Why I’m pausing for reflection

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I have been trying to post articles twice a week. In the last few weeks that has slowed down. This week I have struggled to post anything at all.  On reflection I think it's time to pause for a while, and reduce postings to a trickle.

Why? Partly it is plain depression - though the non-political side of my life is going well enough. After multiple shocks to the political system, that is not be surprising. I still struggle to accept that Britain is leaving the European Union, that Donald Trump is the US president, and that liberal attitudes are being thrown out in favour of nothing very coherent.

But I think it is deeper than an emotional reaction - I'm afraid I'm an Enlightenment spirit that believes that reason should rule emotion. The world has changed, and the balance of political forces has altered in ways that I have not yet understood. It is tempting to impose oversimplified models on this. For example, it is commonplace to ascribe changes to a reaction of the white working classes. But that can only be a partial explanation - there just aren't enough white working class people for it to be more than that. All successful political movements are coalitions - and it is the unnoticed elements of that coalition that may hold the key. Guilt by liberals over the struggles of many white working class people is being used as a cover for more sinister forces - and some not so sinister ones too.

And if I don't understand what is driving this change, the consequences of change are also obscure. Many bad things are happening as a result of the Trump presidency and Brexit - but some good things might happen too through the law of unintended consequences. Breaking up the old complacent order will force many things to be rethought - and it will not just be liberals who are discombobulated. For example, Mr Trump's recent questioning of the two-state approach to peace in Israel may be no bad thing -as it will force Israel's politicians to be clearer about what it is they actually want - rather than just getting in the way of US policy. In another example, Russia's propaganda narrative about confronting western liberalism loses its power if western liberalism is in retreat. The Russians are having to be careful about what they wish for. And is it too much to hope that ethnic minority campaigners, so long dependent on a narrative of victimhood and guilt, might freshen up their story when the main competing narrative is also one of victimhood and guilt? Perhaps they might spend more time campaigning on problems that they share, rather than on what sets them apart?

And so my reaction to unfolding events is, so often, "wait and see".  The interesting stuff has yet to emerge. Here I am departing from many other liberal observers - who are content to vent a very understandable anger. I cling to an optimism. Liberalism is experiencing a backlash that is similar in some ways to that endured in the later 19th Century. That led to calamity - a nationalist blind alley that only ended in 1945 after countless millions were killed. This time I think it is different. There are many more liberals now; our values are more deeply embedded. The forces of darkness are weaker than they look. We will turn the tide. But how, and where? That remains unclear. It will require new ideas - and a new coalition.

And so I want to spend more time reflecting, and less time simply reacting to events. I will post, but less frequently.

I started this blog almost exactly six years ago. Looking back at it, that has been six years of political retreat. The crushing loss of the British referendum on changing the electoral system in 2011 now looks like a portent. I need to need to rearm and rethink to get ahead of the game.

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Why WTO-plus is better than EEA-minus as Britain negotiates Brexit

It's still very wounding to think of the UK leaving the European Union. The Leave campaign was based largely on lies and wishful thinking; those who voted to leave fell well below 40% of the electorate, which might be a reasonable threshold for such a major change. But Theresa May, our new Prime Minister, has said "Brexit means Brexit". This is surely the best way forward. Rather than try to undermine the referendum result, it is better in the long run to test it to destruction.

Calls to rerun the referendum are understandable but unrealistic. The Conservative Party is overwhelmingly Eurosceptic amongst its membership, if not amongst its MPs. The party must rally to that cause. Members and MPs who don't like it should leave the party. Politically it needs to rebuild its appeal to the working and lower middle classes outside London, who overwhelming voted for Brexit. Mrs May stands a better chance of succeeding here that the duo of David Cameron and George Osborne.

Labour is in an impossible position. Though its MPs overwhelmingly support membership of the EU, most of them had large Leave majorities in their constituencies. They will be unable to ignore this. So with neither the Tories nor most of Labour ready to fight to overturn the referendum result, that leaves the SNP, the Liberal Democrats and an assortment of Northern Ireland MPs to take up the fight. They are impossibly outnumbered. Which does not mean that they should stop putting the case. But that fight is the first step in a very long road. It may be possible that the UK could limp back into the EU as its negotiating position collapses and it faces a deep economic crisis. This would leave a bitter legacy and it is not to be wished for.

