european countries followed in the footsteps of the ex-colonial countries and opted for the type of parliamentary democracies you see across Europe (and of course the parliamentary system was invented in Britain). The US constitutional experts who had hot-footed east hoping to persuade the newbies to copy the American system (and earn fat fees setting it up), were bitterly disappointed. But if they'd thought for a moment, they'd have realised that only daft people would willingly choose a system like the American one.
This November the US turnout will be much higher than in previous years - but only because a toxic combination of Hurricane Katrina, economic woes and Iraq has made Americans desperate. People are so desperate that some will willingly queue for the entire day to vote and get their new saviour into office. I only hope that the polling officials lay out enough polling booths to accomodate them, else we'll have the tragedy of citizens willing to do their bit and the system letting them down.
Saturday, February 23, 2008
Santos of the West Wing was modelled on Obama
Hat-tip to Tom Freeman who says that the scriptwriters of the West Wing have confirmed that they modelled the character of Matt Santos on Barack Obama:
"I drew inspiration from him in drawing this character," West Wing writer and producer Eli Attie told the Guardian. "When I had to write, Obama was just appearing on the national scene. He had done a great speech at the convention [which nominated John Kerry] and people were beginning to talk about him."
Art taking inspiration from life and then predicting it! The only difference between Obama and Santos is that Santos is married to a traditional American who shares his universalist views. Obama's big weakness is his wife Michelle who appears not to.
The secret attraction of Obama is that his world-view is colour-blind and neutral. Listen to his speeches, they are very universalist. Anyone can relate to them, whether you are from Britain, Germany, America, Kenya or the Phillipines. This is backed up by his biography: Kansas mother, Kenyan father, Asian-American half-sister and born and raised in Hawaii, that friendly mixed and exotic out-post of America. This is the melting pot embodied in one family.
Michelle Obama however is culturally African-American in a way Obama is not. All her speeches (which you can see on You Tube) are full of the anger, grievances and victimhood of black America, that are completely absent from Barack Obama's speeches. She doesn't address any other community in America, and gives the impression that without her husband's family connections to white America and asian America, she wouldn't bother with these people at all. Of course black Americans have been victims, but they are also only 13% of the US population. Anyone in the White House has to do the Nelson Mandela forgiveness thing and include the other 87% in their new world. Obama gets this but I'm not sure his wife does. The Obama campaign would be wise to ask her to keep a very low profile, especially as the Republicans have a history of attacking the wife when they can't attack the candidate, as Hillary can attest.
Speaking of Hillary - it looks like she will graciously step aside if she doesn't do well in Ohio and Texas. Her stock has risen during this campaign - it's clear she's the better Clinton, not just intelligent, but calm, disciplined and gracious where Bill is self-indulgent, self-absorbed and impulsive. It was the Bill-the-spouse that scuppered her campaign. If Obama gets elected, I hope he offers Hillary a place on the Supreme Court. It will serve the Republicans right. They plagued the Clintons, determined to try to overturn the 1996 election result, and to attack them beyond endurance. What would be better justice than for them to have to bear Hillary in the court for the next thirty years?
"I drew inspiration from him in drawing this character," West Wing writer and producer Eli Attie told the Guardian. "When I had to write, Obama was just appearing on the national scene. He had done a great speech at the convention [which nominated John Kerry] and people were beginning to talk about him."
Art taking inspiration from life and then predicting it! The only difference between Obama and Santos is that Santos is married to a traditional American who shares his universalist views. Obama's big weakness is his wife Michelle who appears not to.
The secret attraction of Obama is that his world-view is colour-blind and neutral. Listen to his speeches, they are very universalist. Anyone can relate to them, whether you are from Britain, Germany, America, Kenya or the Phillipines. This is backed up by his biography: Kansas mother, Kenyan father, Asian-American half-sister and born and raised in Hawaii, that friendly mixed and exotic out-post of America. This is the melting pot embodied in one family.
