House prices and the Labour vote

Even the most hardened anti-Labour activists have noticed that Labour has been recovering slowly but surely in the polls. YouGov put us at 24% just before the Labour party conference in September 2009. The latest YouGov poll showed Labour at 31%. That's a shift of some 7 points in six months. Muttering "it's within the margin of error" each time there is a poll doesn't magic away the trend.

So what has caused the move? David Cameron has undoubtedly helped - Cameron's airbrushed vanity plus his evasiveness and flip-flopping have made people nervous about him. The economy recovered slightly in the fourth quarter of 2009 and unemployment has stabalised at 2.45 million. At 7.8% of the workforce, it's roughly where it was when Labour came to power in 1997.

Tories seize on these facts to "prove" that the recovery won't mean a Labour win. Even with unemployment as "low", in Tory terms at least, as 7.8%, and an economy that had been growing for four years, John Major still lost the 1997 election.

This overlooks the fact that voters vote based on how the economy is affecting them, they arn't really swayed by headline figures in the newspapers. GDP growth means nothing. But "my house price has risen and I'm in a job" means something.

There are some 40 million people eligible to vote in the UK, and between 25 million and 30 million actually do. There are also 14.5 million homeowners in England alone, and therefore house prices have the biggest impact on voters, far more than anecdotes about what is happening to other people, or unemployment which affects a smaller percentage of the electorate.

The Labour government has taken a completely different approach to recession than the previous Conservative government. Norman Lamont and co made policy on the grounds that "if it's not hurting it's not working"; their goal was to hurt as many people as possible to wring the inflation that the Lawson boom had caused, out of the system. By contrast the 2008/9 global recession took place in a deflationary environment, and the Labour government's mantra was "we must avoid hurting people, pain impedes the recovery". To this end, all sorts of measures were taken. The bank bailout, and the stimulus are the things most people remember. But there were also a lot of small policies designed to mitigate the effects of the recession on the individual.

For instance, prior to the recession, you only got help with the interest portion of your mortgage if you had been unemployed for 39 weeks. This was promptly changed to 13 weeks. The government decided that it was cheaper to help people stay in their houses than to have to house them elsewhere with full housing benefit. It had a knock-on effect that it put a kibosh on the forced selling of homes that contributes to house price crashes. Trade unions played their part too, arguing for pay-freezes in return for no redundancies - and they found employers willing to listen; they too had memories of the early 90's recession where they made people redundant at great expense and then found themselves having to hire the same people back during the recovery.

And when it finally twigged at the Bank of England that this was a serious crisis, they cut interest rates aggressively, which meant that many of the people who were struggling to meet their mortgage in early 2008 found themselves able to breathe a sigh of relief. Home owners further used the drop in interest rates to overpay their mortgages. The Bank of England reports that mortgage debt fell by £7bn in Q1 2009, £7 bn in Q2 2009 and £4.9bn in Q3 2009. The more people pay down their debt, the less vulnerable they become to forced selling, and the less likely a full blown housing crash becomes.

The sum result of all of the above is that the Halifax reports that house prices have now risen for 7 consecutive months. The average house price according to the Halifax is around £169,777, which is down 15% from it's all-time peak in 2007. Importantly, the trend is up.

This is all in sharp contrast to the situation in 1997. Back in July 2006, I wrote a long post arguing that it wasn't sleeze that did in John Major's government, it was house prices. To illustrate my point, I posted price changes in London between the peak of 1988, and 1995. A full seven years after the peak, house prices were still in the doldrums. In fact house prices didn't recover their 1988 levels till 1999 - two years into a Labour government, whose decision to make the Bank of England independent restored confidence to the housing market.

Just to underline the difference, I'm going to repost the figures:

Average Price

          1988            1995                     
E1     £111,855       £ 72,010    -36%   Steepney  
E2     £ 80,658       £ 70,133    -13%   Bethnal green
E3     £ 88,481       £ 86,269    -2%    Bow
E4     £ 89,347       £ 77,110    -14%   Chingford
E5     £ 79,244       £ 67,454    -15%   Clapton
E6     £ 71,728       £ 51,666    -28%   East Ham
E7     £ 69,497       £ 51,441    -26%   Forest gate
E8     £ 96,424       £ 65,137    -32%   Hackney
E9     £ 79,834       £ 65,071    -18%   Homerton
E10    £ 64,831       £ 51,960    -20%   Leyton
E11    £ 74,805       £ 66,005    -12%   Leystone
E12    £ 72,743       £ 60,835    -16%   Manor Park
E13    £ 63,935       £ 45,875    -28%   Plalstow
E14    £121,729       £ 76,965    -37%   Poplar
E15    £ 66,949       £ 47,655    -29%   Stratford
E16    £ 71,207       £ 44,701    -37%   North Woolich
E17    £ 66,885       £ 56,229    -16%   Walthmanstow
E18    £ 89,053       £ 74,760    -16%   Woodforrd
SE1    £ 84,712       £ 86,777      2%   Southwark
SE2    £ 60,705       £ 51,552    -15%   Abbey wook
SE3    £110,009       £ 91,978    -16%   Blackheath
SE4    £ 71,175       £ 58,508    -18%   Brockerly
SE5    £ 91,696       £ 95,027      4%   Camberwell
SE6    £ 73,931       £ 63,182    -15%   Catfrod
SE7    £ 72,669       £ 69,859     -4%   Charlton
SE8    £ 70,171       £ 56,656    -19%   Depford
SE9    £ 88,586       £ 72,842    -18%   Eltham
SE10   £109,023       £ 90,617    -17%   Greenwich
SE11   £107,695       £ 89,279    -17%   Kenington
SE12   £ 78,779       £ 70,014    -11%   Lee
SE13   £ 71,095       £ 61,565    -13%   Lewisham
SE14   £ 75,195       £ 56,585    -25%   New Cross
SE15   £ 74,480       £ 57,896    -22%   Peckham
SE16   £ 90,481       £ 77,725    -14%   Rotherhyde
SE17   £ 81,681       £ 66,449    -19%   Walworth
SE18   £ 64,781       £ 53,108    -18%   Woolwich
SE19   £ 71,505       £ 59,180    -17%   Norwood
SE20   £ 65,283       £ 57,741    -12%   Anerly
SE21   £ 88,365       £113,095     28%   Dulwich
SE22   £ 74,459       £ 72,835     -2%   East Dulwich
SE23   £ 74,539       £ 65,878    -12%   Forest Hill
SE24   £ 91,261       £107,809     18%   Herne Hill
SE25   £ 66,173       £ 52,403    -21%   South Norwood
SE26   £ 72,065       £ 59,202    -18%   Sydenham
SE27   £ 74,806       £ 64,903    -13%   West Norwood
SE28   £ 59,946       £ 41,740    -30%   Thamesmead
SW1    £155,444       £143,949     -7%   Pimlico
SW2    £ 73,355       £ 75,317      3%   Brixton
SW3    £179,108       £286,283     60%   Chelsea
SW4    £104,969       £101,298     -3%   Clapham
SW5    £123,264       £150,934     22%   Earls Court
SW6    £125,794       £154,992     23%   Fulham
SW7    £202,467       £309,205     53%   South Kensington
SW8    £ 79,711       £ 75,780     -5%   South Lambeth
SW9    £ 79,461       £ 78,125     -2%   Stockwell
SW10   £138,141       £149,483      8%   West Brompton
SW11   £112,650       £122,419      9%   Battersea
SW12   £ 94,880       £101,541      7%   Balhan
SW13   £151,440       £213,998     41%   Barns
SW14   £145,167       £160,891     11%   Mortlake
SW15   £116,233       £133,784     15%   Putney
SW16   £ 78,829       £ 71,502     -9%   Streatham
SW17   £ 78,376       £ 81,292      4%   Tooting
SW18   £ 99,452       £ 93,966     -6%   Wandwoth
SW19   £ 94,504       £104,880     11%   Wimbledon
SW20   £119,287       £123,355      3%   West Wimbledon
W1     £186,261       £160,324    -14%   West End
W2     £141,258       £137,045     -3%   Bayswater
W3     £ 99,658       £ 92,276     -7%   Acton
W4     £112,954       £141,164     25%   Chiswick
W5     £119,393       £104,85     -12%   Ealing
W6     £113,409       £106,397     -6%   Hammersmith
W7     £ 86,619       £ 82,690     -5%   Hanwell
W8     £178,362       £252,656     42%   Kensington
W9     £113,235       £129,276     14%   Maida Hill
W10    £ 99,949       £102,227      2%   North Kensington
W11    £147,168       £202,748     38%   Notting Hill
W12    £ 96,080       £107,936     12%   Shepards Bush
W13    £104,843       £108,235      3%   West Ealing
W14    £103,523       £115,983     12%   West Kensington
NW1    £128,027       £118,038     -8%   Camden
NW2    £ 94,768       £ 82,839    -13%   Criklewood
NW3    £136,916       £162,687     19%   Hampstead
NW4    £112,462       £ 97,307    -13%   Hendon
NW5    £111,719       £137,997     24%   Kenish Town
NW6    £103,487       £100,780     -3%   Kilbourn
NW7    £114,286       £ 91,416    -20%   Mill Hill
NW8    £130,556       £164,265     26%   St Johns Wood
NW9    £ 90,753       £ 73,471    -19%   The Hyde
NW10   £ 81,750       £ 69,790    -15%   Willesdon
NW11   £152,377       £144,263     -5%   Golders Green
N1     £126,169       £118,018     -6%   Islington
N2     £115,475       £130,491     13%   East Finchley
N3     £113,428       £109,560     -3%   Finchley
N4     £ 83,772       £ 86,198      3%   Finsbury Park
N5     £116,772       £109,871     -6%   Highbury
N6     £128,605       £169,553     32%   Highgate
N7     £ 97,678       £ 86,880    -11%   Holloway
N8     £ 92,203       £101,196     10%   Hornsey
N9     £ 75,355       £ 58,552    -22%   Edmonton
N10    £108,290       £106,685     -1%   Muswell Hill
N11    £ 89,087       £ 80,152    -10%   New Southgate
N12    £104,052       £ 95,928     -8%   North Finchley
N13    £ 92,338       £ 70,766     -23%  Palmer green
N14    £131,327       £112,201     -15%  Southgate
N15    £ 73,075       £ 55,931     -23%  South Tooting
N16    £ 82,812       £ 81,106      -2%  Stoke Newington
N17    £ 72,228       £ 54,282     -25%  Tottenham
N18    £ 78,221       £ 56,145     -28%  Upper Edmonton
N19    £102,708       £ 98,869      -4%  Upper Holloway
N20    £130,108       £117,172     -10%  Whetstone
N21    £127,239       £114,728     -10%  Winchmore Hill
N22    £ 80,880       £ 72,934     -10%  Wood Green