That leaves the question of what Britain should aim for in its negotiations for exit. Many advocate something referred to as "EEA-minus". EEA is the European Economic Area, which consists of the EU plus Norway and Iceland and one or more tiny statelets.  EEA members have access to the Single market, but must also abide by the three key freedoms of movement: goods, capital and labour. The idea behind EEA-minus is that the UK would negotiate exceptions to freedom of movement of labour - as immigration was easily the most successful argument used by Leave campaigners. It feels like a pragmatic compromise between the 48% who wanted continued membership and the 52% who wanted to do something about immigration. It would reduce economic disruption. But it is a shabby compromise that would please almost nobody. Leave supporters would still find the country bound by EU laws and courts, and making budget contributions, with the indignity of not being able to influence them. It is hard to argue that it isn't a net backward step on practical sovereignty. Remain supporters would look at the whole exercise as being pointless. And any fudge on free movement of labour is guaranteed to disappoint.

Actually, there is a deeper problem. Free movement of labour goes to the heart of the EU's sense of itself. It is precisely what excites most younger EU enthusiasts about the union. And it is hard to understand why the other EU governments would want to fudge it - the risks for them would be enormous. Any negotiation is practically bound to collapse or at least prove an enormous disappointment.

The opposite possibility is hard Brexit. This means that Britain would be unambiguously outside the EU, without an overarching treaty to bind it in at all.  Trade would be covered by the World Trade Organisation (WTO) framework, guaranteeing some minimum standards. This is by no means as straightforward as many Brexit campaigners claimed in the referendum campaign - it actually requires significant amounts of negotiation in its own right (as the FT explains). But it is a robust baseline, and there is much merit in making this the main focus of the UK's rather limited negotiating resources. The UK would then need to identify a series of priority issues to negotiate with the EU to add on top. Top amongst these are the rights of residence and labour market participation of EU citizens living in Britain, and vice versa. Also there is the passporting of financial services, though this is not an issue to die in the ditch over.

There are three advantages to a "WTO plus" approach, over "EEA minus". First is that it presents a tough negotiating position, which will help to win concessions on critical issues. Second is that it follows the picture painted by Leave campaigners most closely; in the long run it is critical to call their bluff - they are either right in their optimism - in which case the EU needs to rethink itself - or they are wrong, in which case they will be undermined as the major political force they have become. And third it helps get the bad news out of the way quickly. There remains a lot of denial about the impact of leaving the EU; the announcement of WTO-plus would administer a second shock to the system, causing further losses to the pound and inward investment. But then it should hit bottom, and the momentum might be back upwards. This would be healthier in the long run than a drawn out series of disappointments that would erode confidence in the British economy and make it look the sick man of Europe. Getting the bad news over with is something the Americans usually do much better than Europeans - and we should learn from them.

And for us EU supporters, we need to understand that freedom of movement of people is at the very heart of what we want, and we must recognise that we have, for now, lost the argument. But we must rebuild the case, using the traumas of Brexit as evidence. Meanwhile we must think about the sort of EU that we want. We are now witnessing an unholy mess as the Italian government and the EU Commission wrangle about rescuing Italy's banks. The EU's rules on state aid look much too restrictive.  The EU will survive, and one day Britain will rejoin it. But it will be a different Britain and a different EU. We must work to change both.

 

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4 liberal themes on economics and public services: my contribution to Lib Dem Agenda 2020

Agenda 2020 is the consultation exercise being carried out by the Liberal Democrats to set the framework of policy in the period up to 2020, when we next expect parliamentary elections. At this stage the idea is to keep the thinking at quite a high level. This is always quite hard for political activists. We somehow got onto VAT on tampons in the consultation exercise in Bournemouth. Then again, I'm always saying that political types on the left are too abstract. I haven't submitted the following contribution yet, but the idea is to be strong on general direction, with only a few pointers on the detail. I'm afraid that it's still a bit longer than my normal posts.

Economics, public services and wider Liberal Democrat policy

Economics and public services should be at the heart of any political narrative. Too often in the Liberal Democrats both topics have been neglected. The party has opted for a simple middle ground between the Conservatives and Labour. The 2015 General Election was no exception, at least as far as the headlines went. The time has come for a much more robust narrative. Here are some ideas on what this might look like.

