The Tories are living up to their “Stupid Party” label.

As I posted yesterday, the recent local elections were bad for the Liberal Democrats, the party for whom I am an activist.  But if there’s any cheer to be had, it comes from looking at the behaviour of the other parties.

Labour have reason to be cheerful, but the results contain a trap.  Their party has lurched to the left, going back on Tony Blair’s legacy.  They want more spending, and more taxes to pay for them.  This is a good line for motivating activists, many incandescent over the Coalition’s cuts, which they consider to be unnecessary and ideologically motivated.  This is great for getting the turnout up in local elections.  But it’s not enough for them to win in 2015 – and the weakness was evident in their failure to capture the mayoralty in an essentially Labour London.  Liberal Democrats must hope that they keep reading their Polly Toynbee and let their anger trump their strategic sense.

But what is even more remarkable is the response of the Tories, to judge from the weekend’s press and backbenchers popping up on the radio.  It echoes my advice yesterday to the Lib Dems in London yesterday – to shore up their core vote.  They think the party will fail because it isn’t right wing enough, and that they should go back to being “the Nasty Party” to fit the nation’s sour mood.  This is sheer panic, and befits the party’s other nickname: “the Stupid Party”.

They do have a problem, and one that I predicted over a year ago before the referendum on the Alternative Vote.  There is a resurgent UK Independence Party (UKIP) chipping away at their core vote, while the Lib Dems find it easier to convince soft Tories to vote for them than soft Labour voters – and so they are going after them.  That is why they should have supported a Yes vote in the referendum last year – or at least not fought too hard for a No vote.  The more they go after the UKIP vote, the easier the Lib Dems wll find it to pick their centrist supporters off; the more they shore up the centre, the easier it is for UKIP to continue their progress.

But the correct answer to this problem is “don’t panic”.  They should endure a few difficulties in local council elections and the Euro elections in 2014 – because the real prize they are aiming for is outright victory in the General Election in 2015.  In this election they should have no difficulty in crushing UKIP, by painting the real enemy as Labour and the Lib Dems.  They will then use Labour’s lurch to the left to scare Lib Dem inclined voters into supporting them too, while reassuring them that they are quite nice and liberal really.  It’s the latter task that is by far the trickiest, so they shouldn’t jeopardise it by lurching to the right.

David Cameron knows this perfectly well, and his continued leadership represents the party’s best chance of outright victory in 2015.  But if the right openly rebels, the party will  both make itself look divided, and retoxify the Tory brand.  The rebels should shut up and wait for 2015 – much as the Labour left did before 1997, and indeed 2001, before that party lurched to the left with its big spending expansion of government in the 2000s.

Labour lurching to the left.  The Tories to the right.  This makes life a lot easier for us beleaguered Lib Dems.  Please let it continue.

The Coalition – there’s a narrative, but the right doesn’t like it. Time for Lib Dems to make the case.

Since the budget in March, the British Conservative-Lib Dem Coalition government has been having a rough ride in the media.  This is showing up in its poll ratings, with Labour romping ahead.  Mostly this is Westminster bubble nonsense, but Liberal Democrats, in particular, need to ponder what is happening – and do more to lift the government’s PR performance.

The list of issues that the government is said to have handled badly grows.  It started with taxing pensioners, takeaway food, and charitable donations, which arose from the Budget.  This week the issues have been queues at Immigration at airports, poor GDP figures for the British economy, and revelations that the Culture Secretary, Jeremy Hunt, was a bit to close to Rupert Murdoch’s News International media group.

Mostly these are either non-stories stoked up by the opposition, or quite sensible policy decisions that are attracting opposition from vested interests.  The Jeremy Hunt problem is the only one that looks a bit more serious, but it is part of a much more complex story that sits rather outside the government’s main purpose.  The GDP figures do relate to an important issue, the economy, but were of little significance in their own right, and told us nothing that was actually new.

So why can’t the Government get on the front foot and just swat this stuff away?  There is some nostalgia for “big hitter” government spokesmen that previous governments have been able to trot out to do just that: Labour’s John Reid, or the Conservatives’ Ken Clarke (in another era – he’s older and off-message now).  There was a rather interesting discussion on BBC Radio 4 yesterday morning on this, featuring Mr Reid and Norman Tebbit, who has also performed such a role.  These spokesmen blamed the government’s lack of narrative.  Lord Tebbit scoffed at Lords Reform and gay marriage as ideas too small to make a compelling story.  Both added that the fact that the government is a coalition made this very difficult.  These creatures of the old politics would say that of course, but it’s worth trying to tackle the argument rather than the man on this one.

First there’s the rather complacent point that all governments suffer from mid-term blues, and can get bogged with apparently trivial news issues at round about this time.  It’s not clear that the big hitters helped much this.  Things get better in the natural cycle.

