thinking liberal – Page 41 – Matthew Green's blog

The tide is turning against Heathrow expansion

Last week the British government decided to defer its decision on whether to expand London’s Heathrow airport. This has been roundly condemned by people the media calls “business”, referring to self-appointed lobby groups of large companies. But what is all this about? Now it could be what the lobbyists claim, which is weak government pure and simple. Or it could be a straw in the wind for a much more interesting change in attitudes in the political economy.

The story so far. Heathrow has long been operating at near capacity. London’s second airport, Gatwick, is approaching capacity too. If you believe that air travel must increase for a healthy economy, then something must be done to expand capacity. In the long view this conventional wisdom is open to question: but as a good liberal I must accept that the freely made choices of my fellow citizens point to further growth in air travel. The politics, however, are toxic. Airports in the prosperous south east of England are not popular with those that live nearby, whatever benefits they bring. Since Heathrow is quite close to the London conurbation, that adds up to an awful lot of people. Many of these people live in marginal constituencies.

Nevertheless the Labour government prior to 2010 supported an extra runway at Heathrow. But both the Conservatives and the Liberal Democrats, spying opportunities in these south west London seats, were vehemently opposed. The Conservative leader, David Cameron, went as far as to say: “No ifs, no buts, there will be no third runway at Heathrow” (or something like it). When these two parties turned Labour out in 2010 and formed a coalition, the existing expansion plan was thrown out. Instead the government set up an Airports Commission to evaluate the alternatives, to conveniently report after the next General Election, in 2015. It duly reported in the summer, recommending a new runway at Heathrow, in a different place to the previous plan. By then the Conservatives had crushed the Lib Dems and were in government on their own. It would have been a good moment to show decisive leadership and accept the Commission’s results. They would have been able to steamroller opposition from their London MPs.

But Mr Cameron didn’t. He dithered. Why? There seem to be two nakedly political factors. The first is that Zac Goldsmith, the Tory MP for Richmond Park, had threatened to resign and cause a by election if the government supported Heathrow expansion. That ordinarily would be a little local difficulty – but he is the Conservatives’ candidate for London Mayor in 2016. A split would be messy. The second is that Mr Cameron’s “No ifs, no buts” promise is weighing on him. He fears a “Nick Clegg moment”, referring to the collapse in the Lib Dem’s leader’s public standing when he decided to reverse a pledge on student tuition fees after 2010. And Mr Cameron needs all his political capital to carry through his referendum on the European Union. Perhaps this is enough to explain last week’s announcement to defer the final decision until next summer, after further reviews of the implications for air pollution. By then the Mayoral election will have happened, and so might the EU referendum.

But there may be something deeper. It could be that the tide of conventional wisdom is moving against Heathrow expansion, recognising that the terms of reference of the Airports Commission were flawed. If that is the case then the delay is a process of gathering more evidence against Heathrow, so that a decision to expand Gatwick instead will be better proofed against judicial review.

Why might the tide be turning? Well, the case for Heathrow is based on 20th Century economics. The idea is that to make a big airport even bigger is more efficient that building up smaller airports. Time was when the concept of economies of scale was so baked into the conventional wisdom that this logic would not have to be seriously examined. But for airports it does have to be questioned. For a start, any air traveller knows that larger airports are less efficient for point to point travel. Every stage of the process takes longer than for a smaller airport. I remember vividly that taxiing to the terminal after landing at Schiphol airport took as long as the flight itself.

But there is a clear benefit of a running a large airport: that of making connections. This is referred to as being a “hub”. There are two aspects to this. The first is that hub airports can consolidate short distance flights into long distance ones, in a configuration that allows demand for long haul journeys to be met more efficiently. The second is that the presence of a lot of people waiting around in hub airports is an economic opportunity for the host country: it can sell them things. It is on the benefits of the hub operation that the Airports Commission’s recommendation is based: expanding Heathrow will generate bigger benefits to the British economy as a whole than would expanding Gatwick. This can be challenged, however.

The first point of challenge is on the efficiency of the hub model as the best way of managing long haul traffic – or of a hub based in London. One argument is that technology is moving against this. Smaller, efficient long haul aircraft are being developed that allow the alternative, point to point model to be more viable. The second is that the Arabian Gulf is emerging as an alternative airport hub location, and one which has a clear comparative advantage, if not an out and out absolute advantage. Pumping up a London hub is fighting the laws of global economics.

The second point of challenge is on the business of running a hub: the shops and restaurants. The London economy is already overheated, as shown by very high property prices. There really is no need for the extra income. If the hub was in the north of England, that might be a very different matter. The fact that the airport is so unpopular locally gives a clue to this.

And on top of these direct challenges there is a strategic tide. Politicians and economists are worried that economic growth in developed countries like Britain is bypassing most people, and ending up in the pockets of large multinationals and a tiny elitesof people that run them and provide supporting services such as tax avoidance advice and banking. The penny is dropping that this may largely be down to the excessive market power of large businesses, extracting monopolistic profits. And yet the Heathrow business case seems to be a paean to this form of monopolistic capitalism. And those business lobbyists provide an unwitting confirmation of this.

Before the Commission reported, it was arguments such as these that induced me to predict that Gatwick would win over Heathrow. The Airports Commission was a blow; but I am holding to my prediction yet.

The left is failing. It must confront reality

Pity the French Socialists. Last weekend they managed to stall the Front National at regional elections – but only by supporting the centre-right Republicans. The collapse of the left and centre-left in France offers lessons to the British left – in the Labour, Liberal Democrat and Green parties. But they are not listening.

Now remember that only three years ago the French Socialists were triumphant. François Hollande won the presidency, and parliamentary elections confirmed the party’s ascendancy, along with left wing allies, including the French Greens. France was in an anti-capitalist mood; this was no victory of the centre ground. The Socialists promised tax hikes on the very rich, and the reversal of many of the centre-right’s reforms on public services. It is probably as close as we will see in Europe to a triumph of the British Labour Party under Jeremy Corbyn – right down to a leader that did not follow the conventions of personal charisma.

But the Socialists lost their way almost immediately. They put through a few token left wing changes, but have been following the political centre ever since. The left wing programme proved unworkable. The electorate could not see the point of the party. Working class voters defected to the Front National, offering another mix of un-keepable promises, alongside its defining xenophobia. That France’s fractious centre-right was able to recover and provide the main challenge to the FN completed the humiliation of the left.