The story so far

After 1945 the great Liberal thinkers Maynard Keynes and William Beveridge founded a post war consensus on economic management and public services. This was based on the state taking responsibility for managing the business cycle through fiscal policy, and a greatly expanded set of state services, funded by much higher taxes (compared to pre-war levels), to fulfil a series of new entitlements, designed to ensure that everybody obtained a basic level of wellbeing. These ideas were taken on by the Labour and Conservative Parties, and developed into an overbearing state, which also took over a series of failing businesses, from railways, to steel, to even aero engines.

By the 1970s the state had lost control of its finances and the country was heading for towards economic collapse. Public services had been captured by vested interests, with very little regard for their users. In reaction to this emerged a new conventional wisdom, initiated by Margaret Thatcher and expanded by Tony Blair. This new thinking was again based on liberal principles, and it is often referred to as “neoliberalism”.  The idea was that citizens should be empowered as buyers in a market economy, with the state stepping back to provide only basic services and a basic safety net. Much of the regulation of the business cycle would be taken up by monetary policy, so as to reduce the role of the state. Marginal rates of tax on income were cut, though overall levels of tax increased, if anything.

Probably not coincidentally, this change to public policy was accompanied by dramatic shifts in technology and global trade. Society changed substantially, mostly for the better. Living standards advanced, life expectancy improved, and pollution was cut. But now the country, in common with the rest of the developed world, seems stuck. Most economic growth just benefits a rich elite; businesses hoard excess earnings rather than invest or pay their workers more; property prices escalate. The number of badly paid jobs rises; most younger people are shut out of decent jobs and decent homes. Demand for health and care services grows, while public resources do not keep pace. And prosperity is restricted to a small number better-off areas, especially in the south east of England.

Liberals should worry. Power is being concentrated among a wealthy elite of people connected to big businesses. This trend Is abetted by a highly centralised national government that would rather deal with these large businesses, or else large public agencies like the NHS, than directly with the public. The power of the markets works for many people, but it is failing many more. Many people have inadequate leverage in the markets for jobs and homes in particular, leaving an unequal power balance in both domains. This state of affairs breeds fear and insecurity, which in turn leads to the rise of the political extremes of right and left, which threaten social cohesion.

In the meantime thinking on economic policy has not caught up with these profound changes. Most economists still think of the economy in a highly centralised way, in terms of aggregates across the whole economy, rather than the fate of its component parts. And thinking about productivity is stuck with ideas appropriate to manufacturing industry and economies of scale - and not to the efficient use of the human resources the country actually has to hand, in an economy increasingly dominated by personal services. The left rails against a series of pantomime villains, but resists any serious progressive reform of public services. This old thinking simply concentrates more power and wealth into the hands of a well-connected elite. Public services are dominated by functional silos based on political empires, not people’s actual needs.

We need fresh thinking, and my suggestion is to organise this around four liberal themes.

Liberal theme 1: green growth

Green growth means the advancement of human wellbeing while reducing the consumption of physical resources, especially non-renewable energy. The twin objectives are to ensure that everybody has the chance to live a healthy and fulfilling life in a comfortable environment, while easing the stress on the local and global environment.  There are two aspects to this: developing and implementing technologies that are more environmentally efficient, and breaking the idea that ever increasing consumption is the path to improved wellbeing. This requires a profound change in outlook - though one that is already taking place.

Green growth may or may not entail economic growth as currently measured. That depends on how advanced wellbeing is reflected in the monetary economy. In the short to medium term it entails a substantial level of investment, in more efficient homes, power infrastructure and transport infrastructure, as well as research and development. If properly carried out these investments will entail improved economic growth. Longer term growth requires the harnessing of human resources more effectively. This means a wider distribution of information management and decision making, or:

Liberal theme 2: small is beautiful

Large organisations, be they businesses or government agencies, are one of the main threats to green growth and liberal values. They concentrate power in the hands of the elites that control them, leaving the majority of their employees disempowered, and unable to react most effectively to the world as they find it. The elites are geographically concentrated, leading to geographic concentrations of power and wealth, and the hollowing out of communities elsewhere. This hollowing out leads to a waste of human resources, which must be tapped if green growth is to take root. Furthermore, large commercial organisations have a tendency to hoard surplus earnings (often abroad) rather than invest them, acting as a further drag on the economy.

Of course large organisations also play a vital role in any efficient economy; they are the best organisational form to take on some functions. But these are not as many as often supposed. A liberal government must change the legal and regulatory environment so that it favours large organisations less. This will include reforms to political structures, banking and taxes.

