Category Archives: Politics UK

Reflections on general political developments and ideas in the UK

Election issues: Scotland. Political chaos beckons. That could be a good thing.

I despair. My ambition was to do a weekly survey of important political issues relevant to this election. But after the economy and the NHS there seems to be little actual argument over policies. Housing and immigration do feature prominently in local hustings. But education, the EU, political reform: nobody seems interested. Instead the election news is dominated by Scotland. So that’s what I’ll cover this week.

The proximate cause of the fuss is the rise of the SNP. This surge was first evident in 2011 when they secured a majority in the Scottish Parliament, in spite of its proportional electoral system. But for some reason the Westminster parties did not appreciate the threat. The calculation may have been that unionists would easily win the referendum on Scottish independence which was to follow, and this would deflate the nationalist bubble. But the referendum caught the Scots’ imagination, and made the Westminster parties look flat-footed. The unonists won the referendum, but by a smaller margin than expected, and only through the use of negative tactics. The SNP bubble did not burst; new members flocked in, excited by its offer of hope and optimism.

The Lib Dems in Scotland had long been braced for bad things. Their association with the toxic Tories in Westminster turned a lot of their Scottish supporters off. But a collapse in the Labour vote took that party by surprise. They have offered nothing but negative campaigning and institutional inertia; it should have been no surprise – and it was certainly well-deserved. As a result the SNP seem certain to sweep Scotland on May 7, leaving Westminster with a problem. The party will surely hold the balance of power. and they have said that there is no way that they can support a Conservative government.

A flailing Conservative campaign has seized on this. It is stoking up English (and Welsh) voters with the idea a Labour government would be propped up by the SNP in a “coalition of chaos”. To stop this they are appealing to floating voters, especially those bending towards Ukip, to support the Conservatives to give them an outright majority and show the Scots who’s boss (they don’t actually articulate that last bit). Former Conservative Prime Minister John Major offered the English offered the country a stern warning.

So: what to make of this? My first reaction is exasperation at the Tories. They, more than anybody, and Mr Major, as much as any other leader, have created the situation where Scots and English and Welsh voters have diverged. Margaret Thatcher started it, with no comprehension of Scottish sensitivities. Mrs Thatcher “stole” the North Sea oil to prop up shaky English finances, and then dismantled much of Scotland’s old industry, creating mass unemployment. Well that’s how many Scots saw it, and still do, though whether Scotland would have been better off without her is another matter entirely. The final straw was piloting the hated “Poll Tax” in Scotland with no democratic mandate. Neither she, nor Mr Major, were interested in taking forward constitutional reforms that might give Scottish voters a greater say in their own government. Mr Major was quite passionate about this – he saw devolution as the start of a slippery slope. Well he wasn’t so wrong about that – but I hate to think what the state of Scottish politics would have been without devolution. The fact is that neither he nor Mrs Thatcher understood what was going on north of the border, and still less had any constructive solution. If the Tory brand was less toxic north of the border, the party would be much less isolated now, and the whole situation much more manageable. And if they truly believe in a democratic union, and the legitimacy of Britain’s electoral system (both core Tory beliefs), then they must allow that the SNP’s right to influence the British government is legitimate.

But the Tories are pointing to a real problem. The SNP have been setting out their stall on the UK-wide policies they would support. They want less “austerity” – i.e. more public expenditure unsupported by tax rises. They oppose Britain’s nuclear deterrent. They are also happy to vote on issues in the UK parliament that apply to England only – and in particular the NHS. Their justification for this is that Scottish public funding is based on the so-called “Barnett formula“, which ties it to levels of expenditure in England. The continued use of this formula represents a major strategic failure by the Westminster establishment. Unfortunately the three main Westminster political parties very publicly re-committed to it during the referendum campaign in a panicky “vow” in the last weeks. This gives cover for SNP MPs to make mischief. If only the Westminster politicians had thought about the matter more deeply, they could have found an escape route under the guise of giving Scotland more autonomy. But instead they simply put the matter on the “too difficult” pile, in classic Westminster style.

But how would a Labour-SNP partnership at UK level work out? The first point to make is not to underestimate the SNP leadership. Unlike the Westminster parties, they think strategically. They are unlikely to follow the playbook forecast by Mr Major, of demanding impossible things and storming off. A deal on economic policy is well within reach – the SNP vision actually sounds remarkably similar to Labour’s (bring the deficit down gradually; slowly reduce the level of national debt). A vote on the nuclear deterrent could well be engineered. SNP votes on selected English matters might well give the government a bit of stability. But two wider problems beckon.

The first is holding the Labour Party together. Many of the SNP demands will be popular with English and Welsh Labour supporters and MPs. This will exacerbate tension between Labour’s pragmatic leadership and its angry grassroots, its trade union backers, and its local mafias in key strongholds. To make matters worse, the party will be desperate to recover its standing in Scotland, and to fight back against the SNP. This is a toxic mix.

The second is just how SNP influence will play with the English public. The malign British press stand waiting to stoke up resentment. A backlash favouring both Conservatives and Ukip could well arise. This would be a lot worse if Labour has fewer MPs than the Conservatives, and yet are still able to form a minority government, because nobody will work with the Conservatives.

There are two ways that Labour might head off the problem, though. The first they will not like at all: and that is to form a minority coalition with the Liberal Democrats, so that they can securely outgun the Tories, and reduce their dependence on the SNP. They might then dare the SNP to bring this government down – along with some token concessions. This approach has the added advantage of a big block of Lib Dems in the House of Lords – which could be a key battleground for a minority government, but where the SNP are weak.

The second (and not incompatible) way is to quickly form a UK constitutional convention, to promote a package of political reforms for the UK. This is official Labour policy, though it ranks alongside their commitment in 2010 to introduce the Alternative Vote and reform of the House of Lords, both of which they torpedoed subsequently. It is official Labour policy to play for time – but they could start taking it seriously and giving it real political heft. This could, and should, provide cover to replace the Barnett formula, as well as portraying any partnership with the SNP as a stopgap while these bigger issues are dealt with in a properly democratic way.

Both solutions require rather more strategic insight than the Labour leadership has shown to date, however. But personally, I rather prefer the idea of a chaotic period of British parliamentary politics to a period of majority Conservative government. It might at last hasten the political reforms the country badly needs north and south of the border.

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British election: tactics have triumphed over strategy. The result is deadlock and danger.

To make sense of the opinion polls in Britain’s general election it is best to look at the BBC poll of polls.