The problem for the left is that it is happier protesting and airing their “values” rather than governing. And a lot of its protest turns out to be very conservative. Many on the left seem to see their mission, not as improving the lot of the disadvantaged, but as protecting (“defending”) this or that public institution from attempts to reform them. Alongside this they protest at “injustice”. But there is no clear and consistent picture of how to make things better. There is an idea that you can raise taxes harmlessly by aiming at the wealthy, and then using the money to pump up public services and benefits without asking whether they are doing the job they are meant to be doing. And as for foreign affairs, it seem to be largely making a noise about various victim groups, and then doing practically nothing about it.

One example of political failure is dealing with racism. Look at this article from Kehinde Andrews in the Guardian. He is commenting on the 50th anniversary of the Race Relations Act. He points out how some forms of racism have been driven back in the 50 years, but then points at the racial minorities still suffer discrimination, and are disadvantaged on a wide variety of measures. The failure is clear, but what to do? All Mr Andrews can say is this: “Britain must acknowledge the uncomfortable history and reality of racial discrimination and be prepared to consider solutions that transform the conditions faced by oppressed groups”. Note that he has moved to language of victimhood and oppression. And the complete absence of thinking about how on earth to solve this intractable problem. To be fair, Mr Andrews is not a politician. But I hear all too often the language of victimhood and difference amongst leftist politicians who address ethnic minority issues. Everything is always somebody else’s fault.

As Tony Blair put it in a recent article in the Spectator:

Right now we’re in danger of not asking the right questions never mind failing to get the right answers. All of it is about applying values with an open mind; not boasting of our values as a way of avoiding the hard thinking the changing world insists upon

This leaves the left with two big problems. First is trying to present themselves as a convincing party of government. This is what Labour failed to do in this year’s General Election. But the French Socialists showed that you can still win, if your opponents are even more distrusted than you are. Then comes the second problem: what do you do when the left achieves power. Does it “stay true to its principles” and push through a populist left-wing programme, attacking independent businesses, and cosseting public sector workers, including an expanded nationalised industry. Recent examples of this approach are Argentina under the Kirchners, Brazil under Dilma Rousseff, and Venezuela under Hugo Chavez. In the end the government cannot escape economic reality, and the economy turns sour. Interestingly this approach seems to be much more difficult in Europe than in South America. No doubt European institutions are stronger – making wilful suicide much harder. France cannot print its own currency, for example. The other choice is simply to U-turn, as the French did, and implement policies that most people cannot distinguish from those of the centre-right. This leads to an existential crisis for the governing party.

In Britain we can see that with the second party of the left, the Liberal Democrats. They entered coalition with the centre-right, the Conservatives, in 2010. Activists and members fled; the party felt as if it was imploding. It was vilified from across the political spectrum for selling out. Mostly this was because they dared to face up to the compromises of government – although it was also tangled with the toxicity of working with the Conservatives.

Rather than confront the realities of government, the left indulges itself with the language of protest, usually constructed in abstract terms (“austerity”, etc.) that means little to people they are supposed to be helping. And that leads to two problems. The first is losing working class voters to the populist right. British leftists have had some luck here. Ukip is the only credible party fishing in these waters, and they are not adept. But the popularity of movements like Britain First shows that there is a ready group of white working class (and not a few middle class) voters who are ready to take this direction. The second threat is the centre-right. If this group has an organising philosophy, it is economic liberalism, using a conventional wisdom that has built up since the 1980s. It is well past its sell-by date, and yet it is more credible than the non-offering of the left.

To reverse this, I think the left will need to do three things:

Develop a new policy framework that addresses the challenges of the current world. That is the main focus of this blog, so readers should have some idea of what I mean. It needs to focus on sustainability, local networks and public services coordinated around the needs of users, not providers.
Develop a better language with which to frame its ideas to those currently disillusioned with politics. I suspect this is better done through local, community politics than clever brand building by Westminster operatives.
Develop alliances across the parties of the left, and move away from destructive tribalism. This will need to be underpinned by political reforms that make such collaboration easier (proportional representation, for example). There are some good ideas bubbling up across all the parties, alongside the nonsense.

There is, alas, almost no sign of progress on any of these three lines. But I will not give up hope.

Success in Oldham deepens denial among Labour left

Last week BBC Radio 4’s Thinking Aloud ran a piece on research showing how people assume that most other people think like them. This is, apparently, particularly strong at the political extremes. We don’t need academics to tell us this, of course – it explains many of history’s major political misjudgements. Prime candidates at the moment are supporters of the Labour leader Jeremy Corbyn, who are in deep denial about how difficult it will be for their party to win elections. In this, if nothing else, they resemble the supporters of Donald Trump in the US.

Of course, being in denial is something that, as a Liberal Democrat supporter, I know something about. Throughout the Coalition years we were told that our party faced oblivion at the next election. We refused to accept this, but alas we were wrong. Denial is always easier to see in others. The main problem on the Labour left is that they assume that most Britons share their view that the Conservatives are out only to line the pockets of the rich, and that “austerity” is evil. Now I’ve written before that this outlook will doom the Labour Party to failure, and that one of the first tests of the Corbyn leadership would be the Oldham by election. Well that election was last week, and it was a triumph for Labour. They increased their percentage share of the vote, though with less votes overall. A challenge from Ukip failed to materialise: they increased their vote (by 3%), but by much less than the Conservative vote fell (over 9%). Is this vindication for the Corbynistas?

Up to a point it is. It shows that all the chatter that Labour’s lurch to the left has affected the party’s electoral standing is just that. There is little decent data on this result, analysing who did and didn’t support each party, so we can’t say for certain what happened. But as Alistair Meeks points out in politicalbetting,com, the result is completely consistent with previous by elections in the area. Nothing much has changed. There is much for Labour supporters to take heart from here.

The first point is that Ukip look like a busted flush. The party was supposed to be picking up disillusioned white working class votes, and presenting a major threat to Labour in the north of England. They nearly won one of those previous nearby by elections. If Mr Corbyn did not play well on Oldham’s doorsteps, as the chatter suggested, Ukip’s Nigel Farage played no better. He used to be a media star, and regarded as “authentic”, but he seems to have lost his credibility. The Ukip result in the May General Election was disappointing, as they were mugged by the ruthless Tory election machine. Mr Farage’s shenanigans over whether he was resigning as leader may have had the same sort of effect on his public standing as Nick Clegg’s U-turn on university tuition fees. The party needs to dump him, but probably won’t. The transition from a Tory breakaway in the shires to being a party of working class protest is too much for it.

