The Emily Thornberry resignation is political correctness gone mad

Last night the Labour MP Emily Thornberry was forced to resign Strood 2from her role as a front-bench spokesman for her party. It is difficult to have any sympathy for her as a person – leading Labour politicians are utterly ruthless with their political rivals. But I still find the episode shocking.

Her offence was to send out the tweet illustrated here. It was a picture from the streets of Rochester and Strood (Strood, in fact), where there was a by-election yesterday – won for Ukip by Conservative defector Mark Reckless. There was no comment – but because it combined two icons of white working class chauvinism – the St George Cross flag and a white van – it was judged to be snobbish – a chuckle at the expense of Britain’s white working class voters. Britain’s “raucous”  (as its sinister political motivation is euphemised) press was certainly taking that view, as it suits their agenda to make trouble for the Labour party. Rather than contest this, Ms Thornberry  resigned, apparently at the instigation of the Labour Leader Ed Miliband who was supposed to be “angry”.  Sadly, this was almost certainly a wise decision. It was the quickest way of killing a story that could have gone on for weeks with the same end result and much more damage to the party. And this meek surrender can even be portrayed as firm leadership by Mr Miliband – as one Labour MP was claiming on the radio this morning. A more abject demonstration of his weakness cannot be imagined.

There’s an irony here. One of the main complaints of tabloid commentators and  the Ukip insurgency is that “political correctness” has crimped freedom of expression. By this they mean the expression of views that might be construed as racist, misogynist or offensive to people with disabilities. But what is this episode if it is is an acute outbreak of political correctness? Pity Labour campaigners! The old norms of political correctness remain as firm as ever, but the list of people they are not supposed to offend, even tangentially, grows ever longer.

This presents a dark picture of our society indeed. People are quick to claim offence, and we are not supposed to have a quiet chuckle at any of our fellow citizens, unless they are rich, aristocratic, a politician or a “celebrity” – in which case we can be as offensive as we like, regardless of any sense of fairness. A society at ease with itself can laugh at itself. What we have is a society of victims and wonton verbal cruelty.

It also shows how Britain’s tabloid press remain in control of the news agenda. Readership may be falling, and people may rely on other media for information, but they still set the tone. Television and radio, including the BBC, meekly follow where they lead. Social media simply promote instant outrage rather than any sense of proportion or justice. A depressing picture indeed.

 

Sliced bread, beer and politics. We must embrace pluralism

mothers prideSometimes I still hear the expression “the best thing since sliced bread”. This refers to the 1960s revolution in bread production, whose leading brand was Mothers Pride (missing apostrophes were another aspect of 1960s modernity). This was not just a matter of slicing the bread, but the invention of new baking processes that made the bread last longer. What was not to like about the new, modern stuff? It lasted longer and you did not have the hassle of cutting it. Sandwiches and toast became a doddle; the daily trip to the baker was no longer needed. And it was much cheaper, being mass produced in big factories. The new bread swept all before it, and traditional high street bakers disappeared.

But my mother hated the stuff, which she referred to as “cotton wool”. Mothers Pride was banned from the Green household. Eventually we resorted to baking our own bread. But in this, as in so many other things, hers was a lonely voice, to be sniggered at behind her back. But she was right. Bread consumption started to fall, and then to collapse. The new invention had solved many problems, but it had compromised its core values – taste and texture. Bread became pointless. Eventually craft bakeries sprang up as the middle classes, at least, were prepared to pay extra for something like the old product.

This is a pattern that repeats in the modern world. Another exampleHeineken is beer. Traditional beer is tricky to produce. But our industrial behemoths succeeded in creating bland, gassy and cheaper products. And then they set their marketers and advertisers onto the task of selling the stuff (a process that also happened to bread). There was more resistance at first. But the advertisers won through with lager. Clever, funny advertisements, like those for Heineken (“refreshes the parts other beers cannot reach”) hit the zeitgeist, and traditionally made beers fell into rapid decline. Advertisers loved lager. They regarded it is a pure marketing product. It sold only through the strength of marketing, which had nothing to do with how it tasted. Indeed, researchers found that the blander it tasted, the faster, and more, people drank. The brewers adjusted their products accordingly.