Secondly the lack of a clear narrative is hardly new either.  Mrs Thatcher was clear enough – though that did not stop very poor mid-term poll ratings.  And as for John Major, Tony Blair, and Gordon Brown – none of these governments had a clear mission, beyond being competent managers.  Mr Major was lampooned for his “cones hotline” as being his biggest idea – beside which gay marriage and House of Lords are clearly a big deal.  But Mr Blair’s main thrust in the 1990s boiled down to “the same, only different”.  He was elected in 1997 with a huge majority and little mandate beyond introducing devolution in Scotland and Wales, ideas that were evidently forced on him from outside.  Mr Brown’s lack of clear narrative is the stuff of legend.  This is what modern managerial politics has become.

But actually there IS a perfectly good narrative, if only you look for it.  First is the economy: Labour left a horrible mess, which went beyond trashed government finances to a highly unbalanced economy.  The Labour economy was built on massively unsustainable levels of government expenditure, both for services and benefits.  Painful though this is, they have to be cut back, and there’s never a good time to do that.  But it wasn’t just the government being too big, there were too many of the wrong sorts of services, and not enough things we can export.  All this means that you can’t just stimulate the economy back to growth – because as soon as the stimulus ends the economy sinks back to where it was before, with even more debt.  This is a long haul – let’s be thankful that unemployment is at lower levels than in earlier recessions.  What is really needed to get us moving is more investment by business – but that’s difficult in the current world climate.  Now just what is it in the message “this is a long haul” that do you not understand when carping about 0.2% in GDP figures that are going to be revised in a month or so’s time?

But the narrative has to go further – Lord Tebbit conceded that there was a reasonably clear narrative on the economy.  And this is the Big Society/Localism/Community Politics agenda.  We need to make central government smaller so that people can be empowered locally to change things to the way they want them.  That means reforming the whole shape of government – including the NHS.  We’ve been so addicted to the old centralist ways that it is bound to take time for these things to work themselves out and there will a lot of protest on the way.  And finally we need to clean up politics.  This involves tightening up the electoral system (equal constituencies) and reducing the number of MPs.  It means tackling that out of control and ineffective patronage factory called the House of Lords.  Of course people are squealing.  There are no omelettes without broken eggs.

I could go on to bring in Europe (not the time for radical changes in the UK relationship with the economy so delicate), and immigration (this is something most of the electorate agreed on at the last election and the Lib Dems promised to grit their teeth).  This narrative is surely no worse that Tony Blair’s government that got re-elected twice.

The first problem is that the government is not clearly articulating this narrative.  They are doing quite well on the economy, though could do better.  But not the bigger picture.  The problem is lack of narrative itself, it is that the Tory right, and their friends in the press, don’t like it.

Of course there are tensions in the government – between parties and within them. But that’s not new. Mrs Thatcher had her “wets” on the Tory left.  Mr Blair had both the Labour left, who felt utterly betrayed, and the brooding presence of Mr Brown to deal with.

There’s no excuse for the government not to be trying harder to present a more coherent case for what it is doing.  The Prime Minister David cameron should be leading from the front here, but seems strangely absent.  But I think the Liberal Democrats should be doing more too.

For the Lib Dems the position is rather intriguing.  The party took a huge hit in the Coalition’s first year, while the Tory standing increased, if anything.  Now it is the Tories that are taking the main pounding.  But there is little comfort for the Lib Dems here.  They may not be heading for the opt-predicted wipe-out.  But for them to advance beyond their current reduced poll ratings, the Government as a whole has to be seen to do better.  And if the party fails to advance from its current standing, it will not play a major part in the next government, even if there is a hung parliament.  The first lesson for the Lib Dems from the Coalition was to show differentiation.  Now they must understand that it has limits.

 

Earthquake in Bradford. Not many dead.

“The most sensational by election victory in history”.  For once it is difficult to argue with George Galloway’s comment on his stunning win over Labour in yesterday’s Bradford West by election.  But as the dust settles, has anything changed?

The Coalition parties did badly in this election, but can be forgiven for having a chuckle.  Labour’s loss was spectacular, and it has been a tough week for the government.  For whatever reason, the media had turned on them over a series quite sensible moves (pensioners’ tax allowances, VAT on takeaway food, preparing for a potential strike by tanker drivers), which were admittedly exacerbated by some presentational gaffes.  Labour had been taking some undeserved credit for this; and now they’ve been shown to be as out of touch with the real world as they allege the coalition parties to have been.

But Labour’s big problem is that they are seen as a party of government rather than one of protest.  This leaves them vulnerable in by elections like this to candidates that seem to embody anger and frustration more.  But it is a good thing if they actually want to win a General Election.  In the narcissistic game of trivia played out by politicians and political correspondents this is a reverse.  But no reason to panic.