The second cheering point for Labour is that their challengers to the left are thoroughly neutralised. The Greens achieved barely 1% of the vote. The Lib Dems put in a major effort and still lost their deposit, and tried, unconvincingly, to draw comfort from the fact that their vote did not actually fall from a mere 3.7%. In this environment at least, these parties are treated as a complete irrelevance. In living memory the Lib Dems were capable of pulling off a stunning wins almost anywhere. There are some signs in local by elections of a Lib Dem bounce back, but it is highly localised and bypassed Oldham.

All this bodes well for Labour’s prospects in May 2016, the next big local polling date, when there are also elections to the Scots and Welsh parliaments, and London’s Mayor. Labour’s candidate for London Mayor, Sadiq Khan, has every chance of wresting the position back from the Conservatives. In Scotland, though, prospects look dire for Labour as the SNP machine looks dominant. It is even possible that the party will drop to third place behind the Conservatives. But London’s political class seems to have written Scotland off.

So why am I suggesting that Labour activists are in denial? Because May’s result in the General Election was terrible for them and there is not the faintest sign of it getting better – only that it is not getting worse. Their prospects in Scotland are not the sort of irrelevance that Londoners seem to assume. Scotland is one of the most important battlegrounds in British politics; it has been for at least five years. If Labour can’t engineer a recovery there, they will be locked out of politics in Westminster. Interestingly, the success of the SNP was a key piece of evidence for the Corbynista thesis – that the public was really angry about austerity, and Labour’s big mistake was not to be angry enough. But Scots voters turned on Labour because they thought they were incompetent, and did not stick up for Scotland. Mr Corbyn’s election does not improve their standing on either count, to put it generously.

Labour may be standing up well enough in the north of England, in spite of a cheeky challenge by the Conservatives to win back support there, but there is no sign that Labour can win back those politically sceptical middle-England voters that they progressively lost after Tony Blair stepped down as party leader. To do that Labour activists must break free of the notion that most people share their political outlook, deep down. Meanwhile a dangerous rift between the parliamentary party and the leadership reinforce a general air of incompetence, the most fatal thing in politics.

I have heard a number of people suggest that the real winners of Oldham are the Conservatives. It is hard to disagree.

Osborne uses an accounting trick to implement People’s QE

When Jeremy Corbyn, was running his successful campaign for the leadership of Britain’s Labour Party, he floated the idea of “People’s QE”. “QE” stands for Quantitative Easing, the means by which central banks try to loosen monetary policy in an economy without reducing interest rates – handy when interest rates are near zero. It attracted quite a bit of attention from economists, much of it quite approving. That is because the idea touches on one of the most important aspects of modern economic policy: the suggestion that governments can sustain quite big deficits simply by “printing” money. In the end we find, not for the first time, that the current Conservative government acts much further to the political left than it talks, as did its Conservative-Liberal Democrat predecessor.

Back in the 1980s, when monetary policy first became the height of fashion, we had uncomplicated views about what it was about. Although most money was in bank accounts, economists painted a picture as though it was all in notes and coins, and the various actors behaved as if they were kids spending pocket money (and even then was probably too simplistic…). They talked of a “money supply”, which could be manipulated, and the size of which affected spending behaviour. We are older and wiser now, though many economists and journalists still talk about “printing money”, even though physical money has almost no role to play, and bank accounts are different in very important ways. Even trained economists who should know better sometimes trip themselves up in this way. For example there is much excited talk about how commercial banks create money rather than the central bank – which turns out to be a red herring on reflection [That link from Paul Krugman includes a broken link to a masterful essay from James Tobin in 1963, read it here]. It is better to look on monetary policy as a series of policy instruments under the control of the central bank, which have not entirely knowable effects on the economy at large.

The most important of these instruments is the short-term interest rate the central bank charges to commercial banks in their interactions with it. These ripple right through the economy. But when they are very low, as they are now in the UK, it is very hard to lower them further. Some European banks are using negative interest rates without the sky having fallen in, but these negative rates aren’t very high – fractions of a percentage point. So how to “loosen” policy – that is encourage a greater level of economic activity? Here the invention of QE comes in, pioneered, as so much of modern policy, by Japan in the 1990s and early 2000s. This is often talked of as if it means printing physical money and handing it out to the kids to spend on sweeties. What it actually means is that the central bank goes into the market and buys bonds, usually government bonds, like British gilts.

How does that help? Well the people who held the bonds now hold cash instead, which they should spend on something else – which might include new capital investment, after it has changed hands a few times. And it might reduce bond yields, which will reduce long term interest rates right across the economy, and increase asset prices. This creates a “wealth effect” that might encourage the mass affluent to spend a bit more money on stuff that people make. Or all that could happen is that there is a merry-go-round of money chasing various flavours of pre-existing asset to create an asset price bubble. It’s not very clear what has happened to the Bank of England’s QE over the years. The bank produces various statistical associations as evidence that it has helped stimulate the wider economy. Others are sceptical.

Which is where People’s QE comes in. What if, instead of buying government bonds in the market, the money went into extra government spending, such as infrastructure investment, or even current spending. Because the Bank controls the currency in the UK, it can fund the government’s deficit without the need to borrow money from investors. It borrows money from itself. This amounts to supporting looser fiscal policy (i.e. government tax and spend), which should provide a more predictable stimulus to the wider economy.

Mr Corbyn’s advisers developed the idea with the suggestion of administrative structures to channel the extra money into infrastructural investment. This puzzled some economists. There is no need for such engineering. All the government has to do is spend the money, increasing its deficit, issue bonds as normal, which the Bank of England then buys in the existing QE programme. If the Bank is buying bonds, the government is less beholden to the bond markets. In Japan, which has been practising QE on a massive scale, the government now issues little net debt to the bond markets, making large deficits sustainable.

But how does this work? Surely it is something for nothing? The answer to that is that it only works if there is slack in the economy, and the government steps in to create demand because businesses are investing less than the public is saving, creating an imbalance. If this is not the case, you can get inflation, which is what happened to Germany and Austria in the 1920s, Zimbabwe more recently, and is happening in Argentina now. Alternatively you get a asset price bubble. Which in the modern, globalised financial and trading system is in fact more likely for developed economies – though this seems to be a blind spot for many economists, who think that asset markets are too efficient for that.

But in the developed economies, including the US, the Eurozone and Japan, as well as the UK, there does seem to be scope to do this kind of stimulus. There is a lack of business investment, while, it appears, too much money ends up in the hands of rich people, who don’t spend it. Nobody knows how long-term this problem is, but it does look as if large government deficits are much easier to sustain than before. If the bond markets refuse to fund all of the deficit, then central banks can simply “print the money” as the popularisers would put it. Prominent British economist (Lord) Adair Turner (whom I am something of a fan of) suggested that this could be a long term policy in a recent book.