BBC Poll of Polls

There just isn’t much going on. When each poll comes out there is a breathless headline, as the votes seem to shift from the last time the poll was taken – and this is usually expressed in terms of the gap between the top two parties. For example yesterday the Ashcroft poll showed a 4% Conservative lead rising from zero the previous time; and ICM showed the Conservative lead dropping by 2% to 2%. But all that is happening is random variation around something quite stable: Conservatives and Labour both on 34%; Ukip on 14%; the Lib Dems on 8%; and the Greens on 5%. Perhaps the Conservatives and Lib Dems have edged up slightly at the expense of Labour and Ukip in the last few days – but it is too early to tell. The big picture is remarkable stability.

The Conservatives seem to be the most perplexed by this. The party had a plan, the best possible professional advice, carefully tested on samples of voters, and everything had been working well. Good economic statistics have been coming out each week; they easily outmanoeuvred Labour in the Budget; the press mobilised and they have plenty of money. But they are stuck.

Their plan was to scare voters with the prospect of a Labour victory, both by demonising Labour’s leader Ed Miliband, and raising the prospect of higher tax or borrowing under Labour. Against the minor parties luring voters away, they created the phrase “coalition of chaos” to tap into general scepticism that coalitions mean broken promises.  With this, they had clearly calculated, they could bring in an election winning score, with the upper 30s in poll ratings and a lead over Labour of 6% or more. This was more about hauling voters in from Ukip and the Lib Dems, and abstainers, than actually converting Labour voters from 2010.

But the Tory approach to this election has proved to be all tactics and no strategy. Those professional advisers call themselves “strategists”, but they their brains carry no strategic thoughts. This is how the modern political class thinks: and so they are blaming failure on poor tactics. Much has been made of Mr Miliband doing well on television and so exceeding the low expectations. There is some evidence for this (his ratings seem to be a bit less dismal). But his performances cringe-worthy as ever – full of abstract ideas and only token connection with real people. The real problem is that the Tories are fighting against two very damaged brands. First their own, as the “nasty party”, on the side of the rich. Second the general brand of mainstream politicians as slippery so-and-sos out for themselves. And their problem is that strategically the party has gone backwards in the last five years. No clever tactics can cover for that.

Things had been picking up for the Conservatives when David Cameron took over in 2005. He worked hard to detoxify the Tory brand by associating it with softer policies and softer images. This had been working very well until shaken by the twin shocks of economic crisis and the MPs expenses scandal. Still, going into coalition with the Liberal Democrats in 2010 was an excellent strategic move. It gave substance to the detoxification process. But thereafter it collapsed. It turned out that detoxification was a tactic for the 2010 election, not a strategy. Out came all the vile Tory instincts: obsessive anti-Europeanism; bashing the disadvantaged; scepticism of environmental policies; and so on. This was mainly driven by the party’s backbenchers – but Mr Cameron lifted not a finger to stop it. A low point came in 2011 with the party’s campaign against implementing the Alternative Vote  (AV) electoral system, when they not only deployed a series of spurious arguments, but they launched a particularly nasty attack on the Lib Dem leader, Nick Clegg. Funnily enough, supporting AV would have been a good strategic move for the Tories – as this system tends to reinforce two party politics; advantages to the Lib Dems would have been short-lived. Since then the Tories have compounded their strategic errors – notably by neglecting Scotland and stirring up English suspicions of the Scottish. I will allow Mr Cameron credit for two positive strategic moves: support for gay marriage (which has helped detoxify the brand amongst gays, in spite of interanl opposition within the party) and the renegotiate-and-referendum policy on Europe. The latter is often viewed as a tactical concession to Ukip pressure – but there is real strategic value for the Conservatives in it – though a referendum campaign could kill the party, it is often strategically necessary to embrace risk.

Labour are no better. Their “strategists” conjured up a cunning tactical plan to win them the 2015 election: the 35% strategy. The idea was not so much compete to for the  Conservative vote, but to hang on to their core vote and scoop up a large chunk of the ex-Lib Dem vote. This equates roughly to 35%, and would ordinarily be enough to win under the country’s electoral system, if the Tories remain undermined by Ukip.  This fantastic graphic from YouGov shows that this has largely been working (hat-tip Mike Smithson of Political Betting, on of the best places to go for objective news on polling).

Where they wentLabour have been boosted by a large slug of ex-Lib Dem votes (though the Greens have scooped up a lot of these too – I suspect this is mainly in safe Labour seats). Meanwhile a large slug of the Tory vote has gone to Ukip.

Of course there’s a major flaw in Labour’s plan. Scotland. Labour’s relentless focus on political tactics rather than strategy meant that they didn’t see the SNP juggernaut approaching, in spite of its clear visibility ever since the Scottish assembly elections of 2011. It looks likely that the SNP will sweep Labour out of Scotland, along with the Lib Dems. Labour weren’t ready for this, and have had no effective tactics for handling it. They wasted a lot of energy on trying to tell their voters that a vote for the SNP would let the Tories in. The SNP have had little trouble in torpedoing this notion.

And this is the sort of thing that happens if you systematically neglect strategy, and focus on short-term advantage. You are vulnerable not just to getting stuck in a rut, like the Tories, but to sudden collapses in support. Look at the Lib Dems. The party had been relentlessly tactical in building its support base, especially under the watch of Charles Kennedy, its leader from 1999 to 2006. Nick Clegg, the current leader (since 2007), is more strategic but could not undo the party’s vulnerability; he completely misread the danger from promising not to raise student tuition fees in particular.  The result was that the party’s support collapsed as soon as they entered coalition with the Conservatives – even though this was a correct strategic decision. It was viewed as betrayal by many of the party’s voters and the party’s brand has been badly damaged. Though it is saying many sensible things in the campaign, and much that a lot of people would agree with, most people just aren’t listening – and its new pledges invite a sceptical response. It now relies on popular candidates to maintain its place in parliament. The party has some hard strategic choices to make after the election.

The only party that looks truly strategic is the SNP. They have had an easy hand to play, admittedly – simply to exploit the neglect of Scotland by Britain’s political class. But you can see them thinking two moves or more ahead all the time, allowing them to capitalise on their gains. They are now executing a tricky manoeuvre from the political right to the left without incurring any real damage.