It will also entail a substantial reform of public services:

Liberal theme 3: public services that solve problems

It should be obvious that the main reason that public services are inefficient is that they do not work together to solve people’s problems. Housing, mental health, addiction, crime and poor physical health are very often bound together in one person’s feeding on each other - and yet we persist in trying to deal with each of these issues separately, in separate chains of command all the way to Cabinet. Often the key is making all the relevant services work together in such a way that the user moves to a better way of life, with less call on the public purse. Usually what happens is that the relevant agencies work against each other.

Public services should be organised to meet the needs of people, and solve problems rather than playing pass the parcel. This should be the foremost area for the development of policy, based on best existing practice. There may be a number of possible approaches.  Some of things are clear, however:

  • Changes will be easier to implement if responsibility for public services is more localised and more integrated.
  • Some form of empowered professional intermediary will usually be required to assess the users's needs, to coordinate the different agencies and, where needed, to negotiate the compliance of the user. Empowerment will mean some form of budgetary control. This means a step back from the current tendency to disempower and de-skill such intermediaries, like social workers and probation officers.
  • Large scale functional outsourcing will usually take services in the wrong direction. Repeated tendering also leads to a dumbing down, a tendency to gloss over more complex issues. The greater use of local social enterprises may well be a better approach in a framework that ensures proper accountability.

Public services should help with some of the most difficult problems relating to poverty; but this has to be in a wider context wealth and income distriubtion. We also need:

Liberal theme 4: redistribution to correct imbalances

A well-ordered, liberal society might not require the redistribution of income and wealth. And liberals dislike redistribution for its own sake - different levels of wealth may simply reflect freely made choices over how to balance accumulating money with other things life has to offer. But in our society imbalances of wealth and income pose a threat. The less well-off are denied the opportunities that should be theirs. Excessive wealth can be used to buy political influence and monopoly power, reducing choices for others. The accumulation of wealth may also lead to excess savings and economic stagnation. Liberals must embrace redistribution, albeit warily.

Redistribution needs to work at two distinct levels: personal and geographical. The wealthy must be taxed on both income and assets (land, in particular), and the worse off must be compensated through access to benefits and rights to state services, especially housing. Children must be a particular focus of redistribution as early years are critical to life chances.

Also funds must be redistributed from wealthy regions and districts to those less well off, to offset the negative network effects of clusters of wealth.

At both levels redistribution arrangements must be designed so as not to create dependency. Those less well-off should be encouraged to improve their lot - but at the same time the level of redistribution must fall as the need for it falls. Systems of redistribution based on universal rights (like the state pension) have their place, but have limits too. Truly liberal systems of redistribution will require careful design.

A policy programme to match

At this stage the idea is to sketch out broad political priorities, and not detailed policy programmes. I do not believe that in most cases a radical departure is needed from adopted Liberal Democrat policy. The high level emphasis will need to be rethought, however.

The main policy implications of taking forward the four liberal themes are:

  1. Political reform, and especially the devolution of power to regions and districts. This is essential to create the right political environment. This may be combined with a new federal settlement for the UK and reform of the House of Lords. Electoral reform is important to ensure a plurality of power - but the priority must be to implement proportional voting systems at local level rather than at Westminster. A further important strand of political reform should be restricting the influence of wealthy individuals and organisations, especially through political donations.
  2. A programme of green investments must be instituted, including high quality social housing.
  3. With public service reform the emphasis should be on bottom-up initiatives - but national funding structures will have to be reviewed to facilitate this.
  4. The tax and benefits system will need to be re-examined. The Lib Dem commitment to increasing personal allowances must be rethought, as it is inefficient as a redistribution policy. Restoring tax credits is a higher priority. Taxation of land in some shape or form makes sense, though we may get no further than reforming Council Tax.
  5. On overall fiscal policy it is best to manage down expectations of additional government spending - though the principle that the government (including local governments) can borrow to invest must be clear.
  6. The banking system must be reformed to allow new, locally-based lenders to come into play. Investment in the “real economy” should be encouraged to create new assets, While avoiding a merry-go-round of existing assets.
  7. The UK should act internationally through the EU to curb tax avoidance, especially by large corporations. Trade agreements and relations with the EU should be viewed through the prism of promoting smaller businesses, and not simply advancing the interests of large multinationals.

Of course there are many more important policies that have a bearing on the economy and public services - not least reducing the level of carbon emissions. But overall such a policy platform should be quite distinctive from the orthodoxies of right and left, and yet fully in tune with modern times.