In Britain there is an accounting wrinkle which is having an important impact. The Bank buys government bonds, but it holds them rather than cancelling them, so that it can sell them should it want to tighten policy. So the government still pays interest on the gilts the Bank holds, and this used to count towards the publicly declared deficit. But the Coalition government changed the rules, so that it does not count the interest on the Bank’s holdings against the deficit. That reduces the fiscal deficit and allows the government to spend money on other things instead. Also the effects of QE on longer term gilt yields reduces the deficit projected by the Office for Budget Responsibility (OBR), which plays such a pivotal role in longer term government spending plans. According to the FT’s Chris Giles £22.4bn of the £27bn that the Chancellor, George Osborne, “found” to allow him to loosen austerity measures in the Autumn Statement resulted from these accounting tricks. This boils down to People’s QE, and Mr Osborne used it to fund his U-turn on tax credit cuts, amongst other things.

The problem, as Mr Giles points out, is what happens when the Bank feels the need to tighten policy in, say, a year or two’s time? Then the whole thing goes into reverse. Politicians have seen gain in blurring the distinction between fiscal and monetary policy. That could return to haunt them, at both ends of the political spectrum.

Tim Farron comes of age as Lib Dem leader

The honeymoon is over. For the last few months Liberal Democrats have been able to project their hopeful expectations onto Tim Farron, their new leader. And he skilfully avoided disappointing them. But his decision to back the government in last night’s vote to involve British forces in attacks on Islamic State in Syria has changed all that. Now, alongside the traumas of the Labour Party, we are asking what political parties are for, and how politics should work.

I was surprised at Tim’s decision. As my last posting shows, I was personally inching towards that view – but I consider myself to be something of an outlier in Lib Dem circles. The party at large is clearly against intervention, as a recent online poll showed. My Facebook timeline showed strong opinions against. And he had given himself plenty of cover. He had set five tests against which to judge any proposal to intervene. This is usually a political tactic to oppose something. And, to put it kindly, it is stretch to say that all five tests have been met – though it is also true that there has been movement in the right direction.

My doubts over intervention were not helped by David Cameron, the Prime Minister in today’s parliamentary debate. First he suggested that the attacks were needed to prevent IS activity in Britain. They will make very little difference; that is just not how these things work. Then he tried to suggest that there were about 70,000 “moderate” fighters who might act as the ground spearhead to defeat IS, without invoking the Syrian government under Bashar al-Assad. Even if the numbers are right, they do not form a coherent fighting force with the military skill to take on the highly effective IS army. And thirdly, it came out that he had smeared some of his opponents as terrorist sympathisers. That was the previous night in a “private” meeting with his party’s MPs – and it alludes to some of the new Labour leadership’s apparent sympathy for “freedom struggles” in the past. He might have graciously apologised, but he did not. As Jeremy Corbyn, Labour’s leader, said, it diminishes the office of Prime Minister. But it is a foretaste of Conservative tactics against the new model Labour party.

Mr Corbyn, on the other hand, was a model of dignity. There was no high-flown rhetoric, but at least what he said was clearly true. And if it was also beside the point, the same can be said of Mr Cameron. The reason why there is a momentum in favour of intervention, at least in parliament, is that there is s strong public mood to “do something” after the Paris attacks, that a gesture of solidarity with France will have diplomatic benefits, and that with Syria creating a massive refugee crisis, it is not a political topic we can turn our back on. Inaction seems to pose just as big problems as action. If it is good enough for the Germans, whose government is planning to commit forces to the same campaign, almost without precedent, that surely it is good enough for the UK? The fact that the proposed British contribution is small scale is actually in its favour – a lot of diplomatic bang for quite a small buck. Iraq this is not.

This is what politics is about. Weighty issues for which there are no obvious solutions, and where messy compromises are needed. It is about politicians from across the country and different political persuasions, working out what the country as a whole should do. The trouble is that there seems to be a new politics about, where political representatives are seen as figureheads for wider movements of like-minded people, for whom compromise is betraying your principles. The Labour Party is being overwhelmed by this conception of politics. Labour activists oppose intervention in Syria, and have turned it into a totem issue. They have been harassing any MPs and their staffs who take a different view. Some talk of rooting them out as “scum”.

Such are the death throws of a party that once aspired to govern. After being hammered for entering coalition, the Lib Dems can safely put such aspirations to one side. The behaviour of their MPs is more of a puzzle – though Tim’s leadership opponent Norman Lamb, and one other of the eight MPs voted against. Many of the party’s members have similar views to those Labour activists, though standards of behaviour and language are infinitely better. There has been much talk of rebuilding a core vote – which seems to be code for ignoring messy compromises and attracting the support of more motivated, middle class liberals. But Tim Farron and his fellow MPs seem to have an older view of what MPs are for. They seem to have considered the vote on its merits, rather on any wider political impact. (I will say the same for Norman, incidentally. The differences between the two men are a complete reversal of what was said about them in the leadership contest, when Tim was portrayed as being to Norman’s left).

That wider political impact is hard to judge. Coming out in favour of intervention is the sort of thing that will play well with floating voters. But it will be hard for the party to get any credit for it. They famously opposed the Iraq war, so people will expect them to oppose all military interventions. They will just get confused when they do something different. And the party’s members and activists will not be happy. Some could leave, others just drift away.

It may too much to hope that the party will take this as a lesson on what successful politics must look like. Political representatives are responsible to their voters first, and party membership second. It is not “democratic” for a bunch of self selected activists to agree something using voting procedures, and then impose this on people elected in proper, public elections. Getting things done means compromise and lending support to policies that are second best or worse. This is why we use a system of representative democracy. Political movements not prepared to engage fully with the real business politics ultimately get nowhere. – or if they do get somewhere, end up by forcing their views on others and suffocating political debate.

Unlike what the Labour Party is becoming (and, it has to be said, a lot of what it was of old, for different reasons), the SNP or the Greens I hope the Liberal Democrats will understand this and give their leader some slack. But this will prove a painful coming of age for him.

High morals v low pragmatism: what on earth to do about Syria?

Do we let British forces join their US and French allies and intervene in Syria against the forces of Islamic State (IS)?This is now the biggest issue in British politics. it is not an easy question.

So often we are urged to take such important decisions based on high moral principle. In this case, do we attack those who have, in effect, declared war on us on principle? This seems to be the French view. Or do we rule out the use of violence, outside strict self-defence, on principle? If such moral principles are your guide, then deciding about foreign interventions becomes much easier. Take your moral stand, and if it doesn’t go well, then it is somebody else’s fault. And if the place of the intervention is remote it is somebody else’s problem too. Such reasoning is commonplace amongst the politically engaged – but it is a cop out. Actions (and non actions for that matter) have consequences, and we can’t escape responsibility for them as far as they are foreseeable.