Staggering, isn't it? That's the reason the Conservatives lost the 1997 election. Nearly nine years after the housing peak, house prices were in the doldrums, affecting most homeowners in the land - a vast number of people, and after all that time people simply lost patience and thumped the Conservatives in the general election as hard as they could. It wasn't just that the Conservatives lost a lot of people a lot of money (which is pretty bad). They caused social grief too. Loads of unmarried couples had been encouraged by Nigel Lawson to buy properties together to take advantage of double mortgage tax relief - when they split up they found they couldn't sell, and had to endure the hell of co-habiting with an ex. People who had started families in small flats found they couldn't trade up, had to endure the pressure of bringing up small children in very cramped conditions. The Major years record the highest divorce rates ever, as the pain gleefully unleashed by Lamont and co, tore families apart.

By contrast, the Labour government's more protective family-centric policies are holding people and the economy together.

If you are wondering why Labour has been rising in the polls these last six months, look to the similar rise in house prices in the last seven months. People who don't own property tend to be dismissive about property value. You have to live somewhere, they say, why the obsession with price. But most people who own property are long-term dwellers. They have no intention of moving. But they like the idea that they have the option of moving if they need to. And nobody likes the idea of taking losses, even if they are paper ones.

If the economy continues to recover, and houseprices continue to recover, then there is the possibility that Labour can make the final push to the 35% of the the vote that we need to win. If we can stage a full recovery just three years after the peak, we deserve victory. The Tories can do what they've been trying to do all last year - talk the economy down in the hopes of panicking people and inducing a crash. But they failed at this doom-mongering when the economic danger was most acute. Things will get more difficult for them from now on.

What were they thinking?

Today's events were topped off by a new YouGov poll showing Labour at 31% - just 9 points behind the Tories - part of the trend since the party conferences last autumn, where we've been slowly clawing our way back. We need around 34% to be able to be in with a shout of forming a government.

Amid this trend, and with the public recoiling from the giant airbrushed David Cameron pictures unleashed on them, why on earth did Patricia Hewitt and Geoff Hoon suddenly decide to mount a coup?

It wasn't just Labour members who were taken aback, backbench MPs were irritated too. So why did they do it? If they really believe that Labour is heading for defeat, why not let Brown take the hit, and then go for a full-scale leadership election after the general election? The clue was in their belief that a change of leader could happen within just 21 days, decided by the PLP and with a single candidate. In other words they are afraid of Labour's electoral college.

Labour is structured differently to other parties. A full scale leadership election involves having to win a majority across three electoral colleges - the PLP, the constituency members and the affiliates. In this post-financial meltdown world, I can say with some confidence that the chances of the membership and affiliates electing an arch-Blairite are slim to non-existent. The party will either go for a clean unifying moderate who is not part of any faction, someone like Ed Miliband, or the party will go left.

This means that the only chance for a David Miliband or James Purnell to win is to stage a coup where it's all decided by the PLP. The coups keep failing for the same reason - because they are being staged by the arch-Blairites. The PLP is not stupid. They don't really want to upset their activists, who do the leaflet delivery out of altruism rather than careerism. They can also see the dangers of having an arch-Blairite lead us into defeat (and if we change leaders we will certainly be defeated, simply for treating the voters like idiots with presidential/personality politics - voters don't buy this presidential business, they know that in the UK we elect parties).