Mr Galloway’s Respect party is a personal vehicle, not a convincing political movement.  It attempts the feat of allying left-wing (“Old Labour”) ideas with cultivating the Muslim vote; this difficult reconciliation seems only to be feasible through Mr Galloway’s self-obsessed personality.  He has tried and failed to broaden his appeal.

For the Lib Dems (not so implicated in the week’s gaffes, but having to share responsibility) the result is not a big deal either.  They lost their deposit in a seat where they were already weak; the decline in vote was not quite as spectacular as for Labour and the Conservatives, and they comfortably saw off the Greens and UKIP.  But it offers no particular hope of the party digging its way out of its poor standing in most of northern England, to say nothing of elsewhere.

By far the most interesting feature of this election has been the behaviour of the Muslim community – which seems to have been the main factor behind Mr Galloway’s success, harnessed by some very astute campaigning.  According to Nasser Butt, a former Lib Dem parliamentary candidate in Tooting, who spent the last week in Bradford, the charge was led by younger members of the community, who persuaded their elders to rebel.  This was reversal of the normally paternalistic way that politics is done in these communities.

This is an exciting development, even if it causes liberals some angst.  Muslim communities (in this case mainly Pakistani derived) have a strong sense of grievance.  This seems to be shaped by two things: the West’s ill-judged military campaigns in the War on Terror, and the generally liberal ways of the society that they inhabit, which runs roughshod over their conservative sensibilities.  The latter’s flashpoints are the toleration of gays, perceived insults to their religion from a free-speaking public, and the modesty of women’s dress.

If the Bradford dynamic can be repeated elsewhere, it means that the Muslim vote is much more in play, instead of being stitched up with elders in little local deals, or not voting at all.  The liberal fear is that it will put pressure on politicians in the wrong direction on issues like  gay rights and freedom of speech.  Maybe so, but I think it is a price worth paying.  As the communities become more involved in mainstream politics, they will come to understand the need for compromise and building coalitions.  And they will feel listened too.  They may also come to understand that liberal views are held with passion and principle, and are not merely the signs of decadent society.  In the long run this is good.

Meanwhile yesterday also saw a local by election in Southfields, in Wandsworth.  There was no earthquake here.  The Tories held off a strong Labour campaign, taking nearly half the votes cast.  The Lib Dems, who did not put in a major effort, were pushed back to under 6%, but beat the Greens (under 3%) – something that did not usually happen in Wandsworth before 2010.  Unlike last year’s Thamesfield by election, when the Lib Dems fought at full throttle to get 17%, Labour can’t blame their defeat on them this time.  The Tory one-party state moves on unruffled.  There was a Muslim independent candidate, but he made little impact, with 38 votes (1%), two less than UKIP.

Why the Coalition should not last beyond 2015

Some Tories are talking up the idea that the Coalition between their party and the Lib Dems should continue for a second term.  This doesn’t sound realistic.  And I think it would be a bad idea too.

Some pundits have claimed that Britain’s major parties (aside – I am thinking particularly of the three UK parties here, but there are similar dynamics with the SNP too) have become more alike and simply compete on competence (I often tread this in the Economist, for example).  This may be true so far as they way that they each reach out to a group of critical floating voters, but in fact each has a very different view of the world.  And it makes a difference which one of them is in government.

That was why it was such a surprise that the Liberal Democrats went into Coalition with the Conservatives in 2010, and why it has been, and remains, so painful for them.  To the Lib Dems, the Tories are on the wrong side of a great historical struggle that still shapes our politics.  The Tories stand for the rich, cleverly roping in those who aspire to be rich, and social conservatives and nationalists in a coalition of nastiness. The stakes in this battle are rising, since, for whatever reason, the rich have been doing very well over the last couple of decades, and have a lot to protect.  Redistribution, in some shape or form, should be high on the political agenda.

The Lib Dems are essentially liberal; they have some fellow feeling with the aspirant well off (or should do), but have historically been the other side of the rich-poor divide – and find social conservatives and nationalists anathema.

But in 2010 the party had little choice.  In its own way Labour was on the wrong side of history too.  Labour is the party of big government, and its core constituency is public sector managers and workers, the quangocracy and the many organisations that feed off tax funding.  The unions are heavily associated with these same interest groups, so its historical alliance with them does not cause undue strain.  And just as the Tories marshal social conservatives to keep the show on the road, so Labour marshal those who depend on state handouts, without any real interest in curing them of their dependency.

The first decade of this century proved a happy time for Labour.  The economy grew steadily, increasing the tax take, allowing the government payroll, direct and indirect, to expand, as well as the net for all sorts of benefits.  To many within the party it must have seemed that they were on an unstoppable march to solving the country’s problems through government action.

