The imperial illusion of macroeconomics

Once again the UK Chancellor of the Exchequer’s Autumn statement has provoked a storm of claim and counterclaim among economics commentators.  The particular breed of expert whose voice is loudest is the macroeconomist.  They have a lot of important things to say.  And yet their analysis is often superficial.  We end up talking about the wrong things.

There is a magnificent imperial power about macroeconomics.  It looks at economies in aggregate, and develops a broad sweep.  It deals with national income, growth rates, productivity, inflation, unemployment – all concepts that are represented by neat numbers.  Their policy instruments are referred to as fiscal and monetary policy – policies that are meant to influence these aggregates in a fairly direct way, and which

For me, the metaphor of imperial rulers to represent these experts has strong appeal.  It conveys the right sense of arrogance.  I conjure up pictures of imperial aides to the Russian Czar (or his Soviet successors) implementing arbitrary policies to be implemented across their domain.  They deal in the big picture – and refuse to hear the special pleading of provincial representatives.  Of course things don’t work out in every detail, they say, but the reach and sweep of their rule means that much more good than harm is done.

Macroeconomists themselves no doubt would prefer an analogy with classical 19th century scientists.  They did not concern themselves with the movement of individual atoms, but derived physical laws that worked at a higher level.  In aggregate the behaviour of atoms and people are predictable.

The idea that leaders deal with big strategic matters, and leave the details to their underlings is an old one, that has enduring appeal.  It enhances the egos of the leaders. It doesn’t work, though.  The best leaders find themselves having to command both the strategic sweep and the tiny detail.  The Russian Czars came acropper.  And the theroties of 19th century scientists turned out to have much less value than they thought in the real world.

This is true of macroeconomics too.  In the first couple of years of taking an Economics degree, you learn about macroeconomic models – about the use of fiscal and monetary policy to guide the aggregate movements of an economy.  It is tremendous fun – but by the third year you really should be growing out of it.  In the end economies are driven by what is happening at the level of individual people and businesses – and as people are highly adapable, and behaviours change – never mind the evolution of technology – what works one year may not the next.  Unfortubately too many economists can’t seem to get past the imperial illusion.

Take the current furure over the British economy.  It’s full of growth rates, deficit levels – and demands for this and that on fiscal and monetary policy.  Two elements of the macroeconomist’s stock in trade are prominent: international comparisons (the British growth rate is less than Germany’s, etc.) and comparisons with the past, going all the way back to the Great Depression of the 1930s.  And the analysis usually stops there – few attempt to pick apart the differences and similarities that these comparisons invite.

And yet there are a number of big changes taking place in the British and world economies that are bound to affect the choices open to our policymakers.  These get superficial coverage, if at all.  Here are a few:

  1. Finance’s role in the economy is diminishing, as we understand that much of its alleged value is illusory.  This means that a sector that appeared to be highly productive in macroeconomic terms is shrinking.  That is not a bad thing – but people seem to be screaming blue murder when the national income figures suffer the inevitable outcome.
  2. Likewise the benefits of North Sea oil are fading – another statistically highly productive sector shrinks, though this one has more underlying substance.
  3. Banks’ lending practices are changing, as credit to private individuals becomes less easy, and loans to property developers more difficult.  This is inherently a good thing, as it helps get the economy onto a sustainable path – but it is playing havoc with the macroeconomic statistics.
  4. The gains from globalisation are going into reverse.  For years in Britain the prices of imported goods fell or stayed the same while wages and domestic prices rose steadily at 3-4%.  These “gains from trade” added a lot to the feel-good factor and growth before the crisis- even though we whinged about loss of manufacturing and overseas call centres.  Now import prices are rising steadily while pay remains frozen.  These gains from trade were not permanent, bankable changes – but reversible.  This is nothing to do with protectionism, by the way, but arises from the perfectly predictable workings of the economic law of comparative advantage.
  5. Meanwhile “additive manufacturing” and other technology changes mean that fundamental technological change is alive and well, bringing both new opportunities and continued obsolesence – but of quite unknown impact on conventional economic measurements.

I could go on.  These factors, and others, should be very much part of the discussion.  They invalidate historical and international comparisons – until and unless we dig a lot deeper.  To me the wider message is that we can’t simply wind the clock back to where we were in 2007, and it is not self-evident that a sustainable growth rate of 2% or even 1% can be regained just a lifiting levels of confidence a bit.  Therefore using fiscal policy to stoke up aggregate demand may simply bring short-term relief followed by an even bigger crisis.  Increasing government sponsored investment is almost certanly a good idea, but it matters where this goes.  But neither the government’s critics, nor even its defenders seem interested in such details.

In an excellent article in this week’s FT, Sebastian Mallaby shows how macroeconomic success leads to microeconomic complacency, which in turn leads to breakdown.  The developed world has just gone down this route.  Now the BRICs are doing it.  China shows no sign of dealing with the baleful influence of its state owned enterprise; India is content to let curruption and inadequate infrastructure go unaddressed; Russia sees no reason to change its contempt for the rule of law; and Brazil’s government is releuctant to take on vested interests.  All these economies are now slowing.

Meanwhile, back in the developed world you would have thought that we had been cured of macroeconomic complacency.  And yet almost nobody seems prepared to take on the deeper issues that lie behind the crisis and any solution to it.

European elections: saving the Lib Dems from wipeout

Winner Lib Dem Golden Dozen Blogs – 9 December 2012

The Liberal Democrats have just selected their candidates for elections to the European Parliament in June 2014.  These elections are important to the party – it takes itself seriously as a player in this forum, and it contributes a lot to the party’s strength and depth nationally.  But the party faces a wipe-out.  It needs some radical thinking to have a chance of avoiding such a fate.

The problems start with the party’s low opinion poll standing.  The typical 9-10% is not enough to get the party representation in any of the regional constituencies, except the South East, under the PR system that is used.  But it is worse than that.  The party has always underperformed in these elections.  Its usual campaigning methods are worse than useless.  The party’s appalling showing in the London 2012 elections is a much better guide: closer to 5-6%.  Complete wipe-out.  How to save the party?

The first point is that the party needs to acknowledge the root causes of its campaigning weakness in this type of election.  The party’s electoral successes in local and Westminster elections have been achieved using campaigns that focus on three things in particular: identifying local issues that stir the passions of floating voters, a ruthless third party squeeze (“Labour can’t win here, etc”), and identifying voters and getting to them to the polling stations.  All three are useless in Euro elections – and yet they are so deeply embedded in Lib Dem campaigners’ thinking that they infect everything the party does.  The party fails to put over a message that motivates voters, and since canvassing covers such a small proportion of the potential electors (and usually they are based on other sorts of elections anyway), the polling day knock up has very little impact on the result.

Unfortunately, it gets worse.  The party’s Euro candidates tend not to be, shall we say, the party’s most inspiring campaigners. They are very interested in the goings of the European Union.  This makes them well qualified to be Euro MPs – and indeed the party punches well above its weight there.  But they are not good at finding messages that connect with voters.  Even when they think they have found a killer, like using European arrest warrants to catch terrorists and paedophiles, this in practice has little resonance with the public.