And now the brewers are in crisis, in developed markets anyway. Beer drinking is in decline. All the momentum is with craft brewers, who produce small quantities of the stuff using more traditional methods – and which taste of something.

And so to politics. Politics used to be a labour intensive business. Political party membership would run to millions, and it was an essential part of social fabric. You won elections by knocking on doors, putting on public meetings and other events. Election literature was mainly a local affair. But the professionals got hold of this. They wanted something much more productive, with a wider impact. They pulled apart campaign messages and reconstructed something better crafted to the process of winning elections, using mass media to promote it (mainly a politically aligned press in Britain). This strategy, in essence, was to demonise the opposition with negative campaigning, while toning down your own offer to cause minimum offence. And persuasive effort was focused on a minority of swing voters. The message to more reliable supporters was was simply: I know you aren’t keen on a lot of what we are saying, but please come out and vote to stop the other lot. This required lots of money, but fewer people. These modern techniques worked. No modern mainstream political party would be without its professional advisers, armed with polling, focus groups, target voter analysis, and an array of modern marketing techniques.

And sure enough, public engagement in politics has declined. Voter turnout has steadily fallen. This bothered the professionals little, apart from some token public handwringing. What mattered was winning elections, after all. But now the political equivalent of craft breweries are on the rise. Smaller, tightly focused but distinctly unprofessional political parties. In Britain the winning political party would usually get over 40% of the votes cast (and in the 1950s about 50%). Now polling shows both main parties bobbing along at about 30%, even as the third mainstream party, the Liberal Democrats, languishes at about 7% when it used to reach two to three times that level at this point in the cycle. At the European elections earlier this year, the only national elections held under proportional representation, voters were confronted with a bewildering array of political parties, many brand-new. Few of these make much headway, but three “craft brewer” parties are making seeing success: Ukip, who won that election,  the Greens, who won more seats than the Lib Dems, and the SNP are sweeping all before them in Scotland (and who I would not accuse of being “distinctly unprofessional”).

This phenomenon is not unique to Britain. In America there are few in the way of craft parties – but there are distinct craft elements within the main parties, especially the Republican Tea Party groups. In Europe an array of fringe parties are doing well, as establishment parties take a diminishing share of the vote.

Can this decline of mainstream parties be reversed? Occasionally a charismatic leader can reverse the fortunes of mainstream parties. Junichiro Koizumi and Shinzo Abe in Japan; Tony Blair in Britain; Matteo Renzi, perhaps, in Italy. There is an interesting common feature in with all these politicians. They set themselves up as taking on their own party’s establishment, and picked fights with the conservatives on their own side. But the instincts of Britain’s current main party leaders, David Cameron and Ed Miliband, are to paper over the cracks in their parties and not to pick fights. Perhaps, unlike Japan and Italy, there is not enough wrong in the British establishment to make such a battle credible. Tony Blair’s fight with the Labour left was spectacular, but his electoral platform reached new heights in blandness.

What to do? Personally I think that the fragmentation of British politics is a good thing, and that our electoral systems should be changed to facilitate it. This would turn politics into a squabble between smaller parties. In due course something more coherent would emerge. The idea that a single political party can encompass enough of a national consensus to have a mandate to govern belongs to the past. The choice of bread and beer in Britain is steadily improving now that the big businesses have been pushed back. It is perhaps the best it has ever been. Pluralism is not failure.

As the Tories implode, will Ed Miliband sieze the moment? Or will Labour follow Hollande not Renzi?

