The rise and fall of neoliberalsim

The left loves to frame politics in terms of abstract nouns. And as is the human way, they are happier talking about what they are against rather than what they are for. Two abstract nouns in particular are top of the left’s hate list: “austerity” and “neoliberalism”. For the left’s challengers, it is usually best ignore this war on the abstract. It convinces few, after all – the left is much more effective when it campaigns on the concrete: food banks and bedroom tax, for example. Yet abstract ideas have their place, and it is worth exploring them more deeply sometimes. Austerity I will leave for now; I want to look a little more deeply at neoliberalism.

To most on the left “neoliberalism” is a scattergun term to brand all right and centre economic thinking that prevailed from the 1980s, after the collapse in confidence in the system known as “Keynesianism”, though Maynard Keynes would have disapproved of much of it. But if we are to understand what was actually going on we need to distinguish it from neoclassical economics, which was an important strand of thinking in this period. As its name suggests, neoclassical thinking harks back to classical economics, that evolved in the late 19th and early 20th century, before Maynard Keynes revolutionised economic thinking. This saw economies as self-correcting systems that did not need state interventions. At any point an economy is in an equilibrium, and any attempt to shift it would be self-defeating. Attempts to kick against this system would simply lead to such ills as inflation and unemployment.

Keynesianism fell out of favour in the stagflation of the 1970s, following the collapse of the Bretton Woods system of managed exchange rates and the an explosion in the price of oil.  Some economists used this to go back to classical ideas, saying that Keynesianism was a big mistake. In America these economists were often based in Chicago and the Midwest – and were known as “freshwater” economists in contrast to the “saltwater” sort on the American east and west coasts. They turned to the idea of “real business cycles”, which proposes that the fluctuations from boom to recession  are driven by changes to the “real” economy in equilibrium – and not a process of disequilibrium, as Keynes had suggested. So, for example, in pre-industrial societies the cycle might reflect the effect of weather and plague. In the modern age economists call this changes to technology. The true heroes of a neoclassical economy are the entrepreneurs who advance the productivity that make us all wealthier – the American author Ayn Rand was something of a hero. The state and taxes were loathed.

In spite of some rather superficial empirical studies which provided some evidence to support it, real business cycle theory is almost self-evident nonsense. Modern economies are almost never in equilibrium; state interventions are frequently helpful. Neoclassicism kept going because it was politically convenient to a certain class of wealthy American, who funded supportive institutions – and it was, and remains, politically influential amongst US Republicans. It lost all credibility to everybody else in the aftermath of the financial crash of 2008-2009, when the neoclassicists had nothing helpful to say. It was also clear by then that their advice in such places as Russia (post the fall of communism) and Iraq (post the US invasion) had been disastrous – they had advised the Republican US government to stand back and let things take their course – it was the economic wing of neoconservatism. Still, almost no idea is completely without merit. Technology has important implications for the workings of macroeconomics, and yet it is almost universally ignored by macroeconomists, who think that the economy worked much the same way in 1900, 1950 and 2000, and that all changes are explained by decisions in fiscal and monetary policy. In fact if you want to understand why Keynesianism worked so well in the 1950s and so badly in the 1970s, technology provides the most convincing explanation.

So, what is neoliberalism? It is an altogether more subtle economic analysis that sought to built on the insights of Maynard Keynes rather than throw them out. Indeed their ideas evolved into something referred to as “neokeynesianism”. At its heart are two ideas. First is that markets function as processors of information, and are the most efficient way that information about supply and demand can communicate and coordinate in our highly complex society. This is an idea developed by the Austrian economist (and sparring partner of Keynes) Friedrich Hayek, and who is the patron saint of neoliberalism (and much more pragmatic than his leftist critics pain him – he formed a common front with Keynes during the war). The second is that the incentives of people who manage institutions that are not subject to market forces, such as regulators and governments,  are generally not aligned to the public good. These insights lead to the conclusion that even well intentioned state interventions often do more harm than good – and that it is best to try and design such interventions so that they work closely with market forces, aligning incentives and making better use of information.

Neoliberals sought to repair the tattered state of the Keynesian conventional wisdom with the idea of “equilibrium unemployment” – a state of the economy at which any increase in demand would simply lead to inflation – with the insight that the level of this equilibrium could be much higher than what was conventionally regarded as full employment. It depended on the state of labour markets and technology – best addressed through “supply-side” policies, which often meant deregulation. In the 1970s, they said, the trouble arose from over-managed labour markets (the effect on trade unions in particular) and technological disruption (especially the relative rise of energy prices) that rendered much of the industrial economy obsolete.

In terms of economic management, neoliberals liked free capital markets, including floating exchange rates (in contrast to Keynes’s preference for managed international capital flows, exemplified by the Bretton Woods system). They disliked the use of fiscal policy (i.e. the deliberate management of government budgets to regulate deficiencies in demand), as it was rendered useless by misaligned incentives – there would be a tendency to let booms run too long. They did like the idea of “automatic stabilisers”, being tax and benefit policies that tended to increase or reduce demand according to the state of the business cycle – and as such accepted a large state sector – unlike the neoclassicists. Instead they preferred to regulate demand through government intervention in interest rates, delegated to arms-length central banks (an idea which neoclassicists hated, incidentally – they want to leave interest rates to the market).  Like their Keynesian predecessors, they thought that inflation was the critical sign of whether or not supply and demand in an economy were in balance – though they developed the idea that inflation could be built on expectations, as well as simply mis-matched supply and demand (i.e. if people expected inflation to be high, they would demand extra wages, turning this into a self-fulfilling prophecy). For all their scepticism of government, they still saw it as playing  a central role in the management of the economy – and searched for optimal levels and designs of intervention.

Neo-liberalism became the conventional economic wisdom in the 1990s, all the way through to the great financial crash. This period saw an unprecedented advance in living standards across our globe. So why do most people think it has failed? Because the picture in developed economies in that period is much more mixed. In the US in particular, the economic gains have been concentrated amongst the wealthy, with large companies amassing unprecedented levels of profit. The destruction of many industries through technological obsolescence and globalisation left a huge legacy in ruined lives and failing local communities. And finally there was the crash itself, which most neoliberals had failed to see coming and to head off – and whose fall-out they proved ill-equipped to deal with.

And yet. The main advance in human well-being in the neoliberal ascendancy came in the developing world – and the adoption of neoliberal insights was clearly responsible for this – in China, India, and many other countries. And the failure of attempts to defy neoliberalism, in France under Francois Hollande and, more dramatically, by the Kirchners in Argentina, has led to local revivals of neoliberal ideas. Something has clearly gone wrong, but is the whole system really rubbish?

I will examine that question in a future post.

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Can Vince Cable broaden the Lib Dems appeal?

Last week Vince Cable was elected unopposed as leader of the Liberal Democrats, following Tim Farron’s resignation. This is not a situation many Lib Dems expected to be in a month or so ago.  I don’t think I would have voted for him if the selection had been contested.  Yet I dare to hope.

Let’s start with my reservations. The first is his age at 74. This is the least serious. Age has different effects on all of us, and Vince has clearly been looking after himself, physically and mentally. He will have bitter memories of 2007, when he was advised not to run for the leadership vacated by Ming Campbell, who was only slightly older. Ming was widely bullied for being too old – I remember some vicious cartoons. And yet the reasons for his failure were clearly something else – age was just a convenient proxy, reflecting the prejudices of the time.  By picking the relatively youthful Nick Clegg, it is far from clear that the party was better off. Meanwhile there have been a number of successful older politicians – including Jeremy Corbyn and Donald Trump. Age does mean that Vince’s tenure is likely to be less than a decade. But that may not be a bad thing.