Gordon Brown is actually a very important transitional figure in our party, a bridge between our past and our future. He's essentially holding the ring, holding it all together. If an arch-Blairite led us into defeat, there would be a reaction sharply leftwards in the leadership election afterwards. I'm sure this is why Peter Mandelson keeps defending Brown. If Brown toook the hit on behalf of the party, then it's likely a fresh moderate such as Ed Miliband would be elected by the membership. But the best way to keep Labour moderate and thus where the voters are, is for Brown to actually win the general election. That way when he retires, a moderate centrist has a very good chance of succeeding him. Governing keeps you moderate, opposition is when the loonies come out of the woodwork - see the 1980's for Labour and the early part of this century for the Tories.

The arch-Blairites kinda sorta know that their era is coming to a close, but can't come to terms with it. The irony about these repeated coups is that if some non-factional person with integrity staged them - someone like John Denham - people would follow. But who would follow a Geoff Hoon, or a Hazel Blears?

Tories bank on an Airbrushed David Cameron

Looks like the Tories have already started their election campaign, spending £500,000 on a poster campaign trying to get as much spending done before the election starting gun is fired (when election spending regulations will apply for the duration of the campaign).

What is interesting about their campaign is that even the Conservative party logo was omitted from the posters, and the Daily Mail reports today that the poster of David Cameron was airbrushed.

Instead the emphasis is all on Cameron - giant photo of him, (airbrushed because he's vain and fake obviously!) with the words "I'll cut the deficit not the NHS".

It's a very risky strategy. First of all the airbrushing plays into the narrative that Cameron is a phony con-man. Slippery. Fake. The emphasis on "I" rather than "We" suggests he believes in an imperial presidency rather than parliamentary government and the giant photos of himself suggest delusions of grandeur. Even Blair at his height only had a (non-airbrushed) picture of himself on the Labour manifesto booklet, never on giant posters. And he always appeared next to the word "Labour" with our logo prominent.

Then after suggesting fakery with his airbrushing, Cameron invokes the NHS. This might have worked had there not been the sight last summer of Tories going abroad trashing the NHS on American TV, disloyally talking Britain down as well as slamming a well-loved institution - and Cameron not even feeling the need to withdraw the whip from them. Who will believe him on the NHS now? Even if he offered a "cast-iron guarantee" about it.

I am feeling more cheerful about the prospects of the coming general election than I have for a while.

The Coming British General Election

Jackie Ashley wrote an interesting article in the Guardian recently, where she examined the tactics that Labour has been using against the Conservatives.

She observes correctly that the public don't really view Cameron as an extreme Thatcherite regardless of what his actual policies are - his persona is comfortably fat and fluffy. (She didn't point out that George Osborne does look hatchet-faced, but the Tories are carefully keeping him out of sight).

She also made the point that the toff attack doesn't really work because most people recognise that they have no control over whom they are born to, indeed you don't really have much control over the first eighteen years of your life. (What you do after age eighteen is fair game; so attacks for joining Bullingdon are valid because it shows the mindset of the adult, whereas attacks for going to Eton are really attacks on a man's parents, whom as a child he couldn't control)

Further the toff attack makes some in Labour itself uneasy. Keir Hardie, our founder over a century ago made a point of inviting the middle-class and upper-middle-class Fabians to merge with his working class Independent Labour Party, the trade unions and the co-operative movement to create The Labour Party in 1900. Hardie's view was that it didn't really matter where you came from, in a true egalitarian society everyone was equal and it was your values, what you believed that counted. Thus such men as Attlee were welcomed into the Labour party in 1908.

The true class-based party at the moment is the BNP - their entire appeal is down to the perceived victimhood of a certain class and race, and they exclude all others. If you truly believe in egalitarianism and inclusiveness, as do all Labour people, then class-based politics have to be rejected, because how can you create a truly equal society if a segment of society is pitted against another based on circumstances of birth (whether class or race) that they have no control over?

I believe the toff attack hasn't really worked because Labour's heart just isn't in it. We'd be better off campaigning on something we truly believe in - such as egalitarianism and equality: if the poor have to pay tax, then so should rich folk like Michael Ashcroft and Zac Goldsmith; if the poor are slung into jail for drug-taking, so should the rich and so on. The Tory idea of one rule for elites and another for the council estates is just plain wrong as well as unfair.