The two-party architecture of Britain’s political system is disintegrating, as both Labour and the Conservatives struggle with the Ukip insurgency and an energised SNP in Scotland. The Conservatives were the first to lose their nerve and are on the verge of implosion. There is now an opportunity for Labour and its leader, Ed Miliband, to seize the initiative and secure a decisive advantage at next year’s election. But that would mean turning against the sort of small-minded, tactical political leadership that got both parties into this mess in the first place. So I will be surprised if it happens.

Last week I posted on how David Cameron’s Conservatives are moving beyond respectable politics in a bid to buy off defections to Ukip. They are making the fatal mistake of addressing the symptoms of their weakness, not its causes. This is as much because the leadership has lost control of the party as any misjudgement from the top. Not a day goes by without a Tory popping up on Radio 4 (my main source of daily news) proposing something that goes well beyond the boundaries of sensible political discourse. They are playing up ill-informed public opinions on immigration, the European Union, human rights and climate change. They advocate policies that will address these fears directly (controlling EU freedom of movement; repatriating powers from the EU or leaving it all together, and so on), but which are incapable of addressing the root causes of public anxiety. These are not sensible, workable policies, and this is becoming more and more obvious. The leadership is being dragged along in order to prevent a fatal break-up. The rise of Ukip is the proximate cause of this trouble – and yet its popularity simply rises as the Tories appease it, while Tory poll ratings languish. At some point the party’s more sensible components, which give the party the respectability it needs for credibility, will start to desert it. When that happens it is Game Over for the Conservatives as a serious contender for government.

Labour are better disciplined and its leader has held his nerve, if that is what to call it, for longer. Ed Miliband has made some rather silly left-wing noises – the craziest being to propose a freeze of energy prices that will interrupt, at best, badly needed investment in the country’s energy infrastructure. But this is far from the lurch to the left that some commentators portray. He does not launch into diatribes against failed “neoliberalism” or promise to reverse government’s austerity policies, except in a few token places. Extra taxes on the rich would once have been regarded as loony left, but they are now part of the sensible centre. The untapped wealth of the wealthy is draining the life out of developed world economies.

So far, so good. But this is not leadership; it is the party keeping its mouth shut. It has not properly engaged with the surge of populist discontent, that also includes support for Scottish independence. This lack of leadership has had its benefits. Many Labour politicians praise Mr Miliband for holding the party together at a time of challenge. But there are cracks. The party’s leader in Scotland, Johann Lamont, resigned last week, complaining that the party’s Westminster leadership had failed to understand the implications of Scotland’s referendum vote. This seems well-grounded. The political mood and landscape has changed decisively north of the border, following unprecedented political engagement in the referendum. And yet Mr Miliband’s response has been token at best; he simply resumed his underwhelming attack on the national coalition  government as if nothing had changed. His only concession was to call for a constitutional convention – but in the manner of one who wants to bat such issues into the long grass, so that serious change can be sabotaged in the way Labour already has the reform of the electoral system, campaign finance and the House of Lords in this parliament.

But what the country now cries out for is proper leadership. This means tackling the populism and ignorance head on. Pointing out that public fears on immigration, the EU and human rights are misplaced, and that the obvious countermeasures will make things worse, not better. Instead the British government should press ahead with a programme of serious political reform (devolution and electoral reform) and economic investment (education and infrastructure), that will draw more people back into political engagement, and prepare the country better for the future. The Conservatives have irretrievably cut themselves off from leading such a programme. Labour has not.

Such a course would be brave. It would mean taking on the tabloid press, and the many conservatives in Labour’s own ranks, who oppose political reform, or serious reform of any sort. But the public can surely spot leadership when the see it. Labour should be inspired by Italy’s Matteo Renzi. He has adopted a bold programme of political and economic reform, upsetting many of his party’s traditional supporters, and he has reversed the anti-politician tide in Italy as a result.

Alas, instead Labour seems to be following France’s Francois Hollande. Mr Hollande secured a massive electoral victory in 2012. Labour’s strategists seem to want to follow the strategy that secured that victory – by playing on his opponents’ weakness. The centre-right was being fatally undermined by the populist right of Marine Le Pen. It was a victory by default. Mr Hollande offered various bones to his left-wing supporters, but no convincing programme to address France’s pressing problems.