My next reservation is more serious. It is that Vince is not known for grassroots campaigning. His constituency organisation in his Twickenham seat was notoriously weak between elections – and that ultimately lost him his seat in 2015. In the jargon, Vince is a man of the air war, not the ground war. That is a worry because the Lib Dems weakness in ground organisation is one of the bigger issues that the party has to face. Tim Farron, by contrast, was much stronger on the ground activity. But am I worrying too much? Vince’s constituency campaign this year was one of the better organised – and the result was spectacular. Tim came within a hair’s breadth of losing his seat, which had been the “safest” in the country (there’s no such thing as a safe Lib Dem seat). For all Tim’s enthusiasm for grassroots campaigning, he did not strike me as a gifted organiser. We may be no worse off.

And finally there is policy. I have advocated fresh thinking on economic policy for the party, in particular to unlock under-used potential in poorer areas. I am also deeply suspicious of monetary policy as a method of managing aggregate demand. Vince is much more of a traditional economist – he seems more interested in using neoliberal ideas more effectively than looking for the next revolution in economic thinkin. Again, I am probably making too much of this. He has a lot of common sense, and does not strike me as a man that pushes policies that aren’t working because he thinks they work in theory. And innovation needs to be small-scale at first if it is to win public confidence.

Against my reservations, though, I am finding quite a lot to like. He is very impressive when being interviewed on the radio. He answers the questions being asked, and confidently, displaying a great deal of expertise and honesty. He has enormous credibility, built up over many years – not least his five years as a senior cabinet minister. He can overdo the honesty and get himself into trouble – but this is a net benefit. Former London Mayors Ken Livingstone and Boris Johnson have learnt to pull this trick – being a bit too honest – off very successfully (though Mr Johnson’s shine has now worn off), as has the Labour leader Jeremy Corbyn. When it works it is a priceless gift. Vince has much more impact on the media scene than did Tim Farron. He makes headlines effortlessly – and not by making gaffes.

And Vince’s evident experience and expertise puts him ahead of almost every other front bench politician in the country – especially since Labour have been forced to promote inexperienced MPs into front line roles. This makes the Lib Dems look like a player in the grown-up game of politics, which hasn’t been the case since the party’s catastrophic defeat at the 2015 general election. Especially since there is now a back up team of experienced politicians in Norman Lamb, Ed Davey and Jo Swinson. This is important, because if the major parties do start to break up under the pressure of divisions over Brexit, the Lib Dems are starting to look like a credible alternative for refugees – or at least a vital alliance partner for any new grouping.

So that is why I dare to hope. But meanwhile the party is very weak. Many of the sixty or so parliamentary seats where the party used to be in close contention now look gone for good. It is not clear how the party is to replace them with new ones. The party might have some success in tapping angry Conservatives, but it is remains pretty hopeless against Labour in the pitch for younger voters. I am seeing quite a lot of manufactured kerfuffle about how Labour is supposedly breaking promises on student debt. Any Lib Dem who thinks that the party is going to make traction with that line of attack should think again. It’s best hope against Labour remains its firm position against Brexit – but as yet Labour remains coated with Teflon on the topic.

Recently I read an article in the Guardian by Deborah Orr that lambasted the party as a waste of time. What is striking is that this liberal, well-informed journalist only ever thought the party stood for electoral reform – and so the party’s failure on that in coalition leads her to claim that it “lost all it stood for”. That shows how much work the party has to do. Most people think that the party stands for very little – they associate it with a single policy, like electoral reform, or, before 2010, free university tuition. When the party fails to deliver on this policy, it is reduced to emptiness in their eyes and it has start all over again. Meanwhile the Conservatives and Labour can chop and change policies at will, because they are seen to stand for something much broader. At the moment the big policy for the Lib Dems is opposing Brexit, with legalising marijuana as a second string. This is far too narrow.

So the Lib Dems need to be seen as standing for a broader range of ideas, and not tied to a single headline policy. There may be an opportunity for this. Most left-inclined liberals still think Labour stands for them – but Mr Corbyn and his allies want to take their party somewhere different. And many Conservative supporters think that their party stands for pragmatic liberal economics – but Brexit ideologues in cabinet don’t seem to care what happens next as long as it is Brexit. If anybody can convince these people to look, or to look again, at the Lib Dems, it is Vince Cable.

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The British are bowing out. Now the EU is a battle between the French and German visions.

The European Union dominates British politics at the moment – but in a rather superficial way. It is focused on the short-term implications of the country’s relationship with it, and not on the institution itself. And that is true especially of continuing Remainers. They concentrate so much on stopping or diluting Brexit that they avoid tackling questions about what the Union is, and what it is turning into. More thoughtful Leavers will no doubt suggest that the focus on Brexit is a displacement activity from more uncomfortable questions about the EU. So it is worth taking a step back from the kerfuffle about Brexit to think about the Union itself.

I think it is helpful to view the debate over the EU as a conflict of three visions. I will characterise (or caricature) these as the British, the German and the French visions. The British vision is of the union as a free trade area; its fundamental purpose is economic, and to bring to its members the manifold benefits of free trade. The British are divided on whether this necessarily includes the free movement people, or, rather, labour (as opposed to temporary visitors, which most people are happy with). Many older people (and probably a majority) think emphatically that it doesn’t, and that goods are fundamentally separate from labour. Younger voters tend to say that it does – seeing free movement as a way to expand their personal horizons. Some are muddled – wanting all the benefits of retiring to Spain and using its health service for free, while stopping people from moving into Britain. But all sides treat this as a fundamentally economic question. and think of it individualistically – how does it benefit me?

The Germans feel that the fundamental point of the EU is to create transnational order. This affects trade, so that manufactures and services are based on common rules, and that countries don’t get an unfair trading advantage through lax labour or environmental laws. But it goes deeper; they see nothing wrong with rules that secure fundamental political principles, such as human rights and the democratic order. Britons tend to resent this as an unnecessary intrusion, feeling secure in their own country’s institutions – different histories do much to explain the different attitudes. Britons have learnt to trust domestic institutions; Germans (right up to 1990 in the East) have learnt that trust can be abused. The Germans’ outlook is more collective than the Britons’ – but they share Britons’ distaste for political meddling from EU institutions.

But the French, on the other hand, emphasise the political union. To them it is a joint political project, in which their country must take a leading role. They tend to see the EU as a counter to the giants that stalk the world stage, and in particular to the US – but also to Russia and China. Internally they advocate a greater use of political mechanisms to resolve the problems and conflicts within the Union itself. This is the most collectivist view. If Europe as a whole advances, the logic goes, then we all do as individuals. The British tend to view it the other way round.

It is tempting to suggest that these three visions are all right, and that some form of reconciliation or compromise must be found. But I find it more helpful to see the three visions as varying stages of understanding of what the European project implies. A free trade area cannot reach its potential without transnational rules, including some form of transnational arbitration. And you cannot have such a transnational system of rules in the long run without common political processes to manage them. The North American Free Trade Area (NAFTA) was often held up as an example of what “just” a free trade area might look like – but it first lost momentum and is now in imminent danger of collapse, as it has been unable to handle the  political tensions it has created. The French understand the implications of the EU the best, the British the least – which, of course, is the main reason why Britain is leaving. Most of the British public do not want to accept the political implications of the EU; many of those that voted Remain were in denial, and voted that way to maintain their own short-term economic prospects. The whole Remain campaign last year was based on little more – one reason that the more thoughtful Leavers feel that it is they that hold the high ground.