Michelle Obama however is culturally African-American in a way Obama is not. All her speeches (which you can see on You Tube) are full of the anger, grievances and victimhood of black America, that are completely absent from Barack Obama's speeches. She doesn't address any other community in America, and gives the impression that without her husband's family connections to white America and asian America, she wouldn't bother with these people at all. Of course black Americans have been victims, but they are also only 13% of the US population. Anyone in the White House has to do the Nelson Mandela forgiveness thing and include the other 87% in their new world. Obama gets this but I'm not sure his wife does. The Obama campaign would be wise to ask her to keep a very low profile, especially as the Republicans have a history of attacking the wife when they can't attack the candidate, as Hillary can attest.
Speaking of Hillary - it looks like she will graciously step aside if she doesn't do well in Ohio and Texas. Her stock has risen during this campaign - it's clear she's the better Clinton, not just intelligent, but calm, disciplined and gracious where Bill is self-indulgent, self-absorbed and impulsive. It was the Bill-the-spouse that scuppered her campaign. If Obama gets elected, I hope he offers Hillary a place on the Supreme Court. It will serve the Republicans right. They plagued the Clintons, determined to try to overturn the 1996 election result, and to attack them beyond endurance. What would be better justice than for them to have to bear Hillary in the court for the next thirty years?
Wednesday, February 20, 2008
A surge in tax revenue
The FT reports that we've received a surge in tax revenue this January. Income tax receipts were 15% higher than in Jan 2007 and corporate tax receipts were 23% higher than in Jan 2007. January is the period when businesses pay one quarter of their taxes, and when individuals who complete their self-assessment forms pay what they owe to the revenue. In addition, the ONS had to revise down their estimate of government spending (the govt has been keeping a very tight rein on this as public sector workers will attest). All of which is good news for the public finances.
The thing to understand about tax is that people only pay it on profits or income earned, and only after they've exhausted their allowances (and everybody checks their allowances avidly). If you don't have a job or don't make a profit, you don't pay tax. Tax revenues are therefore a very good gauge of how well the economy is doing, because no one has any incentive to pretend they earn/have made more profits than they actually have, because then they pay more tax. The surge in tax revenue proves that the period 2006/7 was a very good one for UK plc and the corporate tax shows 2007/8 is pretty good too.
The question is what happens in 2008/9. It's still not clear to what extent American problems will affect the UK. The financial sector has tightened their lending criteria quite sharply, but on the other hand employment continues to rise and unemployment continues to drop. The claimant count has been falling for 16 consecutive months and was 794,600 in Jan 2008, which is the lowest since June 1975. The number of economically inactive people also continues to drop (those classed as economically inactive are students, housewives, people who've retired early, the unemployed and the disabled). In order for there to be a proper blowout in the property sector, you either need massive oversupply or massive unemployment. We have neither.
In a way all the economic doom and gloom in the newspapers might actually be to Labour's benefit. It lowers expectations and if it makes people take advantage of the good job situation to earn more and put their financial affairs in order, it should stand us in good stead in the rest of the year, and if we guide the country through this patch, the results will contrast sharply with the darkness of the expectations.
The Tories have been prancing about town trying to claim the country is experiencing a return to the 1970's. Of course no-one wants to see a return to the 70's - or the 80's with it's grim recessions. The Tories electoral message is "it's a return to the 70's, therefore the country needs to elect the Tories". Of course the corollary to that is "if it's not a return to the 70's, then why elect the Tories?" Especially if it is clear that they can't even tell the difference between the dark period of the 70's and 80's and the conditions in this new Labour century. If we weather this storm even while the USA struggles, it will be the second worldwide slump New Labour has seen off (the first being the world recession of 2001). If we go into the next election with twelve consecutive years of growth under our belts Labour deserves to be re-elected - according to the Tories.
The thing to understand about tax is that people only pay it on profits or income earned, and only after they've exhausted their allowances (and everybody checks their allowances avidly). If you don't have a job or don't make a profit, you don't pay tax. Tax revenues are therefore a very good gauge of how well the economy is doing, because no one has any incentive to pretend they earn/have made more profits than they actually have, because then they pay more tax. The surge in tax revenue proves that the period 2006/7 was a very good one for UK plc and the corporate tax shows 2007/8 is pretty good too.