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Why the Conservatives are the coalition of chaos

The choice is simple: "competence and a clear plan" with the Conservatives, or a "coalition of chaos" with Labour. So says the leaflet just delivered on behalf of my Tory MP, and so every Tory spokesperson has been saying in answer to any question from the media. Clearly this has been a carefully researched formula, since it is part of well-prepared election campaign. That's a bit strange: since political chaos would certainly follow a Conservative victory - and that would overwhelm any governing competence that they may be able to offer.

The proximate cause of that chaos is easy enough to see: Europe. This starts with the uncertainty engendered by the party's promise of an in-out referendum by 2017.

Not many people have thought seriously about the consequences of a British exit from the EU. Some predict disaster. Others, like Ukip, suggest that it will unlock a bonanza, allowing more expenditure on the NHS and defence, and tax cuts thrown in. A more cynical view is that if the UK left the EU it would make little practical difference to most people, most of the time. The Ukip view is clearly fantasy; the pessimistic view is a possibility, though the more cynical view is the most probable in the longer term.

But that is to step over the sheer complexity of the exit process. The EU reaches so far into the way the country works that negotiating exit would be a massive undertaking with an uncertain outcome. To get an idea of this the best thing to do is the read the prize-winning entry of the Institute of Economic Affairs' Brexit prize. The IEA, and the essay's author, advocate departure from the EU - but they are doing everybody a service by outlining what is involved. The range of outcomes runs from a Norway solution, whereby trading would be little impacted, but the country would still have to abide by many EU rules and contribute to EU funds, to total exit, which would get in the way of much of what we now take for granted. The country does not just have to decide whether it wants in or out, but if it leaves it has to decide what kind of relationship it wants with the rest of the EU. And on top of that the process of exit would be the top item of the policy agenda for government for years following any decision, distracting attention from other matters. Amongst the collateral damage of this might well be the breakup of the United Kingdom itself, as Scotland does not share the scepticism of the EU that the rest of the country does.

The referendum outcome is by no means a foregone conclusion. Much of the British establishment favours staying in the EU, and opinion polls show a comfortable lead for staying in. But powerful forces range against it, including most of the country's influential press, and exit fits the sour political mood of much of the electorate. So chaos and uncertainty would not only follow an exit vote: it would affect the country in the lead-in period. Both domestic and foreign businesses would be tempted to defer investment until the outcome was known - undermining the economic recovery.

But that is not the half of the problems a Conservative government would face. The party itself would be riven from top to bottom. Euroscepticism runs to obsessive levels amongst the party's grass roots, and increasingly in its parliamentary party. This was on show until quite recently, with repeated rebellions by Tory backbenchers, two of whom defected to Ukip. But much of the party's respectable wing, including its leader David Cameron, are more pragmatic. Their plan is to present a claim that they have renegotiated Britain's relationship with the EU, and that the loss of sovereignty has been moderated. And yet such claims will rest on weak foundations. It is now clear that there will be no revisions to the EU treaties. These have become so difficult to push through that only a deep sense of crisis makes that idea feasible. For now, though, the EU has avoided such a deep crisis, and it has shown strong survival instincts. The EU is changing in a manner that suits British wishes - but not as a result of any renegotiation process that Mr Cameron can take credit for.

This would only make Tory divisions worse. There would be against Mr Cameron's leadership; it is quite possible that he would be ousted as party leader. More  moderate Conservatives could be forced out. Or if the moderates keep the party machinery under their control, there could be mass defections to Ukip. There will simply be no middle ground around which to rally the party. The coalition that is the Conservative party would surely fragment. Such goings on would affect all areas of government. Chaos would not be a bad description of it, and "coalition of chaos" not a bad description of the party itself.

Conservatives like to invoke the 1992 election, when they, under John Major, fought off a strong challenge from Labour to win an overall majority - defying pundits and opinion polls. This blog has made drawn such parallels itself - Labour was likewise undermined by doubts over its economic competence, and its leadership in general. But people would do well to remember what happened next. John Major's government was perhaps the most disastrous for the party in its history. It suffered its most severe defeat ever in 1997, and has never been able to secure a majority since. Mr Major could not control the party's Eurosceptic wing, and the whole government suffered drift as a result. Since then the Eurosceptics have grown in strength and confidence; the referendum issue will be yet more polarising. Matters will be much worse.

And yet few commentators on Britain's election seem to understand any of this (the Economist's Bagehot column is an exception). Such is the strange culture of denial and short-termism that stifles British politics.