So the party’s normal messages and techniques are ineffective, and the Euro candidates struggle to find an alternative.  In the last election I remember delivering piles of tabloid newspapers that were clearly going to have little or no effect.  Motivating the activists is a real problem, never mind the voters.

So what to do?  The basic strategy is quite clear, and has been talked about for some time.  Find enough voters who feel positive about the EU’s role in Britian’s future to turn up and vote to reach about 15-20% of the vote share.  No other significant party is rallying that vote.  The Labour Party is trying get these voters by default, but without prejudicing its chances with the more sceptical majority.  The Tories don’t seem to think these voters even exist.

Next, how can effective campaign be mounted?  What will be needed is poster and Internet advertising, mass direct mail based on promising demographics, and a good freepost (the single leaflet delivered for free by the post office).  This is supported by an online and social media campaign.  All this activity, combined with the right messaging, will draw in media attention.  Almost no need for local activists to do much legwork – they can get on with their local campaigns.  This will cost a lot of money – so the first priority will be to raise it.

The party is getting better at fundraising, but many party activists have little idea about how it works.  Donors, rich and not so rich, need to be motivated in a very similar way to ordinary voters.  They need to be inspired by the campaign’s messages, and think they might catch on with the wider public. You don’t raise the funds first, then decide on the campaign’s messages; it is the other way round.  So the work on messaging needs to start now.

Here is my humble suggestion.  The campaign theme should be “Save Europe!”.  No doubt this can be improved on, but note the key features.  First and foremost it is pitched as a response to a threat.  People are more motivated by response to threats than positive ideas, and motivation is critical.  The “No” campaign for the AV referendum was highly successful as it pitched AV as a threat to the status quo.  So is pulling out of the EU a threat to the status quo.  The party can be progressive and conservative at the same time!  Further is the idea of “Europe” – vague and big.  The idea is to appeal to people with an international consciousness.  There is a double meaning: first to save Britain from leaving the EU, and second for the country to play its full part in solving a continental crisis that will affect us anyway.

How to build on this idea to make the threat seem real?  “Save jobs” and “Save the Environment” should be the focus.  Messing around with EU membership is a clear threat to jobs – and indeed one of the main appeals will be to businessmen who fear for the future of Britian’s relationship with the EU.  The environment allows the party to play on its international outlook.  Indeed it is an appealing idea to use an Earth from space picture with Europe visible on the surface as a campaign logo.  It also sets the party up for some skirmishing that may be needed with the Greens.  And it contrasts with Ukip’s outlook.

Ukip are the rising starts of Euro elections, which frightens the two main parties.  But if the Lib Dems are after core voters rather than floaters then Ukip’s strength is an opportunity.  It helps define the party: “We are the party which is against everything Ukip is for.”  The more they know about Ukip, the more they know about us.  The party should indulge in some relentless negative campaigning against Ukip – including how they have behaved in the European Parliament – though not straying into accusations of racism.

So you get the general idea.  The best next step would be to appoint a national organiser to work on messaging and strategy.  This needs to be somebody comfortable with challenging the Lib Dem conventional wisdom on campaigning, but with a degree of political realism (contrast some of the Yes to AV campaign types).  Though much of the campaigning needs to be done in the regional constituencies, a lot of the design effort can be done nationally – and the Internet and media campaign needs to be led nationally too.

I do hope the party wakes up to the danger and tries to a bit radical!

Leveson: the messy truth about regulating the press

The big story in Britian’s media this week has been the publication of the Leveson Report into the press.  This comes from Lord Justice Leveson’s extensive inquiries into abuses perpetrated by Britain’s newspapers.  The newspapers, of course, have been anxious to get their answer in, starting days before the report was actually published.  But bloggers have been diving in as well.  I have neither read the report, nor all this commentary in detail.  But stepping back, I find something rather striking.  Mostly the arguments are made on grounds of high principle.  If only life were that easy.

Critics focus on the report’s recommendation that a new regulatory regime for the press should have “statutory underpinning”.  This is taken to mean state regulation, and even state licensing of news publications.  And this in turn runs against the sacred principle of freedom of speech and freedom of the press.  So supporters of the report’s recommendations are attacking a free press.  This argument is pushed by the usual suspects in the press itself.  But not just them.  There is Lib Dem blogger Stephen Tall, for example, supported by the Facebook site Vote Clegg Get Clegg.

Most Lib Dems, though, support their leader Nick Clegg’s backing of the report.  For them the sacred liberal principle is the protection of the weak against the unaccountable power of the press.  Pres self-regulation has been tried so many times and found wanting that something stronger is required, they say.  “Do it for Milly Dowler,” they say referring to one of the most egregious episodes of press abuse.  They think the promise by newspapers that this time it will different is just a cynical ploy, so that they drift back to their old ways when the dust settles.  They have form after all.

I was planning to take sides in this debate – and in support of the report’s full recommendations.  Most of the arguments against are pretty specious.  I don’t think freedom of the press is being attacked in any meaningful way.  The accountability of the press to its readers, who may always refuse to buy newspapers, doesn’t work either.  Unfortunately the readers are part of the problem.  And the idea that we shouldn’t attempt to regulate the press because the scheme ignores the internet is a classic red herring.  Behind this lies my intense dislike of the baleful influence of many newspaper publishers on political debate, to say nothing of the cynical disregard they have members for the public.

The fact is that running a liberal society is a balancing act, much though we like to think of it as being the upholding of high principle.  Freedom leads to abuse: people will always try to use it for the purposes of harming others.  There have to be laws and regulations to limit the damage – but it is rarely clear exactly where the line should be drawn.  But it is clear that we all have to put up with a certain amount of abuse if the regulatory framework is to do more good than harm.

This is painful.  I find this especially so in the case of politics.  The British press consistently puts about lies and half-truths in order to further their sponsors’ own political agendas – or simply because it encourages people to buy papers.  This overwhelmingly favours political conservatives.  But there really isn’t much that can be done about this.  Regulation of broadcast media is quite successful – but the press is quite a different matter.  Regulation, if we have it, must focus on the rights and privacy of ordinary members of the public – and not politics.

It follows that any regulatory solution has to be a messy compromise, whose effectiveness turns on tiresome details.  Trying to derive your views by basing them on high principles doesn’t work.  The Prime Minister, David Cameron, opposes the “statutory underpinning”.  This is no doubt a political calculation, as the Conservative Party depends heavily on the press to do a lot of its dirty work – the sort of negative campaigning that would be done by paid advertising in the US.  But one point he made did strike a chord.  He said that any law to implement the recommendations would be highly complicated, and probably not worth the trouble.