The question is what happens in 2008/9. It's still not clear to what extent American problems will affect the UK. The financial sector has tightened their lending criteria quite sharply, but on the other hand employment continues to rise and unemployment continues to drop. The claimant count has been falling for 16 consecutive months and was 794,600 in Jan 2008, which is the lowest since June 1975. The number of economically inactive people also continues to drop (those classed as economically inactive are students, housewives, people who've retired early, the unemployed and the disabled). In order for there to be a proper blowout in the property sector, you either need massive oversupply or massive unemployment. We have neither.
In a way all the economic doom and gloom in the newspapers might actually be to Labour's benefit. It lowers expectations and if it makes people take advantage of the good job situation to earn more and put their financial affairs in order, it should stand us in good stead in the rest of the year, and if we guide the country through this patch, the results will contrast sharply with the darkness of the expectations.
The Tories have been prancing about town trying to claim the country is experiencing a return to the 1970's. Of course no-one wants to see a return to the 70's - or the 80's with it's grim recessions. The Tories electoral message is "it's a return to the 70's, therefore the country needs to elect the Tories". Of course the corollary to that is "if it's not a return to the 70's, then why elect the Tories?" Especially if it is clear that they can't even tell the difference between the dark period of the 70's and 80's and the conditions in this new Labour century. If we weather this storm even while the USA struggles, it will be the second worldwide slump New Labour has seen off (the first being the world recession of 2001). If we go into the next election with twelve consecutive years of growth under our belts Labour deserves to be re-elected - according to the Tories.
Friday, February 08, 2008
LibDems signal support for Tories
Very significant article in the FT where they say the following:
Nick Clegg says his Liberal Democrats could support a minority Conservative government after the next election, if David Cameron proposes genuinely “liberal” reforms in areas such as civil liberties, public service reform and the environment.
.........Mr Clegg’s legislative shopping list is remarkably similar to the priorities identified by Mr Cameron’s team for his first Queen’s Speech. They include a focus on civil liberties, education reforms, the environment and more local decision-making.
In other words, the Lib Dems have decided they are a match for the Tories, and Labour should expect the two of them to do a deal in the event of a Hung Parliament. This is HUGE. It completely turns on it's head the politics leading up to the 1997 general election, where Labour supporters voted LibDem in places where the LibDems were second to the Tories, or in the lead, with the explicit reason of "keeping the Tories out".
In these areas the LibDems originally gained ground in the 1980's when they were the Alliance, and voters who weren't Tories but couldn't bear Old Labour went to the third party. However Michael Foot, Militant and Old Labour have long been consigned to the dustbin of history. There was no reason for Labour voters to continue to vote LibDem except simply convenience and expedience in that the Labour party in the run-up to 1997 didn't want to spend a lot of time reclaiming these constituencies, preferring instead to concentrate their fire-power on Labour-Tory fights.
The new LibDem-Tory coalition changes everything. What on earth is the point of Labour voters tactically voting LibDem if it results in a Tory government? It underlines again how politics is changing. Not only new generations with new ideas coming through, but old coalitions and old tactics being made redundant.
This LibDem overture to the Tories has been coming a while now, and it is a relief that they've made it public. At least we now know where we stand. Labour activists in Labour-Tory marginals should take a screen-print of the FT article and put it on their leaflets. Especially if they are in those constituencies that the Tories won from Labour in 2005 without increasing their vote at all, because some Labour voters switched to LibDem. Ditto if Labour are up against LibDems either in general or local elections. And the Labour party need to start making plans to reclaim those areas we left to the LibDems and Tories, not least because Labour voters in those spots are now disenfranchised.
Nick Clegg says his Liberal Democrats could support a minority Conservative government after the next election, if David Cameron proposes genuinely “liberal” reforms in areas such as civil liberties, public service reform and the environment.
