Tuesday, 26 October 2010

The Comprehensive Spending Review

An awful lot has been written about the comprehensive spending review, so much so that it’s quite hard to think of anything new to say. However, I did actually listen to George Osborne’s speech and because it was supposedly the start of the roll back of the state it was important enough to be worth a comment.

And I did feel real anger about the review: not at the cuts, but at the reaction from various Labour politicians and commentators complaining about the increase in unemployment that will follow. They are the ones who wrecked the economy, leaving the UK with a massive debt burden. They are the ones who recklessly signed contracts they knew could not be afforded, leaving defence in particular in a mess. They are the ones who have left a blighted underclass without access to education and social skills to let them escape. They are the ones who left more people unemployed than when they came into office – as indeed every Labour Government has. Let’s repeat that: the people criticising the coalition for putting jobs at risk are the people who every single time they come to power make more people unemployed.

The comment I enjoyed most came from Giles Coren in the Times (I can’t link to it because of the Times firewall, presumably designed to devalue the worth of its authors by limiting their exposure). The heading was Let the Posh Boys Sort it Out; in summary it was saying that there is some relief, having watched a supposedly meritocratic group make a complete mess of things, in seeing some people born to rule getting a grip. I’m not sure if he was being ironic or not but he has a point.

One of Alan Johnson’s criticisms of the speech was the reaction of the Tory backbenchers appearing to relish the “cuts”; I’d certainly agree that Osborne was unnecessarily partisan in what should have been a sober assessment of the situation. Some of us do delight in seeing the state become less important, and in the sound of interest groups bleating about the problems that will arise from them having less money to waste. But that is a Tory, a partisan, perspective: there is also a wider national interest at stake which is much more important. I’ve written many times before about the need to get a grip on spending because of the size of the interest burden which flows out of the country and because of the requirement to keep finding other people to fund our borrowings. Proving that we can sort ourselves out is crucial to that and it is why something on the scale of the CSR was essential.

Other brief thoughts:
- There’s a lot to criticise - aircraft carriers with no planes, reducing spending on Scotland by less than the rest of the country – but it is a great achievement to have got agreement within a coalition to do as much as they have;
- The LibDems may be unpopular now, but as the “cuts” start to work they will get some of the credit and will be back as a credible third party by the time of the next election;
- As again many have written, these are not “cuts”, they are reductions in the growth of spending. Cuts would have been desirable had the economy been in a better state. Because confidence is poor the reductions are probably as much as is possible.
- It would have been easy – as Labour did a couple of times – to reduce capital spending keeping running costs unchanged. But the review has kept a number of infrastructure projects in place, as well as investment in longer term intellectual capital. This reinforces the coalition’s desire to support private sector growth.
- The long term success of this Government will be driven by its ability to reform the welfare system by simplifying it and creating an incentive to work. The CSR provided some first steps in this direction – a sign of intent – but much remains to be done.
- There is a debate about whether the "cuts" are fair. “Fair” can mean many things. It’s as Lewis Carroll said. The coalition will hope that most voters share their meaning of the word: early indications are that they do, but it's subject to change. In the end this will depend on the performance of the economy.

Overall a pretty good start.

Thursday, 30 September 2010


There seems to be a strong consensus that the economic problems are due to bankers. A recent poll showed this, Vince Cable showed his economic competence by conflating bankers spivs and gamblers crippling the British economy, Finance Ministers across the world are trying to restrict bonuses to financiers (actually, apart from in the UK they aren’t, but they are talking about it).
This worries me; not because the bankers will be upset – they will cope particularly as they will continue to earn lots of money, but because misunderstanding the cause of the problems makes it more likely we will do the wrong things to so solve them.

The real problem was that we all borrowed too much – individuals, banks and especially governments. We spent money we didn’t have causing house prices in particular – but all assets as well – to artificially rise. This was enabled because governments encouraged banks to gear up, to lend more, to need less capital to support their business. Governments did this because the resulting short term boom made them look good. I say Governments: not all did this; many Asian ones didn’t, not all Europeans did. Iceland was the poster boy for carelessness, but the US, the UK and Eire were not far behind.

I know the banks did some very stupid things – not all of them; for example JP Morgan and HSBC had a “good crisis”- but many lent foolishly, created products their managers didn’t understand and effectively went bankrupt; their shareholders have generally suffered as a result. But the rest of us did stupid things as well, and so did our Governments who not only encouraged the excess but also increased their own borrowings. They also did not get a decent reward for the guarantees they provided the banking system. And who voted for those Governments? Supported their public spending? We did.

If we want to know the cause of the problem: look around.

The UK's public sector deficit is because public spending got out of control. The banks were bailed out but mostly by guarantees which have lapsed; some taxpayer money was invested directly, but a small amount compared with the deficit and it is likley to be recovered at a profit. The bankers therefore played a small part in the problem and in fact there are three ways the banks and bankers are helping us get out of our economic problems:
- As they become profitable, the money we put into them becomes worth more. The state will profit from their investment;
- Banks employ a lot of people and finance and associated services remain one of our few world leading businesses which generate a lot of earnings from overseas;
- Banks and bankers pay a lot of tax.
We would miss them if they went. It’s easy to say we wouldn’t: but who would then pay the bills?

The problem we have to solve is one of excessive consumption – by ourselves but mainly by our Government. That is the problem that needs fixing. Punishing bankers for our mistakes may make us feel better but will stop them from supporting the economy.

Wednesday, 29 September 2010

Ed or Dead?

It's too soon to say whether Ed Miliband's election as Labour leader is good for Labour or not.

In the short term it is good for the Tories because Labour have elected someone who was the second choice of most MPs and activists and someone who is clearly in the pockets of the trade unions. He is also inexperienced and lacks charisma. And lastly, he gives the impression of not liking people like me - middle class, slightly successful, workers (I'm not a swing voter but many people like me are). As a member of the establishment intelligensia he looks down on us: we are only fit for whatever cash he can extract from us. I talked about him with a Labour supporting friend, who thought he was sincere: but was that because she agreed with what he was saying? He strikes me as deeply insincere.

BUT... deeply insincere is another way of saying ruthless. He is clearly ruthless. And that ruthlessness may cause him to dump the unions, he may learn to look as though he likes me (and people like me), he will get experience and he may absorb character. And therefore become a successful leader. His brother has done him a big favour by moving to the back benches - it is possible he could become a really useful informal consigliere unless there is now a major family rift. So

The key to his success, however, has nothing to do with him: it is whether the economy recovers during 2013 and 2014. If it does, then the coalition will get a lot of credit and Labour's opposition to getting public finances under control will be seen as silly. If it doesn't, then Labour will have a chance to rebound by saying that the coalition damaged the recovery by cutting public expenditure growth too strongly before the private sector had started to recover.

But at least his appointment will give the coalition some breathing space as things get difficult.

Wednesday, 18 August 2010

100 Days

What is the significance of 100 days? It is 2,400 hours. Or 3 months and 8 days. It's a meaningless period of time which has yet become, through history, a period to judge a new situation.

JFK said in his inauguration speech: "All this will not be finished in the first 100 days. Nor will it be finished in the first 1,000 days; nor in the life of this administration. Nor even perhaps in our lifetime on this planet. But let us begin.” Perhaps the most sensible thing he ever said; policies - especially changes in policies - take much longer to implement than they do to describe.

So how has the Government done in its first 100 days? Pretty well, I think.

- the coalition has worked so far, proving doubters like myself wrong. I'm sure this is part personal chemistry and part developing firm "rules of engagement" between the parties right at the start. Both parties benefit from being in Government; the Tories benefit in two additional ways: they can be harsher with the budget than if they were on their own because they have cover from the LibDems, and their lunatic fringe cannot hold them to ransom as easily. The LibDems are suffering in the polls at the moment but I suspect they will benefit later as the economy improves.

- they have started to get to grip with the budget deficit. Amidst a lot of noise about "cuts" a limited number of commentators (John Redwood most concisely) have noted that Governmengt spending is not being cut at all, rather the rate of growth is being slowed a bit. But what they are doing is better than nothing, and better than the alternative, and as I noted in my previous post the country is benefitting from lower interest rates and from being given the time to manage things ourselves. Even if there is a double dip recession (not very likely), it's unlikely that reducing the scale of Government expenditure in the UK will be a major cause.