He may be right.  The power of the press is fading.  Newspaper circulations are falling.  Old fashioned press barons are slowly being replaced by faceless, calculating corporate types.  People rely on newspapers less and less.  They are being replaced by a combination of broadcast media and internet outlets.  That brings its own problems.  No doubt the press’s behaviour has helped to hasten its demise.  What is good for short term sales can damage long term results, like sliced bread or lager.

That’s probably for the best.  But please, liberals, don’t pretend that this debate is all about sacred principles.

The gorilla of London’s government

The elephant in the room, referring to an issue everybody can see but won’t talk about, is one of our most irritating cliches – almost as bad the perfect storm, used to mean trouble on more than one front.  So I am employing the elephant’s slightly less tired cousin, the gorilla, in a shameless atempt to get a more interesting headline.  I want to talk about the politically unmentionable fact of London’s local government: its borough system is not fit for purpose.

Local government in London is the responsibility of 32 Boroughs, plus the oddity of the City of London.  These boroughs were created in a reorganisation of London’s government in 1963.  They were amalgamations of a series of much smaller boroughs, and were civil service creations, designed to carefully balance income from rates, the taxes then charged on both business and residential properties – and which funded a large part of each borough’s activities.  Inner London districts, like Vauxhall, were paired with leafier areas like Streatham.  There was little or no attempt made at geographical coherence.  They were more or less random collections of London’s villages, with boundaries often ignoring even these (Balham is split between Wandsworth and Lambeth, for example; Wimbledon between Wandsworth and Merton, and so on).

Geographically incoherent and designed for a defunct system of local taxes: not a promising start.  But that is not the main problem.  Fifty years after their creation they are clearly much too small to deliver most of their services efficiently.  I have had the same conversation with a number of different people working with local government in a number of different parts of London.  They all agree that the boroughs are much to small to be effective, especially in the areas of social services and education – but also in general administration. But politicians won’t talk about it.

Two problems are coming together.  First is critical mass and economies of scale: there is excessive duplication at senior and administrative levels, and loss of flexibility in the deployment of staff.  Then there is geographical incoherence: problems often cross boundaries.  I can see this clearly in the area that I have most to do with: education.  Even at primary school level: there is a crisis of lack of primary places locally; it is worst at the borough’s boundaries – and yet officials are loath to consider new schools where a lot of pupils will come from another borough.  The problem gets worse at secondary level – and it is an absolute joke at tertiary – where the colleges boroughs are responsible for service much bigger areas than a single borough.

The efficiency argument is getting a little bit of political attention.  The government is encouraging boroughs to merge departments with neighbours.  This is being advanced by the tri-borough arrangement of Westminster, Kensington & Chelsea, and Hammersmith & Fulham.  But this is ad-hoc and awkward, since the councils themselves are being left intact.

But as well as the boroughs being too small, they are too big.  A local sense of place is already quite weak in London.  Such as it is works by “village”, whose boundaries can be hard to see, but which each have a distinctive centre, often based on an ancient village that was once rural.  The borough feels remote and arbitrary by comparison – with residents often feeling that their area is neglected by councillors and officials.

Too big and too small at once.  Perhaps there is little surprise that politicians are staying clear of the issue.  But it is worth thinking about how it might be organised more sensibly.  I want to do this in the opposite way to a classic civil servant: from the bottom up.  This starts with the villages.  These need to be defined as the basic unit of local government.

My starting point for identifying local villages would be the good old postal districts.  These were designed in 1917 by the Post Office, without regard to parish or civil boundaries.  But they seem to have known what they were doing, and it is easy to attribute a village name to each district (SW11 = Battersea; N1 = Islington, and so on).  They have also become a badge of identity in their own right.  This won’t always work, and they get a bit dodgy around the edges, but think this gives a broadly viable size.  One thing that should be disregarded is current ward boundaries.  Wards are designed to be of even population size within a borough – which means they disregard commonly understood village boundaries.

These village should then be grouped into a smaller number of boroughs.  Geographical coherence is probably not a realistic objective here – though it makes sense to broadly accept the Thames as a boundary.  There should be no fetish about exactly equal size, however.  How many?  There are two current models.  There are six NHS PCT clusters.  This would be the radical version, and sort feels like the five boroughs of New York.  The less radical alternative would be the 14 constituencies of the Greater London Assembly.  This feels like a better balance between Greater London overall, and and the villages.

So how would the two tiers work?  The heavy lifting, including all contracts of employment should be at borough level.  The main function of the village level would be scrutiny and coordination.  But the villages should lead on the critical area of planning.  Things like licences for pubs should be decided at this level.  Following the example of what goes on outside London, residents could elect councillors at both levels: principal local authorities and local town or parish councils.

But amongst those that have worked with such things there is almost no enthusiasm for separate town council elections.  The general level of political apathy may make it difficult to sustain in many areas – and it is a recipe for friction and conflict.  A much better idea is for the principal councillors to do both jobs.  The borough would form village committees of the councillors elected in each village.  This is the neighbourhood committee system which operates successfully in Liberal Democrat boroughs such as Kingston.  This places some constraints on  size.  You would need, say, a minimum of six or seven councillors elected in each village.  Let’s say there were 120 to 150 villages across London: that would maybe 1,000 councillors.  With only six boroughs you would have an average of about 170 councillors in the principal authority.  With 14 you would have a more manageable 70 or so.  The best way of electing the councils would be one multi-member ward per village, elected by proportional representation (STV or party list).  You would simply vary the number of councillors in accordance with the population, without the need to keep reviewing boundaries.

Well that’s enough to start with.  I haven’t even mentioned taxes and debts. But the point now should be to start talking about it.  Surely this would be a more efficient and effective way of running the capital?  It needs to get on the political agenda.  Probably the next step would be for a think tank to take the idea on, and then start drawing in politicians from across the political spectrum.  Time to talk to the gorilla.

The hollowness at the heart of the Church of England

“We have some explaining to do,” said Rowan Williams, the outgoing Archbishop of Canterbury, after the General Synod of the Church of England failed to endorse the ordination of women by the requisite majority.  That is certainly true.  Many English citizens, practising Christians and not, and in total despair about whole purpose and meaning of the church.

One thing struck me immediately about Dr Williams’s televised statement.  After saying the Church had some explaining to do, he went on to point out the reasons why he thought women should be admitted as bishops.  They were all pragmatic, having to do with the need to reflect the wider values of society, and its ability to influence those values.  This was a bit of a shock.  I had thought that religious bodies made such decisions on the basis of high principle.  If it is the right thing to do in Christian terms, then do it.  Or not.  The Roman Catholics, at least, show much greater clarity in such things.  They heroically plough on against the values of wider society because they believe that is God’s path.  The CofE’s path bespeaks a certain hollowness at its heart.

It also shows something about the toll arguments about the role of women, and indeed gays, has taken on the institution.  I was brought up in a Church of England household, was confirmed and a regular churchgoer until I was 21 (in 1979).  At university I was a member the Christian Union, though not entirely signing up to the full Evangelical credo – I never could take the literal truth of the Bible, for example.