With Britain on the way out, the driving tension will now between the German and French visions. The British view was shared by other members, especially the Scandinavians (as a matter of principle) and the eastern members (as a matter of political convenience). Brexit not only removes the British view’s biggest advocate, but also it points to the ultimate destination of countries that follow it.

The Franco-German tension could ultimately destroy the union. The Germans are easily the union’s most powerful member; but the French are ultimately right – the Germans are simply postponing an inevitable reckoning. This tension is most easily seen in the management of the Eurozone. The EU’s treatment of Greece, for example, was brutal and surely misguided – even if I find most of the pleadings by Greek politicians such as Yanis Varoufakis to be self-serving and evasive. To the Germans, the Greeks simply broke the rules. They lied about their economy to get it into the Euro, and then milked the Union for all they could get with no attempt to make their economy more productive or less corrupt. The crisis was a reckoning, and it must be played out according to the rules. That Greek voters approved of gobbling up their neighbours’ resources as an easier alternative to fixing deeper problems at home did not make what they were doing democratic. But this view is also self-serving and evasive. German banks contributed mightily to the Greek bubble, and German businesses where happy to sell things to people who could not afford them. There must be a principle of caveat emptor. Instead the German taxpayer bailed out their banks, and their government is trying to blame the Greeks. It is a political mess that requires a political solution, and that means some of the rules must be changed. It is clear, for example, that much of the Greek government debt must be forgiven. The country also needs financial aid to help its economy to grow on a financially sustainable path. But that implies accountability from the Greek government.

And yet the French view, which is now being vigorously pursued by its new president, Emmanuel Macron, leaves hard questions at its core. It requires stronger and deeper transnational institutions, whether at the EU or Eurozone level. But are the democratic institutions up to the job? And is there democratic consent for them? And how deep must these central institutions go? The type of problem posed by Greece persists: member states trying to take the rest of the union for a ride – to take the money, but without any any serious attempt to develop an open and efficient economy, buttressed by democratic institutions, based on the rule of law applied without corruption. Challenges aren’t just being presented by such countries as Hungary and Poland, but by countries closer to the heart of the picture, like Italy. And France. And even Germany with its destabilising surplus savings. Mr Macron’s strategy is to boost France’s credibility by reforming its economic institutions. But what will make other countries follow this path?

What will happen next will be the usual European muddle and fudge. That muddle and fudge will either lead to disintegration, or to something that looks much more like a federal state. Or both – if more countries leave but a more integrated core remains.

And that poses a challenge to British Remainers, who either want to reverse Brexit, or to rejoin the union at some later stage. If Britons remain wedded to what I have called the British view, this will end badly. Britons must accept that they are signing up to a political project that reduces the sovereignty of the British state. Liberal Democrats, in particular, need to understand when there will be too much European centralisation, and when they would say no. After all their other rallying cry is the decentralisation of political power.

And me? Fundamentally I am a Frenchman on this. Proud though I am of my British and English identity, I also have a strong sense of European history and identity. I long to be part of a joint European political project. But not even I have thought through the full implications – and I am in what looks like a small minority. For that minority to grow, more persuasive arguments must be made.

 

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Can Britain afford to abandon austerity? Maybe

Perhaps only Brexit is a more important political issue in Britain than austerity – the policy of restraint in public spending that is causing acute stress in parts of the public sector. It might surprising, therefore, that the quality of debate is so low as to be nonsensical. But then again, when things get important, truth is the first casualty. So let me attempt a dispassionate overview.

First let’s look at the case made by government supporters in favour of continued austerity. This runs at the level of household accounting. The government is outspending the revenue it collects. This means it is piling up debts which future generations must pay. How irresponsible! “There is no magic money tree,” says the Prime Minister, Theresa May. But one of the first things you learn in economics is that running a government budget is nothing like a household one. And the government does have a magic money tree – it’s called the Bank of England. It is perfectly safe for a government to create money to pay its own bills, in the right economic circumstances. Japan has being doing this for a couple of decades. Plus spending government money in the right way may generate the means to pay it back – through bringing spare capacity into the economy, or through investing in projects that generate a return. Or even both at the same time. The case made by government ministers is simply irrelevant. But that doesn’t make them wrong.

The case made by the left has more economic sophistication – and it is even nominally supported by authoritative economists like Joe Stiglitz, an American Nobel Laureate (who wrote a useful textbook on public economics). The main argument they make is often referred to as “Keynesianism” after the great Liberal economist Maynard Keynes, who offered it a the time of the Great Depression in the 1930s. Keynes pointed out that if there is spare capacity in the economy, such as during a recession, extra public spending will not displace other activity, and it will (or should) therefore cause the economy to grow, and pay for itself. But this argument is made by left-wingers regardless of the economic climate. Find me a trade unionist that has ever, ever said that because the economy is overheating, government spending restraint is required. It’s like finding a businessman who says, in any given economic conditions, that interest rates should go up. They are like barristers making a case, no matter how ridiculous. What should judge and jury think?

Two pieces of evidence may be offered in favour of Keynesian expansion now. First is that economic growth since the great financial crisis of 2007-2009 has been lacklustre, and behind many of Britain’s peer economies. Surely it needs a kick up the backside? Second is that inflation is low and looks stuck. Actually, inflation has been creeping up a bit, but that is due to the pound falling. Pay inflation – surely the critical point in this case – remains low. In classical economics high inflation is the surest sign of an overheating economy.

But two pieces of evidence can be offered against Keynesian expansion. First is that unemployment is at near record lows for recent times, and overall employment is very high (unlike in the USA, there don’t appear to be a lot of people who have dropped out of the labour market and so not treated as unemployed). Second is that Britain has a high current account deficit – at 3.1% of income it is one of the highest in the developed world, though it has been coming down since the pound fell. That means that Britain needs foreigners to pay it in its own currency, or Britons need to acquire foreign currency to finance foreign debts. This means that the country depends on “the kindness of strangers” as the Chairman of the Bank of England put it. Among other things that takes some of the magic out of the money tree owned by the Bank – and is a contrast with money-plucking Japan, which tends to run big surpluses. Money trees need net savings (or current account surpluses) to nurture them, or else their fruit turns bad, as many a horror story from South America will attest.

So there should be public debate around what these pieces of contradictory evidence mean. Unemployment is low, but the quality of many jobs is low – so would people work more productively under the right pressure? Britain has a trade deficit, but most debt (including government debt) is still denominated in Sterling, reducing risks substantially. There is much to explore, but few take the trouble. Easing austerity could simply raise growth; it could cause us to borrow in currencies that the Bank of England can’t print; it could cause inflation; it could simply stimulate more low paid immigration; or nothing much might happen at all.

The important message, though, is that it matters how any extra government money is spent. This rather goes against the flow of the usual macroeconomic debate, which likes to deal in quantities rather than qualities. But if you read carefully you will see that trained economists brought into oppose austerity policies are quite careful about the type of extra spending they advocate. They want more investment. If the government invests in things that generate financial returns by making the economy more efficient and productive, then the question of whether or not the economy is running at full capacity is side-stepped. The Labour manifesto at the general election offered this line of reasoning, and that is doubtless why the likes of Mr Stiglitz felt able to endorse it. Labour also wanted to put taxes up albeit mainly on the rich – which, nominally, at least, should reduce excess demand.