- they have started to get a grip on the absurdities of the last few years of Labour - dumping inefficient school funding programme, getting rid of public bodies paying external people to lobby other public bodies and so on. Everyone has a view on what the Big Society means: to me it means removing the attitude of public sector management that they have an entitlement to direct the public, rather than a duty to serve them. This is a massive cultural change and it wuill take time to implement. But you can sense the tide is about to turn.

- they made a great move in putting Ian Duncan Smith in charge of welfare reform, and (for reasons of getting support in implementation) complementing this with various Labour advisers. But this is one area where the jury is out: it is critical to take a long term view of welfare reform if the cycle of dependency in many parts of Britain is to be reversed. Improving education will not be enough. But welfare reform will costs money, which is why the issue has been blocked for many years. Cameron must ensure IDS can take a long term view.

- the approach to international affairs seems suitably pragmatic for a medium sized power: we should not expect or demand too much, but our history and culture - and armed forces - mean we have a lot to offer if we have the confidence to do so. They have so far not been waylaid by silly Euro-sceptic issues - the LibDems probably help here.

- I do worry about the NHS reforms that have been announced. I am sure the principle - of localisation and removing the Primary Care trusts - is very sensible, but surely the last thing the NHS needs is a lot of expensive further reform. This smacks of a bored minister looking to make a name for himself.

- given that the Government has started to do a lot, it is very refreshing that it is also fairly quiet. We do not have daily headlines about how wonderful they are. To me, that smacks of quiet competence, a focus on delivery not presentation and on letting people get on with their lives. Perhaps that is naively optimistic, but it is a good change.

The best thing for me, though, is to read the daily whinges of the quangocracy - people like the association of chief police officers, the UK Film Council and so on -who have drained so much energy and money from the country. They are suddenly realising they have to justify what they do. And most of the can't. These daily headlines are a joy to read.

So overall - a good start.

But to channel JFK: 100 days isn't very long. There's a long way to go.

Wednesday, 23 June 2010

The first coalition budget

In the bad old days of Brown’s budgets, and to a lesser extent Darling’s, it was a mistake to comment too soon because the problems were always hidden in the small print released afterwards. George Osborne has admirably been straight with his presentation so it is easy to see the impact quickly.

The headline comments have been about the increase in VAT to 20%; the headline criticisms that this and the cutbacks will damage the economic recovery and impact poorer people more.

I think there are more points of underlying importance than this:
- The budget has started to get to grips with our budget deficit. As I said earlier, it is so big that interest costs are a major outflow from the economy – and a growing part of the deficit. Early action matters, and the quick next day assessment of the budget by the gilt market was good; the UK’s funding costs have reduced slightly.

- Some of the apparently softer cuts will have a big impact on the deficit: a two year restriction on public sector pay increases –with none for employees earning over £21,000 – and increasing benefits by the CPI rather than RPI will save a lot of money quickly.

- The budget sets a positive direction for businesses in terms of tax reduction and simplification. The most important way we will get out of the current mess is for the private sector to grow. Lower and simpler taxes help confidence. This is the first budget for years to have an approach of freeing the private sector rather than tinkering with it.

I think the criticisms are overstated. The VAT rate will not increase until January 2011, which gives time for the confidence boosting measures to work; it is also likely to bring forward spending to benefit the economy in 2010. Less wealthy people tend to spend a greater proportion of their income on non-vatable goods, and so it is less regressive than you might think. In addition, there are specific measures (tax thresholds; housing benefits) targeted at the poor.

I think the main criticism is that the details of the tax cuts are still to come, in the Autumn expenditure review. This delay is inevitable but still permits uncertainty till then.

Overall, it is refreshing to have a budget that is transparent, focused on sorting out the problems and giving an optimistic direction for private sector growth.

Tuesday, 1 June 2010

Capital: A Tax on Gains

I don't understand the fuss being made about an increase in capital gains tax - or rather I do, I piut it down to mischevious Tories trying to spoil the coalition. I would exempt people like John Redwood making constructive comments about to improve the situation.

The fact that capital gains are taxed at a very different rate from income is very new - it was brought in in 2008, mainly to help some of Gordon Brown's main funders. Nigel Lawson, as part of his tax simplification process, had equalised the rates. This remained the case for over 20 years. There were allowances for the time the asset was held, and some exemptions for entrepreneurial assets.

Those protesting against the increase mainly focus on two issues:
Some research suggests that lower rates bring in more money. However, this is not conclusive as small changes probably don't effect behaviour and wider economic trends have at least as much impact.

The special pleading about middle class second home owners and shareholders is too self serving. Firstly, more tax on gains on such assets is no hardship. Second, if they were bought pre-2008 they were bought under a regime where income and capital tax rates were the same. So the proposed change is no change. If they were bought after 2008 then (in most cases) there will have been minimal gains if not losses so people can readjust their savings now without any serious penalty.

The different rates have caused a big tax avoidance industry to try to turn income into capital. This is both unfair and unproductive. We should want the tax system to be simpler, and harmonising rates is the way to go. I do think it is fair to differentiate some business assets and to encourage saving by having reliefs according to how long assets are held. But these are the points that Tories should focus on (as Redwood has), and we should be grateful the Lib Dems have suggested rate harmonisation. This fits our principles.

Again, I see this as jealous Tories stirring for the sake of it.

Sunday, 30 May 2010

David Laws

There's been a lot of comment about David Laws. His resignation is a blow not so much to the coalition and Conservative/Lib Dem co-operation but to the resolution of our financial problems. He had more intelligence and credibility than most to identify and sell necessary cuts in public sector expenditure.

So if you believe the financial situation is by far the most important problem facing this country, is it right that a brief media campaign can force out someone very well (if not best) qualified to help sort it out? Especially as the amount he actually claimed was much less than he could have claimed. My first thought was that as he had been reasonable there was no story and he should have stayed. But at the end of the day, he does appear to have claimed the wrong amounts and he did not take advantage of the quasi amnesty last year when all the fuss was going on to clean up his disclosures. This suggests a lack of judgement. He also would not have had the credibility to do his job properly. And lastly: it is important for the new Government that they are seen as clean. So he had to go.

As far as the economic situation is concerned, I know nothing about the new Chief Secretary, but he will have loads of help and lots of market pressure forcing him to cut expenditure. So as always, no-one is indispensible.

The intriguing thing for me, though, is why did the story come out now? Was it the Telegraph just being good jounalists and checking out the stars of the new cabinet? Or was it because Laws' "whiter than white" attitude annoyed people? Or did Liam Byrne (his predecessor) or Vince Cable (shown up as economically inept) resent him? Or was it disaffected Tories or jealous Lib Dems who tipped the Telegraph off? This is the part of the story we'll probably never learn, and the part that will be the best indicator of the strength of the coalition. Guido has more on the conspiracy theories here.

Sunday, 16 May 2010

Free thinkers

Independently minded MPs who don't just follow the party line are popular. But there's a fine line between principled opposition and being a self indulgent pain - and you can usually spot the line. The coalition will give an opportunity for both Lib Dem and Conservative awkward squads to posture, not least because they have lost influence and therefore power. (Their Labour equivalents will be occupied for a few months with their leadership election).

The first signs of the self indulgent pains are emerging as backbenchers line up against the proposed fixed term arrangements.

My problem is that I can't see what the problem is. Given the real problems facing the country, who cares whether we have fixed term parliaments or not? There are good arguments for them - and against. On balance, it's probably a good thing because it puts more power in the hands of backbenchers rather then minsiters. But it's hardly a big deal.

And if we do have fixed term parliaments then surely they should be just that - fixed term. So you must have an arrangment to stop the term ending too easily, especially if there's a hung parliament. So a 55% requirement for dissolution seems fair enough. In practice, if over half of MPs have no confidence in a Government then it will fail.

So why the fuss? I can see Labour simply want to stir, but I don't understand why the Conservatives would complain. Except as a token gesture of dislike for the coalition. It'll be interesting to see if this protest is just a one off self indulgent release of tension or if the taste for dissent will be catching. I hope not; and I hope that voters identify those MPs who are self indulgent rather then principled. And punish them. Even if it takes 5 years to do so.

Thursday, 13 May 2010

A new phase

Now the election is over, I'll take down the manifestos etc. After all, they won't be of much use to anyone now. I will link to the coalition agreement as that could be a useful reference document in the future.