However, despite the strategic mis-hits, Labour has been clawing back position in the polls since late Oct. The vast Tory leads of earlier in the year where BPIX put them 22 points ahead and Populus put them 20 points ahead have evaporated, and the gap on average is between 6 and 12 points. Why has this happened?

In my opinion it's all down to Cameron dumping his "cast-iron guarantee" on Europe. He not only annoyed eurosceptics, he made centrists and moderates very nervous indeed.

If he knew he couldn't actually deliver on the policy, why make pledges in such concrete terms? Is he a con-man, or someone who simply can't see two steps forward to the consequences of his decisions? (His trip to Georgia during the Georgia-Russia war, to promise them Britain would send troops to fight Russia suggests the latter. What sort of idiot wants to send Britain to war with Russia? What sort of idiot makes these pledges without checking who is in the wrong (the UN concluded that far from being a victim, Georgia had provoked the war)). If Cameron can't keep cast-iron guarantees to his own supporters, then will he also dump mere promises to look after the NHS? What does he actually believe in? Is he sunshine, is he austerity, is he a weather-vane who can be blown all over the place by people more powerful than him?

More and more you hear the old story about him cycling to work while having his gas-guzzler chauffeur his briefcase behind him. Labour's first attempt to define him, those chameleon ads inspired by an idea John Prescott had, turn out to be on the mark.

That princess of pop and populism, Cheryl Cole put it best. "David Cameron. Brrrrr. Slippery isn't he?" she says in her interview with Q magazine. She's voting Labour. "Better the devil you know." The vast middle of Britain who spend more time watching X-Factor than the news will agree with her. They may not follow every twist and turn of politics, but they are shrewd about grasping the big picture. Labour's big strength in this election is that we are known quantities.

I think we should fight the election on the "cast-iron guarantee" question. If he can't keep "cast-iron" guarantees, can we trust any promises and pledges he makes? Does he believe anything he says? Or is he thinking no further than the next morning's photo-shoot? This is not only no time for a novice, it's no time for a flim-flam photo-shoot guy who doesn't know his own mind either.

Did the great financial meltdown of 2008 make people turn left or right?

When the financial meltdown of autumn 2008 got underway, there was much debate on how this would affect politics around the world. Some argued that it would make people swing left - after all the cause of the crisis was the private sector out of control and not regulated enough (regulation, which the Cameron-commissioned Redwood report slammed as too heavy turned out to be too light). Others argued that financial crises made people turn right as they became more conservative, and cited the 1930's for proof.

Well, we've now had several general elections around the globe, so we should have a feel for how the global crisis has affected voters. Here are the general elections conducted since the crisis broke:

Canada: The Canadian federal election came during the crisis itself; it was held on Oct 14th 2008. The Conservative Harper government increased their seats by 19, with a swing of 1.38%, but failed to gain the overall majority they wanted. The result was that the incumbent conservatives continued to govern with a minority government. Swing: right

USA: The American federal election was held in November 2008, and voters swung decisively left. Obama took the White House and the Democrats took control of both houses of Congress. The turning point in the election was John McCain's histrionics during the TARP bailout, after which Obama started to pull ahead. Swing: left

Iceland: The Icelanders held a crisis general election two years before it was due, in April 2009, when their government resigned. Iceland was one of the worst hit countries in the financial meltdown, and a combination of being outside the protection of the EU and infuriating the rest of the world by trying to renege on international financial law meant they had to go to the IMF for help. IMF help came at the price of interest rates at an eye-watering 12%. The right-wing Independence party, which had been in power for the previous 18 years got hammered in the election. The Social Democrats were elected in an alliance with the Greens. The Social Democrats ran the election on a promise to try to gain entry into the EU and join the euro within four years. They followed through and formally applied for EU membership in July 2009, and the EU accepted the application, and has started accession proceedings. Swing: left

India: The enormous Indian electorate held their federal and state elections in stages from mid April to mid May 2009. India was relatively unscathed by the financial crisis thanks to the old-fashioned reserve requirements imposed by their central bank and heavy banking regulation imposed by their centre-left government. The governing centre-left Congress party gained seats, with a swing of 3.96%. Prime Minister Manmohan Singh became the first Indian Prime Minister to be re-elected in 40 years - an impressive feat given that India's stroppy voters take pleasure in kicking politicians out. Swing: left

Japan: Japan held their general election in August 2009. Japan was indirectly affected by the financial crisis due to their reliance on exporting to the USA. After spending most of the 1990's mired in zero growth and deflation, they had hoped they had moved back to normality from the middle of this decade. But the crisis plunged them back into deflation and something seems to have snapped. The centre-right LDP, which has ruled Japan since 1955, was swept from power in a landslide defeat (they lost 177 seats). The Japanese finally got tired of crony capitalism where public funds were used for pet projects in LDP constituencies, while doing nothing for the main economy. The centre-left Democratic Japanese Party took power. Swing: left