In the 1970s arguments about women priests raged.  My mother, a senior clergyman’s daughter and brought up on a cathedral close, was a passionate supporter of women’s ordination, and the whole family followed her.  But there were antis at our rather anglo catholic (at the time described as “high church”) local parish.  I remember arguing furiously with our curate – he held the view that it was impossible for a woman to be a priest since the Christian image of God is male.

This was an instance of the anglo catholic view.  This line of thinking places huge emphasis on the church’s traditions and history, and thinks that sweeping them away drains the faith of meaning.  They have rather ambiguous feelings about the Church of Rome – but they feel that the Church of England’s ultimate destiny should be to reunite with it.  This group is fading in its importance.  It has failed to capture the imagination of the young.  It has been fatally undermined by the defection of so many of its adherents to the Roman Catholic church.  The Romans have maintained a more dynamic balance between tradition and modernity, and are fundamentally more appealing to the traditionally minded.  The more mystical and less intellectually tyrannical Orthodox church also appeals.

The most important part of the blocking minority in the Church of England is now a group that describes itself as “conservative evangelicals”.  I know very little about this group.  The evangelicals that I knew at university were different and more mainstream – a group from whom the next Archbishop of Canterbury, Justin Welby, is drawn.  I have seen them described as inspired by American thinking – and their use of the word “conservative” to describe themselves rather lends support to this.  It isn’t a hurrah-word here, even among conservatives.   They are sceptical of many ancient church traditions, and treat the Bible as their main source of authority.  They seem have a strong, nostalgic and paternalistic outlook.  They do not object to women bishops as such – they just do not want to be in a position where their congregations have to accept one.

What is this institution over which these factions are arguing?  It is deeply embedded into English life and the unwritten British constitution.  Most English use it to mark the big life events of birth, marriage and death.  It is the source of pretty words and beautiful old churches.  They lustily sing Christmas carols and sigh at children’s nativity plays.  The CofE is deeply identified with the country’s lingering identity with the Christian faith.  It is a bastion of civic society, as church members carry out social work in the wider community, and even reach out to those of other faiths.  The English have mainly stopped going to church but they would no more abolish the Church of England than they would the Queen or the first-past-the-post voting system, other traditions that have long lost their intellectual coherence.

But for practising Christians this is hollow.  The ultimate purpose of the Church should be to bring people into the faith, and here it has failed.  Now it is failing even to define what that faith consists of, as it comes a loose association of incompatible understandings.

The hope among some, such as Dr Williams, was that there was enough common ground for these disparate groups to sustain a joint community – and then use the platform provided by the Church’s national status to draw more people in.

I don’t find this such a silly idea.  I think at the heart of the Christian gospel is  a wonderful set of ideas that are still capable of drawing people in – myself included.  Love, forgiveness, redemption, equality, embracing the disadvantaged.  They are as fresh today as when Jesus first preached them.  If only practising Christians could agree to talk about just these in public, and agree to differ on everything else.

But no.  Christians are obsessed with abortion, gays, the ordination of women, the literal truth of the Bible, heaven, hell and a host of other peripheral things where the church’s teaching fails to resonate with our modern understanding of how the Universe is.  The Church of England has lost so much time and energy talking about such things that they have no energy left for anything else.

Personally I think it would be right for Parliament to save the Church from its constitutional mess – and then hope that the new Archbishop, who shows some signs of promise, starts to put some meaning back into its hollow heart.

The dark side of evidence-based policy

Speaking at a Lib Dem conference in the Coalition’s earlier days Linda Jack, a Lib Dem activist, called for a commitment to “evidence-based policy”.  She was interrupted by strong applause from the floor.  Ms Jack is a feisty activist, but is not known for thought leadership.  Her use of the idea, and the applause she got for it, shows that evidence-based policy has become a mainstream idea in some liberal circles.  Not long ago it was a rather abstruse, fringe idea pushed by academics who wanted the extra public funding that it would require.  Why is it now hurrah phrase used by political activists?  Is this a good thing?

But first, what is it?  No many people just think that it means that any public policy idea should first be based on some kind of evidence that it works, rather than just sounding like a good idea.  But, to those that take the time and trouble to advocate it, it in fact refers to a particular type of evidence: statistical studies comparing the effects of the policy in action against some kind of control group.  It takes its inspiration from medicine, and, indeed, some of its strongest advocates, like the writer and journalist Ben Goldacre, and Lib Dem former MP Evan Harris, are medical doctors.

Evidence-based therapies are all the rage in modern medicine.  Statistical evidence techniques have long been used in drug trials, but their use is widening to other areas.  It forms the core of policy advice put forward by Britain’s National Institute for Health and Clinical Excellence (known as NICE).  What is interesting about these evidence-based therapies is their pragmatic element.  Treatments are recommended because they are shown to have benefits, even if the explanation is unclear.  I am taking medication to reduce ocular pressure, because ocular pressure seems to increase the risk of glaucoma.  My consultant told me that why this was so was not understood – the treatment was prescribed purely on the basis of the evidence.  Although the technique is often described as scientific, this pragmatism takes it away from classic scientific method – not in the rigour of the testing, but in the lack of a theoretical model to drive the hypothesis.  No matter; a lot of useful therapies are being put into use, and some ineffective ones are being weeded out.

So it is quite natural for people to want to use the technique for non-medical areas.  An early example of this was the testing of conditional cash transfer programmes in South America in a bid to raise levels of schooling and reduce poverty.  A programme would be devised, and participating villages would be compared to ones outside, preferably with a random assignment between the groups.  These studies helped make the case for these programmes, which are now a standard part of the anti-poverty tool set, and are credited with particular success in Brazil (the Bolsa Familia programme).  A lively academic debate has been provoked as to how useful the technique is.

What are the problems?  Most of the debate that I have read about focuses on two issues: the rather limited nature of the questions that you are able to gather evidence on, and the huge difficulties of gathering untainted evidence, especially if it is not possible to do large scale randomised trials, which it usually isn’t.  It is disappointing that wider public debate is so limited, though, and evidence-based policy has simply become a warm, apple pie idea, without people asking searching questions as to what it is and what its limitations might be.  There is a dark side to it.

This dark side is in fact evident in the medical model.  Dr Goldacre has made his name in using evidence-based ideas to expose charlatan claims for fringe treatments that often get uncritical publicity in the press.  This is good, but he*, and especially his disciples, swiftly move on to attacking alternative therapies in general.  Homeopathy is a favourite target, since its use of extremely diluted solutions defy scientific common sense.

This is an interesting case.  I don’t know much about homeopathy, but from what little I do know it places great reliance on three ideas: that you should look at the whole person; that mind and belief are a critical element of therapy; and that every person is an individual.  These are three blind spots in statistical evidence techniques.  They can only be used to test very simple propositions, so it is necessary to break down the whole person into a limited number of measurable symptoms.  It is impossible to distinguish mind and belief effects from the so-called “placebo effect”; the placebo effect often works, but is excluded and ruled out of order by the evidence advocates since it is so difficult to test.  And statistical evidence techniques depend entirely on using general rules, and do not attempt to find treatments that will work for everybody.  So homeopathy is untestable using evidence-based techniques.  That is a problem (how do you spot the charlatans?) but it does not make it rubbish.  In fact what the evidence advocates are trying to do is to impose a particular belief system on what should and should not be included in health therapies.  There is a world of propositions that are testable by statistical techniques, and a world that is beyond their scope.  Both are big and important.