But for Britain’s main parties strategy is much harder. To gain strategic advantage they have to sacrifice tactical benefits, and to take tactical risks. They need to address the generally bad reputation of politicians by being less negative and less aggressive towards their opponents; they need to embrace political reforms (on party funding and electoral systems) that may cause them short-term setbacks; they need to have open rows within their own ranks about what their parties stand for. For the Tories it looked as if Mr Cameron might embrace this agenda, but he lacked the courage. For Labour, David Miliband might have done so, but the party opted for his younger brother.

The highly professionalised and tactical focus of Britain’s political class has led to the current electoral impasse.  After the election it could lead to the breakup of the Union and the country’s departure from the EU. Does the country’s political class understand the danger it is in? Will the right leaders emerge to make the difficult political decisions needed? I’m not counting on it.

 

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The Lib Dem 2015 Manifesto. A Liberal future one policy at a time.

Yesterday I went to the launch of the Liberal Democrat 2015 Manifesto, 2015 Manifestowhich sets out the party’s policies for the forthcoming British General Election. It is not a ringing declaration of liberal values designed to strike fear into the party’s opponents. It is a triumph of practical politics.

The first thing to notice is that it is quite small – A5 format rather than the showy A4 of former versions. But that is not because it lacks content. It has 151 pages plus an index, and these are typically densely written in a small script. Almost nobody is going to read the whole thing. I have only picked at it. In the past I have slipped a copy of the manifesto through voters’ letterboxes after a request. This time I will just offer the link (above, incidentally).

The document succeeds in following the election strapline of “Stonger Economy, Fairer Society, Opportunity for All”. Five key pledges grace its front cover:

  • Balance the budget fairly and invest to build a high-skill, low-carbon economy
  • Guarantee education funding from nursery to 19 and qualified teachers in every class
  • Cut taxes by an additional £400 by raising the Personal Allowance to £12,500
  • Protect nature and fight climate change with five green laws (specified elsewhere)
  • Invest £8 billion to improve our NHS and guarantee equal care for mental health

Beyond this there are eleven chapters, chock-full of policy proposals. These comprise a lot of sensible ideas, some interesting ones, some gimmicks. Plenty of these originate from the two policy groups that I have been a part of (Quality of Life and Sustainable Growth). One may be said to have my fingerprints on it – putting Personal, Social and Health Education (PSHE) into a slimmed down core national curriculum. There are some disappointing gaps. In the education section, for example, I can’t find any reference to changing the measurement of school performance by the progress that all children make – as opposed to the number that pass a particular threshold. This has been promoted by Lib Dems in government, and could dramatically improve the way many schools are run. Also a defence might have been made of the government’s health reforms – moving to a doctor-led system with proper local accountability, in place of the pantomime accountability of the Secretary of State. But these are details in a document that few will read in full.

The first impression is overwhelming and underwhelming both at once. Overwhelming in its volume. Underwhelming in its lack of stirring themes  -the party’s strapline is hardly going to put fire in the belly after all – all parties will say they are doing it. But on reflection I think it is rather wonderful. The party has learned much from its spell in government.

The first point is that political progress rarely results from revolutions. The Greens call for a peaceful revolution, turning the whole way British government works upside down. In the past, I have wanted to do the same. Tear the whole system down and start again. Of course, revolutionary change has its place. Forming the NHS in the 1940s was a bit of a revolution, for example. But mostly revolutions bog down or get diverted by power struggles. The wonder of human life evolved through a process of incremental evolution (or so I believe); that makes it a bit illogical and random, but the advance from single-cell organism remains astonishing. So it must be in politics.

And the second point follows swiftly behind this. The Lib Dems are not a majority party, and probably never will be. We will never have a mandate to implement our vision in one bold step. (And neither will the Greens, which renders their policy platform pointless and laughable). We make change by persuading other people that our policies are the best ones, one at a time.

And the people we must persuade are people who belong to other parties. The voters are not interested in the ins and outs of individual policies; they delegate that to politicians. Our policies get implemented in three ways: other parties may adopt them as their own (“stealing” it is sometimes called by insiders); or they may be forced to implement them as part of a deal to pass parliamentary legislation; or the party can implement the policies directly through a coalition government. The last is the most powerful, as those doing the implementation have the true vision.

The Manifesto is designed to be basis for the Lib Dem share of any coalition government. None of the polices are so radical that no other party will ever agree to implement them – least of all the five headline pledges. The last manifesto lacked the requisite detail. Taken together the policies would up to an important liberal shift in the way the country is governed.

There’s something else. The manifesto proposals are clearly drawn from the party’s deliberative policy making processes, to which many members have contributed, and on which many more have voted at party conferences. These aren’t the bright ideas of a select elite dropped from a great height, or crafted by campaign “strategists” based on focus groups (or not most of them anyway). This ensures a basic level of thinking through – compare that the Conservatives’ muddled policies on the right to buy housing association properties, which starred in their own manifesto. It also gives some point to joining the party as a member, rather than just being used as a footsoldier in somebody else’s career.

Of course we need to do the inspiring vision thing too. We need to recruit new people to be the party’s core supporters and activists, and keep those we have in fighting spirit. But that’s a different time and a different place.

But what’s on display here is liberalism’s secret weapon. It may only be a minority creed, but its cosmopolitanism gives it a hearing in many audiences. People may not make a liberal society as their first choice, but as a second choice it has a very wide appeal. That’s a basis on which you can negotiate. And liberals are often ahead of the trend too; their ideas become common wisdom in time. Our country is a much more liberal place than 50 years ago. It really is possible to reach a liberal future one policy at a time.

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Election issues: the NHS. None of the parties are credible on funding. Labour would create more chaos.

After the economy the biggest issue in Britain’s General Election is the NHS. This comes top, or near to the top, of most voters’ lists of concerns. Labour want to make the most of these worries, while the Conservatives want to muddy the waters.

Two things seem to worry voters in particular. The first is pressure on Accident & Emergency services, which is knocking on to other parts of the system. This gives a general sense of the system failing. The second is the effect of NHS reorganisations of local services. This is often associated with outsourcing. Whether the public is as incensed about this “privatisation” as people on the left think is an interesting question – but they are suspicious of any threat to familiar local services.

That the NHS is under stress should be no surprise. As the proportion of older people in the population rises, so does the workload – but not the tax base from which it is funded. Furthermore many new treatments tend to be expensive; technological change does not improve productivity – but simply increases demand as new treatments are found.

There is political consensus around the free-at-the-point of use principle of the NHS. This has both flaws and strengths, but the NHS does quite well in international comparisons, though more for value for money than keeping people alive. Given this there are two important issues for the politicians to tackle. The first is organisational architecture, and the second is funding. They are related, of course, since the efficiency with which the service uses its funding depends on the architecture of the service. But it helps to keep the two separate for now.