The Cabinet and ministerial appointments are mostly good, but there's a couple of real disappointments. Particularly good appointments (I think) are Iain Duncan Smith at Work and pensions, who has done hard work in identifying the causes of poverty rather than just seeking to create a dependent society, and those like Hague, Gove and Fox who have taken on the department they were shadowing. I think I heard Cameron say on the radio that "stability" and a long term outlook must apply to ministerial appointments as well as cost cuts, and I hope that he means it and ministers will be allowed to stay long enough to learn and manage rather than just create headlines. The exception to that stability is Osborne: although Clarke will be a good figure for political reform, I would have preferred to see him as Chancellor simply because he is more credible and has a track record of previously dealing with economic problems. Especially with Cable as Business secretary. Lastly it's hard to see Theresa may being tough enough to be home secretary, a job better suited to Chris Huhne.

As far as policies go, again, they seem pretty reasonable; in fact I think the combined tax policies are better. My worries are the retention of FSA, although macro supervision will move to the Bank of England, and energy security (ie will nuclear power stations get built?).

Wednesday, 12 May 2010

Polling Day

It took me longer to post what happened on polling day than it took to form a Government; but perhaps this post will last longer.

Polling day is quite exciting but also hard work if you are involved in a political party. Most people just have to vote - although that seemed to be too hard for about 1/3 of the population - but the rest of us are active. One of my friends who helped at the Council election suggested that all we were doing was giving us something to do to keep us quiet, but in fact the polling day function - also known as get out the vote - does help and I am sure we go out the vote.

What we -and all the parties in all the seats they hope to do well in - do is sit outside the polling stations to find out who has voted. (It helps in an area like ours because so many people know each other). We then cross this off and nag people we think will support us to vote. It sounds easy but its a lot of hard work and co-ordination. We had 30 people in the Belford and Coastal area helping on polling day, and we have about 8% of the electorate in Berwick upon Tweed. My job was to try and make sure the operation worked, which involved a lot of driving about looking busy.
I think we did well; we had more voters than expected, we managed to call out some who would not otherwise have voted and we think we had a majority of Conservative voters in this area. The result overall was both excellent and disappointing - it was a shame Anne-Marie didn't win, after an excellent campaign and record on helping people in the area, but winning would have been very hard, and she has turned the constituency into a marginal from a safe LD seat. Next time?

We didn't have queues at 10.00 at our polling stations - people were much more sensible than that. But the experience in some seats was shameful, and I hope one of the things that the new Government will have time to do as it looks at political reform is to get rid of the Electoral Commission, which is unaccountable, and to focus on proper management of polling day and voting.

Tuesday, 11 May 2010

Principled politics

I know the Lib Dems are now my dearest and most trusted friends, and therefore beyond criticism, but I thought the Guardian's photograph and analysis of the major issues for Clegg (as shown by his notebook) during the negotiations was interesting. For someone caring about the country, they showed a surprising number of issues focused on his and his colleagues' position.


In the meantime, given the election result, the coalition is the best outcome for Britain. I am pleasantly surprised the Lib Dems signed up to a deal with the Conservatives; I was wrong on thinking they'd only work with Labour so maybe I'll also be wrong in predicting it won't last long. There is one real worry: the appintment of Osborne and Cable to important posts dealing with the economy. Neither are capable and hopefully will be supported by people who are. And of course the bond market investors will be the main drivers of sorting out the economy as we need to borrow so much from them.

Conservative Home (an independent site) has a very good (and lengthy) analysis of "what went wrong" without naming too many names; a summary is here, the list of contents here.

Saturday, 8 May 2010

Where Next?

The smoke filled room discussions that are an inevitable consequence of proportional representation are proceeding.

A couple of weeks ago, I would have been horrified at the thought of a Conservative-Lib Dem coalition or even compromise. There are too many areas of difference, especially in economic policy.

But given the result of the election, it must be right for them to talk especially given Brown's clear intention to hang on as Labour leader until he is forced out.

Cameron's statement on Friday was polished and politically astute - if there is not a deal, he knows that come the next election he can point to it and show he wanted to compromise for the sake of the country; if there is then he can start cleaning up the mess and having a wider group on board should help the implementation of expenditure cuts. The size of the two parties combined in Parliament should also be good for market confidence.

There are clearly some lines that should not be crossed (as there will be for the Lib Dems) but if a deal can be done it will be good. Especially as it may mean there's a focus on the economy rather than on other areas. A hidden benefit could be that a new Government won't start meddling in the detail of how hospitals, schools etc work. Letting front line staff get on with things would lead to better public service.

So I hope the stupid parts of the Conservative party don't try to grandstand and oppose just to make them feel better and as revenge for a pretty badly run campaign. That post mortem can happen later.

However, I still have a sneaking suspicion that:
a) the Lib Dems will do a deal with a Brownless labour, and
b) in any event we'll have another election within 18 months.

Friday, 7 May 2010

The Morning After..

I'll post on the polling day experience later (when we know the result of our constituency), but first some thoughts on the election result.

I'm obviously disappointed because the result does not lead to a definitive Government and is almost certain to lead to another election within (say) 18 months. The uncertainty over this, and more importantly over which parties will co-operate to form the next Government, has lead to a fall in sterling and a rise in the cost the UK has to pay to borrow. As I noted earlier, this really is money taken out of the economy. Hopefully the parties will sort out who will do what before Monday so they can get on with sorting out public finances.

I'm a bit pleased since the result is in line with my expectations posted yesterday, particularly with my comment that all the parties had a bad campaign.

First thoughts:
- the real unfairness of the voting system remains the unfair distribution of seats and boundaries, hence the reason the Tories do not have a majority despite getting so many more votes. All methods of voting have elements of unfairness; I would be focusing on reducing the number of MPs and making seat distribution fairer before introducing another system.
- this particularly emphasises the different result in Scotland, where the seats largely remained unchanged with a small swing to Labour, to England where there was a sizeable swing to the Conservatives. Scotland has more seats per head than England. Is it time to promote Scottish independence?
- the Lib Dem surge didn't happen. This suggests that the excitement either came from people not registered to vote, or it was just a media hype (very likely), or on reflection people realised the Lib Dems were not promoting anything new.
- I'm rethinking whether there will be a Conservative arrangement with the Lib Dems. It is too soon to resolve this - they need to know the results of all the seats to see just how far from a majority the Conservatives are - but the sudden switch of Labour to wanting voting reform, and their continued promotion of Brown as leader, may make it all a bit too unconvincing.

Wednesday, 5 May 2010

National Views

This has been a strange election where none of the three parties has really done well - apart perhaps from the Lib Dems, where a sparkling "we're not like the other two" performance in the first Leaders' debate has increased their polling percentages, but they have not really stood up to scrutiny.

Labour has had a series of disastrous moments - surprisingly for a Party which was so brilliant at presentation, partly because of Brown's general incapacity to deal with human beings and partly because the split between Brownites like Balls and Whelan and Blairites like Campbell and Mandelson has prevented a consistent approach. They are probably down to their irreduceable core vote, and the recent suggestions that people should vote tactically and their emphasis on negativity (don't vote for us because we're good, but because the oitehrs are bad) suggests they know that.

They deserve to lose: they had ideas of sweeping changes in the constitution and the management of public services but failed to implement them properly, leaving much running much more inefficiently, and more importantly they have squandered 1997's successful economic legacy, with Brown leaving behind a really serious public debt problem, the most complex and costly tax code in the world and serious unemployment, especially in the young. (I'm not going to link to all those points - they are discussed in more detail in my earlier blogposts).

A neighbour yesterday told me that the UK was not as bad as Greece; I'm not sure about that. We have one major advantage: we are not in the Euro, so have more flexibility to devalue sterling (so increasing inflation and interest rates) to stimulate exports and reduce the value of debt we owe externally. But our total exposure is worse, and we have massive uncounted liabilities from public sector pension liabilities and PFI spending. Just like Greece we are perfectly happy spending other people's money; unlike Greece, we haven't had to start paying it back yet.

Brown was featured in a double page spread in the Times today; they commented on his continual emphasis on child tax credits. A good idea perhaps - but so typical of him. He has created a complex and costly structure so that many who need help can't get it and those who do get it become dependent. But that is how Brown got and wants to keep power: to lock people into dependency and to deprive them of opportunity to break away. Little does he care about the effect of his detailed tax and benefit structures as long as he can be boss. Hopefully, whatever else is the result of this election, he will go.