And what about evidence-based policy?  The idea is bandied around very loosely by political activists, and most have very little understanding of the full implications of the technique or its limitations.  Why are they so keen, then?  At first I thought it came from the habit of politicians (including, and especially, the “non-political” sort) of using loose statistical associations to support their advocacy – to try and give themselves more credibility.  This happens: I see much nonsense around the wisdom or otherwise of the government’s policy of converting schools into academies free of local authority supervision.  But the cover was truly blown for me when I saw Dr Harris at a fringe meeting at the recent Lib Dem party conference.  This was on the government’s “Free Schools” policy.  Because of the difficulties of gathering evidence to test any policy proposal, he could knock any proposal down at will on the basis of lack of evidence.  It is a powerful weapon with which to defend the status quo (which, of course, you do not need to test…).

Evidence-based policy, in the limited sense that its advocates use, is no doubt a useful tool, but of quite limited value in practice.  We need to broaden our idea of what constitutes proper evidence, and develop an understanding of where good old-fashioned human judgement and instinct is more appropriate, given its speed, responsiveness and ability to handle both complexity and individual variations.

* Dr Goldacre is very careful in his use of words.  His actual attack on alternative therapies may not be as direct as I am implying.  He is, rightly, more interested in challenging false claims about evidence than in challenging therapies that make no such claims, but where conventional evidence is lacking.  This not true of many of his fellow travellers – I have read much mockery of homeopathy online.

BBC crisis – should it be radically reorganised?

The British political and media establishment hunts in a pack.  They pick one issue, everybody attacks it at once…and then they swiftly move on to the next.  There is no time for proper critical analysis, or maintenance of aim over any period longer than a few days, sometimes just hours.  This has been evident over the recent media scrum over the BBC and child abuse.  First it emerged that celebrity DJ the late Jimmy Savile was up to no good in the course of his work, some years ago, at the BBC.  This raised some deeper issues about the management of these sorts of risks at both the BBC and elsewhere.  Before any serious reflection  could take place on that, though, the pack had moved onto the editorial decisions of the BBC Newsnight programme when it dropped an investigation into Mr Savile in late 2011.  Then came another Newsnight investigation into a long past scandal at a Welsh children’s home, which supposedly implicated a then senior member of the Conservative Party, who wasn’t named.  The individual concerned, who was quickly outed in the usual social media, then counterattacked, and it quickly became clear that the allegations against him had no basis.  The pack moved onto the role in this of George Entwhistle, the BBC’s Director General (DG) of less than two months.  After a particularly aggressive interview on BBC radio by John Humphreys, Mr Entwhistle was considered dead meat and duly resigned.  Briefly the pack went onto the question of the BBC ‘s cumbersome management structure, before, this morning, focusing on Mr Entwhistle’s severance terms.  Each of these issues deserved more considered analysis than it generally got, although a few thoughtful articles were published (like this one from the FT’s Philip Stevens – behind paywall).  The issue of how the BBC should organise itself is a particularly difficult and interesting one, though.  This blog is a lone wolf who only occasionally hunts with the pack, so I make no apologies for backtracking a bit to give it a bit more thought.

First, the health warnings.  I have very little experience of the BBC except as a consumer of its output.  I have never worked in a media organisation.  But as a manager I have a lot of experience in the design of organisation structures.  There is a tendency for introverted managers like me to put too much weight on organisation charts, which we can play with to our heart’s content in private, at the expense of other vital organisational elements, like strategy and culture.  But they are nevertheless very important.

In the BBC’s case, the general accusation is that it has too many layers of hierarchy; it is also said that it is too complex, which probably means elements of “matrix management” and multiple reporting lines.  At the end of a BBC comedy News Quiz a couple of weeks ago, the programme writers made this point by adding into the credits all the managers responsible for the programme up to Director General.  It was a long list (including heads of comedy, Radio 4, Radio broadcast, etc.). The BBC Trust’s Chairman, Christoper Patten, voiced his frustration at the sheer number of managers at the BBC.  This, it is said, diffuses responsibility for any given decision, allowing poor decisions to go unchallenged; either that or there is excessive challenge and innovation is stifled.

But this type of structure is quite typical of large organisations dealing with complex processes.  Indeed it can be seen as the common sense way of organising things – the sort of structure most people would come up with if they were asked to organise things.  This was illustrated wonderfully when a former BBC Chairman, Michael Grade, was interviewed.  What Mr Entwhistle had lacked, he explained, was a deputy specifically responsible for keeping an eye on BBC journalism, and moving to head off trouble, or at least alerting the DG of trouble ahead.  The problem wasn’t that Mr Entwhistle had too many managers, he seemed to be saying, but that he did not have enough.

And, of course, that is exactly how such structures come into being.  If you have a particular problem or challenge, you create a management position to own it and give it due focus.  And so organisation structures grow.  This can work, but it usually doesn’t.  It is rear-view mirror driving, and can create so many conflicting tensions that organisations seize up.  Both of these problems can be overcome by the right sort of leadership at the top – which indeed is what Lord Grade also suggested.  Somebody who can cut the c**p and short-circuit the structure when required.  But this did not seem to be Mr Entwhistle’s management style, whether from inexperience or natural preference, he seemed to want to let his managers get on with their jobs.  This gives another clue as to the endurance of manager-heavy organisations – they suit big egos at the top.  They also offer lots of promotion paths to people further down the organisation.

So multi-layered management is common sense, and can work with firm leadership from the top.  That does not make them efficient.  The alternative is known as a “flat” structure, from how it looks in a classic organisation chart.  There are fewer layers of organisation (five is not untypical from cleaner to Chief Executive, perhaps seven in a very big organisation), but each manager has more other managers, on average, reporting to them (say from three to seven or eight).  This requires many less managers.  But it also requires clarity, vision and managers who don’t mind acting on initiative, and other managers who don’t mind it when they do.

How might this work for the BBC? To my inexperienced mind the obvious way to go would be to organise it into a series of separate brands aimed at particular audience segments, and each given a number of television and radio channels, and then give each head of brand a lot discretion how and what to deliver through the channels under their control.  BBC News would probably best be treated as its own brand, even if most its distribution would be through other channels.  There would be some technical functions too, with generally lower organisational status.  Duplication and clashes between the brands would be tolerated.

But this does not sound very BBC.  We like to think of it serving the nation as a whole – and duplication looks wasteful, even if in the long run it isn’t.  But maybe it would force the BBC to sharpen up its idea of who it is trying to appeal to.  That is appropriate in a multi-channel age.