First let’s consider this organisational architecture. The NHS has evolved since a chaotic mix of institutions was nationalised in the 1940s. Two ideas have always competed: a Soviet-style command and control model, with clear accountability to the politician at the top of the system; or a demand led organisation where users create demand and the service is forced to follow it. The Left tends to focus on the first, which is slow to react to change, and beset by tribal organisational silos. The Right prefers the latter, which suffers from a lack of reliable information about the true level of demand, and creates organisational instability.

What we have is a compromise between the two approaches. The service is divided between commissioners, who identify what services are needed and make choices as what to prioritise with the available money. And providers, such as hospitals, who actually deliver services based on the identified demand, a small proprtion of which is outsourced to the private sector. In addition there are other organisations charged with making it all work, including regulators of various sorts. This includes NICE, which rules on what treatments provide acceptable value for money. This basic architecture was established by the last Labour government, and remains largely unchallenged by the parties – though it is disliked by many health professionals.

But the details of Labour’s system were flawed. It was designed by management consultants in less stringent times. At its heart was  an over-engineered monster called World Class Commissioning, with commissioning being spread out amongst a large number of Primary Care Trusts – which were bureaucratic, with little clinical input and token local accountability. The Coalition rightly attacked this structure, and set about redesigning it – with commissioning now being given to a combination of national specialist bodies and local commissioning groups, run by general practitioners. This succeeded both in bringing in more clinical input and improved local accountability. But it was a massive and distracting exercise (in spite of a Tory promise of “no top-down reorganisations”, enshrined in the coalition agreement). This was a serious mistake which has left much muddle in its wake. It was perfectly possible to achieve much the same ends on an evolutionary basis – piloting different approaches in different regions. The reorganisation has created a huge amount of bad blood, and not a little paranoia amongst health professionals. It has been accompanied by a steady process of outsourcing elements of the service, though no private or third sector organisation will take on the major hospitals that are at the system’s heart.

Alongside this reorganisation has been steadily increasing demand, which has run ahead of funding. The combination has resulted in huge organisational stress. The way in which the service started to cope with the extra demand, and the need for greater efficiency, was classic top-down and Labour-inspired. It was called the “Nicholson challenge” after the then Chief Executive of England’s NHS. Funds were ratcheted down gradually each year on all parts of the system, with a bullying “just-do-it” approach. This did not unlock enough of the creative thinking and deeper re-engineering that the service required. Much of the result was mindless cutting and hoping for the best. Under a new Chief Executive (with reduced job scope), Simon Stevens, a more intelligent approach is being adopted – but the wreckage remains.

Given this history, surely the best idea is to work on the current structure on an evolutionary basis. This is what the coalition parties propose to do. The main work-in-progress is something called “integration”. This means getting social care, run by local authorities, to run jointly with the NHS. Awkwardly, this cuts across many of the bureaucratic structures currently in place, especially when it comes to parcelling up the money. It is far from straightforward, and it makes sense to proceed by means of locally run pilot schemes. It runs alongside greater devolution of responsibilities, as exemplified by the recent deal regarding Greater Manchester. The wider the scope of a service, the more localised the organisation has to be in order to prevent unmanageable complexity and stasis.

The main challenge for Conservatives is their approach to outsourcing. There is nothing wrong with outsourcing elements of the NHS. It can bring in fresh ideas and fresh management. It can be used to bring in new ownership structures, like cooperatives and social enterprises, to replace the hierarchical empires that the current NHS fosters. But the way it has worked out is dysfunctional. The tendering process can be so complicated that only behemoth suppliers need apply. These behemoths can afford slick tenders put together by professional marketers and priced at whatever level it takes to win. Once they win they are free to break their promises and a general period of mindless hollowing out follows. Sometimes this is what is needed; usually not. Many Conservatives just don’t get this.

The challenge to Labour is a bigger one. They want to respond to the anger over the last reorganisation and reverse parts of it. Does this imply another chaotic reorganisation? Will it kill the good elements of reforms along with the bad? Do they think integration should be enforced top-down from the centre? Or will they follow the path of devolving political responsibilities? Does their idea of in-house NHS services being given preference mean less value for money and slower innovation? Will their idea of capping the profits of the outsources prove to be yet more bureaucracy that favours the heartless behemoths rather than the innovative social enterprises? Will Labour revert to the top-down, bullying style of management of old? And will they need SNP votes to get their reforms to the English system through? More uncertainty and chaos beckons.

The Lib Dems have a rather interesting take on NHS policy. They want to prioritise mental health services. As I have written elsewhere, I think this approach is inspired, and one of the better reasons for voting for the party. They stand for intelligent continuity.

And so we come to funding. Britons do not spend a particularly high level of money on health services (much less proportionately than the Americans), and there is no economic reason why the country shouldn’t spend a lot more than it does. There is no evidence that the overall level of demand is excessive because the service is free; people really want the services, and would pay a lot for it them if they had to. The problem is the opposite: funding is constrained by the need to pay for the service through taxes, where it competes with a whole lot of other things, like schools and policemen. And the government isn’t raising anything like enough tax to pay for it all.

Last year Mr Stevens produced a plan which showed that the service will need an extra £8bn per annum in five years’ time, even after a lot of efficiency savings. Will the political parties follow his plan? The problem is that its affordability depends on how well the economy and the tax base does – which is unknowable. The gaps between the parties come down to the different ways in which they are handling these forecasting uncertainties. The Conservatives are the most optimistic, Labour the least, and the Lib Dems somewhere in between. None of them are committing to sufficient tax rises if a growing economy does not deliver the extra tax revenue. Both Labour and the Lib Dems are offering some tax gimmicks to help close the gap, but none are offering the increases to Income Tax, VAT or National Insurance that will be required if the economists get their growth projections wrong (yet again). Labours plans are obscured by their issues of NHS organisation; they will not sign up to Mr Stevens’s plan for that reason.

If the NHS is starved of funds more people will go private, social solidarity will fade and a death spiral will be put in motion. Something very like this has happened to NHS dentistry. If we want to keep the NHS in its current format, with few charges, then this means extra tax, and not just the somebody-else-is-paying sort. It really is quite simple. It is very disappointing that our politicians (and Ukip, the Greens and the SNP are as bad as the others, or worse) will not face up to this. I find it impossible to choose between the parties based on their funding proposals.