Unfortunately this can lead simply to politicians labelling all public expenditure as “investment” – a favorite trick of former Labour Prime Minister Tony Blair. We need to look at matters case by case. What if the government gave NHS employees a pay rise, which some say they are due after years of pay restraint? Some of the extra money would come straight back in taxes; some would be spent creating demand which might help local economies to grow. But some might be spent in businesses that will just put their prices up; some might simply be saved (which has no short-term economic impact) or spent on things like foreign holidays that just add to the current account deficit. Unless balanced at least some extent by tax rises the economic case for this looks unconvincing (where those tax rises should fall is not a simple question either…). But there are other benefits to increasing pay. Would it make it easier to recruit and retain top quality staff that would make the service more efficient? That mean the service could run on fewer temporary staff and make cost savings by heading off medical complications? Well that’s the key, and it depends on strong management. These benefits don’t just happen.

But what of devoting more money to public health? If done properly, this will head off demand for health services, and reduce the costs of poor health elsewhere in the economy. The case for funding this from borrowing is much easier to make. A similar case can be made for schools funding – though again this depends on good management (though personally I am more confident of that in schools than in hospitals, if only because the former are much simpler to run).

There is a lot of extremely interesting debate to be had around the economic implications of different sorts of public spending. Would forgiving student debt be a financial catastrophe? Or might it provide an economic boost in exactly the right places? We need some dispassionate analysis.

Instead we have a Conservative Party that will not engage in arguments of any economic sophistication, and is allowing some of its cost savings to do lasting damage to society. And though the Labour Party understands this, it seems uninterested in the discipline that will be needed to ensure that extra government spending and borrowing does not drag the economy down, rather than boost it. Each party is sponsored by advocacy groups who think that the overall outcome for the country is somebody else’s problem. Such is modern British politics.

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Modern liberals have a religion problem

Shortly after the General Election Tim Farron resigned as leader of the Liberal Democrats. He said that it was impossible to maintain his Christian faith and be party leader. He was echoing a complaint from many practising Christians that they feel excluded from the party and in wider liberal circles. Muslims feel exclusion too, though often from different people. Is this true? And if it is, does it matter?

Opposition to discrimination is one of the defining principles of liberals. This started with religion, and in particular, in England, discrimination against Catholics and various non-conformist sects, such as the Quakers. It then moved on to issues of sex, race and sexual orientation. Now the problem seems to be between secularists and those practising religions with a universal claim to truth, such as Christianity and Islam.

At the heart of this is a genuine problem. Many adherents of these faiths claim that their faith requires discrimination against sex and sexual orientation, and opposition to such modern practices as abortion. These are important battlegrounds for liberals. Christians who believe that the state should discriminate in these fields clearly can’t be liberals. But how far should liberals lay claim to private beliefs? It is quite common for people to say that they don’t believe in abortion personally, but that they do believe that the state should permit it – that it should be a matter of personal conscience.

It is over such issues that Tim Farron tripped up. He was seen to prevaricate. Famously he tried to evade a question about whether gay sex was a sin, with the statement that “we are all sinners”. I have some sympathy with him over that one. I have a church upbringing, and though I am no theologian, I know enough to tell that what Christians mean by sin is quite a complicated thing. The point is not to avoid being a sinner, but to forgive sins. I could add that many Christians feel that hetorosexual sex is a sin – or at least taking pleasure in it is – although this has softened in recent times. Tim was trying to say that it was the wrong question. Much later he clarified to say that he didn’t think gay sex was a sin, but the damage had been done. To many “sin” meant “wrong” and that he therefore could not be trusted to uphold liberal values. The party’s opponents made useful weather of this (unofficially, of course). It did real harm to the party.

That makes me very uncomfortable. It seems to exclude a large number of religious people from the movement. It draws the line in the wrong place. Liberalism is becoming equated with aggressive secularism. The response of many people (such as the Guardian’s Polly Toynbee) is evasion. Religion was not the reason that Tim resigned, they say, but political ineptitude. Well there are plenty of reasons for saying that Tim was not up to the job (including his evasive response to that interview question – and his rambling email when he resigned), but this type of reaction reminds me a lot of the ways that people try to escape accusations of race or sex discrimination by pointing to other reasons for their views.  It’s the “I’m not racist but…” position.

Tim is hardly the first person to claim that liberals discriminated against him for his religious faith. It strikes me that secularists have no idea when they are being discriminatory. Again there are parallels with race and sex discrimination. Workplaces that accept women as equal provided they behave in exactly the same boorish way as the men are discriminating against women. I found advancing sex equality when I was working in the City of Londonwas really hard work in many roles, especially senior ones, as many men had no idea what the problem was. They did not see that a whole range of behaviours and assumptions were discriminatory. The Lib Dems themselves are wrestling with why so few women advance to elected office, and why so few people from ethnic minorities join it. I think there is a similar problem with religious faith amongst liberals, but it is worse because it is unacknowledged.

This is exacerbated by a certain intellectual arrogance amongst aggressive atheists, who form an important minority amongst liberals – people like Richard Dawkins who are apt to talk of prayer as “talking to your imaginary friend”. This stems from a rather old-fashioned logical-positivist outlook. They say that you should only believe things if there is sufficient evidence for them. But you have to have a nul hypothesis – you have to have a working assumption that you hold to until something with more evidence comes up. The battles of religion can be seen as asking what shape that nul hypothesis should take, and how much it should be based on handed down wisdom and shared understandings. To more thoughtful religious people, the classic aggressive-atheist viewpoint is an incomplete, like trying to drive a car through the rear-view mirror, and it is often device to evade discussion of important spiritual and moral issues. The point here is not to have debate on the virtues of religion, but suggest that many atheists suffer from arrogance and could do with a bit more intellectual humility.

Which would a good place to start when working out how to treat religious people in politics. So I want to make a number of points:

  1. Political movements should be about changing public life, and not private beliefs. There is much that liberals want to change, and to protect, in public life. It hurts that political cause if you exclude potential allies because of differences in private faith. This is happening with people of religious faith, and liberals need to be more tolerant.
  2. Being a liberal may still be quite challenging for many in particular religious traditions, especially those that set store by traditional teaching and interpretations of texts. Liberals need to give such people more space – without compromising on liberal public values. I don’t think they did with Tim Farron, or others like the former Lib Dem MP Sarah Teather.
  3. Liberals also need to be careful about promoting their own religious interpretations in the political sphere. This is a particular issue for Christianity. People like me who were brought up in the faith have strong views about some religious traditions. Pushing these views should not be part of political discourse – though, of course, that doesn’t mean that those views should not be aired. I might think that there is no serious theological objection to women priests – but I need to be careful about where and how I air that view, especially since I am no longer a practising Christian.

It strikes me that there are two things going on here. The first is that we should be more conscious of our religious or anti-religious biases, which could lead to discrimination in public life The second is that is important to bring people into the liberal political movement even where their religious faith creates tension.

So we should be worried that Tim Farron’s religious faith proved such an obstacle to being part of the liberal movement. And we shouldn’t pretend that it wasn’t.

 

 

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The Brexit fiasco shows how Britian is being let down by its political class

More than a year has passed since the shocking result of Britain’s referendum on leaving the EU. Pessimism about a very messy break is growing. This is typified by this article by Gideon Rachman in this week’s FT, which suggests that whatever happens there will be humiliation for Britain. Are we really in such a mess?