And, of course, the closer we get to the place of intervention, the muddier it all seems. For us the big issue in Syria is the progress of IS. And yet, with the exception of the government of Iraq, this is not top of anybody else’s agenda. This can be seen from last week’s episode with the shooting down by Turkish forces of a Russian bomber aircraft. The story presented by neither side is convincing. The Russian bomber looks as if it was attacking a Turkomen force that is nothing to do with IS, but which is resisting the official Syrian government of President Assad. The Turkomens seem to have the covert support of the Turkish government. Russian actions have been high-handed and directed at supporting the Assad regime, under the cover of fighting “terrorism”. The Turks seem to be telling them to keep away from their protégés in the only language the current Russian regime seems to respond to.

To my mind it is the conflicting agendas of the local middle-ranking powers that is the most frustrating aspect of the Syrian situation: Turkey, Iran and Saudi Arabia in particular. To them IS seems to be of rather tangential importance, whose main use is as a hook to draw in Western powers on their side, taking the pressure off them to resolve the conflict. The West still suffers from a post imperialist idea that it is the world’s policeman, and that the local powers should be treated as unruly children rather than accept responsibility for the maintenance of peace and order in their neighbourhood.

It doesn’t get much better when you look at IS itself. For some reason this organisation likes to project an image of undiluted evil. It seems to help it draw in foreign recruits to its cause – who see moral clarity where we see evil. But its support base is clearly much wider than that. The local Sunni populations, in both Syria and Iraq, have lost faith in their official governments, and with good reason. Rule by IS seems preferable, and nobody is offering a credible alternative. Remember that the standard Western answer that you set up a democratic government has been tried in Iraq – only for it to be abused by unscrupulous power brokers intent on their own enrichment. Why should it work better next time?

All this fog points against the high moral case for Western intervention, and so against further British involvement. How can it be effective? And arguments of this type are seized on by opponents of intervention. But they too strike a high moral tone. They organise protest rallies; Jeremy Corbyn justifies his stance on the basis of the opinion of political activists, and urges these activists to lobby their MPs. Such tactics can only be driven by high moral purpose, not by a pragmatic weighing of the options.

This high moral purpose seems to be driven by a loathing of two things. The loathing of the use of military force in pretty much any capacity. And the loathing of Western capitalist governments, and especially that of the US, and all their foreign interventions. How these two loathings balance varies widely between individuals. But such moral arguments are clearly suspect. In Syria we have had years of non-intervention, or limited intervention, by Western powers. That has left the country in an appalling stalemate, which has now created a refugee crisis that is placing huge strains on European civic society. Surely this threatens Western interests sufficiently for some kind of intervention? Are we being too dismissive of intervention, and using the clear practical difficulties as cover irresponsible inaction?

Building a pragmatic case for intervention runs something like this. The US and France are already heavily engaged. By joining them as a full member of that alliance (Britain already provides support in Iraq) may not make a huge difference to that joint effort immediately, but a three country alliance would have considerably more diplomatic weight than the current incomplete one. Britain’s current half-hearted contribution is almost useless on that basis. This alliance of Western nations, which joins up with local Kurdish forces, would then be able to bring pressure on other actors to work towards a new settlement of the Greater Syria region (i.e. Syria, Iraq, Lebanon and Jordan) than can form the basis of future peaceful development.

But any such settlement must face up to the central challenge of what can replace the current IS regime? Neither the Assad regime, nor the Iraqi one looks up to the job, though changes in leadership might help. Trying to create new government institutions from nothing is what went wrong in Iraq. Everybody says that it would be impossible or immoral to negotiate with the IS regime, and looks a fair judgement based on its current leadership. But might a successor emerge from within, amongst its clearly highly competent military leadership, with whom negotiation might be possible?

So there you. The pragmatic arguments against intervention have real weight. There is no clear game plan to bring matters to resolution. But the Syrian war is causing damage at continental level. Can we really just walk away and hope for the best?

The Autumn Statement shows the conflict of short and long term Tory priorities

George Osborne, Britain’s Chancellor of the Exchequer, delivered his Autumn Statement yesterday. This is a very British piece of political theatre, delivered by somebody with a very theatrically British job title, that adds up to “Finance Minister”. In the statement Mr Osborne announced financial plans for the next five years of the Conservative government. It is a set-piece event designed to score political points and attract good publicity. The dust has not had time to settle, but some important issues are clear.

The main headlines were these: the government dropped the central part of its plans to reduce tax credits to top up the incomes of people working on low pay. It also withdrew plans to cut police budgets. Various other goodies were doled out; schools had their budget protected in real rather than nominal terms; there was more money for the NHS, and various investment projects. This was all part of a familiar game of managing expectations, which Mr Osborne now handles with competence. The reversal on police cuts was particularly well managed. The short-term politics has worked very well for the government, helped by the Labour opposition spokesman John McDonnell’s misjudged stunt using Chairman Mao’s Red Book.

But let’s step back a bit. The first point to make is that this exercise is one of completely false precision. The justification for a greatly reduced level of cuts to departmental spending (according to the FT’s Martin Wolf, from £41.9bn in pre-election March, to £15.6bn in post-election July to £7bn now) was a £27bn reduction in 2020’s projected borrowing. This £27bn figure is widely reported in the media, but it is nearly meaningless. It is based on economic forecasts which have almost no chance of being fulfilled – though at least they are produced independently by the Office for Budget Responsibility. That £27bn can appear out of nowhere in four months simply reflects this imprecision; it can disappear just as quickly. Personally I feel that the projection of a steady 2% plus of GDP growth, which underlies this forecast, is most unlikely to be fulfilled; it is an artefact of a deeply flawed process of economic modelling that still has a grip on conventional economics, because nobody has found a substitute.

So this needs to be taken in a broader strategic context. The government has two stated economic aims for the medium term. The first is that the state should run a surplus in the middle of the business cycle; the second is that overall government spending should be cut to about 37% of national income- low by postwar standards. Both are entirely arbitrary. There is a good case for a government deficit to fund investment, especially if the private sector is reluctant to invest its profits, which has been the story of the 21st Century so far. There is no convincing evidence that I know of to suggest that a lower level of government expenditure is more economically efficient.