The polls show that the Lib Dems had a sparkling first part of the campaign, overtaking Labour and equalling the Tories. As time has gone on, the sparkle is a bit tarnished. The Lib Dems policies have not stood up to scrutiny in many areas - immigration, the Euro and Europe and defence to name some, and regular readers will know my view that Cable is incompetent. Some of their tax policies have merit but others appear designed to prevent business growth. The Lib Dems are an old party with as many dubious donations as anyone else (if not more), and with electoral behaviour worse than most. The main problem for me is that the Lib Dems have not really spelled out how they will behave in the event of a hung Parliament, and they have not really convinced they can match the rhetoric. Not being Labour or Tory isn't really a convincing slogan, nor a recipe for long term success.

The Tories have had a poor campaign nationally. Never mind the tactical error of encouraging the leadership debates and allowing Clegg an equal platform, they have not sounded honest on the economy (because despite sounding the right warnings during the 80s and at the last party conference, they have not said just how bad things are and will be) and have not sounded convincing on social issues (by focusing on concepts like "the big society" rather than on the need for freedom and a smaller state). Like Labour, they have to cope with two camps running their campaign. And because many voters have not yet suffered from our economic problems - we are spending other people's money and have not been asked for it back - the Tories are worried that too negative a message won't chime with voters. Cameron has tried all the way through to be positive and optimistic. Despite a poor performance, the Tories offer two things which mean they deserve to be elected:
- they recognise that public spending is not the only answer to problems;
- they believe in the private sector, that economic growth is ultimately what pays for things and will pay for us to get out of debt.

What will happen? I've consistently thought there will be a hung Parliament, which will inevitably increase uncertainty and therefore harm the economy. It's also hard to see such a situation lasting for four or five years, suggesting a further election quite soon.

I think one of two things will happen: a Lib/Lab pact if the Tories don't get enough seats to have a go, and a Tory minority Government if they do. I'd hate to see a Lib/Tory pact because we won't get proper policies and the Tories would get the blame. But lets wait and see....

Local Views

The local paper last week had an interview with the candidates from the three main parties (Alan Beith, LD; Anne-Marie Trevelyan, Con; Alan Strickland, Lab) asking for their views on six topics – their political philosophy, the A1, rural issues, immigration, youth unemployment and a hung parliament.

Most are as you’d expect from their parties and the manifestos (during the election period, see top left of blog for links to the party manifestos); there are a couple that aren’t:
A1: Beith thinks it should be a strategic road and dualled, although his party doesn’t want to spend money on road enhancements of this type.
Immigration: Beith believes there should be more control and a system people should have confidence in – yet the proposed amnesty will not help this.

I don’t think an MP having different views from his party is a bad thing; but Beith’s lack of position within his party (he wasn’t even in the top 50 most influential Lib Dems last year) means he lacks influence and people voting for him need to be aware that they are really voting for a different set of beliefs than his.

Talking to people on the doorstep is always interesting. I sense a frustration that politicians can’t be trusted, a concern that not enough has been done to support North Northumberland, a real interest in what is going on and a surprising indecision about how to vote. I think the Conservative vote will be stronger than people expect because of a need to change. Will it be enough?

On the eve of polling, I’ll repeat my thoughts from the beginning of the campaign:
Nationally, the country has serious economic problems. We are the slowest recovering G20 economy with one of the biggest public sector deficits in the world. We have also had over a decade of largely ineffective initiatives with a new law being passed for almost every day Labour have been in power. The Conservatives are believers in small Government and sound finance – they have a record of achieving higher employment and better finances. In turn, every Labour Government has left office with more unemployment and a bigger public sector deficit than when they came into office and this one looks like being no different. If there is to be a change in Government, constituencies like Berwick need to become Conservative.

Locally, whatever individual help people have received from Alan Beith, this area has suffered from under-investment. This must at least partly be due to the fact that we do not have an MP from one of the parties of Government. Anne-Marie has in a short time made progress on many projects, such as launching the most recent dual the A1 campaign, helping get money for the new harbour wall at Seahouses and getting a mobile MRI scanner to Berwick Infirmary. I think we now need someone of her energy as MP.

Monday, 3 May 2010

The Final Countdown

There's two more days of action, then polling day. Then it's all over - although if there is a hung Parliament my guess is there'll have to be another election within a year. And the economic position will be much worse; as I previously posted, coalitions and minority Governments may work where countries are used to them, but we are not. The uncertainty will almost certainly lead to increased interest rates, harming the economy and increasing payments from the UK to investors abroad.

I've been rushing about today trying to get things prepared for polling day; there's a term used by all the parties: Get Out The Vote. It's an operation designed to make sure as many supporters vote as possible, and involves trying to establish who has voted, comparing that to the known supporters and then trying to nag the remainder to vote. At this stage it means clearing my dining room table of all remaining leaflets (one more drop tomorrow) and trying to make sure people know what they are doing on polling day in my small but perfectly formed area. This activity will be being mirrored up and down the country by all parties, and I suspect that it will make a difference in marginal seats, where the best organised and motivated party is more likely to win.

I think Berwick Conservatives have run a good campaign. It's not easy to unseat a long standing MP in a safe seat when they haven't been involved in a major scandal, but the local candidate has worked very hard, focused on important local issues and has got as good a name recognition as the sitting MP. She has also built a hard working team.

I've sensed more interest in the election than I expected, with more people taking an interest in the canvassing, leaflets and media debates. The polls are shifting slightly in the Conservatives favour, although I can't quite believe that they can overcome the massive swing they neded to achieve.

A good sign is that Labour and the Lib Dems are becoming slightly rattled and are campaigning very negatively, about what's wrong with the Tories rather than what's right with them. I was annoyed with Clegg's outburst today about Cameron's "arrogance" in saying what he would do if elected. Actually, Clegg, having an idea about what you would do after the election would be rather helpful. And giving people an idea about what you would do it is what campaigning is about. But as long as you end up in a position of power I suppose you don't care.

What is a Hung Parliament?

The Final Countdown

Sunday, 2 May 2010

Leaders' Debate 3

Again, I preferred humilation in our local pub quiz to watching the debate, and again caught up on the impressions afterwards.

My sense was that:
- It was even more boring than the others;
- Cameron won;
- Brown was strong but negative;
- There was less clarity about Clegg; I've heard two views from non Lib-Dem supporters; one that he continued to be the most likeable, the other that we was just irritating because he had nothing to offer except being rude to the other two.

Now that Cameron has finally won a debate, I feel free to express my concerns about the whole exercise. The idea was heavily pushed by Sky (although lots of broadcasters wanted to do something) and I suppose Brown and Cameron didn't want to let Murdoch down. But it was the wrong thing to do:
- It has dominated media coverage to the extent that the 6,000+ candidates dotted around the country trying to get elected have almost become an irrelevance;
- We do not have a presidential system of government; one of our problems is that Prime Ministers have bceome more presidential without the checks and balances needed to control them. This debate has reinfoced the improtance of the Prime Minsiter's office over everything else;
- It trivialises. From doorstep conversations, I don't think it has sparked much interest in the public, but the media have focused on this to the exclusion of much else.

The Daily Politics has held a series of debates on different topics - Business, the Environment and so on. These are available on iplayer and are much better that the Prime Ministerial debates because they are straightforward debates with an intelligent questioner/moderator - Andrew Neil. They have hardly been reported despite being more informative.

So I hope the leader debates don't happen again - although I'm sure they will! If they do, they need to be shorter and have less rules. And better moderators.

Friday, 30 April 2010

The general public

Politicians need the general public. But at a safe distance. When standing for the council, I often expressed frustration because the public's simple questions usually have complex answers. And people don't usually have time to listen - certainly the media doesn't, and the media is always watching the leading politicians.

The sad thing about "Brown's gaffe" is not so much what he thought about a specific voter (any of us could be caught out sometimes if people heard what we really think) but the attitude the political elite have to one of voters' real concerns: immigration. Raising the issue commands the response "bigot" if not "racist". It's one of the most frequently raised issues on the doorstep - especially amongst the young - and there's a lot of reasons for that (perceived pressure on local services, unfair prioritisation for services, focus on multiculturalism rather than integration, too big a growth in population numbers in too short a time) mainly arising from the fact that we have not had proper controls over immigratuion for some time (apparently as a deliberate policy).