Mr Rachman suggests three forms of humiliation. One is that Britain is forced into a deal by which it subscribes to most of the substantive terms of membership (including cash contributions and the jurisdiction of the European Court of Justice) in order to stave off severe economic disruption. This is sometimes called Soft Brexit. A second is that Britain drops out of the EU without a complete deal, and is subject years of confusion and disruption, resulting, inter alia, in economic hardship. The third is that exit does not happen at all, and Britain crawls back in, its attempt at exit having failed, like the German Fleet returning to port after the Battle of Jutland.

This analysis is based on a simple idea. There is just not enough time before the exit becomes legal, on 29 March 2019, in order to arrange alternative structures outside the EU Single Market or Customs Union. And that such a failure would result in chaos from air travel to the manufacture of Guinness (brewed in Dublin, bottled in Belfast). There may elegant solutions to each of the problems thrown up, but we simply don’t have the time and resources to decide what is best, and still less to put in place any of the new infrastructure required.

One reaction is simply anger: to blame the shadowy EU powers for creating such an unreasonably short departure window. And yet a longer interval would not have been acceptable to the Brexiteers. Some chafe that two years is too long. The interval is a reflection of the politics; it is up to ingenuity and negotiation to find solutions to the problems it throws up. The puzzle is why that does not seem to be happening.

And it really isn’t very hard to see what that solution is. It is a phased withdrawal, whereby full membership expires on the treaty date, but other aspects of membership do not. In particular that means prolonging the single market membership (including financial contributions) well beyond that date – three to five years, say. Single market membership along the lines of Norway should be a relatively simple thing to put in place, because it leaves so much of the existing apparatus intact. It is a soft Brexit followed by a properly thought through and prepared hard Brexit. It is a much less risky enterprise. It is also more democratic. Membership of the EU is a very complex thing, and a simple referendum result does not tell you what people actually want; indeed, how could people know? A prolonged period over which the details are discussed and subject to the normal democratic process is much better than being railroaded into a solution advocated by some faction of the ruling political elite. Deliberation is a critical element of the democratic process – and we saw precious little of that in the run-up to the referendum.

I have suspected that this, an orderly phased withdrawal, is what Theresa May’s government has been planning all along. But recent statements by members of the government have shaken my faith in this. They have been ruling out being part of the single market after 29 March 2019 – on the grounds that there would be a big backlash from the Brexit supporting public if they did. This is unconvincing until you substitute “Tory MPs” for “the public”. The public shows signs of weariness over Brexit, and most would surely accept a well-argued case for a transition. But many Tory MPs are Eurosceptic to the point of insanity. Maybe it’s all tactics and those government spokespeople plan to unveil more realistic transitional plans later.

And a properly prepared hard Brexit may not be quite the nightmare many Remain supporters think it would be. Modern technology and fresh thinking could provide innovative solutions to many of the logistical problems involved – not least for trade and immigration. The country could move to some form of associate status with the EU (perhaps alongside Ukraine and even Turkey?) to provide a framework for political cooperation. But there is no sign of any such coherent vision being put together by our political leaders. Instead the Conservative government has what the Auditor General, Amyas Morse, has called a chocolate orange strategy – something that falls apart on contact. Meanwhile Labour are content to play a game of obstruction, with no attempt to create an alternative vision; for them the prospect of seizing the levers of power amid the chaos trumps all other considerations. The country doesn’t just lack time – it lacks the leadership.

The truth is that the country is being let down by the poor quality of its governing class, who can’t work complex problems through. That is how we got into this mess in the first place: a referendum on EU membership simply to settle an internal party feud was a terrible idea. If the government had been clear in its wish to leave, and presented a prospectus for departure (as the Scottish government did on the independence referendum in 2014), that would have been an entirely different matter. And now the politicians seem incapable of getting us out. The joke that the British are behaving like the family cat, which mews like mad to be let out into the garden, only to simply sit on the threshold when the door is opened, remains as funny now as it was last year.

Why are we being let down? One argument runs that it is a recent thing. Politics no longer attracts big beasts with worldly experience  – and instead is dominated by shallow types who have devoted themselves to a political career from their early 20s. This idea was developed by the columnist Peter Oborne in his book The Triumph of the Political Class. A less familiar argument is made by the FT’s John Gapper, which is that it has always been this way. Britain’s ruling class has long favoured dilletantes with humanities degrees, who shy away from technicalities and details, and instead make clever debating points, like barristers who will move on to another case tomorrow (and many of them are barristers…). He quotes a lecture in 1959 by the novellist and scientist CP Snow. This rings true. The most obvious example is Boris Johnson, the country’s embarassing Foreign Secretary – but it applies just as much to David Cameron and Michael Gove. It applies less obviously to Mrs May or the Labour leader, Jeremy Corbyn. But there is a worrying narrowness to Mrs May – exemplified by an obsession with the ECJ and an evidently weak grasp of economics. Mr Corbyn’s lack of patience with detail is legendary – though he may have improved a bit recently.

This is in stark contrast to the way most other countries do it. France’s leaders are educated in elite institutions that prize deep analysis; Germans value technical expertise; Russians admire chess players; the Chinese like to be led by engineers. And so on, with the important exception of the United States – but even they do not fall for clever dilletantes like Mr Johnson – they prefer authenticity to the superficial cleverness so beloved by the British. And it was not always that way in Britain. Gladstone, the great British 19th Century prime minister, started his ministerial career sorting out railway timetables, and sealed his reputation overhauling the country’s tax system in minute detail.

How we could do with a Gladstone now. Alas national humiliation is the price we will pay or picking such weak leaders as we now have.

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Grenfell Tower shows the poor state of British democracy

I have made passing references to the Grenfell Tower disaster – the tower block fire in a social housing estate in London’s North Kensington district on the evening of 14 June, in which at least 80 people are thought to have been killed. It has been a highly significant event in British politics, but its implications are as yet unclear. To me it marks a failure of British democratic institutions. Alas it is in the nature of those institutions to divert attention to other issues raised by the episode, and a few that aren’t.

The tragedy got wall-to-wall coverage very quickly. It was conveniently located in central London, and it produced some spectacular television footage. BBC TV news set up their anchor with a smouldering building in the background. Although the published death toll in those early days was modest, the coverage was proportionate to the scale of the event. There is a curiously about this. Nobody in the mainstream media wanted to speculate on the number of deaths, but there was an unspoken understanding that it must be high. The estimate doing the rounds amongst those who knew a bit about the block was apparently in the region of 100. Those who felt that the authorities were trying to minimise the scale of the disaster apparently estimated the figure was 200 (the block housed over 300). But there are standard protocols about reporting casualties, so the BBC and others were probably being responsible in not reporting such estimates – though they would have helped public understanding if they had.

The main story in the days following the tragedy was the failure of the official response. There was a din of complaints from those close to the scene that was eagerly reported. I don’t know how justified these complaints were – and how much they were affected by the anger that such a disaster could be allowed to happen in 2017. But both local and national politicians showed a failure to grasp the political implications. Theresa May failed to talk to victims in her first visit, which nearly cost her job. It is easy to understand why she was advised not to – she was going to be on the receiving end of abuse, and there would have been public order issues that would have diverted resources from the relief effort. But savvy leaders understand that you have to allow people to vent when things go badly wrong. Other politicians, such as the opposition leader Jeremy Corbyn and the London Mayor Sadiq Khan, had a much easier job, but did it well enough. The media, meanwhile, seemed uninterested in deciphering the cacophony.