But it was a castle being built on sand.  Economic growth was not built on substantial advances in productivity, but on a combination of debt and good luck.  We should note that most of the debt in question was in the private sector, but it is also true that government debt expanded more than was prudent.  The good luck (consciously exploited Labour’s leaders) was the expansion of China and India, and the gains from trade that followed as costs of manufactured goods in particular advanced at well below the general inflation rate.  In addition immigration from Poland and other central and east European countries stopped the British labour market from breaking down, and expanded the overall tax take, if not income per head (a matter of some controversy).  All this has come to an abrupt halt, so that we are being forced to unpick many of Labour’s advances.

The shock to Labour supporters of finding that their dreams were built on air has been enormous.  In 2012 they still mostly don’t really seem to believe it; in 2010 they  were in such deep denial they were absolutely unfit to be in government, even in coalition.  There was no basis to work with the Lib Dems, whose general world view is somewhat closer to them than the Tories.  Given the financial crisis, a coalition with the Tories was easily the best option available to the Lib Dems, with the added benefit of the party learning how to take part in government.

How will things look in 2015, when the next General Election is due?  It is still a long way off, but another hung parliament looks quite likely.  Labour’s problem is not just that they are on the wrong side of history, it’s that most of the electorate realise it.  They instinctively know that Labour’s aspirations cannot be afforded, and that they have no real idea how genuine economic growth can be found, so their support is stuck.  But they should still advance from their lows in 2010, making a Tory outright win very difficult to pull off.

And what of the Lib Dems?  The general betting is that the party will fall back.  A near wipe-out is certainly within the range of possibility, but more likely is a significant loss of seats to, say, 30 or so (from the current 57).  The situation in Scotland, source of many Lib Dem seats, looks dire.  The consequence of this is that being part of a coalition is very difficult to make work.  It’s difficult enough with the current balance between the parties.  Could you really have a Deputy PM with just 30 seats? Offered a coalition by the Tories, the party would be wise to turn it down and let them make their way as best they could as a minority.  The financial crisis should not be anything like as severe as in 2010, so this will look a more realistic prospect.  Coalition with the Tories, especially with reduced moral and actual authority arising from a loss of parliamentary seats, is simply too toxic to continue.

And coalition with Labour?  It’s difficult to see how that would work in 2015 too.  There would need to be a change in party leader, and not just because he is a hate figure in Labour circles.  To the public changing sides without changing leader would stink to much of ducking and weaving just to maintain office; he would need to have pulled off a really good election result to be able to stay.  Changing leader is best done while not in government.  And the problem of not having enough MPs would still hold.

But what if the Lib Dems should do unexpectedly well in the 2015 election, maintaining or even increasing their representation?  This would certainly give the party a new moral authority after all they have been through.  But the toxicity of the Tories remains; they are simply on the wrong side of history.  With an increased representation, the party may well have the choice of partners, and if so, it should try to strike a deal with Labour, and one that gives the party increased overall clout in government.

But if Labour had done so badly that a coalition with them is not feasible?  This would be the Lib Dem opportunity to show that they are the true opposition to the Tories.  The party should offer the Tories terms that they are unlikely to accept, and then let them stagger on as a minority.  A tricky stunt to pull off, but surely better than five more years in government with the Tories, giving Labour yet another opportunity to recover?

 

Time the British woke up to the crisis in Europe

It is a commonplace for Britain’s politicos to sadly shake their heads and complain that the Euro crisis demonstrates a woeful lack of political leadership.  Regardless of the fairness of this charge in respect of Angela Merkel, say, it clearly has resonance for Britain’s own leaders.  There seem to be two camps: ravingly impractical Eurosceptics, and sheer paralysis from everybody else.  The mood amongst Europhiles (as I witnessed at fringe meeting at the Lib Dem conference) is akin to deep depression.  It is time for this to change.

To be fair some key players have been showing something less than paralysis – George Osborne and Nick Clegg have both been conspicuous in raising the seriousness of the situation with their international colleagues – but their pronouncements are hardly more helpful than anybody else’s.  They aren’t bringing anything to the party and they aren’t trying bring our own public alongside.

The first point is that the Euro crisis has serious implications for Britain, much though most people seem to think it is happening to somebody else.  This is for two main reasons.  First is that this country would be caught up in any financial disaster.  Our oversized banks are deep in the mess; Euro zone countries are vital trading partners for a country very dependent on trade – especially given that international financial services are so important to us.  Our fragile attempts at recovery risk being completely blown off course.  Forget Plan B if this lot breaks.

The second reason it matters to Britain is that resolution of the crisis could take the European Union in a direction that is against our interests.  Britain leads the single market wing of the union: the chief Euro zone countries are more protectionist in their instincts.  We risk being shut out of the design of critical architecture – much as the Common Agriculture Policy was put together in our absence.