But all this makes more sense if you think about the politics rather than the economics. And here the Statement was balancing long and short term aims. The long term aim is to crush an ecosystem of political bureaucrats in central and local government, and a range of agencies, consultancies and NGOs that hover around them. This is the principal power base of the Labour Party, and flourished mightily under the patronage of Mr Osborne’s predecessor but one, Gordon Brown. What is set to replace it is series of soulless, hollowed out agencies that are as easy to deal with as modern big businesses like phone companies (BT, TalkTalk, Virgin Media, etc) that are unable to manage complexity, so try to deny that it exists. The government’s new Universal Credit system is shaping up to be just such a nightmare. I see both sides of the argument here. I hate the old Labour bureaucracy and its hangers on with a passion, and I am not sorry to see it being dismantled (though a lot of excellent professional services are going too). But its hollowed out replacement lacks credibility, and at will be a partial solution at best.

The difficulties with this Conservative dystopia are apparent in the short-term politics. Welfare, security, health, education and social care are proving politically highly resistant, and hence the retreats evident in Mr Osborne’s statement. The Conservative fight to crush the opposition Labour and Lib Dems is going very well. But this is in large part due to Labour’s ineptitude. What if it woke up and led a serious fightback?.

The Conservatives’ drive to cut government budgets leaves them politically exposed. They stand a real chance of shutting Labour out of power for generations, but only if they secure the votes the working class and and the less secure middle classes. The changes to tax credits would have made these voters very angry. Mr Osborne’s U-turn is unsurprising – but leaves the question of how he managed to get into the mess in the first place. Meanwhile added demands of an ageing population on health and social care services is a challenge that will not go away. The extra funds found for these are unlikely to be equal to the challenge. And the problem of an economy polarising between low and high wages, while housing costs are escalating, is placing huge stress on welfare.

The hollowing out of the state at both national and local levels will continue apace. But a weaker than expected economy, and mounting pressure on health and social care services are likely to break Mr Osborne’s plans eventually. Whether the political opposition, outside Scotland, will be in any shape to exploit this situation remains open to doubt, however.

To understand the politics of Islam you must look at its history

Islam has become one of the hottest topics in politics worldwide. And yet the religion is little understood by non-Muslims. Instead ill-informed narratives gain currency, even amongst the better educated. It is a hard subject to get a grip on, but BBC Radio 4’s The World This Weekend, on Sunday broadcast an excellent item on combating Islamic State (IS). Each of the three introductory interviews was illuminating, but that with Washington Islamic history expert Haroon Mughal made things a lot clearer to me.

As with most areas of current politics, we need to get a historical perspective. Most educated people will know that Islam has two main denominations, Sunni and Shia, which arose from a split in the 7th Century over who was the prophet Mohammed’s successor as caliph. That, of course, remains an important fault-line, as followers of the two sects (and variations within) are intermingled in Iraq, Syria, Lebenon, Saudi Arabia, the Gulf and Yemen, to name the main hotspots. The split may be compared to the Christian split between Catholic and Orthodox, but geographically it is much messier. Apart from in Iran and, to a lesser extent, Iraq Shias are in the minority – but they are politically more coherent because there have reasonably clear hierarchies and, perhaps, they are used to a greater level of challenge.

The Sunni realm too used have clear hierarchies and orthodoxies, sponsored, in early-modern times, by the Ottoman Turks, who held sway across most of it; there was even a (nominal) caliph, until the Ottoman Empire fell in 1922. But this orthodoxy was subject to challenge, and a Reformation of sorts took place in the 18th Century, led in particular by Muhammad ibn Abd al-Wahhab. Like the Christian Protestant Reformation, it urged a back to basics creed, that rejected the corrupt ways that orthodox Sunni religion was practised. There are two key things to know about Wahhabism, which is now the orthodoxy in Saudi Arabia. It emphasises the separateness of true-believing Muslims; others are condemned to hellfire and not worthy of consideration. The second is that it takes inspiration from the customs of early Arab days, most notably in its strictures on sex, women and crime.

Mr Mughal’s critical insight was that, unlike for the Christian Reformation, there was no Counter Reformation – a reinvigoration and counterattack by the orthodox. At this time the Ottomans were on the wane, and the orthodox structures were too weak to mount such an effort. That leaves a vacuum at the heart of Sunni Islam. There is a huge amount of scholarship which can be used to counter Wahhabism, but efforts to do so are weak and disjointed. Imams tend not to be up for the sort of intellectual challenge required. Meanwhile the Wahhabists have a clear message and are expanding their appeal. The ground has been prepared through official Saudi sponsorship of mosques and schools, which has spread throughout the world, and undermined orthodox teachings. Now more sinister forces are promoting Wahhabi ideas to the disaffected, in ways that a re socially corrosive.

There are two important groups of Wahhabist derivatives, both of which have a clear political agenda, that some refer to as “Islamism” . There are the violent ones (I don’t want to call them “Jihadis”, since it is important to preserve non-violent aspects of jihad, just as there are non-violent uses of “crusade”, a very similar idea), promoted by terrorist movements like al-Qaeda and IS. They have a millenarian interpretation of the scriptures: that the end of the world is nearing. They extend the Wahhabist ideas of separateness to the practice of violence against non-believers, not least Muslims that do not share their binary world view. There are enough sacred texts and historical episodes from Islam’s formative years to allow a coherent narrative – even if their practices go against a mass of Islamic scholarship. This narrative of violence has a clear appeal to the disaffected looking for some kind of heroic way out of their dead-end lives. The second group is known as Salafists; they share much of the millenarian credo of the terrorists – but they are non violent. They advocate the withdrawal of believers from any non-Islamic political structures. Salafists are much more numerous than the terrorists, with a lot of strength in Egypt and Tunisia, but their doctrines of withdrawal reduce their political weight. Some politicians have tried to play them off against the terrorists, since they are able to argue the case for non-violence from a Wahhabist perspective. But this serves to entrench the basic, and socially corrosive, ideas of Wahhabism.

The critical question is whether orthodox Sunnis can organise themselves into putting together a vigorous, international counterattack on Wahhabism, and to win back the battle of ideas. The hope is that a confident, cosmopolitan orthodoxy can be established that offers a middle way between a godless materialism that denies Islamic heritage, and the backward looking ideas of Wahhabism. This seems to be what Mr Mughal was advocating.

But such a Counter Reformation faces formidable challenges. The first comes from political power. One group that would love to promote such a “respectable” version of Islam are the military backed regimes of Arab countries, like Egypt. And yet the incompetence and corruption of these regimes is one of the things that gives the Wahhabist creeds a lot of their appeal. Any Counter Reformation has to keep its distance from such willing official sponsors. Another challenge, of course, is the rejection of Saudi sponsorship; we may hope that low oil prices will reduce this malign influence.