But without that type of customer-centred organisation you are forced into something functional, which would soon resolve itself into something very similar to what it is now.  And no doubt that is what will eventually happen.  A few managers will be knocked out; and a few multiple reporting lines removed, amid claims of radical change.  But the underlying tension causing the complexity wouldn’t have been dealt with.

The BBC is a wonderful institution.  Its news brand is somewhat tarnished, not just by these recent episodes, but by sloppy reporting generally.  And, as Philip Stephens suggests, it is perhaps too beholden to celebrity presenters.  But it’s still the best there is on TV and radio.  And at least this episode shows that it can report objectively about itself (how unlike the Murdoch empire’s papers).  It won’t be the end of the world if it does not have the courage to reorganise itself properly.

 

Turning the Nice Party into a successful political force

Over the last two weeks the Lib Dem conference has awoken this blogger from a rather inactive period (so far blogging is concerned).  Today I will complete this active period with a longer post, before going quiet for a couple of weeks.  I want to follow through the thoughts provoked by my last few posts to set out what I think the Liberal Democrat strategy and policy stance should be.  I am not part of the party’s Westminster set, and failed in my attempts to join it.  Neither am I standing for any of the party committees.  But I want to get this off my chest, and I hope it provokes a constructive train of thought amongst Lib Dem readers, and offer insights into British politics to others.

In Monday’s post I discussed the question of the Liberal Democrats’ core identity.  I concluded that the party should base this around the values of tolerance and freedom, allied with a strong sense of civic responsibility and compassion.  An identity that rejects the classic identities of class and nationalism that the two other main political parties still depend on.  In other words, the Lib Dems should be the Nice Party.  Within this identity should be plenty of scope for differences of opinion around community politics, economic liberalism and so on.  But how to turn this rather challenging proposition into a successful political movement?

And here we run into the grim realities of how you create sustainable success in politics.  It isn’t very nice.  But it is a challenge that the party has successfully risen to in local politics in some parts of the country.  I have met a number of people in the Kingston Liberal Democrats, where the party has both an MP and runs the council.  I think they are nice people.  I don’t think their Tory (or Labour) opponents will share that opinion: they manage their politics with a certain killer instinct.

I think the best place to start is with where the party should be campaigning, and whose support it needs to win.  There are three groups: floating voters where the party is strong; core sympathisers everywhere, and potential donors.

The first group, floating voters, is entirely within the party’s comfort zone.  Other parties may be catching up, but there is a lot experience and wisdom promulgated by organisations such as the ALDC (Lib Dem councillors) or gurus like Mark Pack.  It is question of local campaigning, meeting people fact to face, good messaging (usually including a ruthless squeeze on whichever other main party is weakest), and ruthless targeting.  This is all very good, but it is not enough.  It needs activists and it needs money, and increasingly these have to be drawn from outside the targeted area, which is, by implication, being neglected.  And even the best local campaigns are helped by a bit of national bounce that comes from broader popularity.

So the party needs to build core support everywhere: say about 10% of the electorate who become reliable supporters at any election, anywhere, and who are a source of activists, who can then be used in target areas.  And here the party is completely out of its comfort zone.  It requires a completely different style of low-effort/high-impact campaigning from that used in target areas, where huge efforts are made to gather the last few votes.

The London elections earlier this year show us this graphically.  London is quite a liberal place, but the party’s Mayoral candidate, Brian Paddick, failed even to secure the 5% necessary to keep his deposit.  The funny thing was that, by the party’s standards, the campaign was quite well funded – much more so than in previous London elections.  The messaging was wrong.  With an ex-policemen as its figurehead, the party tried to reassure voters worried that the party was a bit soft, by showing a “tough” face.  “You break, you pay” was one slogan, emblazoned on billboards.  All this did was put off the party’s potential core.  They should have done the opposite – instead of trying to paint Mr Paddick as a Mr Nasty to reassure sceptical floating voters, they should have tried to reassure the core than in fact he was really rather nice and liberal (which he is).  It’s the difference between going after core votes and floating voters.

Also the party needs to do more of what I have called “insurgent campaigning” – light touch, quick impact campaigns than move on quickly.  The party needs to focus more of its campaign training on this type of campaigning, even though it wins no elections under first past the post, and celebrate success.  Unfortunately every trained activist seems to want to fight a full-strength floating voter campaign even in areas where this is clearly not appropriate.

But while this sort insurgent campaigning may be relatively cheap on activist time, it helps a lot to have some money – and money is increasingly important in target campaigns too.  If nothing else it makes the party look slick and credible – and our increasingly consumerist society puts the two together.  I have noticed this especially here in London amongst ethnic minority voters, who tended to laugh at our cheap, old-fashioned literature.

And money requires donors.  It also requires success at things like European elections, where the party’s weakness at core-vote campaigning threatens oblivion in 2014.  But this is where coming into government should be a big help.  People tend to assume that the present is a template for the future.  While the party was confined to the sidelines it was often assumed that the party would never get beyond local government.  Now people assume that future coalitions are a strong possibility.  And the party’s serious work in places like the European Parliament (compare it to UKIP!) make this a party that companies and rich individuals might see the virtue in helping.  But this requires the party to think about how it might go about persuading such people to part company with their money.  Here too the party seems outside its comfort zone.  All too often party activists think that fundraising is either local dinners and raffles that raise paltry sums, or else in the scope of professional fundraisers who can be left to get on with it.  But it has to be integrated into the whole campaign process.  Donors need persuasion in very similar ways to voters.

Now comes my next jump.  The party’s policy stance, both in what it says and the messages it chooses to prioritise, are an important part of its success, especially for core voters and potential donors.  They translate abstract notions into things that people might be really concerned about.  And here we can afford to raise our eyes for a moment away from the grubby business of political campaigning to higher things.  What is it, exactly, that the party wants to achieve in politics that is different from the other parties?

And here it is not just a question of doing a bit of work with focus groups.  We need to look at the bigger trends in society, and try to make sure that we concentrate on policies going with the grain of history – and not leading to cul-de-sacs.  The party needs to play long, and profit from slip-ups by the other parties.

For what it’s worth I suggest focusing on three broad policy themes: fair growth, limiting government, and global responsibility.

The idea of fair growth takes as its starting point the growing inequality of distribution in both income and wealth.  Modern economic growth, it seems, benefits only a small minority.  A large number of people are completely marginalised, and a lot of others fear that will be their fate.  The economic orthodoxy that growth benefits all society, and that pay reflects the marginal cost of labour are both flagging: not so much untrue as not enough.  A lot of the unequal distribution of wealth is not about due rewards for benefits conferred on all society – but about a skewed distribution of power.  This clearly affects policy on tax, benefits, and public services, which may redistribute wealth.  But there are also issues about how pay rates are set within organisations.  These are issues that Labour has now taken to heart (after being a bit blind in the Blair era), but where the Tories have a complete blind spot.  Here the party can distinguish itself from the Conservatives, but not Labour.