How to proceed?  We need to tackle the dark spectre head on: the best resolution of the crisis involves changes to the European treaties.  To change the treaties will require a referendum here (let’s not weasel out of it this time).  If we face up to that challenge now, it will show real courage, and help get things moving.

But, of course, we would need to see something in return.  Changes to the treaties that would further our interests.  These need to be to promote the single market, to protect London (and Edinburgh) as centres for financial infrastructure, and to reduce unsightly bureaucracy and/or operating costs of the Union (the siting of the European Parliamnet at Strasbourg needs to go on the table, at least).  Given our understanding of finance, we might well have useful things to say on the Eurozone architecture too – even though we clearly can’t be part of it.

To do this our leaders (the Prime Minister and the Deputy Prime Minister in the lead) need to build two sets of alliances.  The first is within the British body politic, so that the referendum can be won.  This needs to cover Tory pragmatists (David Cameron, George Osborne and William Hague), the Labour leadership and, preferably, the SNP.  The Lib Dems have an important role in making this hold together since, by and large, they understand the Union the best.  Mr Clegg’s experience of deal-making in the European parliament counts for a lot.  The next set of alliances is within the Union itself, to create a Single Market bloc.  The obvious candidates are the Nordic countries, Ireland and the Netherlands, together with many of the newer members in central and eastern Europe.

This will be very difficult.  That’s the point, almost.  The reward is a stabler EU, constructed more to our taste, even if we must concede some powers to an inner core of Euro area countries.  Everybody wins.  And by taking on the wilder Eurosceptic fringe, including their newspaper backers, it will cheer all right-thinking people up.  It’s time we stopped being paralysed by fear and came out fighting.

The strange cheerfulness of the Liberal Democrats

I returned from the Liberal Democrat conference in Birmingham yesterday.  After the March conference, when things were already looking bad, I blogged under the title of “The Strange Cohesion of the Liberal Democrats”.  The cohesion is still there, but to that was added widespread cheerfulness.  This was not expected, but widely commented on .

This is strange for a number of reasons.  The party’s situation remains dire.  The Independent’s cartoonist depicts the party’s bird logo as a dodo.  Though I naturally believe the opinion polls showing the party at 17%, this still isn’t that much better than what was achieved at the calamitous local elections last May.  And plenty of polls show a much lower rating, down to 10%.  Some party leaders (notably Paddy Ashdown) made much of some improved results in local by elections; but these are nearly meaningless, a fortunate confluence of favourable local factors.

And there’s plenty of anger about too, especially over NHS and education reforms, which worry many activists a lot.  And not everybody buys the leadership line that there is no alternative to the government’s austerity policy.  As Steve Richards of the Independent points out, the second conference after a general election should be when it is safest to display dissent in public; so why was it so muted?

Party conferences are always bubbles where attendees can cheer each other up without too much intrusion from the outside world.  And there was undoubtedly an element of this.  One reason for both the cohesion and the at times positively aggressive cheerfulness was a response to adversity.  As a party that is just one step away from oblivion, people did not have the confidence to display of too much disagreement; we are much more vulnerable than the Labour or Conservative parties when in similar straits.  This is not a bad sign; it shows a degree of maturity and survival instinct – in contrast to the response of the SDP in particular to the 1987 election, which resulted the party’s poll ratings dropping into the margin of error of nothing.

Party outsiders will not be convinced that the party’s fortunes are on the mend.  But for insiders there are some reasons for cheer.  First, of course, the thrill of being in government remains strong.  For so long the only hope of getting pet policies into action was that other parties might steal them.  Direct access to the levers of power is the ultimate reward for any serious political party.  It still feels good; almost nobody says that going into coalition with the Tories was a bad idea.

Further, the threat from the other parties does seem to have receded somewhat.  The Left’s rampant anger at the cuts and Lib Dem “betrayal” seems to be burning out.  Compared to Sheffield the demos outside the conference were pathetic.  And Labour’s poll rating are stuck in a rut.  And as for the Conservatives, only last May it looked as if their “human shield” strategy was working to a tee.  Our presence in the government was supposed to help de-toxify the Tory brand, while we took the full brunt of the anger at government policies.  Since then the party has managed its PR better, so that the opposite seems to be the case: that the Lib Dems get credit for anything progressive that the government does.  For example quite a lot was made of the government’s commitment to increasing foreign aid; and yet David Cameron gave this policy much more prominence than we did before the election.  In this, ironically, the party has been greatly helped by the Tory right, and their friends in the press.  The more they complain about Lib Dem influence, the easier it is for the Lib Dems to take credit for the nice bits.

All this gives credence to Nick Clegg’s “centre ground” strategy, first unveiled in March (I think) to widespread scepticism.  That means the party defines itself by what others do, the complaint ran.  But neither of the other parties can win a majority without the centre, so denying it to them improves the chances of a hung parliament.  And there may just be enough votes there so that the party can hang onto enough seats to be a real influence in the subsequent bargaining.  And who knows, if the party stays the course they may even get a little grudging respect from the electorate that so despises it now.