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Happy Christmas from Thinking Liberal

Today I was going to post the third in my series of reflections about being the governor of a successful school. But I suspect that too many people will be too busy to read it. Not coincidentally I'm probably too busy to write it anyway. I really should nip down to Waitrose to buy the final Christmas supplies before the shelves are stripped bare. And then wrap a few presents. And so on.

So instead I will just wish all my readers a Happy Christmas. Whether I resume posting next week remains to be seen...

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Lib Dem Spring Conference: finding a cause worth fighting for

According to tonight's BBC news, the big thing on our minds at the Lib Dem Spring Conference was the Income Tax threshold. In fact almost nobody here in York was talking about it. Uppermost in our minds were the European Parliament and local elections due in May this year, and broader manifesto issues for the general election in 2015.

The BBC headline came from a speech by Danny Alexander, the Treasury Secretary. It got a dutiful standing ovation, but was pretty uninspiring stuff. Much more interesting was the party's stance on the European Parliament elections, which was showcased the night before at the conference rally. This is to shamelesslessly advertise the party as being in favour of the EU and set itself up as being in contrast to Ukip, with the Tories and Labour as fence sitting irrelevance. Defence of the EU being is cast in terms of the risks presented by leaving it, especially to jobs. Thinking Liberal hardly not approve of this. It is exactly the strategy I advocated in the wake of the disastrous 2012 elections. It is a core vote strategy that is at long last getting professional execution. Until now the professionals have preferred a floating voter strategy aimed at the middle ground. They seemed constitutionally unable to execute a core vote strategy, which showcases the party's core beliefs. We will have to see how this strategy works out, but if nothing else it is inspiring for activists.

Personally I think this could be a bit of a turning point for the party. Nick Clegg ushered in a new era when he took up the party's leadership in 2009 (I think). The old guard, epitomised by the chief executive Chris Rennard were swept away. This needed doing, but a lot of wisdom was swept away in the process. The party's campaigning has been flawed under Mr Clegg. There was a brief moment of triumph in the 2010 General Election campaign, but the end result was disappointing. And entering into coalition government exposed flaws in the party's strategy in a very painful way - even though the process of entering government was something that few had dared to imagine beforehand. Dismal electoral results in local and London elections followed.

But at last the party has come out fighting. It is discovering a sense of purpose. This was evident in a policy motion on immigration this morning, where the party has failed to succumb to tide of anti immigration rhetoric that is otherwise overwhelming the political landscape. Other policy motions, on planning and constitutional reform were less convincing. Though in the former case party activists are at least starting to engage with the clear need for more housing in the south of the country.

If nothing else this proves the need for three party politics. Labour and the Conservatives would rather duck and weave around the issues of Europe and immigration, appealing to voters on both sides of the argument, while suppressing proper debate. The Lib Dems increase the costs to them of doing so.

Will it work? It may not. But increasingly Lib Dem activists relish the prospect of going down fighting. And who knows, perhaps rewards beyond the imagination of the average political commentator?

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Labour can win in 2015. A disaster beckons in 2020.

Is it just me, or can I see a certain spring in the step of Britain's national politicians? Ever since the party conference season last September they have been focusing on one thing above all: winning the General Election due in May 2015. The perplexing state of the country is now simply a source of ammunition to batter the other side. Actually solving the problems can be left until afterwards. What a relief!

The Labour leader, Ed Miliband, is having the better of it, if the relentlessly superficial media chatter is to be believed. This is quite a turnaround, since the same chatterers had him as toast as late as August. He has abandoned his party's "too far, too fast" criticism of the government's austerity policies, which helped rally the faithful (and rattle Lib Dem activists) but cut little ice with the country at large. The recovery of the country's economic statistics has not invalidated their argument, but it has made it far too complex a proposition to argue, especially since their rhetoric had placed far too much reliance on these "flatlining" statistics in the first place. Instead they are focusing on living standards, and things, like fuel bills, which affect them.

From a campaigning perspective, this change of tack is astute on at least two counts. First, it appeals to direct personal experience, rather than the ephemeral world of economic statistics, to which the country's GDP growth statistics belong. Second, it is such an intractable problem that the government is unlikely to be able to neutralise it. All that remains is to find some eye-catching policies to embarrass the government and keep the political debate on their ground. The centrepiece of this is the pledge to freeze energy prices for two years if Labour takes power, while they put in place a longer term fix to limit the damage inflicted by the greedy energy businesses they blame for the problem. A second push has been to enforce a "living wage" significantly higher than the legal minimum wage, through government procurement, and a tax break for employers who raise their wages.