Limiting government, on the other hand, is Labour’s blind spot.  Unfortunately it is uncomfortable for many Lib Dems too.  I described the core problem that this addresses in this post earlier in the week.  The costs of most public services are destined to grow in proportion to the rest of the economy, and costs as a ratio to output.  This applies most clearly to healthcare (where it is being helped along by demographic trends), but we can see the same issue in education, policing and defence – not to mention the issue of pensions.  Tax is an imperfect way of funding anything – it  is difficult to make it accountable, and it is difficult to form a consensus on what a fair tax take is.  So it will not be realistic to fund these increased costs entirely from taxes.  The state will have to do less, and it will have to use new structures to do things more efficiently.  Here the Tories have a good understanding of what is happening, even if they muddy it with irrelevant talk about “competitiveness”.  If there is a unifying theme for the Coalition, this is it.  Labour, meanwhile, want to row back on many ideas to reform public services, for example by using private and third sector providers.  Their only cost saving idea is to freeze public sector pay – not at all sensible in the long run.  This is where the party needs to challenge Labour rather than quietly going along with it.

And on global responsibility we have to break free from the idea that this country can go on its own happy way, while the rest of the world deals with trade, regulation, carbon emissions and what have you.  This is most clearly visible in the Euroscepticism that fast becoming a national consensus, so say nothing with a general loss of momentum on climate change, and knee-jerk opposition to immigration.  There are friends and foes in both other parties on this – but the emerging Euroscepticism of the Tories offers the biggest opportunity.  I like this theme not so much because it plays well with the general public, but because it will resonate with large parts of the business community – who might start to realise that exterminating the party is not such a good idea.

Concentrating on these three broad themes, means excluding others.  These include a more explicit focus on global warming and the environment, Paddy Ashdown’s idea of re-enfranchising electors through localising politics, and constitutional change more generally.  Worthy as these ideas may be they are not going catch on quickly enough.

To exploit these themes the party rapidly needs to develop some heavy-duty and distinctive policies on taxation and Europe, and perhaps education; it needs to hold the line on health reform and university finance, and in needs develop insurgent campaigning on everything else.

Taxation is the critical issue: but it must be understood that that the total tax take is just as important as which parts of the economy are taxed.  If there is a torpedo heading for the good ship Miliband, launched with such a fanfare this week, it is the tax burden.  We can rely on the Tories to fire the torpedo, but we mustn’t let it sink us too.  Besides limiting government expenditure, and so taxation, this answers the question as to why we are in coalition.  But tax also plays to the fair growth agenda – we need to find ways of taxing the very rich that do not throttle enterprise.  A tricky issue will be the top rate of income tax; there is a strong case for cutting out the 45% rate, and no doubt this would help the party’s appeal to donors.  But it might be too difficult to sell.

Europe is critical because this would a central plank of the party’s appeal to business.  But the party needs to have a convincing answer on how we stay clear of the Euro, while still at the heart of the regulatory process.  The party is dripping with European experts – if it can’t come up with some good looking ideas here you really do have to ask what the party is for.

Education is important because it is a central part of the fair growth agenda.  There is a space for more constructive policy that stays clear of Conservative grandstanding and micromanagement.  I do wish the party hierarchy would make more effort to reach out to members invovled with education, though these can be quite tiresome: it may help to win over educational professionals, whom I am sure are being put off by the government’s current rhetoric.  But this does not sound to be a make or break issue for the next election.

On health and education finance I think the party needs to stick with the current governments reforms, more or less, on the grounds that the tax burden will get out of control if we don’t.  It will help with the proposition that Labour are profligate. We may be able to come up with some variations to soften the message, but I think the party has to grit its teeth.

And by insurgent campaigning, I mean grabbing a headline here and there, especially in areas where it plays to liberal principles and will motivate core voters and activists.  Human rights and the security state provide some issues, and environmental policy no doubt more. and there will no doubt be local issues that can be taken up, not just in target areas.

There I need to leave it.  This post is not quite as well developed as I hoped, but I hope it provides food for thought.

 

The Labour challenge gathers pace, but the ghost of 1992 still haunts

What to make of Ed Miliband’s speech to the Labour Conference yesterday?  I did not see it.  On reading that it lasted 65 minutes I’m afraid I ducked out of watching it or reading transcript.  So what I am relying on is a very indirect impression – much as the rest of the public gets.  One thing is clear: it was a big success.  This shows that Mr Miliband is a leader who learns from his mistakes, and is consistently raising his game.  In my view Labour are now odds-on to win the next General Election with a full majority.  What happens after that is another matter.

One way of gauging the speech’s success is silence from the usual suspects.  The Lib Dem early morning briefing for activists decided not to mention it.  Even more egregiously the right-wing think tank Reform’s daily press summary contained only a tangential reference.  Contrast this with the hay that the usual critics were making last year.  The most important thing about this is that it confers on Mr Miliband and air of competence – something that is absolutely vital in modern politics.  As an aside, I think that the real reason why Republican presidential candidate Mitt Romney is in trouble is not the substance of his so-called gaffes, but that these make his campaign look incompetent.

As to content, this is harder to gauge.  Some commentators hail his appeal to the “One Nation” theme of 19th Century Tory Prime Minister Benjamin Disraeli as a stroke of genius.  Maybe you had to be there – but this looks like a speech writing gimmick.  On the whole the speech seems to have been pitched at the so-called “centre ground”, apparently vacated by the Conservatives in spite of David Cameron, and also eagerly being eyed up by Nick Clegg and his advisers.  Vocational qualifications; apprenticeships; housing; not promising to reinstate all the current Government’s cuts.  Lib Dems complain that many of these things just exactly what they are already doing in government.  That’s politics: the Lib Dem message is being drowned out by the Tories.  Interestingly there were some sops to big business on encouraging long-term investment – rather spoiled from their point of view by his attack on the current government’s cut to the top rate of income tax – “writing a cheque of £40,000 to every millionaire in the country” – something that is palpably not true (many, even most, millionaires did not pay the 50p tax rate and are unaffected; quite a few non-millionaires did; almost none will actually get a cheque)…an ill-judged sound bight in the battle for donations, if not conference applause.

This is quite well judged overall, though.  Even better, the whole party seems to be singing from more or less the same hymn sheet.  This is so unlike the Tories after they were turned out of power in 1997.  With this discipline and intelligent messaging, they look set to retain the votes they took back from the Lib Dems, and pick up a few more – while the Tories look out of touch and incompetent.

What can go wrong?  All successful political movements require a balancing act, and Labour is no exception.  Labour need to harness the anger of public sector employees at government cuts and reforms to give them the ground troops to counter Tory money, and not a few votes too.  But, unlike Nick Clegg and his student fees pledge, they plan to win and be in a position to fulfill their promises, so that they can win again.  They need to commit to a set of policies that are reasonably workable.  It is here that trouble is building for the party.