The political parties are mostly afraid to address the issue because of the "r" word - but they must if they are to prevent tension growing - and a further pressure on public finances. And in avoiding the issue they show a contempt for the general public, which is just as harmful as the expenses scandal in devaluing politicians in the public's mind.

Thursday, 29 April 2010


One of the main issues in this area is the state of the A1. The large majority of people in the area want it dualled, for reasons of safety, convenience and most importantly to support economic development in this one of the poorest regions in Britain.

It's just not likely that a Lib Dem will have the influence to get this done. Interestingly in today's local paper he's quoted as saying that he would like to see the A1 classified as a national strategic road (because that would attract more funding). On the same day the Conservatives announced that they would so classify it. That is thanks to Anne-Marie Trevelyan, our local Tory candidate who has fought hard to raise the issue up the political agenda. Although Nick Clegg said on a visit to the North East he would try to find more money, his party's transport spokesman made it clear that the Lib Dems would not spend money on this sort of project.

I think this announcment is a massive step forward. I hope we get a change of MP to initiate it.

Friday, 23 April 2010

Economic Growth: I don't agree with Gordon

A couple of figures released in the last couple of days show that the recovery from the recession is weak - despite, as I noted the other day, very low interest rates and a substantial amount of funds injected into the economy by the Bank of England (QE, or quantitative easing).

Unemployment was up to 2.5 million, and this does not include those of working age classed as "economically inactive", a record 8m.

GDP in the first Quarter was estimated to be up 0.2%. That is lower than expected.

And in addition, inflation (the RPI) rose to 4.4%. This will partly because of the fall in the value of sterling but supports those woried that the large QE programme and low interest rates will be fuelling inflation. This is good in that its one way of reducing the debt burden - but bad because interest rates may have to rise.

So does this mean that the Government is right to warn that the Conservative plan to "take £6bn out of the economy" risks damaging the stilted recovery? And that teh focus must be on protecting growth rather than cutting the deficit?

I think not:

The amount that the Tories are talking about in 2010/11 is small compared to the economy. Even if it were to have a negative effect on the economy it's too small to be material (even Vince Cable agreed with that, until he changed his mind). But it is an important start which sends a message that is critical to investors who fund our debt.

As I've noted before, reducing the amount the Government takes from the rest of us does not take it out of the economy. It leaves it with the rest of us; and we are capable of spending it much more efficiently than the Government.

And perhaps most importantly, the debate on this topic has ignored the interest rate burden from our massive public sector debt. The Bank of International Settlements (the nearest thing the world has to a central bank) published a report on the debt burden around the world, noting amongst other things that the UK has one of the biggest long term problems.

The interest paid on Government debt (about £30bn last year) is in the top 10 of things the Government spends money on, and is forecast to rise to the top 3 or 4 in the next five years (at over £70bn a year). That's in the same ball-park as the entire education budget.

And a lot of that payment really IS money out of the economy. Many countries with high debt - like Japan, Germany and Italy - are fairly secure because their debt is mostly owned by their own residents. The UK however cannot afford to buy all the debt we have. A lot (about a quarter) is held by overseas investors. So although some of the interest we pay is recycled in the UK economy as payments to savers, pension funds and so on, a lot goes to overseas investors. And leaves our economy.

Each % point rise in interest rates we have to pay on Government debt means about £3bn will leave the UK economy. And that figure will grow as the debt figure rises (currently the debt figure is rising at about £150bn a year).

That is why action has to be taken on the deficit quickly. If it isn't interest rates will have to rise to persuade people to buy our debt.

On reading this post I can understand why the Conservatives aren't making more of the point. It's a bit complicated, even boring.

But it's really important: the debt run up by Labour has become so big that the interest we pay - especially that we pay overseas - is becoming a massive drag on the economy. The other parties aren't really interested in this, but it runs to the heart of Conservative thinking for the past few years. If you don't cut the deficit, growth will be weak. Not the other way round.

2nd Debate

I really can't think of anything to say: from scouring the papers, blogs and comments and from watching This Week last night the debate seemed uneventful.

All three performed up to expectations but no better; based on my conversations with people I very much doubt that many viewers/listeners sat through it all, and the vast majority of voters will take their cue from media comment; and this is bad news for the Conservatives because although the Lib Dem surge is fading they will take votes from the Conservatives in seats they need to win. The Betfair index at the bottom of the page (I place great faith in the accuracy of lots of people betting money) has shown a slight rise in the predicted Conservative seats this week, but the average opinion polls since January tell the story.

Michael Portillo last night predicted that the Conservatives would be willing to accept some form of alternative voting system to work with the Lib Dems. That may be so (I doubt it) but I can't see much common ground on the key issues of the economy - where cutting the deficit is critical - and social issues is concerned.

A final anti-Lib-Dem thought for the day: they aren't really that different from the other parties: I've posted before on their dubious funders; here's a comment about their campaigning techniques.

Thursday, 22 April 2010

Does a Hung Parliament matter?

I've thought for many months - well before the boost in Lib Dem support in the polls - that a hung Parliament is the most likely result of this election simply because of the enormous extra number of votes the Conservatives need to get seats, and that a Lib/Lab grouping is the most likely outcome.

Does this matter?

Well, yes, if you don't agree with Lib/Lab policies but I was really thinking of the economy rather than the whole suite of Government policy.

This thought was prompted by a meeting today with the local bank manager about one of the local groups I'm involved with. (I say local - he is based in Gateshead, but at least he's not been outsourced to India). His view, with which I agree, is that many people and firms have not been significantly impacted by the economic troubles because interest rates are at very low levels (he did accept there is a problem getting new credit, to small firms in particular, but issue of the supply of new credit is less important than interest rates on existing credit).

If interest rates go up a lot before the economy is in good shape then many firms and people will have a hard time meeting interest payments. There will be defaults, bad debts, bankruptcies and even more unemployment. (Have I mentioned before that every Labour Government has left office with more unemployed people than when it came in?). For that reason the Bank of England is under real pressure to keep interest rates low.

So what would make the Bank of England increase rates? Two things - increasing inflation and problems selling Government debt. The latter could be affected by a hung Parliament. And badly. Prices in markets of all types are about confidence. If investors think that the UK Government will not get a grip on public finances then they will not buy Government debt unless there was a big increase in the interest rate.

And the problem of a hung Parliament is that it will take time for the Parties to agree who is in charge and then to agree what action will be taken on cutting the deficit. And then there is more likley to be tension and difficulty in implementing the cuts. This will increase uncertainty. And uncertainty will also prevent investors from buying - why should they, when the outcome is uncertain.

I have read a ludicrous comment that a hung parliament would lead to Vince Cable being Chancellor - or at least heavily involved in economic policy, and that would be a good thing. Cable is not credible internationally or in financial markets; he is a good presenter but has shown no consistency. This is starting to be found out.

If the Parties resolve a hung Parliament quickly and reach a quick conclusion on responsibilities and areas of focus for cuts, then the uncertainty will be lessened and interest rates may not have to rise quickly. But if there are delays, tensions and a lack of clarity then we will not be able to fund our massive deficit. And interest rates will have to rise too soon, causing big problems.

In other words: it is possible that a hung Parliament will not cause immediate economic problems. But it certainly could, and that is one important reason why we should hope for a clear outcome on May 7th.

I think there are others, and if I have time I'll write about them later. But first I should comment on the second leaders debate; like the first, I preferred to go to the pub quiz (which once more we did not win) but I've seen enough other people's comments to have a go myself.

Tuesday, 20 April 2010

Election excess

For the first time in my life I am seriously thinking of voting Labour.

I have been in London for a couple of days, where my flat is in a very marginal constituency between Labour and the Lib Dems; it's currently held by Labour with about a 480 majority. I have been inundated by leaflets and letters from the Lib Dems; in the last couple of weeks, there have been 10 different leaflets, papers or letters - including personal letters to me from Nick Clegg and Vince Cable (although strangely their signatures didn't seem to indent the paper, and the ink didn't run when wetted. But they seemed so genuine they surely couldn't have been facsimile signatures).