Which leaves organisation as being the decisive issue. The coalition managed one step forward and one back. Labour’s attitude to organisation threatens another step or two backwards. The Conservatives are suspect on outsourcing and the most suspect on funding. The Lib Dems offer intelligent continuity, but, sadly, even in coalition they are unlikely to be given enough scope to put their way forward into practice.

 

 

 

 

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Election issues: the economy

The quality of debate in Britain’s General Election campaign is predictably awful. Arguments are reduced to simple sound bites. And parties try to muddy the waters on their opponents’ key issues rather than engage with them properly. Many issues are hardly discussed at all. In a doubtless futile mission to raise the level of debate I will look at a number of issues from rather more objective perspective, and handle the arguments on an altogether deeper level. I am not, of course, an objective observer: I will generally make the case for voting for the Liberal Democrats.

Let’s start with the issue the Conservatives most want to talk about: the economy, and which party is best placed to manage it. Their argument runs something like this: Labour cannot be trusted with the economy because they presided over the economic crash in 2008 and haven’t admitted their culpability. The Conservatives have a “long-term plan” that is yielding results without getting the country into too much debt.

Labour are more reticent. They don’t accept that their party was responsible for the crash (or no more responsible than anybody else). They are severely critical of the coalition’s economic record, which, they say, swung to much to “austerity” (i.e. too many spending cuts, benefits savings and a rise in VAT), which choked off and delayed the recovery. They point out that Tory plans for the next few years imply vicious cuts to welfare. They also point to stagnant living standards for most people. Their plans for the next parliament involve significantly more public borrowing, supposedly supported by higher levels of investment.

Arguments over the records of both sides over the last two parliaments are interesting enough. I mostly support the narrative of the coalition partners – but Labour can call on the support of many independent economists with real heft. But past record only counts to the extent it tells us about the future – and in this case it doesn’t tell us much at all. Both sides are placing more faith in the robustness of the British, European and world economies than is prudent.

Many economists and politicians assume that there is a natural rate of growth of about 2% per annum, based on improvements to productivity, that the economy can be guided towards by governments with sensible macroeconomic policies. This seemed to be true before 2008, but it is surely questionable now. Demographic changes, with the proportion of working age people falling, are only the most obvious reason for scepticism; there are plenty of others, about which I have written often. That leaves us with two critical problems. How would the parties cope with the likely possibility of continued economic stagnation? How might they reduce the risks of such stagnation by making the best of any opportunities the country does have for growth?

In the first case prolonged stagnation points to renewed austerity. In order to keep the national debt under control expenditure will have to be cut, or tax increased, or both. The deficit between taxes and spending is still high, and deficits are much harder to sustain if growth is low, even if, as now, interest rates are also low. Japan has managed to get away with prolonged deficits in spite of stagnation, it is true, but that is because they have trade surpluses and accordingly are less dependent on foreign borrowing. What will happen if Britain fails to get to grips with government finances? That is hard to say. In the modern, globalised economy, inflation looks much less of a risk, unlike the last time this situation arose, in the 1970s. Instead stagnation may become more entrenched, and unemployment rise, until there is a financial crisis and our banks start failing again.

If there is renewed austerity the question arises as to how much of the strain is to be taken by tax rises and how much by public spending cuts. As a nation, we have higher expectations of our public services and benefits than most: the NHS, schools, social care and pensions in particular. I cannot see how such expectations can be met without raising taxes. And here there is a big snag.

Both Labour and the Conservatives have ruled out any increase to Income Tax, National Insurance or VAT. These are the main taxes that the general public pays, and account for some two thirds of all taxes. Tax rises without touching these three mean, generally, that somebody else is paying. The trouble is that the “somebody else” idea is wearing thin indeed. Tax breaks for the rich have been steadily pared back (most recently on pension contributions), making our tax laws more complex and draconian in the process. Company taxes are considered off the agenda because that threatens investment (this may not be right – but treating company taxes as a football is clearly bad for investment). The wealthy are already paying for a large part of the services which they never use. Apart from practicality, we are threatening the idea that everybody should pay something towards public services, in order to maintain solidarity and consent. No party is facing up to this issue.

Labour is particularly vulnerable. Their spending plans are more generous than the Conservatives’, as they hope to borrow more against infrastructure investment. Their plan to cut university tuition fees is particularly foolish. The SNP and the Greens are even worse. The Tories are more realistic, if you take their formal plans, laid out in this year’s Budget, with a pinch of salt. These envisage an unrealistically vicious attack on benefits in the first two or three years, followed by a relaxation. This is likely to be smoothed out in practice. But the party gives the impression that they would squeeze public services and working-age benefits rather than raise taxes. This probably is not what most people want.

So, if the parties would rather not contemplate stagnation, how would they create the growth in productivity that would head this fate off? How might this be done? The traditional formula is so-called “supply-side” reforms – deregulation for the most part. The trouble is that these tend to benefit the lucky few, both in terms of skills and income, and geographical location, largely London and the south east of England, where property prices are already through the roof. So the most promising idea is to promote growth in the regions of England, and also Wales (Scotland is the one region of the UK has seems to have bucked the gravitational pull of the South East). There is no sign that any party wants to relax planning controls that might allow this swing to the prosperous areas to occur more smoothly. There is a growing realisation that more balanced growth can only be done through the devolution of political power, and the release of funds for infrastructure investment between and within the regional centres. The Coalition has been feeling the way forward with its City Deals, with Greater Manchester being the flagship.

Once again, the main parties are disappointing. The Conservatives seems to place too much faith in deregulation – and their hostility to the EU and immigration represent roadblocks to future growth. Labour shows an alarming impracticality when it comes regulating and taxing businesses – and tackling such issues as low pay and insecure temporary contracts. While both parties are starting to talk the game on regional devolution, there is reason to doubt their commitment. Labour’s attack on the decentralisation of the NHS to Greater Manchester was particularly revealing. On both sides there is a lack of fresh thinking. The Greens, SNP and Ukip, in their different ways, are worse.

What of the Lib Dems? They are silent on raising tax rates – which undermines their commitment to funding the NHS, for example. They are closer to the fresh thinking needed for regional growth – with a real understanding of what devolution means. They also have interesting ideas on developing a more diverse banking system and promoting alternative business ownership structures. But these ideas aren’t fully formed. They are the best of a bunch that ranges from weak to hopeless.