First is the obvious point that government cutbacks are not just an ideological Tory attack on the state.  The size of the state in 2010 was systematically too big, and the country may never return to a state on this scale.  Many Labour activists misunderstand Keynesian criticism of the government’s economic strategy into thinking that more state spending will generate lots of growth forever and a day, rather than simply being about the tactics of how a shrinkage is best managed.  Mr Miliband is trying to manage these Labour activists’, and especially trade-unionists’, expectations on this front, and it featured in his speech.  But most of his ideas still seem to involve more state spending.  Expand apprenticeships?  That will require state subsidies.  The same can be said of turbo-charging housebuilding, now part of the centrist consensus.  Upgrading vocational qualifications?  This has been a state policy goal for as long as I can remember.  The problem is not lack of intentions – it is the prioritisation of resources.  Money is by no means the only problem with vocational education – but it is surely part of the solution.

And there is a further difficulty.  If Labour can’t promise their activists and union donors extra state spending, then they have to give them something else.  And that something else is an attack on privatising public services – especially in the NHS, and in policing too.  This will hobble attempts to make state services more efficient and make the problem of dealing with limited budgets that much harder.  This is a nakedly ideological policy, when they are trying paint the Conservatives as the rabid ideologues.

A spectre haunts Ed Miliband and the Labour Party: Neil Kinnock’s campaign against John Major’s Conservative government in 1992.  Mr Major’s government make the current government’s inept communications look slick.  In 1992 Mr Kinnock had them on the ropes; it looked as if the Tories did not even want to win.  And then Labour blew it.  A strong change of message by the Tories on Labour in the final week concetnrated on allegedly unfunded spending commitments under the title “Labour’s tax bombshell”.  Their newspaper allies relentlessly played on the idea that Mr Kinnock was not Prime Ministerial.  And Labour lost.  There are a lot of differences between then and now, but if I was in the Tory election planing department, I would be gathering evidence for another “Labour tax bombshell” campaign.  Labour are providing them with too much tempting material.

What is the core Liberal Democrat identity?

One thing that most people who take an interest in the Liberal Democrats agree on is that the party needs to develop a clearer identity and, to use the popular marketing speak, a clear “brand”.  This has characterised much of the coverage of the conference, such as this from the Economist, showing not a particularly good understanding of the party, and this from Michael Meadowcroft, who has an excellent understanding, but does less well in explaining what the party actually needs to do.  Unfortunately these articles are all too characteristic of the debate.  On the one side outsiders, including recently recruited party staffers, who simply assume the whole thing is about deciding on a politically convenient position and then moving the party to it, and on the other by insiders who fail to articulate exactly what they mean by the clear liberal (or Liberal) principles they want the party to espouse.  Let me try to pick a way through.

First: does the party really need to worry about this?  Just because all the pundits agree doesn’t make it true.  The answer is yes.  There are two problems with the party’s current standing, or lack of it.  The first is that it struggles with a “core vote” strategy.  This is particularly important for elections fought under proportional representation.  The ones we fought in London earlier this year were a disaster; party campaigning was directed to floating voters who had long since floated away, and bringing out the vote people who supported the party in other elections for largely tactical or local reasons, and who large did not vote for it on this mandate.  Contrast this with Greens, who for much less money and effort got out a similar vote based purely on setting out who they were and what they stood for.  This matters because a disaster beckons for the party in the 2014 Euro elections, fought under PR, unless this changes.

The second reason is that there is the perpetual danger of policy confusion.  This has been clearly on display in the debate on NHS policy.  Do we want to follow the Liberal idea of a service with strong accountability to local communities, but flexibility on who actually delivers it?  Or do we want a Social Democratic service which is pretty much the same throughout the country, provided by a single organisation?  With the help of Lib Dem ministers, the government started off with something that looked a bit like the former, only for activists to reject it for the latter.  This confusion matters when you are an aspiring party of government rather than one simply of protest and opposition, and a party of government is what the party aspires to be.

But a word of warning: you can overdo the clear identity.  Successful political parties are coalitions, combining both a sense of common identity and a high spectrum of disagreement.  The Conservatives, for example, identify with the rich and those who aspire to be rich: but this brings together social conservatives with those who just want to cut taxes.

It is instructive to consider the two attempts to rebrand political parties that have shaped British politics in the last couple of decades.  The first was Tony Blair’s New Labour project, and the second David Cameron’s attempt to de-toxify the Conservative brand.  Both involved challenging some deeply held beliefs, and have left a deep sense of betrayal in their parties.  In Mr Blair’s case the effort has not been unsuccessful.  The party won three elections and even in opposition is cohering much better that the Conservatives have in a similar position.  I think that is for two reasons, one intended by Mr Blair, and the other not.  The intentional part was the illiberal, strong government aspect, clamping down on civil liberties.  This has played well with the working class communities that are the core of the party’s identity – and has also helped forge bonds with paternalistic ethnic minority communities.  When Mr Blair assiduously wooed liberals in the 1990s, he never really meant it.  The unintentional part of Labour’s rebranding is its identification with public sector workers, expanding their numbers and protecting their interests.  A modern economy requires a large state, and appealing to these workers is a powerful political strategy – but one that Mr Blair tried to resist, unlike his successors Gordon Brown and Ed Miliband.

The Conservative rebranding, five years or so on, looks a lot less happy.  What quickens the pulse of most young Tory activists seems to be an entirely different agenda from Mr Cameron’s, reminiscent of US Republicans: lower taxes, smaller state, escape from the EU, climate change scepticism and an outmoded idea of “competitiveness”.  While some of this chimes with public sentiments at large, as a package it it is not a winner.  Combine that with an electoral system that is tilted against them, and the project is likely to be a failure.  The Coalition with the Lib Dems, as Mr Cameron clearly saw, was an opportunity to consolidate this rebranding, but the price stuck in the throat of his party and he was unable to follow through.  The lesson there is don’t try to take a party to a place that it will not stay.

So what of the Lib Dems?  Firstly the party needs a core identity which is able to withstand a large diversity of views.  This is both easy, and tricky.  The easy bit is that the party stands for openness, freedom for individuals to choose the life they want, all underpinned by a sense of social responsibility and compassion.  All Lib Dems, pretty much, will identify with this, and they will think that the other parties do not.  The first difficulty is that this identity is an anti-identity: an identity that rejects, or downplays, the usual identities of class, nationality and race.  That is a difficult trick to pull off.  The second difficulty is that each of the other main parties (and the Greens for that matter) will think that such nice and inoffensive people can be appropriated into their own coalitions with a few warm words.  And indeed, many people with these values work for these other parties.  It is not quite enough.

But it has two important advantages.  First is that it is a natural second choice: not the most liked position, but not the most hated either.  Second is that the forces of history are with it.  The old identities of social class, nationality and the rest are gradually being eroded – and to the extent that the other parties lean on them, it makes them unattractive.

This is enough for one post.  What will count is not this sort of abstract speculation, but the practical steps that follow from them to create a successful political movement.  That, I will return to.