Tuesday alone saw 3 new bits of paper including a letter from an ex-conservative telling me that he had decided to vote LibDem "because the Conservatives couldn't win here". His letter was in a hand addressed envelope - except again, if I didn't know better, the ink seemed printed rather then genuine. (And even more bizarrely, the letter from the ex-conservative was in a typeface as though from a 1960s typewriter but printed in a very slick 21st century way). My new bestfriends Nick and Vince seemed very angry - so angry that they flung abuse at both Labour and the Conservatives which implied they could never work with either if there was a hung Parliament. They misrepresented the policies and funding of Labour and Conservatives. But despite them being my new friends and despite them saying they wanted openess in politics, they didn't mention the mistakes in policy they had made (for example wanting to join the Euro and encouraging excess borrowing in the mid 2000s) and the dubious funding they had received. And again, both reminded me that the Conservatives couldn't win here.

That theme - the Conservatives can't win here - is a constant theme, repeated on each page of each bit of election material. It was even highlighted in a leaflet printed in Conservative party colours (but with the Lib Dem disclaimer in tiny print at the bottom).

In the election period and the weeks before I have had no leaflets from the Tories - obviously not ones to waste paper - and only one from Labour which rather cleverly didn't mention the Lib Dems, and tried to frighten voters by saying how evil the Tories are.

The Lib Dem strategy isn't helped by having a candidate who comes across as smug busybody you'd just hate to have as your next door neighbour. The Labour candidate is a barrister ex-neighbour of Tony Blair with large property portfolio, but hey - its easier to look after the deserving poor if you aren't poor yourself. And she comes across as quite decent on her occasional appearances on the Westminster Hour.
The thrust of the Lib Dem campaign seems to be: don't vote for what you believe in, just vote for us. And that push to vote against your beliefs makes me want to vote Labour in Islington South and Finsbury just to punish the unpleasant and OTT campaign the Lib Dems have been running there.

I think I would, if it wasn't for the fact that I am actively supporting a good candidate in Berwick upon Tweed who has a real chance of defeating a useless MP. I just hope that others in Islington South and Finsbury are pushed the same way as me.

Two final thoughts from London:
- It's very quiet. Lots of people may be stranded abroad but you'd think there'd be as many stranded here. Yet the tube, the shops, streets restaurants etc are nowhere near as full as normal. Is that to do with the economy? The lack of aircraft? The election? School holidays? Not sure.

- I walked past the Houses of Parliament on my way to an exhibition at the Museum of Garden History about the life at Great Dixter (the garden I most admire) of Christopher Lloyd (the gardener I most admire). It's a wonderful building, currently under used. It made me feel sad to think about just how much damage New Labour 's meddling has done to our Parliamentary process. (Yes, I primarily blame New Labour for the expenses scandal: read here).

Sunday, 18 April 2010

Leaders' debate reprise

I had a weekend full of conversations with normal people (ie non-political junkies).

They were at a relation's wedding (in Scotland) and a golf match - perhaps my relations, their friends and fellow golfers are not the most representative sample of people, but there was a consistency of views from all age groups and nationalities (Scots & English), and not all were closet Tories:
- The debate was too boring to watch the whole way through;
- Clegg did well but not that well - all he said was yah boo I'm not the same as you two;
- It's hard to understand why the media has hyped it up so much. (To sell papers? Or advertising?).

Again, too soon to say whether there's a germ of a point here; if it is media hype, the Lib Dem bubble will burst. Unless it becomes self fulfilling. But it does seem overdone.

And interestingly, just after writing this I noticed this comment on the BBC site...

Friday, 16 April 2010

Leaders' Debate - the result

We didn't win the quiz (see below). We were tied for first but lost the tie break. I did catch the first minute of the debate before leaving - I was at a neighbour's "Debate party" - but my only observation was that, much against the predictions their ties matched party colours rather than being a neutral purple. That decision will have taken hours of time, and usefully highlights the fact that there really is a clear choice between the parties. You'll want to know that I am writing this wearing a blue sweater and trousers, although my shoes are brown.

I've now read lots of blog posts, summaries, newspaper articles etc (even some tweets) on the debate - and talked to people who did watch it - so feel well qualified to comment.

I'm fairly pleased with my predictions below, but underestimated:
a) how well Clegg would do (it was always obvious he would do the best, but he personally must have excelled to have done so well); and
b) the interest in the debate, and how interesting it was; it seems to have been more spontaneous than I thought.

I suspect Cameron (and Brown) must also have underestimated how well Clegg would do. Cameron seems to have made two mistakes in the debate: one was to allow Clegg to appear, the other to be too passive: he apparently could be seen to be holding himself back from attacking Brown (verbally). But he was probably under strict instructions not to behave as though it was Prime Minister's Questions. The impression is that he mildly disappointed, but did not damage himself. Although an immediate poll put him a long way behind Clegg, it continued to show him as the best PM of the three.

And this was after being attacked by both Brown and Clegg. It appears that Brown continually sought to identify himself with Clegg ("I agree with Nick..."), probably partly to cement the pact if there's a hung Parliament and partly to show that Cameron was not the reasonable one.

Clegg did not seem to talk about policy much - his line was, you two (Cameron/Brown) are all the same, I'm one of the public - and his choice to look at the TV audience not the studio - made seemed to pay off as he was "one of us" rather than a - spit - politician. That's a good approach, but it will be interesting to see if he can pull it off twice.

This all creates a dilemma for the Tories and to a lesser extent for Brown - to what extent do they highlight the Lib Dems weaknesses in both behaviour and policy (eg their biggest doner was a crook; they wanted to join the Euro which would have decimated our economic position now) but at the risk of giving them publicity - as opposed to essentially ignoring them and hoping the hero worship will die down.

The immediate polls show a significant rise for the Lib Dems - and the Betfair stats at the bottom of the blog show a near 10% reduction in people thinking there will be a Conservative majority, and a similar increase for a hung Parliament (although strangely there hasn't been much movement in predictions of numbers of seats won by each party). But will this last? The This Week experts last night said ignore any polls until Sunday. Those will be the interesting ones.

And from talking to people who did watch it, I don't sense it's going to change many people's minds. The decided voters saw reasons to support their existing choice, the undecided voters thought Clegg won, felt a bit more positively about him but also thought he had had an easy time of it.

Its a bit of a bugger for Berwick upon Tweed, though, where an exciting Conservative candidate is showing signs of outpacing a Lib Dem MP past his sell-by date. The debate will have made waverers waver more.

Thursday, 15 April 2010

Leaders' Debate

What a shame the three debates clash with my local pub quiz night. I'll have to miss them.

But I suspect I won't miss much; I'll review them based on comments in the press and on blogs.

Some preliminary guesses:
- all three will be regretting they were bounced into it;
- none of them will make any glaring errors because they have been over-rehearsed;
- all three will show their hidden character flaws (Brown: wierd; Cameron: smug; Clegg: bland);
- Brown and Clegg will gang up on Cameron. Which suggests what'll happen if there's a hung Parliament.

Brown will do better than expected, Clegg will win as the "third way" and Cameron will not quite reach his potential.

Clear Blue Water

I haven't read all three main party manifestos - but as I've noted elsewhere, that shouldn't prevent me from discussing them intelligently. After all, almost everyone else discussing them won't have read them either.*

The good thing is that, despite many comments for so long that the parties are all the same, the manifestos are very different. They may all be full of bland comments about improvements and fairness, and and claims about sorting out finances, but no-one really expects them to be taken seriously. What is more important is the themes, the direction of travel.

The Conservative and Labour manifestos differ substantially and therefore offer voters a real choice. The Conservative manifesto, ultimately, believes that people make things happen and the State should be there to provide essentials and a support where necessary - with mre emphasis on the support aspects than previously seen. The Labour manifesto believes that people can’t be trusted and the State – the centre – has to do things. This contrast is an old one and goes to the heart of the differences in the two parties, and will influence how the parties would behave if they won the election. Inevitably, given the relatively small influence Governments have over events, their choices are limited. But where they have choices they will tend to follow the style set out in the manifesto. The Lib Dem manifesto is a soft version of Labour's, but with more specific figures on Government finances (or more made up figures, depending on your point of view).

The Lib Dems deserve credit for highlighting the issue of public finances more than the other two, but given the lack of information on what's really going on with the deficit and expenditure it is hard to take any figures seriously. Again, what matters is the approach, the direction of travel. The Conservatives want to promote private sector growth and to cut public sector waste more quickly than Labour; The Lib Dems follow both approaches.

A couple of other thoughts: Labour wins the prize for the most stylish cover (even if it is redolent of soviet era collectivism) and the Lib Dem manifesto is incredibly hard to collate and analyse.

* In case of interest, they can be found here:
Lib Dem.