Germany: The German federal election took place on schedule in Sept 2009. The centre-right CDU had been governing in a grand coalition with the centre-left SPD since 2005. The grand coalition was held to have handled the financial crisis well - but credit went to the CDU's Angela Merkel, whose party gained enough seats to be able to form a government with their preferred partners, the Free Democrats. Swing: right

Norway: The norweigian general election was held in Sept 2009. Norway was largely unaffected by the financial crisis, insulated by it's oil money. The ruling labour party was returned to power, along with the Socialist Left party and the Centre party in a Red-Green alliance. Norweigian Labour gained seats compared to the previous election. Swing: left

Greece: Greece also held a general election two years before it was due, in October 2009. The right-wing New Democratic party, which had been cooking the books, was swept from power, and the Panhellenic Socialist movement led by George Papandreou came to power with a mandate to clean up corruption and sort things out. Greece has also been badly hit by the financial crisis. Swing: left

The conclusion to be drawn from above is that the crisis has moved people leftwards. Only Angela Merkel escapes, and her government is pretty moderate as right-wing governments go.

One thing to note though is that most of Europe conducted it's general elections before the crisis hit (Sweden 2006, Denmark 2007, France 2007, Ireland 2007, Belgium 2007, Netherlands 2007, Italy April 2008, Austria in Sept 2008 - In Austria, the socialists are the largest party and hold the chancellorship, but the far-right made substantial progress too), so it's hard to tell what their populations think about the crisis. They arn't due to go to the polls again till 2010/11.

Tory Inheritance Tax Proposals

I just wanted to remind readers of a post I wrote in September 2008 about inheritance tax which drew attention to an article in the Telegraph entitled Tories plan to raise inheritance tax threshold to £2 million.

Just to reiterate, it's not £1 million (which is bad enough), it's £2 million for married couples. At a time when they claim that the public finances can't cope with such give-aways. Here's a quote from the Telegraph article:

The detail of the Tory plan was uncovered by Clive Scott-Hopkins, a retired financial adviser and Telegraph reader.

Earlier this year, Mr Scott-Hopkins wrote to Theresa May, shadow leader of the House of Commons asking how the Tory tax plans would affect married couples.

She wrote back, saying: "I am happy to confirm that our inheritance tax proposal will introduce a threshold of £1m per person (not per couple).

"This means that it would be possible for a married couple to enjoy a threshold of £2m."

Conservative Campaign Headquarters confirmed that the £1 million limit would transfer to the surviving spouse.

A Tory spokesman admitted that the party had not publicised the detail of the now-famous plan.

He said: "We would keep the automatic transferability of the nil rate band, if it is still in place when we inherit, and we would raise the nil rate band to £1m per person.

"This has always been our position; it's just that we haven't shouted about it."

Time for Labour to shout about it now?

Has the Sun lost it?

Rupert Murdoch isn't the man he used to be. First he bought MySpace for $1/2 billion just as Facebook was taking off. Then he got the New York Post (the American equivalent of the Sun), to endorse John McCain, shortly after McCain chose Sarah Palin as his vice-presidential candidate. Murdoch was clearly convinced that the Palin appointment was a game-changer...

Then News International announced in August that it made a $3.4bn loss. Then James Murdoch launched a vicious attack on the BBC - which prompted previously indifferent people to rally around the Beeb.

And yesterday we had the news that Rupert Murdoch instructed the Sun to say they were backing the Conservatives in the next general election.

No surprise there - the Sun has been hostile to Labour since Cameron became Tory leader in 2005. So this won't change many Sun readers minds.

But it will affect how Labour voters feel. Labour's problem at the moment is widespread apathy. The September Guardian ICM poll showed Labour certainty to vote at just 53% (compared to 68% for the Tories and 59% for the LibDems). The ICM for 23/24th Sept was a little better - our certainty was 59% (but the Tories certainty had climbed to 70%). Labour needs to get people to the polls, and this could galvanise our voters. One person said to me, if Murdoch is against you, you must be doing something right...

The Murdoch plans for media pricing

It's been a couple of months since I last posted - mainly because I have been so busy in my off-line world, I haven't had time to watch the news let alone blog a response to it.

It's an odd sensation not watching or reading news. You very quickly get used to concentrating on real everyday issues, and you only hear about what is going on elsewhere as a sort of distant muffled echo when a news item is big enough that it gets mentioned in conversation by largely non-news following people. When I logged into the Guardian today, I was sort of disorientated by what they deemed to be important news - most of what was on there (murders, Libya etc) seemed pointless and irrelevant to my life (is it sacrilege to say this?).