The government’s overall response is damage limitation. Firstly that means a properly resourced relief effort – it took them longer than perhaps it should to wake up to the need for it, but they did get there. They also set up a public enquiry and commissioned safety tests on other blocks of flats. And they promptly moved the goal posts on the standards to which cladding, clearly a factor in the fire, should be tested – causing widespread (if not universal) failure of materials that had previously been considered safe. But there is something missing from all of this. It is being treated as a technical failure, to which technical solutions should be sought. There is no attempt at real dialogue with social housing tenants. The victims feel short-changed.

But one of the big issues arising from the disaster is that concerns over fire safety raised by residents were ignored. The management of the block was  delegated by the council to a Tenants’ Management Organisation (TMO). This is a classic piece of government decentralisation of a type that is characteristic of government in the last thirty years or so. Decision-making is pushed down to a body with technical powers but no  democratic mandate of it own, and no revenue-raising powers. The TMO had to negotiate its budget with the council, so the critical decisions ended up by being the council’s anyway. Governments claim that they are pushing decision-making closer to the users of services, but in practice this has very little meaning – the important powers are retained in the centre, and no meaningful consultation with users or local communities occurs.

The Labour opposition are picking up on this democratic deficit – or rather, they are trying to exploit it. Labour politicians have been trying to relay, and in some cases even stoke up, local anger. A lot of this is legitimate democratic politics. But it has been taken to absurd levels. A low point was reached last week when objections were raised by some victim groups to the judge appointed to head the enquiry. Now I have no idea whether this was a sensible appointment, but the objections raised initially by victims’ groups were hard to take seriously at face value. They wanted somebody who had experienced the deprivations of social housing and tower-block living, and who would share their anger. In other words they did not want an impartial inquiry, and the wider benefits that would flow from it. Two Labour spokespeople who were interviewed on the radio, including the newly-elected local MP, simply endorsed this view at face value. One, a front bench spokesperson (I forget who – alas that is rather the state of Labour’s front bench), then went on to deliver a tirade about private sector profiteering. Now of the many failings exposed by the disaster, profiteering is not among them. The failings mainly arose from public sector stinginess – the normal Labour bugbear of “austerity” would have been closer to the mark, though still not quite on point. This bespeaks politicians who are not really interested in the lessons arising from the crisis, but simply want to exploit it for short-term gain.

But surely there is a major political failure that neither the government nor the opposition want to do much about. The victims for now have their moment in the spotlight, and an unaccustomed moment of actual political power. But they know it is transitory. The failures of public administration that led to the tragedy grew out of the powerlessness of local communities, and of social housing tenants in particular. That is characteristic of the British way of politics. The local council, Kensington and Chelsea, is politically uncompetitive, with a large Conservative majority. Political power is concentrated in a clique of the ruling party. Most council wards, where councillors are elected, are safe for one party or another, so little dialogue takes place between the electors and their councillors. Any such dialogue arises from a sense of duty from councillors (who are only paid meagre allowances, except for the most senior), not political necessity. And councils themselves are highly constrained by central government in their powers – especially over funding, which has been severely cut since the financial crisis of 2009.

Politicians of all parties talk about more devolution of power from the centre, but mostly they don’t mean it. They want to devolve blame and not real power. That TMO is the model. So they will insist that the problems are down to inadequate rules, incompetence of some intermediate level of administration, or poor funding decisions at the centre, or some combination. Giving voice to the voiceless does not seem to be on the agenda.

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Why the Lib Dems must keep going

As a Liberal Democrat I started the General Election full of optimism. Labour looked down and out; people would surely want another alternative to an uncompromising Tory leadership? Those hopes soon vanished, as the party failed to spark, and ended up with even fewer votes overall than in 2015. Existential questions arise. If two party politics is here to stay, is there any point to the party?

There was a silver lining to the gloom. The party has increased its number of MPs from 8 (or 9 counting the by-election win in Richmond Park) to 12. And not just that; the new parliamentary team looks a lot stronger. Three former ministers (including two at cabinet level) return, for the loss of Nick Clegg, who, for all his virtues, does have a bit of baggage. One third of the MPs are now female (none were in 2015), redressing a long imbalance. And I took an extraordinary amount of vicarious pleasure in the election of Layla Moran in Oxford West and Abington. She first stood for parliament here in Battersea in 2010, when I was her agent. That brings to two the number of MPs that know who I am (the other is Ed Davey, whom I’ve known, though not well, since 1990). From a motley collection of surviving old hands in 2015, we now have something much more diverse and dynamic.

But three of the gains resulted from the peculiar shifting of multi-party politics in Scotland. In most of England and Wales, the party failed, losing five out of its eight seats, even if they regained another five. In particular, the party was unable to handle the rise of Labour amongst younger voters, except in Bath and Oxford. There is bitter disappointment. The party had been showing momentum in local elections, and even in an ongoing by election in Manchester, until the election was called. Its membership has grown massively, and it could call on a much larger army of enthusiastic activists than the demoralised bunch in 2015.

What went wrong? Some commentators have blamed the party’s policy of a second referendum on Europe, once the exit terms are known. Most electors weren’t interested in this, but it was critical to the party keeping faith with its core vote, especially those new members, who mainly came from a Brexit rebound. The Lib Dems have done enough betraying of its core support in coalition. And I don’t think the policy actually put many potential voters off – nobody expected the party to be able to actually implement its policies, after all. The problem was that the party had little else to say. It claimed to be the only opposition to the Tories and hard Brexit. As Labour surged, that proved nonsense – Labour had no difficulty in winning votes from people supporting a soft Brexit or even no Brexit at all. The Lib Dem manifesto was quite a decent stab at a programme for government – but it looked like an undistinctive split-the-difference programme when compared to the others. Labour went uncompromisingly for the protest vote, in a way the Lib Dems used to, and found that it worked – perhaps because nobody expected them to win either.

On one issue in particular did Labour manage to skewer the Lib Dems: student finance. By promising free university education, Labour picked up a policy that was popular with younger voters, and which had been a Lib Dem flagship until 2010. The Lib Dem reversal on this in coalition continues to haunt the party, and Labour’s policy was the most dramatic possible demonstration of this. That this policy presents major headaches for any government trying to implement it (Labour’s manifesto is comically vague on this) is beside the point when nobody expects you to win. Digging their way out of that hole will be a major headache for the Lib Dems.

The party’s leader, Tim Farron, did not help. He lacked gravitas – he was prone to overblown rhetoric and did not look like a cabinet minister in waiting – even compared to the Labour leader Jeremy Corbyn. Labour campaigners successfully employed distraction tactics over his religious beliefs, and how these might or might not affect his views on gays and abortion. Tim has now resigned as leader – based on the issues around his faith. It was the right decision for the wrong reason – and I will come back to the issue of liberals and religion in a future post. Tim had a solid grasp of the party’s long term strategic priorities (core votes, more women and ethnic minority MPs, community campaigning and so on) but he had too many other weaknesses.