.........Mr Clegg’s legislative shopping list is remarkably similar to the priorities identified by Mr Cameron’s team for his first Queen’s Speech. They include a focus on civil liberties, education reforms, the environment and more local decision-making.
In other words, the Lib Dems have decided they are a match for the Tories, and Labour should expect the two of them to do a deal in the event of a Hung Parliament. This is HUGE. It completely turns on it's head the politics leading up to the 1997 general election, where Labour supporters voted LibDem in places where the LibDems were second to the Tories, or in the lead, with the explicit reason of "keeping the Tories out".
In these areas the LibDems originally gained ground in the 1980's when they were the Alliance, and voters who weren't Tories but couldn't bear Old Labour went to the third party. However Michael Foot, Militant and Old Labour have long been consigned to the dustbin of history. There was no reason for Labour voters to continue to vote LibDem except simply convenience and expedience in that the Labour party in the run-up to 1997 didn't want to spend a lot of time reclaiming these constituencies, preferring instead to concentrate their fire-power on Labour-Tory fights.
The new LibDem-Tory coalition changes everything. What on earth is the point of Labour voters tactically voting LibDem if it results in a Tory government? It underlines again how politics is changing. Not only new generations with new ideas coming through, but old coalitions and old tactics being made redundant.
This LibDem overture to the Tories has been coming a while now, and it is a relief that they've made it public. At least we now know where we stand. Labour activists in Labour-Tory marginals should take a screen-print of the FT article and put it on their leaflets. Especially if they are in those constituencies that the Tories won from Labour in 2005 without increasing their vote at all, because some Labour voters switched to LibDem. Ditto if Labour are up against LibDems either in general or local elections. And the Labour party need to start making plans to reclaim those areas we left to the LibDems and Tories, not least because Labour voters in those spots are now disenfranchised.
Wednesday, February 06, 2008
What does the Obama phenomenon tell us about the coming changes in our world?
What an exciting night in the US primaries. Mrs Clinton seems to have held her own in the populous New York, New Jersey, Massachussets and California despite wall-to-wall Obama mania in the press combined with attacks on her. A tough woman. But Obama did really well too, cleaning up the mid-west and north-west and taking more states than Mrs Clinton.
Even if Mrs Clinton wins the nomination and becomes President, it is clear that something very important is happening in the USA and it is personified by Obama. In my last post I wrote about the shifts that occur when new generations come of age. Obama is sort of the left-wing marker that Barry Goldwater was for the right-wing in 1964. It's important to remember that the Boomers, born 1946 to 1960, did not vote for John F Kennedy. They were too young to vote for him, he was just before their time. Their first insurgent election was 1964, when they supported Goldwater. They were far too few in 1964 to make a difference - but the Goldwater phenomenon was realised with Reagan in the 80's when the Boomers had come of age in sufficient numbers to dominate.
Obama is a similar marker of the views of a new generation. The Millenials in the US are really keen on voting, they trend leftwards and seem quite civic minded - they can't bear torture, they are quite internationalist and are thinking about universal health-care, a big shift for the US. And we are at the early stages of this phenomenon - the US Millenial generation is very big (twice the size of Generation X) and only about eight years of this generation is currently old enough to vote - we won't see their full power till about 2018, when lots more of them come of age. This is a very exciting and important change and we will experience it this side of the Atlantic too.
The UK Millenial generation is much smaller than the US one, but they are still bigger than our Generation X. They also seem to be trending leftwards and it remains to be seen what effect this has. It's quite possible they will move politics in general and the Labour party leftwards slightly, because while the cynical non-ideological Gen X demanded pragmatism, triangulation and steady economics from their politics (which New Labour duly supplied), the Millenials seem to be more interested in fairness, civics, human rights, citizens rights. The good news is that polls show this generation is trending left, they believe in government, regulation and the welfare state and are internationalist, so it will be difficult for "smaller-state" conservatives to win them over - indeed polls show that most Tory support currently comes from the 50+ Boomer generation who seem nostalgic for the 1980's. The Tory hatred of the Human Rights Act, Europe and the world, doesn't chime with the Millenials either.