Only two pieces of news actually got through to me over the summer - the whole upset about the Tory chap thinking the NHS was a "60 year mistake", and the news that Murdoch wanted to charge for access to his newspapers.

Of the two, the Murdoch news is actually the more significant (the NHS is the third rail of British politics, no-one except a suicidal politician would dare to touch it), so I thought I'd explore what it means for the Labour party.

Throughout the 109 years of it's existence, the Labour party has faced a right-wing news-media in Britain. The Daily Mail scuppered the 1923 Labour government, by printing a fabricated letter about imminent communist revolution. Throughout the 1980's and early 90's Labour faced a hostile press given to personal attacks when they couldn't attack on policy.

Despite this however, the three biggest landslide wins any political party has won since universal franchise have been by Labour (1945, 1997 and 2001). We know how Labour achieved the 1997 and 2001 wins - it was done by a two-prong strategy where Blair schmoozed the press while Alistair Campbell ran a relentless rapid rebuttal unit determined to close down negative stories.

But what about the 1945 landslide? Atlee certainly had no PR skills nor any friends in the press. And he faced his equivalent of Murdoch in the form of Lord Beaverbrook, who poured out relentless poison about Labour in the 1945 election campaign, and even managed to influence Churchill so far that he made his shameful "gestapo" speech during the campaign.

So why did this relentless right-wing campaign fail so spectacularly, handing defeat to Churchill just three months after D-day?

In my opinion it was because though the press was pouring out it's bile, a significant part of the electorate wasn't consuming it, for the simple reason that they were still abroad at war, posted in places such as Germany, Burma, North Africa, all over the place really. They weren't reading any of the rubbish the press were putting out, and therefore their choice of party was based on what they personally wanted from post-war Britain - they didn't want soldiers forgotten as they were after WW1, they didn't want unemployment as in the 1930's, they weren't impressed by Tory appeasement of Hitler leading up to the war, and they were fully aware of Churchill's deficiencies as a manager, as they witnessed one cock-up after another in the theatre of war (Churchill was running the war while Atlee ran the home-front). So Labour was swept to power.

How does the 1945 experience inform today's politics? Simple. If Murdoch puts his newspapers behind a pay-wall, we will have once again a significant part of the electorate not exposed to his poison. Except instead of circumstances of war insulating the public, Murdoch will himself be walling off the public from his thoughts.

When the New York Times experimented with it's pay-wall a couple of years ago, their readership fell by 90%. Those 10% who paid did cover the bills - so the experiment was profitable. But significantly the NYT abandoned the paywall because for them profit was not enough - they wanted to be influential as well.

Suppose Murdoch goes ahead with his pay-wall - and suppose for argument that all the other newspapers follow. Suppose even further that he succeeds in his campaign to get the BBC to axe their website. He is assuming that because people cannot get news for free (a dubious assumption as due to the nature of the net, there is always leakage), they will "have" to pay.

I don't think people will be rushing to pay at all, even if all news online was behind a paywall. What will happen instead is a whole bunch of people simply "give up" the news. It's not necessary to daily life after all, and indeed when detached from the emotive poison put out by the news media, life takes on a pleasant tenor. I didn't miss the news at all this summer, and I don't think I'll be consuming it in the same quantity in the future - it now just seems a collosal waste of time, especially if you are busy. A whole generation of twenty-somethings and thirty-somethings have already come to this conclusion, and simply find out what is going on by spending 10 seconds scanning the headlines on their email portal (they don't even bother to click the links).

This is a huge deal for the Labour party. It means one of the biggest headwinds against us eliminates itself. It means that on-the-ground work by Labour members to inform the population (leaflets, canvassing etc) takes on new importance. It means that the influence of media barons over government diminishes (will anyone pay attention to what Murdoch wants if no-one is reading his output?). At a stroke emotive personal attacks on our leaders will lose their power (because no-one will be listening) and policy issues will gain importance (as they actually do affect daily life). Absurd situations where people fear crime even while they don't experience it will disappear if there is no media to fuel fear and people start to draw their conclusions from their own experiences. This probably sounds sacrilegious, but even the elimination of the BBC as a news provider would benefit Labour (as we would no longer be subject to the constant "not good enough" criticism we face no matter what we do, which leads voters to take us for granted and to discount our achievements).

I think this will be a watershed - a step-change in how politics is conducted, which will make the next thirty years very different to what we've known in the last thirty.

I only wish Murdoch was bringing in his pay-wall now, before the general election. I wonder how we could persuade him to go ahead sooner?

How much do the euro elections matter?

For the best analysis of last week's turbulent politics, I refer you to Hopi Sen's excellent article How Not to Plot. He says it all.