But the biggest challenge surely is to develop ideas that are compatible with the modern, cosmopolitan world. This means rejecting the paternalism of the current order -allowing young people more freedom to consort with the opposite sex and choose their own marriage partners, and to offer women more freedom and power all round. To say nothing of more tolerant attitudes to gay sex. This is a huge jump for many, older Muslims. To them the paternalist ways are something worth fighting for, and their religion is bulwark against dissolute modern ways.

Is their anything to learn from what has happened to Christianity? In Europe established churches are fighting a losing battle with materialism. They cannot find a viable middle way between an empty modernism and being perpetually behind the Zeitgeist. They remain the standard bearers for socially conservative values – which is perhaps why they have a strange obsession with sexual morals. This has parallels with modern Islam.

Still, in America it is a different story. Somehow American churches are able to find compatibility between traditional beliefs and the modern world. We may associate them with conservative strictures on abortion and gay sex, but they have moved on in the question of love and marriage, and the empowerment of women. American churches are fragmented and highly competitive. They have no choice but to adapt to the modern world, or else they will lose out to neighbouring churches, constantly juggling a mix of social conservatism and modern values. To my knowledge Muslim imams and mosques haven’t taken on such a competitive approach – but I don’ think there is any institutional barrier to it. This bottom-up way offers more hope, surely, than some kind of top-down institutional one based on learned scholars and high level conferences.

But, assailed by an ultimately futureless and destructive Wahhabism on one side, and the temptations of godless materialism on the other, orthodox Sunni Islam must change itself somehow.

Jeremy Corbyn has been holed below the waterline

The metaphor of a ship holed below the waterline is an engaging one. Above the surface nothing much seems wrong – perhaps a minor list. But down below the water is pouring in; barring extreme good fortune the ship is doomed. I remember using it in 2007, when the world’s interbank markets froze over; the ensuing collapse of the banking system did not happen until over a year later, when Lehman Brothers failed, though a surprising number of people did not see it coming. I think the metaphor is just as appropriate for Labour’s new leader: Jeremy Corbyn.

Many wrote Mr Corbyn off from the start, as a far-leftist, backed by trade unions promoting fantasy economics. These were my instincts, but I tried to give him the benefit of the doubt. He sparked real enthusiasm amongst hundreds of thousands of activists. He came over as an engaging, anti-politician – a nice chap. With the public so tired of the usual type of politician, might he not spark enthusiasm amongst the wider public? Hearing him occasionally on the radio, he seemed to be talking a lot of sense. He had real momentum. You could put a positive spin on most of what he said.

Of course there were doubts. His Shadow Chancellor John McDonell’s inept handling of the government’s fiscal plans did not bode well. There is something chaotic about the party under his leadership, with no coherence across the Shadow Cabinet. But that sort of thing happened to Mrs Thatcher in her early days too – and look what happened to her. And I did not take much notice of those putting it about that next year’s elections, in Scotland, Wales, London and local councils, would be a critical test. Mr Corbyn was enjoying his new job, and his backers were determined to consolidate their hold on the party. I thought he could weather one set of bad results at least. Politicians are expert at finding somebody else to blame; no doubt the left would simply blame die-hards from the old order.

And then came the Paris attacks. The public regards these things as a critical test of political leadership. There is a lot of fear out there. Could something like that happen here? Can we not holiday in safety in European capital cities? We want leaders who can express our outrage, provide reassurance, and take charge of stopping the bad guys. The FT’s Janan Ganesh suggests that the public’s insecurity might make them seek older, more experienced politicians, especially ex-soldiers – in place of the callow think-tankers, PR types or charity workers that currently dominate the political ranks.

What they do not want are the intellectual prevarications we have had from Mr Corbyn in the last few days. He suggested that the killing of British terrorist Jihadi John by drone attack was not as good as bringing him to justice in a court. He failed to dissociate himself from Stop the War Coalition, which he used to chair, when it suggested the the French were reaping what they had sowed. He professed his nervousness about a police shoot-to-kill policy, when the public carried mental pictures of gunmen in suicide vests firing indescriminately. He seemed to rule out attacks on Islamic State in Syria (or Iraq come to that) by the British military.

The point isn’t that these views are without validity. Extra-judicial killing makes many feel queasy – and making martyrs, with all the risk of killing innocents alongside them, is no substitute for the grinding humiliation inflicted by judicial process and punishment. Our politicians have often suggested that the country’s interventions in the Middle East are designed to make our streets safer; that is open to challenge, to put it mildly. Trigger-happy police kill innocent civilians – as Londoners well know from 2005. It isn’t clear how bombing IS target in Syria will help.

But now was the wrong time to raise these concerns. They smack not just of qualified outrage, but of indecisive leadership that will be no match for the hard men (and women) that want to kill us. Unless Britain becomes an unexpectedly more secure and optimistic place, the vast majority of the British public will take fright at the idea that Mr Corbyn could be Prime Minister. The best that could be said of him is that he is too nice for the job. It was bad enough in May when Ed Miliband didn’t look Prime Ministerial enough; this is infinitely worse. In the full heat of a General Election campaign, Labour would be lucky to hold onto seats it had previously considered safe. What happened in Scotland could be repeated across England and Wales. The Conservatives, Ukip, or even the Liberal Democrats could clean up.

And yet SS Labour sails serenely on. Labour MPs know they are in trouble, but apart from an outburst at an MPs’ meeting on Monday they don’t feel they can do much about it- Mr Corbyn’s support amongst grassroots activists is too strong. Those activists are in denial, dismissing these difficulties as a bit of a wobble. They can’t possibly admit they have been so wrong only a month or two ago.

But the party is in serious trouble. I think there will be three key arenas in which this drama will play out: Scotland, London and the old industrial heartlands of England.

Labour must win back Scotland from the SNP in order to regain power in Westminster. Mr Corbyn’s supporters claimed that he was the right man to do this, interpreting the SNP’s rise as a backlash against austerity, rather than against rampant incompetence. But the SNP leader, Nicola Sturgeon’s handling of the Paris outrages has been assured, even promising an open mind on bombing Syria, in spite of her party’s conference resolution against it. Labour do not look like a serious government in waiting in Scotland, and they are sure to be routed in next May’s elections to the Scottish parliament. That will a a hard failure for the left to gloss over.