Two thoughts from searching for these:
- None of them were the top item on the results list;
- The Lib Dem site crashed my network link. I assume it's personal.

Wednesday, 14 April 2010

Headline News: Brown admits mistake

Gordon Brown has admitted he made a mistake in not introducing tougher bank regulation when he was chancellor; the truth is that globally and nationally we should have been regulating them more," he added.

Its good he's admitted he's not infallible. But I don't think he's learnt the correct lesson. It wasn't a question of more or less regulation: it was a question of the right sort of regulation. I wrote last year on the excessive amount of irrelevant financial regulation; a couple of colleagues posed by a stack of paper representing the amount of regulation in one year for financial services. Over 5,000 pages of it. But it didn't focus on a few simple issues, like the amount of gearing banks could have, and by being very detailed, people looked for ways round it rather than applying principles.

And this approach of excessive detailed regulation rather than simple principles applies in most factors of life - another example is our tax legislation, which is the longest in the world having in the 90s been one of the simplest.

It's an attitude to life. Labour believe that people need to be told how to behave, to be told what they are allowed to do, in all aspects of their life because the state can be trusted, people can't.

I just think that's wrong. And although Brown has admitted mistakes on bank regulation (he could hardly do otherwise) he's not, in my mind, admitted the right ones.

Thursday, 8 April 2010

The Etiquette of Leaflet Deliveries

When I stood for council, the question of leaflets deliveries troubled me greatly. I posted on the subject a couple of times.

And here I am again, delivering leaflets around the area.

I still despair of houses with no letter boxes. It's as though they don't want political leaflets.

But the thing that's being really worrying me now is the ettiquette of leaflet delivering. My early political guru told me to be careful to re-latch front gates as you went in as well as out, not to run over their pets and so on. These are issues of respect. Its the more subtle ones that concern me.
- Should you leave leaflets with known opposers? Should you leave leaflets with massive supporters? Especially if either are way out of the way.
- If you know someone, is it better to leave the leaflet and not disturb them? Or will they think that is rude and you should stop and talk to them. But do they really want to associate you with politics?
- If you do talk to someone - how quickly do you get away from them? You have hundreds of the bloody things to deliver - but you don't want to rush it. It's often nice to talk to people. But.
- What do you do with houses with no letter boxes? Tie it to a brick and throw it through the window? I have left them by the door, but perhaps that's not effective enough.

These perhaps are the issues that undecided voters should use to decide who to support. They go to the heart of respect for the individual, service efficiency and care for the community.

Mind you, I'm not sure leaving the car engine running did much for my green agenda.

Received Wisdom

As I drove around delivering leaflets yesterday, I listened to Prime Minister's Questions. And as I lay in the bath this morning I listened to Gordon Brown being interviewed by John Humphreys.

PMQs was much the same as ever; I thought Clegg had the best line, about Labour: "Look at them now. You've failed. It's over. It's time to go." Cameron focused on Brown's major mistakes - Army funding, the economy and so on, especially increasing National Insurance Contributions. One of Brown's claims made me want to deliver leaflets even more: that by reducing the NI tax, the Conservatives would take "£6bn out of the economy". Sadly he wasn't challenged on that. Only someone whose entire life has been lead at someone else's expense could say that leaving money with taxpayers, so keeping people in paid work, was taking money out of the economy. Government taking money from taxpayers isn't putting money into the economy; if anything, given greater public sector inefficiency, its the opposite.

Its a really scary thought of Brown's: he knows how to spend money better than we do.

He peformed well against Humphreys this morning in that he managed to blame everyone else for the current economic position - especially the US regulatory system and "The global banking crisis". And said that when he said he had abolished "boom and bust" he meant he had turned the UK into a low inflation, low interest rate economy.
The only trouble is that he didn't: the transformation came when Ken Clarke started as Chancellor after we delinked from ERM and decided to have formal inflation targeting (which was in 1992/3; there's a good paper from Mervyn King in 2002 on the subject):

He does deserve credit for not messing it up but he can't take credit for the improvement in the UK's position. (There's also an argument that low inflation was mainly caused by China's economic development as a low cost provider of consumer goods, but lets not go there - it's all too complicated). He can however be criticised for giving the Bank of England the wrong targets: he did not ask them to review asset price inflation, which boomed unsustainably and caused much of the UK's current problems. He did not create a low inflation economy; he did oversee a boom and bust in asset prices.
And I do think the system of financial regulation, which was his, and the massive public sector spending increases without efficiency improvements, which was his, meant he can genuinely claim to have created the boom and bust in asset prices.
His last point was that he worked hard to protect the financial system and the banks by the action he took in 2008. I've earlier set out thoughts on why he made the recession worse by doing too little too late, but the key fact is this: other countries - even the US - didn't have such a bad crisis in their banking sector because they had a better system of financial regulation.
So overall - he didn't persuade me that he was fit to control our financial affairs. He messed up and is now blaming everyone else and changing history to prove it wasn't him.

Tuesday, 6 April 2010

It's time, as they say, for change..

In this constituency, Berwick upon Tweed, we have had the same – Liberal-Democrat - MP for nearly 40 years. However, in the 2008 County Council elections across the constituency there were more votes for the Conservatives than for Liberal Democrats. For the first time for years we could have a change of MP. I think there are national and local reasons to vote for Anne-Marie Trevelyan, the Conservative candidate:

Nationally, the country has serious economic problems. We are the slowest recovering G20 economy with one of the biggest public sector deficits in the world. We have also had over a decade of largely ineffective initiatives with a new law being passed for almost every day Labour have been in power. The Conservatives are believers in small Government and sound finance – they have a record of achieving higher employment and better finances. In turn, every Labour Government has left office with more unemployment and a bigger public sector deficit than when they came into office and this one looks like being no different. If there is to be a change in Government, constituencies like Berwick need to become Conservative.

Locally, whatever individual help people have received from Alan Beith, this area has suffered from under-investment. This must at least partly be due to the fact that we do not have an MP from one of the parties of Government. Anne-Marie has in a short time made progress on many projects, such as launching the most recent dual the A1 campaign, helping get money for the new harbour wall at Seahouses and getting a mobile MRI scanner to Berwick Infirmary. I think we now need someone of her energy as MP.

She has a blog herself: Trevelyan Talks which is a chance to see what she thinks. I know from my own experience that it's impossible for her to meet every voter - but she is getting around.

I was just telephoned to arrange to collect a mass of leaflets for delivery in the next few days. That will be a chance to get around and see what people think.

And they're off....

This is a really important election.

But somehow I find it hard to get excited. That's partly because I'm worried about the Tories losing - in the same way that I am writing this rather then watching Arsenal vs Barcelona: I superstitiously feel they'll lose if I watch. And partly because I fear this will be a very poor campaign very poorly reported on. So I haven't been hooked on the media all day.

But I caught sight of Gordon Brown's trip from Downing St to St Pancras, where he was catching a train to somewhere suitably deproved in Kent. The motorcade was filmed by helicopter and it struck me how depressing it would be to be followed by helicopters for the next four and a half weeks. His procession through St Pancras was very strange - they took a circuitous route, being applauded by various passers-by. They also missed out the champagne bar. Something seemed odd - but it took a blogger rather than the commentators to explain that the supportive crowds had in fact been bussed in and were Labour supporters who had previously been leafleting at nearby stations.

And later, I heard the soundbites from Brown and Cameron's opening remarks. Brown's were bland - I forget them - but I winced at Cameron's second or third sentence: something like we'll stop another five years of Gordon Brown.

Now, I don't like Brown. I think he was a disastrous Chancellor who has left the UK with a morass of regulation, the world's largest tax code, a massive debt burden, an inefficient public sector, a destroyed pension system and an ineffective system of financial regulation - never mind ensuring that the armed forces suffered through a lack of funding despite him supporting wars beyond our capability. As a Prime Minister he was weak, ineffective and vindictive. As a person, I think he is deeply uncaring of everything except his own position. I don't want him to be Prime Minister any more.

BUT... I already support the Conservatives. I know the positive reasons to vote Conservative. I know the positive reasons to oppose Labour. Cameron's negative sentence chimes a chord with me. But it won't with many people who either haven't seen through Brown yet, or who genuinely believe he is a decent man doing his best, or who are uncertain about which way to vote. Cameron must say why people should vote Conservative - small state, protect the economy etc. I think he can set out what's gone wrong - but he mustn't focus on it.