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The toxicity of the Tories is the most important fact of British politics

Britain’s Liberal Democrats will do much better in the country’s General Election on 7 May than most people expect. That’s because expectations are so low. The party is fighting hard in 50-60 marginal seats where they have a base to work with, and that intensive ground war is paying dividends, as shown in last week’s constituency polls published by the Ashcroft organisation. But outside those seats the party’s predicament is dire. The party used to routinely pick up 10-15% across the country, and lost few if any election deposits (which require 5% of the vote). Now its national poll rating seems stuck at about 8% and in many seats a lost deposit looks very likely. The party is considered to be such an irrelevance that few people noticed a feisty performance by their leader Nick Clegg in last week’s seven-way leaders’ debate. What has happened?

The answer is simple: coalition with Britain’s Conservative Party. The party has learnt the hard way what many had suspected beforehand. The Conservative brand is so toxic to so many people in the UK that another party doing a deal with it, or a least a deal where the Conservatives play the lead role, suffers a kiss of death. Those who don’t consider the Tories toxic (30-40% of the electorate) vote for the party; nobody else will touch any party that deals with it. This lesson has been marked well by Britain’s other centre and left of centre parties: the Scottish and Welsh nationalists and the Greens. Even for the far-right Ukip the issue is a delicate one. They have been fishing for votes enthusiastically amongst Conservative inclined voters. But Labour inclined working class and lower middle class votes are strategically important to them. These voters do not have the sort of progressive, liberal attitudes that many on the left assume. And yet for them the Tory brand is as toxic as for anybody else.

And this toxicity is vital to understanding how politics will play after the election. The Conservatives may well win a plurality of seats, but well short of a majority. But it will be more than difficult for them to do deals to allow them to form a government. The SNP (who might well win big in Scotland), Plaid Cymru and the Greens (though they are only likely to have a single MP) will not touch them – even to abstain. Ukip and the Lib Dems will be more than wary. The Lib Dems stand open to the possibility, but will surely demand too high a price. A grand coalition with Labour, in spite of my speculation last year, would destroy that party (they tried it with painful consequences in the 1930s) absent a state of war. Only Ulster Unionists stand ready to deal, at the cost of taking the province’s politics forward.

Labour, on the other hand, are in a much stronger position. An outright coalition with this most tribal of parties would be a tall order for any party. But some kind of lesser deal involving conditional support or abstention is feasible for all the other parties, apart from Ukip – including the Conservatives, if that suited their purposes (a referendum on Europe, perhaps). That makes a Labour led government much the most likely outcome of this election, although it might take some time to come together.

It’s worth pondering how this situation has come about.  The Tory brand has always been toxic to many working-class voters, based on old-fashioned class loyalties. The party’s reluctance to embrace non-white immigration has extended this toxicity to most ethnic minority communities, even in the middle-classes. But class feeling is in slow decline. The picture amongst ethnic minorities is more complex, but the Conservatives have moved on from their racist attitudes for the most part. These forces should be declining, but the problem for the Tories is not.

A further problem arises from the distribution of the party’s votes. It is becoming more concentrated in relatively prosperous areas, especially in the south-east of England. Under Britain’s single member constituency electoral system this reduces the number of seats they can win. But this does not explain the party’s toxicity, except to give a regional slant to the party’s image. It is why the party’s toxicity is more of a problem for it.

I suspect developments in the economy have a lot to do with it. The Conservatives are the party of economic winners. Not so long ago upward mobility was a more general expectation. So even if the winners were in a minority, many more people would aspire to do well, and so associate with the party. The message of self-reliance and making good through your own efforts, without the state and taxes getting in the way, appealed to many working class and lower middle class voters. Margaret Thatcher (and her predecessor Ted Heath) were from this upwardly mobile background, and successfully maintained a broad class appeal. But now upward mobility seems blocked for many people.  Those with less good education, poorer social networks or living in the wrong places saw diminished possibilities for betterment. Indeed, steady industrial era jobs were replaced by poorer quality service ones. There is a strong sense of us-and-them with little mobility between them (or more precisely little upward mobility and the constant risk of downward mobility).  And the Tories are often blamed for making things worse – as much de-industrialisation occurred on Mrs Thatcher’s watch. Tory appeals to self-reliance now look like heartlessness – even amongst the better off.

Amongst the Tories themselves there seems to be a pernicious negative feedback loop. The party attracts people that can only be described as nasty. The old consensual “one-nation” Toryism is long dead, and even Mrs Thatcher’s habitual caution too. There is also a wholly unbalanced obsession with the European Union, seen as the source of all the country’s ills. David Cameron, who is not part of this nasty tendency, struggles to contain these toxic types. It is interesting to speculate what might have become of the party had it won outright in 2010 and governed alone. I suspect that the party would be even more toxic that now.

People on the left might chuckle at the prospect of the Tories becoming so toxic that they are likely to be banished from power. And yet they represent a third of the electorate. And much of what is not Tory is a stale, backward looking muddle with little idea of how to take the country forward beyond extending bureaucratic blather to all corners of life. The country would be better governed if Tories were engaged in the political dialogue, rather than treated as toxic pariahs. But they largely have themselves to blame.

 

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Labour’s voodoo economics

“Voodoo economics” was the name given by George Bush Senior to his presidential rival Ronald Reagan’s economic ideas when the two were vying for the Republican nomination in 1980. Mr Bush’s scepticism proved well-founded. Now I don’t accuse Labour of promoting the same ideas – but there is the same sort optimistic logic and build-up of false expectations amongst supporters. Except that in Labour’s case it will be politically much riskier if they actually achieve power.

The original voodoo economics, or “Reaganomics” to its supporters, is associated with two ideas in particular. The first is “trickle down” – if the rich become wealthier then soon enough everybody else will benefit. So it’s OK to cut taxes on the rich – which would stimulate economic growth that benefits everybody. The other idea is known as the “Laffer curve”. If you cut taxes rates then in due course tax revenues increase because economic growth enlarges the tax base.

Reagan won the presidential nomination, and then the presidency for two terms. He wasn’t quite as  reckless as is often portrayed with tax cuts, but he did oversee more liberal economic policies that coincided with renewed economic growth. Mr Bush succeeded him in the 1988 election, and was then forced to raise taxes, in spite of his “read my lips” pledge against “new taxes”. He then lost out to Bill Clinton in 1992, who both raised taxes and oversaw a period of rapid economic growth. Trickle down was notably absent in this period, where median earnings in the US did not track overall economic growth; inequality rose sharply. There was no convincing evidence of the Laffer curve effect either, hence Mr Bush’s predicament. This still hasn’t stopped tax cutting being a central tenet of the US right’s faith.