But there is a question that hasn't been addressed. How important are the euro-elections anyway? It's fashionable to claim that because the Tories got 27.7% and UKIP got 16.5% and "of course" UKIP people will vote Tory in a general election, the Tories are on course for a general election share of 44.2%.

But this overlooks turnout, which was an abysmal 34%. What happens when turnout rises to general election levels? The best way to gauge this is to see what happened between the euro elections of 2004 and the general election of 2005.

Looking back to the 2004 european elections, the Tory and UKIP results were not that different to now. Here's how the results panned out.

Party        Votes     %  
Conservative 4,397,090 26.7  
Labour       3,718,683 22.6  
UKIP         2,650,768 16.1 
LibDem       2,452,327 14.9 
Green        1,033,093  6.3 
BNP            808,200  4.9 
Respect        252,252  1.5 
SNP            231,505  1.4 
Plaid Cymru    159,888  1.0 
                          

The Tories plus UKIP are 42.8%. And in number of votes Tories plus UKIP total 7,047,858.

Now look what happens in the 2005 general election:

Party        Votes     %  
Labour       9,562,122 35.3 
Conservative 8,772,598 32.3   
LibDem       5,981,874 22.1
UKIP           603,298  2.2
SNP            412,267  1.5 
Green          257,758  1.0 
BNP            192,746  0.7
Plaid cymru    174,838  0.6 
Respect         68,094  0.3%
                            

The Conservatives plus UKIP are now 9,375896 (2,328,038 up from their 2004 euro election showing). But Labour puts on a whopping 5,843,439 votes in the 2005 general election compared to the 2004 euro elections.

The message from the above that the Tory+UKIP vote is a reliable indicator of what they will get in the general election - their supporters turn out to the ballot box come rain or shine for all manner of elections. They will put on a bit in the general election, but only marginally. But look at the Labour voters - they just don't bother to vote in non-general elections at the best of times. And in 2004, some were probably abstaining because of Iraq. But they came out in the general election.

Now to the 2009 euro elections. the results were as follows:

Party        Votes     %  
Conservative 4,198,394 27.7%  
UKIP         2,498,226 16.5% 
Labour       2,381,760 15.7% 
LibDem       2,080,613 13.7% 
Green        1,223,303  8.6% 
BNP            943,598  6.2%  
SNP            321,007  2.1%  
Plaid Cymru    126,702  0.8%
                           

In terms of numbers of votes, everyone is a bit down from the 2004 euro elections, apart from the Greens and the BNP. But Labour's vote is sharply down. It hasn't "gone" to anyone. They've just stayed at home.

The challenge for the general election is in getting them to come out and vote. All the plots etc have probably put them off big time. But now that the plots are over, if the party can focus on the idea that the next election is a make or break election, which is going to be close, with clear differences between Labour and the Tories, then, well, it's not over.

It's all about getting out the vote. The most disturbing article to be written in recent days was the one penned by John Prescott where he alleged that certain members of the government were not even trying to win. He's right to be concerned. If that attitude is replicated in the general election, we will lose badly. If the govt pulls up it's socks and starts to fight, that needn't be the case.

Should the taxpayer be buying ginormous houses for MPs?

A Tory MP who has been forced down over expenses has claimed that people were jealous of his big house. Of course there might be some envy flying around - but in general people accept that if you pay for things yourself you can have as large a house as you like. It's only when you get ordinary taxpayers on low incomes to pay for it through their taxes that it becomes a problem.

The second home allowance was designed to help MPs conduct their parliamentary duties and look after their constituents as well as attend Parliament. They can have as large a main house as they like, as they are paying for it themselves, but do they need a massive second home? Wouldn't a modest three-bed or four-bed in the constituency do to enable them to conduct their constituency duties?

And we come to David Cameron's £750,000 second home in Oxfordshire. The Daily Mail, actually raised this issue last year. It's worth having a look at the photo of Cameron's house.
















Does he really need something that large to carry out his constituency duties and should he have charged the taxpayer for it?

Cameron bought the second home when he got elected in 2001. Here's what Cameron has claimed on his second home alowances since then (mostly mortgage interest):

2001/2: £18,009
2002/3: £19,722
2003/4: £20,328
2004/5: £20,902
2005/6: £21,359
2006/7: £20,563
2007/8: £19,626

Total: £140,509

No doubt Tories will swarm on here accusing me of class envy - but he's welcome to have as big a house as possible as long as I don't have to pay for it. It's not clear to me that he needed such a large house to do his constituency duties, he clearly bought the biggest one he could at the taxpayers expense and clearly intends to make a profit from it by selling after he has left parliament whenever that is. Thus he is as guilty of taking the taxman for a ride as some of the other cases we have heard.