And of course, there is the attention.  The party have never had this degree of scrutiny before, leading to the widespread complaint that nobody knew what the party stood for.  They still don’t, by and large, but as the party learns how to present its distinctive profile in government this is changing.  But will the public like what they see?  Or is liberalism just a middle class hobby?  Getting people to understand what liberalism is, and persuading them that it is good for them is the real challenge ahead.

 

It’s time for the Lib Dems to grow up

I had wanted to include the phrase “growing pains” in the title of this post, but growing is not what is happening to the Lib Dems at the moment.  Not in the sense of membership or votes, a small summer bounce in both notwithstanding.  It is about becoming a more mature political party – and becoming more mature is always painful.

I am going up to the party’s conference in Birmingham tomorrow; I don’t know what I’ll find.  Evidence of pain is everywhere.  There was a moment in April 2010, after the first party leaders’ debate when we dared to hope for something spectacular.  And this wasn’t just a  media frenzy – it was palpable on the doorstep and in the streets.  It has been downhill ever since, apart from the brief thrill of seeing the party enter government – though this left the voters unmoved, as opposed to party insiders.

Last May’s local election results were a massive trauma.  Many of the party’s activists were in the process of winning the country over “one ward at a time”.  They thought that by being relentlessly local, and doing a good job for their local voters, they would be insulated from the national tumult – something that has been by and large true in the past.  So it was a really rude shock.  Many blame the party’s MPs as shameless opportunitists who are out of touch with the voters and activists.  And of course, it showed the party that oblivion is just around the corner.

And there’s everything else.  Endless criticism on the papers; being the butt of comedians’ jokes (and worse) on the radio and TV.  Taking responsibility for unpopular reforms in the NHS and education.  I have an email today from a very long standing member who is about to resign because of the NHS bill.

And yet.  These are all vicissitudes that Britain’s two most successful political parties, Labour and the Conservatives, (leaving aside the SNP for now) have long learned to take in their stride.  It is part of being a grown up political party.  It is part of mattering.  At members’ meetings one of Nick Clegg’s favourite stories is what happened when the party went back to talk to the many voters that slipped out of the party’s grasp in last week of the General Election campaign.  It amounted to, “These are tough times, and we need a grown up political party.”  Enduring this type of pain is a necessary step to breaking through to the next stage of the party’s advance.

The trauma could kill the party, of course.  But if you are part of it you need to be positive, and ensure that it doesn’t.  The opportunity is palpable.  Neither Labour nor the Conservatives are flourishing.  If the party can hang on to something like its current number of seats, especially in a smaller parliament, then another hung parliament, and coalition opportunity, is odds on.  Who needs electoral reform?

And the whole nation is in trauma.  The good times just aren’t coming back.  The apparent economic achievements of the last decade are proving hollow.  Property prices will not rise endlessly to make everybody rich.  We haven’t got the money for the public services we used to have – just as the demographic challenge is about to get much worse.  Labour still haven’t come to terms with their failure, and seem to be stuck somewhere between anger and denial.  The Tories are riven by divisions between a rampant but lunatic right, and the leadership’s more paternalistic vision.

If the Liberal Democrats can get their story straight, there is all to play for.  There are signs that the party is slowly addressing this.  The conference motions don’t really do this, with the Facing the Future motion on strategy (with its 17 priorities) a particular disappointment.  The Quality of Life and Community Politics motions offer some light, though.  But behind the scenes there is a furious discussion over the party’s narrative.  Some good ideas are emerging.

Labour’s vision of a benign and overpowering government, aligned with rampant capitalism, has let the country down badly.  The Tories are chasing after a fantasy of a little England run by an unfettered middle class.  The Lib Dems can offer a sustainable future based on real empowerment of the people, in a proper international context.  Go for it!

Affording the NHS

The British government has been talking darkly about the exploding demands on the National Health Service, which will rapidly make it unaffordable if it is not reformed.  This has recently been challenged by Professor John Appleby, at the health think tank King’s Fund.  This was in a recent article in the British Medical Journal, behind a paywall, but summarised by the BBC here.  This question goes to the heart of health policy in the UK, but politicians dare not discuss it – because it puts the very principles of the sacred NHS in question.  But the problem will not go away.

According to some figures on Wikipedia Britian spent an unremarkable 8% of its national income on health, compared to over 16% in the US, before the financial crisis struck.  Those figures will be higher now, since our income has shrunk, but the relativities will be much the same.  The comparison between the two countries is usually held up to show how ineffective US health spending is, since health outcomes look generally pretty poor there.  But the comparison can be looked at the other way.  The US can afford to spend more than 16% of its national income on health and still remain one of the most prosperous countries on the planet.  There is nothing mysterious about this.  Developed countries are long past the level where basic human needs of food and shelter are met; how we choose to spend the surplus is up to us, and there is no reason why we can’t choose health care over cars, designer clothes or big holidays.  It’s not as if it requires massive imports to sustain it.