So what is Labour’s voodoo? This is the idea that raising the wages of the lower-paid will generate sustainable economic growth, which in turn will generate tax revenues from which public services like the NHS can be funded. I’ve heard some such line of argument presented by Labour spokespeople over the last week. It replaces the classical Keynesian stimulus idea that the party had been peddling, until the the economy inconveniently grew and soaked up the slack needed to make such a policy work.

How might this idea work? Well I think it stems from the observation that productivity is weaker in Britain than in many other developed economies – notably France and Germany. So, if employers are forced to pay their workers more, they should be able to find ways of raising productivity to pay for it. And if they do that, the economy as a whole benefits, as well as the lower paid workers.  After all when Labour introduced the minimum wage under Tony Blair, the sky did not fall in. This isn’t nonsensical, but to put it generously, it is open to risk. Employers might indeed raise productivity, but they might well sack workers at the same time. In other words they would produce the same volume with fewer workers, rather than more with the same number. The result would be an increase in unemployment. And this is surely the most likely outcome. The examples of France and Germany are not encouraging: both have been haunted by high levels of unemployment to match their more generous levels of pay. East German pay was rapidly equalised after unification, for example, and the results were disastrous.

The truth is that nobody really understands why British productivity is so weak. Has it always been so, and simply exposed by the come-uppance of sectors like finance and oil which had disguised it? Is it based on poor skill levels, as employers tend to claim? Is it lack of capital investment forcing businesses into labour intensive operations? Or does it simply reflect the bargaining power of employers that will be sorted out as soon as the labour market becomes a bit tighter? I suspect that it is a combination of all of these factors.  Without knowing the causes of poor productivity, it is impossible to know whether any particular policy will work, or do more harm than good.

Of course Labour’s purpose isn’t to convince sceptics – it’s simply to confuse voters who are tempted to vote Conservative based on its economic record, and to give its core supporters some kind of fig leaf with which to cover the flaws in their treasured policy beliefs.

The problem will start if Labour win power, which, albeit probably as a minority, remains the most likely outcome of the election. As they push up the minimum wage and create a bureaucratic morass intended to encourage the use of the higher “living wage” and restrict the use of zero-hours contracts, they will not find the economy responds as they hope. Soon enough they will be forced to backtrack, if not on these policies then others, especially those involving taxation and public spending.

The Labour leadership remind me of the French Socialists under François Hollande. They developed a series of crowd-pleasing leftish policies, which helped secure them victory in 2012. Then the trouble started, and they were forced to backtrack. Their popularity fell into an abyss, to the benefit of the far right Front National. Something similar is building in British politics. Ukip, from the right, the Greens, from the left, and the Lib Dems from the centre are waiting to pounce on disillusioned Labour voters.

 

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Are the Tories winning the air war and losing the ground war?

Britain’s electorate does not choose a Prime Minister in May’s General Election. It chooses a local MP. And enough of them have already made up their mind in England and Wales to make that choice a foregone conclusion in most places, so that the real fight is occurring in a limited number of marginal seats. Has the Conservative Party forgotten this basic architecture of British politics?

That might explain something that is rather puzzling about the election campaign. The Conservatives are having a good “air war” in the expression made famous by Bill Clinton. That means coverage on general media on a largely national level. Labour’s strategy seems to be that government’s lose elections rather than oppositions win them. They have not spelled out a clear alternative vision for the country – preferring to keep party unity intact by concentrating on complaining about the coalition government.

Thus Labour have surrendered the initiative in the air war. The Tories have exploited this brilliantly with “bait and switch” tactics. They fly a kite about some policy or other (public expenditure is the biggest; VAT is this week’s example). Labour duly attack, only for the Conservatives to move in a different direction. And they have undermined Labour’s attempt to create sound-bite policies. For example Labour promised to cut student tuition fees by removing a tax break for pension contributions for the wealthier; the coalition duly  removed the tax break and baked it into the budget baseline. Meanwhile previous Labour attacks, on Keynesian economic management, on unemployment and on energy prices have been undermined by events. The Tory leader, David Cameron, seems at ease and in control – even his supposed gaffe over not wanting to serve more than two terms plays to that impression. In contrast Labour’s Ed Miliband has turned into Britain’s whingemaster general – without giving any impression that he would do any better himself. The Conservatives are well organised; they have powerful allies in the press, which still seem to set the agenda for broadcast media, especially the BBC. Labour are being routed.

But here’s the puzzle: it seems to be having little effect on their poll ratings. Both parties have been edging up slightly, at the expense of the insurgent Ukip. The Conservatives cannot establish the lead they need to overcome the awkward distribution of their vote under the country’s electoral system. Notwithstanding Labour’s impending disaster in Scotland (where, unlike England and Wales, most seats could change hands) the Conservatives do not look as if they will even be the largest party in parliament, still less win outright. Party HQ reassures the nervous footsoldiers that things will turn good in the last weeks. Maybe.

But things are worse than that. A recent survey by the Ashcroft organisation of key Labour-Tory marginals showed that Labour was ahead in all but one. Constituency polls also show the Tory coalition partners the Liberal Democrats confounding their dismal national poll rating in Tory-facing marginal seats. The Lib Dem position grows stronger the more voters are reminded that they are voting for their local MP, and not the national leader. And this poses the question: are the Conservatives losing the “ground war”? The process of direct voter contact by doorstep, phone, social media and locally tailored literature – which is focused on those marginal seats.

The Tories seem to have a weakness here. They don’t attract many younger supporters these days (in striking contrast to Labour), and their policies don’t seem designed to engage with that group anyway. Many of their older activists have defected to Ukip, are demotivated, or are, well, just getting too old. Money can help. One marginal reports literature being delivered at full cost by the Royal Mail. Hired help can make up some of the gap on literature delivery. But it is much less effective in direct voter contact – canvassing – and useless in social media interaction. Direct mail, a past Tory favourite, seems to be losing its value for money.

Labour, meanwhile, have upped their game. They are well organised, disciplined and, in many cases, downright cunning. Here in Battersea – which they lost in 2010 and which many had assumed was out reach this time – they have been using camouflaged front campaigns on the NHS and something called Women of Wandsworth (WoW) Mums. They also seem to be outgunning their opponents on literature. The Lib Dems have always been quite good at the ground war, and are targeting their efforts ruthlessly to make up for their reduced number of activists.