In this line of attack Mr Miliband is the first of our national politicians to make political capital out of one of the most important developments in the British economy, along with many other developed economies, notably America's. For the majority of people, wages are not keeping up with growth in the wider economy. In Britain this trend was clearly established, I read in this piece by Chris Giles in the FT, 2003/04; since 2010 (i.e. when the current government took over) wages have not even kept up with average prices. The benefits of growth are going to mainly to a privileged elite, while government interventions tend to be focused on the other end of the spectrum: the very poor. While the main economic issue is slow growth of pay, the main flashpoints are in taxes (especially for things like fuel) and energy costs.

There is, however, a snag. How on earth to actually fix it? This does not seem to bother Mr Miliband too much. His policy proposals are at best ineffectual, and at worst will actually make things worse. In the field of energy Britain is being overtaken by a crisis, as old nuclear and coal-fired power stations are shut down, and replaced by renewable energy sources that place wholly different strains on infrastructure. What the country badly needs is investment, in new capacity, and, especially, in distribution infrastructure (e.g. moves towards a "smart grid"). Just how Labour's attack on the energy companies is going to solve this problem is, to say the least, unclear. And, if some of what I read is true, the pressure will break out into real problems in two or three years time. Labour's living wage policies are no better thought through. Using government procurement to do heavy lifting in this area, along with many others, risks weighing it down with compliance costs - a process that tends to push out smaller businesses, as well as inviting scandal and fraud. The tax break looks totally unsustainable and an invitation to unscrupulous companies to manipulate the system.

The Conservatives are planning their counterattack. There is growing talk of 1992 (which this blog has long been banging on about), when a well-funded late campaign destroyed what had seemed to be an inevitable Labour victory. They will focus, probably, on frightening voters about the economy and taxes; their newspaper allies will concentrate on personal attacks on Mr Miliband to undermine his credibility as a prime minister. The Lib Dems are crafting a "centre ground" campaign, no doubt hoping to benefit from the damage the big parties will do to each other.

I have urged my readers not to underestimate the Conservatives. That advice still applies. But my current instinct is the Labour will weather the storm enough to form a minority government. That is when Mr Miliband's problems will start. The country will face electricity shortages; clever schemes to enforce the living wage will unravel; living standards for the majority will stay under pressure; Labour activists and trade unionists will be on the government's case to raise benefits and expenditure. The calamity that has struck Nick Clegg and the Lib Dems will visit Labour, for very similar reasons. I understand Labour's strategy for winning in 2015; how on earth are they going to win in 2020?

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The Great British Bake Off: a lesson in fairness and manners

This year's Great British Bake Off ended last night. It was an immensely enjoyable show, and also very popular with the general public. Drawing wider lessons from such apparent trivia is a tricky business - but I was particularly concerned by this article by one of the contestants (Ruby Tandoh) in today's Guardian. There has, apparently, been a lot of abusive comment in the press and on social media. What does this say about the state of British manners?

First let's have the good news. The manners displayed in the contest itself were quite beautiful. In spite of the highly pressured atmosphere, and the obviously competitive nature of the activity, the contestants behaved wonderfully to each other. They actually seemed to like being together - bonding in response to the common task. This applied even to the comments made by the contestants without the others there. This is not always the case with these game shows (though we do not watch many of them), where rather silly competitive stuff often gets said. Nobody forgot that this was just a pointless contest about cakes and bread. This is all part of the charm of the programme, and clearly it helps make excellent viewing. This is welcome relief against the apparent conventional wisdom that bad manners make good viewing.

It is also worth pointing out that the judging was inevitably hard, but scrupulously fair. One of the judges, Mary Berry, being a particularly fine exemplar of good manners while at the same time passing difficult judgements. The other, Paul Hollywood, was less tactful, but never rude and always fair. This huge effort to be fair in the face of something very subjective also made for very good viewing. There are important social lessons there in a cynical world.

So what was the fuss about? Well I know about it mostly from Ms Tandoh's article. My Facebook friends hardly talked about it, still less said anything inappropriate. I did pick up an article in The Daily Mail while I was on holiday last week though, claiming that Miss Tandoh should have been knocked out that week, but wasn't because a tendency to burst into tears had affected the judges. We watched a recorded version of the show, which showed this accusation to be clearly nonsense. Apparently there was a lot more of this rubbish around. Miss Tandoh's view is that it was largely misogynistic - responding to the fact that the final five contestants were all women.