You can take this line of reasoning further.  The basic proposition of health care is to reduce pain and prolong life; these are consumer propositions to, well, die for.  Suppose we lived in the economist’s free market utopia, where health spending was a matter of individual choice in a perfectly competitive free market with no information asymmetries.   There is no reason to think that health expenditure would not be higher than the 8% or so we currently spend in Britain, or indeed as high the US figure.  We can perfectly easily afford it.

That’s not the problem.  The problem is paying for it almost entirely through unspecific taxes, the core design principle of the NHS.  And here the government is on much stronger ground.  There is an upper limit to how much tax we can raise for health care.  Up to a certain point, of course, the NHS model works perfectly well.  Look on the taxes as an insurance premium and it helps spread risk in a way that people like.  But the more you spend, the more the weaknesses of the model are exposed.

  • There is no direct line of sight between what you pay and what you get.  How on earth are you supposed to decide whether you are getting value for money?
  • You have no choice in the level of service you get.  One size fits all.
  • People who are better off may feel that they are paying too much relative to what they get.  This may not be quite as strong an argument as it first appears, since the less well off pay a lot of tax through cigarettes, alcohol, petrol and VAT – but the perception is still a problem.
  • Taxes create a drag on the rest of the economy, reducing incentives to work and therefore shrinking the resources available.

America is able to get away with much higher levels of health expenditure because so much of it comes from private insurance premiums and direct private payments for treatment.  But even there a battle royal is developing over how to balance taxes and government support.

Of course, to some putting up taxes is the right way to go.  France and Sweden get away with higher tax burdens than the UK after all.  But this is very fraught.  Some think you can go after big companies and very rich people and leave everybody else.  This is not as easy as it sounds though, since this wealth is very mobile.  Property is not mobile, of course, but raising taxes on property is probably as politically toxic in Britain as taxing fuel is in the US.  There is also a problem if too much tax revenue comes from the very rich or corporations – these start to acquire more political weight.  Which leaves the not-so-rich.  But these people are under pressure and feel over-taxed – Ed Miliband’s “squeezed middle”.

So I think the government is right.  We have hit the limit of what the country can afford for tax-funded free-at-the-point-of-use health system.  But we have not hit the limit of what people are prepared to spend if it’s their own money and for their own benefit.  The risk to the NHS is that the more affluent middle classes start to opt out of NHS services, depriving them of critical mass and undermining the principle of social solidarity.  This has already happened to NHS dentistry.

Nasty.  In the last years of the previous government the issue of co-payments was quite high up the political agenda: the possibility of NHS patients topping up their treatments with their own money to get things not on the basic menu.  This had become politically charged because of the costs of some rather questionable cancer treatments which the NHS were denying but which people were prepared to pay for.  The Conservatives clearly considered the topic politically toxic, since they have fudged the issue of cancer treatments with a bit of extra funding.  Labour and the Lib Dems were inching towards accepting co-payments, though I expect both parties are now bouncing back.

But in my view co-payments is the best way to relieve the pressure.  The NHS should define a basic menu of treatments that everybody is entitled to, but accept payments for anything outside this.  This undermines one of the sacred founding ideas of the NHS, that everybody gets the same, no matter how wealthy.  But it is better than the alternatives.  It’s the debate we should be having.

How would AV change UK politics?

In my post last week I explained why I am supporting the Alternative Vote (AV) in the forthcoming UK referendum.  This case was based on principle.  We have a system of single member constituencies.  First past the post (FPTP) carries a high risk of unrepresentative candidates being elected.  Of the various systems in use around the world to counter the weaknesses of FPTP (primary elections in the US, run-off elections in France, AV in Australia), AV seems to fit the British situation best.  I avoided asking what the impact of any change would be: just that the system is more democratic.  But there are pragmatic types out there for whom the likely impact of the changes is more important than first principles.  Today’s post is for them.  It will help show them why it is best to think about principles.

The trouble with most analysis of this in the UK is that it is based on looking at past FPTP results, supported by some opinion polls on second preferences, and then predicting how the outcome would have been with AV.  This runs into two problems.  First is that the next election is going to be quite unlike the last few, if for no other reason than that the current government is a coalition.  The next problem is that AV will change voting behaviours, and the campaign pitches of the political parties.  The usual conclusion is that the Lib Dems will benefit quite a bit, Labour marginally, and the Conservatives would lose out.  None of these effects would have been enough to change the outcome of elections except maybe the last one.  Extra seats for Lib Dems and Labour might have made the current coalition impossible, and even a Labour-Lib Dem one on the cards.  That’s enough for most Conservatives.  If we had had AV last time, Gordon Brown might still be PM.