So ground war may be trumping the air war. This runs counter to the conventional wisdom of British politcos, who almost always attribute the success of past Labour or Tory campaigns to the air war (though not those of the other parties). This may always have been overdone. It may be that the parties’ ground war campaigns have cancelled each other out better in the past. But it may also be that British electors make their choices differently these days. The coalition may have damaged the Lib Dems’ appeal, but it has planted the idea that smaller parties matter. Cynicism over national politics has always run ahead of the standing of local MPs – from whom people expect more, even as opinions of politicians in general sink. Besides, national news media may be being crowded out by web and social media (even if their content is overwhelmingly non-political).

It may even prove a mistake for the Conservatives to have torpedoed the leader debates, whose original structure supported their two-party narrative and could have drawn more people into the air war.

Or maybe, as Tory politicians hope, people will come to their senses in the coming weeks: something which both Labour and Lib Dem politicians also hope in their different ways. But my betting is that the game has changed and politicians need to catch up.

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The European Convention on Human Rights is today’s Magna Carta

I’m going to let somebody else do the heavy lifting today. My Magna_Cartanephew and godson James Green has won first prize in the One Essex Court/Times essay competition, with this essay. The subject of the competition’s essays was: “Is Magna Carta more honoured in the breach?”. The essay is about the same length as one of my normal posts, and at least as well written – do read it!

James makes the point that Magna Carta’s main purpose was to challenge King John’s sovereignty, and set limits to it. Today the concept of sovereignty in Britain rests not with the King or Queen, but with Parliament. The European Convention on Human Rights (ECHR), enshrined in British law by the Human Rights Act, was drafted mainly by British lawyers and likewise seeks to set limits on Parliamentary sovereignty. It can be said to be the true successor of the Magna Carta. The British Bill of Rights, an alternative to the Human Rights Act postulated by the Conservatives, seeks to restore the sovereignty of Parliament – or that appears to be the case from the drafts seen so far.

Parliament claims sovereignty based on the will of the people. King John claimed his based on the will of God. King John’s claim may be the more flawed in modern eyes, but the two claims aren’t as different as we often like to suppose. Parliament is a collection of men and women with there own agendas and interests, and elections (which do not apply to the House of Lords anyway) are but an imperfect check. Almost every other democracy places their legislature in check with some form of written constitution. We have the ECHR and not much else. As I think Lord Hailsham put it (speaking as a Tory peer under a Labour government) we live not in a democracy but in an elective dictatorship.

Imposing a written constitution on the deeply conservative British system is probably too big an ask, in the absence of a major breakdown. So in the meantime let’s celebrate the 800th anniversary of the Magna Carta by affirming our commitment to the ECHR.

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Britain’s politicians scrabble over a weak economy.

Yesterday was one of the great annual set-pieces of British politics: the Budget. The Chancellor of the Exchequer, George Osborne, set out his plans for government finances: taxes and spending. This year, behind the theatricality, it was a bit of a non-event. There were few changes to previously announced plans. Mr Osborne rowed back somewhat in his longer term plans to cut government spending. There were some cheap gimmicks. Political inactivity is not necessarily a bad thing. But what is most remarkable is that neither he, nor the Labour opposition, were prepared to talk about the British economy as it really is. Is it any wonder that politicians fail to be trusted?

Mr Osborne’s speech contained a quite astounding piece of hubris. He claimed that Britain was on the path to becoming the most prosperous country in the world – overtaking Germany in the process.  But there is a big flaw in this notion. Britain’s output as a nation is lagging the impressive growth in the workforce. Britons are working harder but have little to show for it.  Mr Osborne sneered about the French economy – and yet French workers are over 20% more productive. Further, Britain is running a substantial current account deficit – which means that, like its despised Labour predecessor, the economy continues to be built on debt supplied by foreigners (or, perhaps, running down the nation’s overseas assets).

Dwelling on this weakness would have made the political message too complicated. His mission was to point out that Labour’s dire forecasts for the economy had not come to pass. So we heard little of any ideas about how lift the economy from its evident mire. Some talk of making life easier for manufacturing. There was the core idea of economic liberalism (that the left calls “neoliberalism”) that a smaller government will allow the total economy to be more productive. Little was heard of the government’s most promising idea – greater devolution of power to regional centres.

Weak fare. But while Labour love to point out the economy’s weaknesses – especially the low wages of many workers – they haven’t any better ideas of their own. Indeed their thoughts on a more intrusive state clamping down on “predator” capitalism seems destined to make the economy smaller, if a little less unequal. Many of their supporters, including journalists at the Guardian, seem to rely on half-digested Keynesianism. Increased state spending (or less austerity as they prefer to put it) will raise demand in the economy which will then lead to growth. As a formula in 2010 or 2011 this might have had some merit. In the near full-employment world of 2015 it does not. Such policies are more likely to lead to an even worse current account deficit, and an economy even more dependent on debt, public or private. It does not address the productivity problem. To be fair, the Labour leadership seems to understand this – but they are still bereft of ideas to tackle it.

So the Tories say the economy is gathering strength fast, and Labour that it is still on its knees. There is a paradox though. The Conservative fiscal policies are appropriate to the idea of continued economic weakness, and Labour’s on confidence in the economy’s continued strength.

How so? If you think the economy is weak, you need to make sure that government expenditure is kept in check. There is nothing certain about future projections of economic growth – and with a weak economy there will be risks on the downside. With the European and world economies looking weak also, this is easy to appreciate. Fiscal restraint may not appear to be necessary based on forecasts, but it gives the government more options in an uncertain world. In contrast, if you think the economy will bounce back strongly, and that the productivity problem sort itself out, then Labour’s much more relaxed approach to government finances make much better sense.

The problem is, of course, that nobody understands why the British economy remains as weak as it does. Is it because deep structural problems, based on poor skills, changing industrial needs and changing consumer preferences (e.g. towards more work-life balance)? Could it be the progressive hollowing out of local economies outside the main economic centres? Is it because North Sea oil is running out, and the apparently highly productive finance sector just a chimera? Or is it just a temporary blip? Will businessmen respond to the right signals to launch an investment drive that builds economic strength? Perhaps labour shortages will force businesses to use their existing workers more efficiently and pay them better.

Regular readers of my blog will know I tend to the more pessimistic of these explanations – though this is based more on instinct than data. I believe it is perfectly possible to advance human wellbeing in spite of an economy that is weak in terms of income growth. But that does mean that we must break our addiction to debt, public and private. For that reason I like the right’s focus on government parsimony, and the left’s focus on inequality. Alas neither of our main political parties seem to grasp the real nature of our economic plight.

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