A further problem was weak organisation. There are honorable exceptions, but there were many horror stories from the campaign trail about disorganisation and opportunities lost. For example in more than one seat inexperienced campaign managers exhausted themselves organising the Royal Mail free delivery at the start of the campaign, while neglecting the advance organisation required for polling day, which they then became too tired to do properly. It is likely that organisational errors like this, and gaps in communication between local and national campaigning, cost the party as many as four seats (including seats in Wales and Cornwall, which would have given the party a better geographical spread). This is particularly disappointing given that the party had a head start on candidate selection. This points to serious organisational weakness in the party that successive leaders have failed to address. It has is an out-of-touch national management, chaotic local management and weak middle management, all reinforcing each other’s ineffectiveness. I exaggerate – there are  islands of brilliance – but strong organisational leadership needs to be a priority.

But is it worth it? Does the party contribute value to British political life? I still think it does because the party has two historic functions that the election has not changed.

The first is as a beacon for liberalism and democracy. Both major parties are taking these for granted. They are fragmented coalitions only interested in seizing a parliamentary majority by whatever means, and then using it to impose a divisive policy agenda. The Conservatives have taken pragmatism past the point of bankruptcy. They continue to peddle failed ideas because they know no better. Labour have collapsed completely into a party of protest, pretending that hard choices do not have to be made.

The second historic function of the Liberal Democrats is to bridge the tribal divide between the two main camps, and attract support from both. It looks as if neither of the major parties can establish a decent governing majority – they are just cancelling each other out. The deadlock can only be broken by a third party. This is what happened in 2010 with the coalition government. Disastrous as that was for the Lib Dems, rebuilding a new coalition is probably the only way that Britain will achieve a government that is “strong and stable” in the language of the Conservative election campaign. That poses a major strategic problem for the Lib Dems – but that is surely the party’s destiny. By the time the party is next given the chance – perhaps after Labour attempts a minority administration – public attitudes may have moved on.

There is a further possibility – that the party becomes part of a new movement that governs without Labour or the Conservatives – in the manner of Emmanuel Macron’s En Marche movement. That was my hope when I joined the predecessor party, the SDP, in 1981. It failed then, but who knows?

Meanwhile the party needs to pick itself up and move on. It must continue to fly the banner for Remain, and tap the growing anger over Brexit – even if the end game is unclear. But the party also badly needs to move on to explain what it is for beyond Brexit. With problems for Britain piling up in all directions, the voters surely need to be offered liberal solutions.

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Was Grenfell Tower Theresa May’s Black Tuesday?

Britain’s Conservatives are in an extraordinarily deep mess. Their catastrophic their election failure was followed quickly by the Grenfell Tower tragedy, which to many showed the bankruptcy of Tory policy. A union representative at recent meeting I attended confidently predicted that Labour would be in power in six months. That looks implausible, but the Tories could limp on like John Major’s government after Black Tuesday in 1992, before it went down to the Tories’ worst ever defeat in 1997.

It’s a bit shocking to think back to last April, when Theresa May called the election. It looked like a stroke of genius. Labour had some of their worst ever poll ratings and looked hollowed out after their internal struggles. But it wasn’t just that. It also looked clever to go to the electorate then, because the next few years were going to be rough going for the government. Brexit was looking very messy, and the short term economic outlook looked dire – especially if the government stuck to the fiscal conservatism that has been their hallmark. Now the party has lost its parliamentary majority, tarnished its brand, and rescued Labour from oblivion. And prospects for Brexit and the economy look just as difficult as before – worse.  I can only guess at the trauma Tory supporters must be feeling.

There has been some predictable lashing out. Tories cannot bear to give Labour’s leadership credit for anything, so they blame their own side for the calamity. Mrs May is regarded as a dire leader; the campaign is written off as the most dismal in history. And yet they won 43% of the vote, the highest since 1987, and their poll ratings were remarkably stable through the campaign. Still, many of the decisions taken by the Conservatives during the campaign look ill-advised in hindsight. A lot of the problem was that the calling of the election was so sudden. There was no time to put together the type of campaign infrastructure that was in place 2015. They lacked good quality campaign intelligence, and failed to see how the battleground was moving. The political environment, after Brexit and Corbyn, is radically different from that of 2015, and yet the Tory campaign theme – “strong and stable” versus “coalition of chaos” – was much the same. This points to a deeper weakness: the party lacks a strong army of volunteers to fight a ground campaign. So it badly needs the advantages that money and a long lead time can buy – and they need to identify the right constituencies and voters to target. It’s clear they were focusing their efforts on the wrong people time.

I have made a comparison before between Theresa May and John Major. Mr Major was a lacklustre leader, who experienced an initial honeymoon when he took over in 1990. He did not call a snap election, but pulled off a narrow but unexpected victory in 1992, after a dismal campaign. He had a bit of a second honeymoon, but it all came tumbling down on 16 September 1992, Black Tuesday, when Sterling was forced out of the European Exchange Rate Mechanism, shattering Mr Major’s economic strategy. It made no difference that he kept going for over 4 years more with a pretty decent economic record – he and his party’s credibility was shot, and the country was only waiting for somebody to put them out of their misery.

Does the Grenfell Tower fire provide a similar, seminal moment, to follow the failed election itself? There are clear signs of government failure, and Mrs May’s slow reaction showed a massive lack of political judgment by her and her advisers. The official neglect that led to a tragedy on this scale goes back much longer than when Conservative austerity started in 2010, but many of the things Conservatives have been saying about cutting public services and regulation resonate badly.

But, like John Major, I suspect the government will be quite successful at limping on. Only Labour currently wants another election, and they do not have enough parliamentary muscle to force one, nor sufficient political skill to engineer one. Also Mrs May herself looks quite secure for now; each of her potential replacements brings problems with them. Personally I think that the Chancellor Philip Hammond would do a much better job, but he would be distrusted as a more open Europhile. If there had been a strong field of potential leaders, Mrs May would not have walked into her job so easily. Just as nobody could replace Mr Major.

But the Conservatives are vulnerable. Brexit makes the short-term economic prospects look weak – undermining their reputation for economic competence. The lower pound is squeezing what people have to spend; business investment is blighted by uncertainty. A good moment for higher public investment in infrastructure and public services? But that would require the import of a lot of foreign skilled workers (and no doubt quite a few unskilled ones) just as Brexit makes life uncertain for the most readily available people. It may or may not be fair to put a faltering economy down to Brexit (it may have been coming anyway), but it is hard for the government to blame anything else, when the most plausible alternative is their own incompetence. And public services, such as education and health (to say nothing of social housing) are becoming stretched to the point of being politically toxic.

But for the Conservatives to be beaten, it takes somebody to deliver the blow. In 1997 that was Tony Blair, who built up the most ruthlessly effective political machine Britain has ever seen. Labour are confident that the spirit of hope and optimism spelt out in their manifesto will convince enough extra voters to give them a try this time. They have plenty of enthusiastic young supporters to give them an army of foot soldiers. But they are very unlike Mr Blair’s Labour. Mr Blair moved Labour towards the Conservatives in policy terms, in a strategy that I have called “the same, only different”, and picked up many Tory voters. For Mr Corbyn’s  party, their motivation comes from a visceral hatred of the Conservatives and all they stand for. Their policy programme is full of contradictions, not least on Brexit, and would wilt under close scrutiny. This time they succeeded because nobody thought they could win. I can’t believe they will be able to deliver a knock-out blow. Challenges built on populist anger can gain momentum (look at Donald Trump and Brexit), but they provoke opposition, and it is very hard for them to get enough votes to secure more than a narrow victory in a parliamentary election. And the electoral system does not favour Labour either.