What this clearly shows is that bad manners are rife on social media. That Britain's awful press  pick up on this and stir it up further is entirely unsurprising. But people buy these papers and clearly like to read it. I can't say for sure whether this means that standards of social behaviour are slipping, or whether social media is simply exposing behaviour that was previously concealed. I suspect the latter.

Regardless, it shows that the British public has a lot to learn about manners on social media. But it is rather wonderful to have a TV programme like the Bake Off to show how good manners can done in a thoroughly modern way, and that it brings with a feel-good factor with it. Miss Tandoh's article is model of good manners itself. She has put her critics to shame.

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Lies and statistics

This week The Economist has an interesting article, Unreliable research: trouble at the lab, on the worrying level of poor quality scientific research, and weak mechanisms for correcting mistakes. Recently a drug company, Amgen, tried to reproduce 53 key studies in cancer research, but could get the original results in six. This does not appear to be untypical in attempts to reproduce research findings. The Economist points to a number of aspects of this problem, such as the way in which scientific research is published. But of particular interest is how poorly understood is the logic of statistics, not only in the world at large, but in the scientific community. This is, of course, applies particularly to the economic and social science research so beloved of political policy think tanks.

One particular aspect of this is the significance of a concept generally known as "prior probability", or just "prior" for short, in interpreting statistical results. This is how inherently likely or unlikely a hypothesis is considered to be, absent any new evidence. The article includes an illustrative example. Hypotheses are usually tested to a 95% confidence level (a can of worms in itself, but let's leave that to one side). Common sense might suggest that this means that there only a 5% chance of a false positive result - i.e. that the hypothesis is incorrect in spite of experimental validation. But the lower the prior (i.e. less inherently probable), the higher the chance of a false positive (if a prior is zero, at the extreme, no positive experimental result would convince you, as any positive results would be false - the result of random effects). If the prior is 10% there is a 4.5% inherent probability of a false positive, compared to an 8% change of a true positive. So there is a 36% chance that any positive result is false (and, for completeness, a 97% chance that a negative result is truly negative). Very few

The problem is this: an alternative description of "low prior" is "interesting". Most of the attention goes to results with low priors. So most of the experimental results people talk about are much less reliable than many people assume - even before other weaknesses in statistical method (such as false assumptions of data independence, for example) are taken into account. There is, in fact, a much better statistical method for dealing with the priors problem, called Bayesian inference. This explicitly recognises the prior, and uses the experimental data to update it to a "posterior". So a positive experimental result would raise the prior, to something over 10% in the example depending on the data, while a negative one would reduce it. This would then form the basis for the next experiment.

But the prior is an inherently subjective concept, albeit one that becomes less subjective as the evidence mounts. The scientific establishment hates to make such subjective elements so explicit, so it is much happier to go through the logical contortions required by the standard statistical method (to accept or reject a null hypothesis up to a given confidence level). This method has now become holy writ, in spite of its manifest logical flaws. And , as the article makes clear, few people using the method actually seem to understand it, so errors of both method and interpretation are rife.

One example of the scope for mischief is interesting. The UN Global Committee on Climate Change presented its conclusion recently in a Bayesian format. It said that the probability of global warming induced by human activity had been raised from 90% to 95% (from memory). This is, of course, the most sensible way of presenting its conclusion. The day this was announced the BBC's World at One radio news programme gave high prominence to somebody from a sceptical think tank. His first line of attack was that this conclusion was invalid because the standard statistical presentation was not used. In fact, if the standard statistical presentation is appropriate ever, it would be for the presentation of a single set of experimental results, and even that would conceal much about the thinness or otherwise of its conclusion. But the waters had been muddied; our interviewer, or anybody else, was unable to challenge this flawed line of argument.

Currently I am reading a book on UK educational policy (I'll blog about it when I'm finished). I am struck about how much emphasis is being put on a very thin base of statistical evidence - and indeed how statistical analysis is being used on inappropriate questions. This seems par for the course in political policy research.

Philosophy and statistics should be part of very physical and social sciences curriculum, and politicians and journalists should bone up too. Better than that, scientists should bring subjectivity out into the open by the adoption of Bayesian statistical techniques.

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