We live in very interesting times because I believe the Labour party will need to reinvent itself again - possibly into Civic Labour and shed the authoritarian impulses that we've inherited from Blair. And we need to do this before 2012 at the latest, or the Lib Dems will move into this space. People like Caroline Flint need to take note - times are a-changing and pandering to the Daily Mail won't cut it anymore, as the Mail represents the Boomer generation whose influence is waning.
Even if Mrs Clinton wins the nomination and becomes President, it is clear that something very important is happening in the USA and it is personified by Obama. In my last post I wrote about the shifts that occur when new generations come of age. Obama is sort of the left-wing marker that Barry Goldwater was for the right-wing in 1964. It's important to remember that the Boomers, born 1946 to 1960, did not vote for John F Kennedy. They were too young to vote for him, he was just before their time. Their first insurgent election was 1964, when they supported Goldwater. They were far too few in 1964 to make a difference - but the Goldwater phenomenon was realised with Reagan in the 80's when the Boomers had come of age in sufficient numbers to dominate.
Obama is a similar marker of the views of a new generation. The Millenials in the US are really keen on voting, they trend leftwards and seem quite civic minded - they can't bear torture, they are quite internationalist and are thinking about universal health-care, a big shift for the US. And we are at the early stages of this phenomenon - the US Millenial generation is very big (twice the size of Generation X) and only about eight years of this generation is currently old enough to vote - we won't see their full power till about 2018, when lots more of them come of age. This is a very exciting and important change and we will experience it this side of the Atlantic too.
The UK Millenial generation is much smaller than the US one, but they are still bigger than our Generation X. They also seem to be trending leftwards and it remains to be seen what effect this has. It's quite possible they will move politics in general and the Labour party leftwards slightly, because while the cynical non-ideological Gen X demanded pragmatism, triangulation and steady economics from their politics (which New Labour duly supplied), the Millenials seem to be more interested in fairness, civics, human rights, citizens rights. The good news is that polls show this generation is trending left, they believe in government, regulation and the welfare state and are internationalist, so it will be difficult for "smaller-state" conservatives to win them over - indeed polls show that most Tory support currently comes from the 50+ Boomer generation who seem nostalgic for the 1980's. The Tory hatred of the Human Rights Act, Europe and the world, doesn't chime with the Millenials either.
We live in very interesting times because I believe the Labour party will need to reinvent itself again - possibly into Civic Labour and shed the authoritarian impulses that we've inherited from Blair. And we need to do this before 2012 at the latest, or the Lib Dems will move into this space. People like Caroline Flint need to take note - times are a-changing and pandering to the Daily Mail won't cut it anymore, as the Mail represents the Boomer generation whose influence is waning.
Monday, February 04, 2008
Generational Shifts
The Washington post has a very interesting article on how the changing tempers of different generations have changed America. The authors contend that every 40 years a "civic" generation follows an "idealist" generation in the USA, and that this pattern goes back to 1828.
The 1932 generation that brought in Roosevelt, fought WW2 and voted more enthusiastically than their predecessors or successors was a "civic" generation. The 1968 generation that voted for Nixon and Reagan, and ushered in 40 years of Republicanism (interrupted only by Carter and Clinton) was the "idealist" Boomer generation. The Boomer generation it turns out, are not just self-absorbed and self-indulgent, they tilt rightwards. But now there is a new big civic generation coming of age - the 1981 to 2003 "Millenial" generation, which is twice as large as Generation X, and promises to be like their grandparents in WW2 in attitudes (less self-absorbed, more collegiate, willingness to engage in politics, trust in insititutions etc and more left-wing).
However in between the "talking" generations that appear every 40 years (civic or idealist) are the so-called "silent" generations - Generation X (people born between 1961 and 1980) and the people who came of age in the 1950's, whose children they are. The silent generations are much smaller than the talking generations, and thus have less clout. The author glosses over the silent generations apart from characterising Generation X as cynical, "Life sucks and then you die" is their motto.