London holds its Mayoral and Assembly elections next May too. The interest here is that London is the biggest stronghold of Mr Corbyn’s activists. If there is to be a pro-Corbyn surge, it will start here. But Zack Goldsmith, the Conservative candidate for Mayor is well-funded, and has hired top-rate campaign advisers, fresh from the Tory General Election victory. He wants to win and will pull no punches – even if other Tories would happily give Labour a run here to keep Mr Corbyn in place. If Labour do badly it will be devastating for their future prospects – though Mr Goldsmith has weaknesses of his own, and it wouldn’t do write off Labour’s Sadiq Khan just yet. He certainly gets my second preference over Mr Goldsmith.

But perhaps the most interesting battleground will be in England’s northern and central heartlands: Manchester, Leeds, Birmingham and so on. Many of these cities are virtually Labour one-party states. But interestingly a number of local leaders are taking a pragmatic and enterprising line to power. They support local devolution and are prepared to work with the government on that basis. And yet Labour’s working class voters will be amongst the most distrustful of Mr Corbyn’s metropolitan ways – and outraged at his recent prevarications on security. An early test of their feelings will come in a by election in Oldham in December. Ukip, anxious to overcome their disappointments in May, scent blood. Even the Lib Dems, with their Lancastrian leader, Tim Farron, are putting in an effort. This will be an interesting election to watch. If Labour fare badly in these heartlands, an anti-Corbyn coup is surely only a matter of time.

And what will happen when the good ship Corbyn finally keels over and sinks? That’s another matter, but Labour’s problems would hardly end then.

The Lib Dems in London: two straws in the wind from @RuthDombey and @MzLashmore

In the shadow of events in Paris, the Liberal Democrats held their London conference last Saturday. For a party that most people think has ceased to exist, party members are in a surprising upbeat mood. Held a university building in Brentford, well out of the centre, the conference was nevertheless well-attended, cheerful and lively. Even as I delivered the Treasurer’s report just after lunch, the dullest piece of business in the whole day, there were dozens in the audience. I survived unscathed, and live on to be Treasurer of the regional party for another year.

And yet detached outsiders would not give much for the party’s prospects. The Mayoral and Assembly elections are in May 2016, and they are a critical test for the party. As things stand even winning the deposit in the Mayoral race (lost last time, in 2012) and any representation in the Assembly (only narrowly achieved in 2012), both of which need 5% of the votes, will be a challenge. The party has sunk into irrelevance in most people’s minds. But the party polls about 8% nationally, the same level that it achieved in the General Election. A result on this level is surely realistic, but would amount to no more than what City traders used to call “dead cat bounce” – bumping along the bottom, in a less colourful metaphor.

But things could be much better. With the Conservatives riven by differences over Europe, the effect of Labour’s lurch to the left uncertain, and with the other minor parties, the Greens and Ukip, seemingly having peaked, a whole range of possibilities opens up. The party is aiming for more than 8%, and so it should. There was a buzz of ideas for promoting the Party’s lead candidate, Caroline Pidgeon, the experienced and capable group leader on the Assembly, who is standing for both Mayor and leads the Assembly list – elected by proportional representation. Policy positions are being developed on housing, policing and taxis.

But these depend on attracting the attentions s of a flighty electorate. Building a more solid base for the future will take a lot longer. On what basis can that be done? One idea doing the rounds is to make a conspicuous stand on touchstone liberal issues, like supporting immigration and human rights. It is estimated that about 30% of Londoners have liberal views on these subjects. The Conservative and Labour parties are still circumspect because they draw so much other support from the other 70%. The talk was of targeting that 30%, who tend to be young and professional.

That’s all very well, but I worry. Some activists were concerned about a strategy based on just talking to people like us, rather than trying to reach out more widely. And though getting a large chunk of that 30% would transform the party’s standing, where would that lead? In order to get anything actually done the party has to engage with the other 70%, either directly seeking their votes, or working in coalition with parties that do. The party’s experience over last five years, in coalition with the Conservatives, have shown how difficult that can be. The party gets accused of breaching its principles, and then appearing irrelevant. Surely the party must try to develop a broader appeal from the start, alongside the core liberal one.

Two speakers at the Brentford conference gave a hint of what that might be. One was Ruth Dombey, leader of Sutton council, the party’s last council stronghold in London. She described how the party has maintained its remarkable record of success there. It is through a process of genuine dialogue with residents, going as far as possible to make them feel included (which, to be clear, means actually including them…). This is completely opposite to the normal model of elected dictatorship that most British politicians confuse with democracy. It is not easy, but Sutton has managed it over many years.

Ruth is a professional and experienced politician, and it wasn’t surprising that her presentation was slick and forthright. A second speaker was edgier. Teena Lashmore, though very much a professional, is new to politics. She led a policy consultation on dealing with knife crime and reaching out to communities. She made two important points: the first, like Ruth, was that politicians must do things with communities and not for them. This is the beating heart of community politics. But it is something that metropolitan elites usually don’t understand, not just politicians. Speaking to her during the tea break, Teena gave me an example of a memorial for victims of knife crime in her area; nobody thought to ask local people what they wanted, with the result a proposal was made that they found insulting.

The second point was that we must find ways of making local economies grow and become more inclusive. Free enterprise is the key to inclusion because it is empowering. Entitlements and handouts are not. She gave the example of a troubled estate where the management contract was awarded to a local enterprise, and not to one of the usual stripped down outsource providers; this contractor then started employing the local young people as apprentices; money stayed in the local economy; antisocial behaviour fell. Now regular readers of this blog will know that I am supporter of developing local economies, following campaigner David Boyle. But it had not struck me until Teena’s presentation just how powerful this idea is for developing inclusion in London.

These are critical ideas. Britain’s main political parties are still in the culture of doing things for the people they represent, rather than with them. Our whole centralised Westminster-bubble culture promotes that. The working ethos of the Labour Party is built on developing client communities that they dish out goodies to. Some Conservatives have toyed with something more inclusive, like David Cameron’s Big Society, but their thinking is more often driven by big business and trendy but narrow think tanks. Indeed, though the Lib Dems achieved much of their early successes in the 1980s and 1990s through community politics, success in Westminster seemed to be slowly corrupting them. And few Lib Dems really got the importance of developing local enterprise, and what this means for wider public policy, for example in commissioning and procurement.

Well now the Lib Dems have been largely ejected from the Westminster bubble. They must go back to the long, hard business of developing conversations with local communities. And it needs to start developing robust ideas for developing local, inclusive economies. That includes in London, and it is a promising basis for reaching out to communities of all ethnic dimensions, not excluding the more stressed white British ones.

It’s a long hard road, but the party has the culture and record to make it work. I hope it rises to the challenge.