The Lib Dems should benefit.  About time many will say – since the party is badly under-represented in parliament.  More pragmatic types worry that this would give a smaller party too much influence in the choice of coalition partners.  But the Lib Dems do face a problem.  In order to benefit their first preference votes need to get past either the Labour or Conservative candidates (in England – it’s more complicated in Scotland and Wales).  They might then attract second preference votes from whichever of these parties gets knocked out.  And yet the classic Lib Dem campaign technique is to persuade voters to vote for them because one or other of the major parties doesn’t stand a chance; this argument has much less resonance under AV.  Voters will say that they will simply give the Lib Dems a second preference, and give their first preference to their most preferred party.  As a result Conservative or Labour candidates currently in third place might sneak into second, knocking the Lib Dems out.  The Littleborough & Saddleworth seat at the last election was a Labour seat that people count as vulnerable to the Lib Dems under AV; but the Conservative vote was strong and under AV they might well have pushed past the Lib Dems into second place, which would, in fact, have made the seat safer for Labour.  This could be a big help to the Labour Party in the South West.  In Australia the two party system is entrenched (one of the “parties” being a coalition in an electoral pact).  The Lib Dems will be desperate for first preference votes under AV, and in the long term it cannot be taken for granted that the party would flourish.

Labour has less to fear.  It might help them pick up in areas where they are in third place – now great swathes of England.  They may not do so well from picking up second preferences from Lib Dem voters next time – but only because they will have done such a good job of persuading them to vote Labour as first preference.  They get some insurance against those voters drifting back.  It is a moment of truth for Labour supporters who believe that there is a “progressive majority” – a majority of voters for whom the Conservative Party is toxic.  If so the system ensures that the Conservatives never get a majority.

And that is the challenge for the Conservatives.  It will be much more difficult for them to sneak in a majority government against the votes of the a majority of the electorate.  But many Conservatives believe in something like a “silent majority” – the opposite of the progressive majority.  There are lot of people sympathetic to their policies that do not say so, and will not give them a first preference vote.  If so, they may pick up a lot of second preferences.  This could be particularly helpful to them at the next election, when both UKIP and the Lib Dems will be trying to pick off their voters.  If Labour succeeds in pulling past the Lib Dems in South Western seats, then this will make a few seats a bit safer for them, since they will get more second preferences from Lib Dem voters than Labour ones.

For the smaller parties AV is ambiguous.  It is difficult to see that extremist parties, like the BNP, will make any headway, since other voters will gang up against them.  Their best hope of an MP is under FPTP in a split seat.  But UKIP and the Greens may well think they can pick up a majority in favoured seats by scooping up enough second preference votes.  In the UKIP case they need to push past the Conservatives, either in what would now be very safe Conservative seats, or in Lib Dem held seats where they can hope to scoop up some Labour voters too.  For the Greens the game is to push past the Lib Dems, and scoop up enough of their votes to push past Labour (or the other way round), to mount a challenge on the Tories.  In both cases these are long shots, but you need a deal of optimism in politics.

In sum, the impact of AV is very uncertain in the UK.  The Lib Dems could assert themselves with a permanently larger block of seats, alongside a scattering of seats for the greens and perhaps UKIP.  Or the two party system could reassert itself, with the other parties finding it more difficult to pick up enough first preference votes.  But the outcome is uncertain for a good reason: electoral politics will be more competitive.  Who knows what voters would do?

 

 

The real meaning of the Barnsley result

The BBC and the Today programme could barely conceal their delight about the Barnsley Central by election result,  gloating over the drop in the Lib Dem vote from 2nd to 6th place.  On this their coverage did not differ much from the rest of the media.  Indeed this was spectacular.  But it wasn’t the only spectacular thing about the result.  For the first time ever in a parliamentary election UKIP claimed second place, as the Tory vote plummeted.

This should give us pause.  It means that the Tories are leaking votes to the right, with UKIP, not the Greens, standing a real chance of being the leading protest party.  Come the General Election, the Tories should have little difficulty in clawing the votes back.  But that won’t stop their activists from panicking in the meantime.  That puts David Cameron in a tricky position.  His newly-acquired left-leaning voters offer the Lib Dems their best chance of clawing back lost ground; any moves to appease the UKIP tendency will simply drive these voters into their waiting arms.  Couldn’t happen to a nicer bloke.

There is a second pause for thought.  If the Tories leak votes to the Lib Dems on the left and UKIP on the right, they will benefit much more from AV than conventional wisdom has it.  Unfortunately their supporters are probably too thick to understand this, on past performance, and so they will continue to campaign vigorously for a No vote.  Mr Cameron is clever enough to appreciate this, no doubt adding to his dilemma.