There are parallels with the UK. Our "civic" generation of the 1940's fought the war and gave us the revolutionary Atlee government and the Welfare state. As that generation starts to die in the 1980's, Mrs Thatcher's majorities increase, as the right-wing Boomers hold sway.
However I disagree with the authors of the article in that I think that Generation X is a very important generation. They are the internet generation, using it with increasing dexterity from 1995 onwards, and more entrepeneurial than previous generations. And Generation X put New Labour into power, aided by the Lib Dems who, via tactical voting, split the Boomer vote. Gen X weren't as sucessful in the USA - they managed to put Bill Clinton into office when they had Ross Perot to split the Boomer vote, but this decade the mad right-wing Boomer generation have out-voted them.
The pragmatic (and sometimes cynical) Generation X, now aged between 28 to 47, is still New Labour's staunchest supporters. But because they are a small generation, they can only continue to prevail in British politics if the Lib Dems continue to split the Boomer vote, or if the new emerging Millenial generation sides with them.
The Guardian ICM poll of 18th to 20th Jan, showed the Tories overall ahead of Labour by 4%, thanks to the Boomer generation (the 50+ group). The LibDems continued to split some of the Boomer vote (they scored their best % among the over 65's), but the new Millenial generation (under 25s) favoured Labour. That's the good news - it means the Millenial generation will ally with Generation X. The bad news so far is that the UK Millenial generation isn't as keen on voting as the American Millenial generation. Hopefully that will change with time. We just need to hang in there.
The 1932 generation that brought in Roosevelt, fought WW2 and voted more enthusiastically than their predecessors or successors was a "civic" generation. The 1968 generation that voted for Nixon and Reagan, and ushered in 40 years of Republicanism (interrupted only by Carter and Clinton) was the "idealist" Boomer generation. The Boomer generation it turns out, are not just self-absorbed and self-indulgent, they tilt rightwards. But now there is a new big civic generation coming of age - the 1981 to 2003 "Millenial" generation, which is twice as large as Generation X, and promises to be like their grandparents in WW2 in attitudes (less self-absorbed, more collegiate, willingness to engage in politics, trust in insititutions etc and more left-wing).
However in between the "talking" generations that appear every 40 years (civic or idealist) are the so-called "silent" generations - Generation X (people born between 1961 and 1980) and the people who came of age in the 1950's, whose children they are. The silent generations are much smaller than the talking generations, and thus have less clout. The author glosses over the silent generations apart from characterising Generation X as cynical, "Life sucks and then you die" is their motto.
There are parallels with the UK. Our "civic" generation of the 1940's fought the war and gave us the revolutionary Atlee government and the Welfare state. As that generation starts to die in the 1980's, Mrs Thatcher's majorities increase, as the right-wing Boomers hold sway.
However I disagree with the authors of the article in that I think that Generation X is a very important generation. They are the internet generation, using it with increasing dexterity from 1995 onwards, and more entrepeneurial than previous generations. And Generation X put New Labour into power, aided by the Lib Dems who, via tactical voting, split the Boomer vote. Gen X weren't as sucessful in the USA - they managed to put Bill Clinton into office when they had Ross Perot to split the Boomer vote, but this decade the mad right-wing Boomer generation have out-voted them.
The pragmatic (and sometimes cynical) Generation X, now aged between 28 to 47, is still New Labour's staunchest supporters. But because they are a small generation, they can only continue to prevail in British politics if the Lib Dems continue to split the Boomer vote, or if the new emerging Millenial generation sides with them.
The Guardian ICM poll of 18th to 20th Jan, showed the Tories overall ahead of Labour by 4%, thanks to the Boomer generation (the 50+ group). The LibDems continued to split some of the Boomer vote (they scored their best % among the over 65's), but the new Millenial generation (under 25s) favoured Labour. That's the good news - it means the Millenial generation will ally with Generation X. The bad news so far is that the UK Millenial generation isn't as keen on voting as the American Millenial generation. Hopefully that will change with time. We just need to hang in there.
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