The alternative is that a new political force is able to grow and deliver the blow, as Emmanuel Macron has in France, drawing support from both right and left. The Liberal Democrats hope to be that force, but at best they can only be part of it. This new force needs defections from both the big parties, and some people new to politics too. And there needs to be a leader. Is there anybody of the right stature around to lead it?  Maybe somebody will emerge, as Tony Blair did. I can’t help thinking of David Miliband. Vince Cable, who looks likely to be the next Lib Dem leader, has a better chance than the current leader, Tim Farron, of drawing support across party lines.

But for that to happen, Labour will have to start falling apart. This is possible. The hard left looks is continuing its takeover of the party machinery. Mr Corbyn has made no gestures of reconciliation to his party’s centrists. But it will take more than driving out a few tainted centrists to break Labour’s momentum – something has to puncture the enthusiasm of Labour’s activist base, who now have a taste for successful campaigning. Perhaps only power will puncture Mr Corbyn’s bubble. Labour might be too weak to beat the Conservatives, even when they are vulnerable. But they may yet be too strong to allow anybody else to.

And that is the best hope for Conservatives. British politics is volatile. Their luck could yet turn.

 

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Hubris wrecked Theresa May. Will it do for Jeremy Corbyn too?

Labour did not win Britain’s General Election. Indeed Jeremy Corbyn’s party did no better than Gordon Brown’s in 2010. And yet Mr Corbyn has every right to be pleased with himself. His party burst through all expectations and is now within shouting distance of power. They did this with an innovative campaign that has changed the face of British politics. And yet their hold remains fragile.

I still have to pinch myself that Labour have done as well as they have. I really did not believe that they could take back the seat of Battersea, where I live,  from the Tories. Their campaign was weak, and their candidate locally unknown; they put in a fraction of the effort they did in 2015. As a resident the only party I heard from was, in fact, the Liberal Democrats (whose vote increased quite respectably) – as well as the independent candidate.

In my last post I attributed Labour success to three things: pushing back the Lib Dems and Greens; taking votes from Ukip; and drawing in new voters, especially younger ones. Subsequent evidence suggest I may have overdone the Ukip component – but that quite a few older, Tory voters stayed at home. The point is that Labour did everything except tackling the middle-England voters who voted Tory in 2015, and whom people like me said were the party’s only route back to success. And that, ultimately, was why Labour still lost.

The most positive thing about Labour’s campaign was the successful way they drew in younger voters who had previously not voted, right up to people in their 40s. This clearly had a powerful political effect, to the detriment of both the Conservatives (including in Battersea) and the Lib Dems (in seats like Nick Clegg’s Sheffield seat). Politicians have too easily neglected this segment of the population, while lavishing benefits on older voters, who turn out in greater numbers. The hope is that once people have been drawn it to vote once, they will repeat the experience – especially since their intervention made a difference this time. This needs to be qualified in two ways. First: older voters are as powerful as ever. It was the Conservatives that tried to challenge this group, and that proved costly, even decisive. Labour pandered to both ends of the spectrum. The second is that Labour’s most eye-catching policy to appeal to younger voters was the abolition of university tuition fees. It will be very hard for them to wriggle out of that policy in future. But it will have all sorts of adverse consequences, from diverting resources from poorer people (both services and benefits) to restricting the funding and independence of universities.

A second positive thing was that finally the stranglehold of the tabloid press seems to have been broken.  In 1992 The Sun newspaper took credit for an unexpected Conservative victory, following a campaign of vilification of Labour’s then leader, Neil Kinnock – and few disagreed. Although newspaper readership is falling, it is striking how mainstream television news often takes a lead from the press. This is very evident from the often bizarre prioritisation of news stories on BBC Radio 4, for example. But many people now get their news from elsewhere, and are used to challenging the line put out by the “mainstream media”. The press is responsible for a whole series of myths and lies about politics (the scale of foreign aid, the impact of immigrants, and so on), so this is positive. Unfortunately its diminishment is not in itself a blow for truth. For example I heard people suggesting the Mr Corbyn was much readier to mix with the public than Mrs May, and yet Mr Corbyn’s audiences were almost as controlled. The left sustains its own fictional world.

Perhaps what surprised me most of all was the success of Labour’s manifesto. I dismissed it as an incoherent set of policies designed to please a series of vocal interest groups. It was not a serious programme for government, and was not economically credible (even if you accept that the government can run a much bigger budget deficit that most people currently think). And yet many voters were happy to find something they liked in it, and put an optimistic gloss on the rest. To me the most remarkable endorsement came from the economist Joseph Stiglitz. Mr Stiglitz is a Nobel laureate and wrote the textbook I used when studying public economics. Having read the manifesto itself, I can see that I was being less than fair. I wasn’t actually wrong in my comments, but I underrated its positive narrative. People were able to project their hopes onto it. They were able to seize on a few things they liked, and take the rest on trust. One striking feature was that it left very little money to reverse Tory benefits cuts, or even for them to keep pace with inflation. But nobody really believed that Mr Corbyn would let claimants down so thoroughly.

But it does seem that British voters don’t like tough choices. The best way to win votes is to make undeliverable promises, such as the one made by Brexit campaigners that leaving the EU would be costless. By contrast Mrs May’s more challenging manifesto was a failure; there were a lot of nasty things in it, but that isn’t what really cost her the votes – it was her attempt to limit the state’s largess to older voters, something that will have to be tackled eventually. This is a less positive development for British politics.

More positive, is that it looks as if televised leaders’ debates are here to stay. By steering clear of such debates, Mrs May was only following standard professional advice that such debates are simply a risk to front-runners. But Mr Corbyn’s last minute move to join the debate with all party leaders was a masterstroke, and one that I suspect lost the election for Mrs May – it badly damaged her already fading brand, which was the central focus of the Conservative campaign. Failure to attend such a debate suggests that a party leader is not up to the job. Now that two-party politics has returned (in the conventional wisdom, if not in fact), we might even get a two leader face-off in future as a permanent fixture. These debates may be theatrical nonsense, but they are a good way of securing public engagement in the electoral process and so a positive thing.

Now that Mrs May seems to be coming unstuck, after placing such a massive bet on her own personal brand, Labour are within striking distance of power. They have already taken a poll lead. But they should beware for three reasons.

First is that, as my last post pointed out, the world of two-party politics is no easier than the multi-party one. Labour now needs to get into the upper 40s of vote-share to win (the electoral system is tilted against them). That means appealing to voters who voted Conservative last time, something they have studiously avoided trying to do until now.

Second is that their manifesto will prove a problem as a template for government. It does too much for some interest groups (e.g. students) and not enough for others (benefit claimants). Labour successfully appealed to both sides of the Brexit argument at once. . it is based on an economic idea that growth is based purely on the quantity of investment, and independent of the ease of doing business. Resources are always limited, and choices always have to be made; Labour shows no preparedness for that eventuality.

And third, doubts about Mr Corbyn’s leadership remain. He had a good campaign, doing things we already knew he does well – it is how he got to be Labour leader, after all. And yet his grasp of man-management and administration has been shown to be weak. These weaknesses are bound to re-emerge, as will power struggles within the Labour Party, which he has been unable to handle.

None of this will necessarily stop Mr Corbyn from winning another election, given the disarray of the Tories, and the lack of challenge from elsewhere. After all Francois Hollande won the French presidency in 2012 on a similar basis. But that led to the collapse of his party. Labour supporters should remember that not long ago Theresa May looked unassailable, but that hubris undid her. Now I see some of that some hubris coming from Mr Corbyn’s side. They should beware.

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