We had a "meet the candidate" (the Conservative one of course) event in a local village recently. It was not that well attended, but it was a Friday evening. Nevertheless a few Lib-Dems as well as Conservatives came along, and Anne-Marie, our candidate, made some useful comments and I hoped impressed them. We then asked for questions: and they were dominated by negativity. Why weren't the Conservatives bashing Brown and Labour more? And so on. I tried to point out that such an approach would appeal to the core support only, and would be irrelevant to the vast majority of voters. But I don't think I got through.

I hope Cameron rises above his opening remarks.

By the way, Arsenal lost.

Thursday, 1 April 2010

Dear Prudence

I missed this last year - Gordon Brown's 10 worst financial gaffes - but its still valid and a useful reminder of the cause of many of our problems. (The link should work for as long as the Times keeps free access).

Dear Prudence, won't you come out to play
Dear Prudence, greet the brand new day
The sun is up, the sky is blue
It's beautiful and so are you
Dear Prudence won't you come out to play
Dear Prudence open up your eyes
Dear Prudence see the sunny skies
The wind is low the birds will sing
That you are part of everything
Dear Prudence won't you open up your eyes?

Look around round round, Look around round round, Oh look around

Dear Prudence let me see you smile
Dear Prudence like a little child
The clouds will be a daisy chain
So let me see you smile again
Dear Prudence won't you let me see you smile?
Dear Prudence, won't you come out to play
Dear Prudence, greet the brand new day
The sun is up, the sky is blue
It's beautiful and so are you
Dear Prudence won't you come out to play

A tax on some jobs

The Tories have form in wanting to limit the increase in NICs: one of their many practical suggestions before the recession hit in 2008 was to reduce NICs because they were a tax on jobs.

It's therefore not surprising that they now want to restrict this tax increase which will do direct damage to employment and therefore ecconomic growth.

They have been called irresponsible for suggesting a tax reduction when they have said that reducing borrowing is important. But this forgets that there will be three ways the deficit will ultimately be paid back, not one:
- a reduction in state expenditure
- economic growth
- inflation (none of the Parties mention this one).

Economic growth will only come from the private sector. State spending in the short term can reduce the harm of a recession: it cannot help growth because it sucks money from the private sector. This is the essential delusion of Labour, and is why they always leave office with unemployment higher than when they came in despite higher public sector deficits. It is what they are mistakenly trying to promote now.

A reason they are happy to increase NICs is because it hits the private sector: an NIC increase is irrelevent to public sector jobs because it is circular. And Labour appear disinterested in private sector jobs; they aren't where their votes are.

Tuesday, 30 March 2010

Two's Company, Three's a Crowd

I didn't watch the "Chancellors' debate" last night:

a) I have a life
b) It's always easier to comment dispassionately on things you haven't seen, and
c) I thought the most important things is not what they said but how people thought they had done.

I've read a lot of comments/blogs/papers and the consensus seems to be:

1. Vince Cable won the debate, but not by a lot;
2. George Osborne did much better than people expected;
3. Alastair Darling was OK – slightly better than Osborne but not a lot;
4. All three therefore came across well, but mostly spoke in generalities;
5. The debate did not change people’s minds about how they would vote;
6. So overall a good result for the Tories given fears about Osborne;
7. Darling and Cable agreed more than they disagreed – another indication that a hung Parliament would probably lead to a Lib/Lab pact of some sort.
8. The debate favoured – in audience selection, positioning and questioning – the Lib Dems.

I have never understood why Cable is so highly regarded; actually that’s not quite right: I can see that he comes across well as an experienced elder statesman. But what he says is often wrong and usually inconsistent with what he said on earlier occasions and with his party’s policy. In this sense he is like Blair: the public take to someone and it takes a long time for them to realise what he’s really like. The good news is that his favourable treatment in the debate has lead writers to more closely examine what he said. I won’t bother with all the inconsistencies, but this (vituperative comment) highlights his agreement with Brown that public finances were fine when the Tories were noting that it wasn’t, this his ignoring of Lib Dem policy and this his wide misrepresentation, to use a polite word, of his discussions with the Treasury.

Do I protest too much, showing I worry that he is taken so seriously? Probably – but I also genuinely feel he would be a bad Chancellor because he has shown no sign of producing coherent policies or of understanding what is really going on. I see an actor.

I have always liked Darling since I met him and heard him speak in the late 80’s in Edinburgh: he struck me as sensible and considered; I feel very sorry for him having to deal with the mess that he inherited from Brown. But if there is a Labour victory – or more likely a Lib/Lab pact – it is highly unlikely he will remain as Chancellor given the well publicised disagreements with Brown’s inner circle.

I doubt if I will watch the leadership debates either. I don’t think they are a sensible introduction to the election process as they will be so staged they will not allow for a proper understanding of the people involved, and each soundbite will be carefully measured and assessed they will not allow a proper understanding of policy. They are there for the greater glorification of the TV producers.

Sunday, 28 March 2010

Why you should visit me

I have failed over the last couple of months to say anything interesting (some say its for longer than that).

But I've just added three panels to the foot of my blog page which should be of interest as the election campaign progresses. They are provided by Betfair, and are:
- An average of the polls day by day;
- Betfair's current prediction (and given the wisdom of crowds it could be pretty accurate); and
- A map of seats showing the latest predictions and an ability to produce your own swingometer.

Just scroll down past my ramblings to the bottom of the page......

Hello Again

After a long absence two press reports (and a long train journey) have galvanised me into commenting - one national, that a majority of people think Labour is more to be trusted on the economy than the Conservatives and one local, that Wooler is not to be allowed a speed warning sign.
I have been busy while I was away - a couple of skiing trips, some canvassing and quite a lot of paid and pro bono work. But I'll try not to be absent for as long again.
Labour more trusted on the economy???
- A deeper and longer recession than other G20 economies;
- A turnround from stable public sector finances to a massive deficit;
- The creation of an inadequate financial regulatory system which did nothing to minimise the problems so our banks' needed a bigger bail out than than other G20 countries;
- Making an independent Bank of England sideline asset price inflation and the general economic situation in monetary policy management;
- Turning the UK from being one of the top countries for funding pensions to being one of the worst;
- A massive increase in public sector investment with a small increase in results and productivity;
- Never mind selling most of our gold reserves at the lowest price for years.
All this and more brought to you by this Labour Government. And yet it is more trusted.
This is worth a lot of thought; the inability of the Conservatives to highlight the gross incompetence of Gordon Brown's economic management is one of the reasons they are not doing as well in the polls. Briefly - and I'll try to return to this in later posts - I think this is for four reasons:
- People have not seen the consequences of the mismanagement yet. They've read about it, but not felt it. The fact that the UK spends £5 for every £4 is still seen as good because we haven't had to pay the difference back. The most frequent accents I heard in Lech and Meribel were English.
- People are nervous of the consequences of sorting out the mess, and prefer the devil they know.
- Many people have accepted the "it was a global crisis and we did more to help than anyone else" story; I won't repeat my earlier posts on this topic but I don;t think that's right: we seem to have come out of it worse than others.
And it is hard for the Conservatives to say how bad it all is without sounding negative. But I think they have to, not least because at some stage they will have to put it right.
I noted three not four things above. The fourth is that George Osborne is not convincing as a chancellor. He has been right on many things - certainly more than Vince Cable who has changed his mind on many issues over the last year or so - but the truth is he does not convince.
Locally, an article in the local papers about Wooler's inability to install a practical speed reducer has many indicators of what's wrong with both local and national Government.
- It was ruled out by Northumberland County Council's "economic prosperity and strategic services overview and scrutiny committee". A committee with such a name cannot be taken seriously.
- This was a local attempt, with money allocated locally, to improve things. Why should the County have the right to interfere?
- From the article: " Northumbria Safer Roads Initiative had also indicated that because SIDs are unauthorised and in some models there is the potential for it to display the incorrect speed of the vehicle, they would not carry out any speed enforcement, with a mobile or fixed speed camera, on any section of road which contained a SID. " First - Who pays for and has responsibility over the Northumbria Safer Roads Initiative? We will pay - but I bet no-one has any responsibility for what it does or says. And second, it refuses to do its job simply because legal technicalities may mean it can't fine people. It does highlight that it sees its role as fund raising not prevention.
One day power may be devolved. But certainly not under a Labour Government.