Such a strategy might yet succeed for Labour. But it is a recipe for implosion once the party assumes government, as has indeed happened to Mr Hollande in France. Or it could fail, as the populist right eats into Labour’s own core vote.

It’s better to be brave. And it’s not too late for Mr Miliband to surprise us all.

David Cameron is winning the race to the bottom. Is he the Michael Foot of the right?

The British electorate is being offered a choice between bad leadership and weak leadership, if they choose between the two biggest parties at the General Election in May 2015.  This is a turn-up for Labour’s Ed Miliband. While he still appears weak, the Conservative Prime Minister, David Cameron, had been seen as a sensible and competent leader. But Mr Cameron is now putting that at risk.

Mr Cameron, over the last month or so has put his name to a series highly unstatesmanlike moves. Let’s list them:

  1. He offered the public about £8bn of tax cuts in the next parliament, while at the same time closing the budget deficit. The only way this works is through savage cuts to benefits and public services. Most observers think it is completely infeasible. He has also through in the prospect of cutting Inheritance Tax, a tax which must be one of the most economically efficient.
  2. He, or rather his party, launched an attack on the Human Rights Act, which amongst other things, makes decisions by British courts and Parliament open to challenge by the European Court on Human Rights. This is more headline grabbing, and an attack on a perfectly sensible piece of legislation. This was supported by a suggestion that the basic human rights set out in the European Declaration were subject to some unspecified “responsibilities” – which shows a complete failure to understand what this declaration is trying to do.  Many Conservatives were horrified.
  3. As soon as the referendum on Scottish independence was declared, he launch a bid for “English Votes for English Laws”, a suggestion that there was some sort of quick fix that would prevent Scottish MPs from voting on matters that affected just England. This was another stunt, designed to deflect calls for a more considered approach to UK’s fraying constitution, through a constitutional convention. Many serious commentators feel that this direction of travel could only lead to the breakup of the UK.
  4. More recently Mr Cameron has suggested that he can renegotiate the country’s membership of the European Union so as to limit the level of immigration from EU countries into the UK. This means unpicking the core treaties that form the EU, and implementation would surely mean referendums in other EU countries and opening a Pandora’s Box. It is far from clear that excessive immigration from other EU countries is a serious problem for the UK – though there are abuses, which are open to less drastic solutions. This looks like another undeliverable promise, which takes the country one step closer to leaving the EU.

What do these ideas have in common, apart from being reckless political stunts? They play well to the agenda promoted by right-wing tabloid newspapers, like the working-class Sun and the middle-class Daily Mail. And they also play well amongst voters who are tempted to vote for Ukip, the insurgent populist party that is polling so well currently. Ukip have taken one seat off the Tories, Clacton, in a by-election following a defection, with an overwhelming margin. The Tories face a much tighter contest from another defector in Rochester and Strood – where polls still put Ukip in the lead.

So Mr Cameron is facing up to the clear threat from Ukip by appeasing their sympathisers. This stands in clear contrast to Mr Miliband and Labour. Labour have their own problems from Ukip, who are popular amongst white blue-collar voters, that used be part of Labour’s bedrock. Indeed the party came within a whisker of losing their own by-election to Ukip in Heywood & Middleton, in Greater Manchester. Their response to each of the four challenges by Mr Cameron has been muted. But they have stood firm – and not followed Mr Cameron’s race to the bottom. Labour politicians even offered some robust defence of the Human Rights Act. Perhaps they sense an opportunity. Labour are not exactly squaring up to Ukip, but they aren’t appeasing them either, apart from offering an  apology for allowing Polish migrants in in the early , which is at best insincere and at worst economically illiterate.

Over the past couple of years Ukip have hijacked the political agenda, with a constant focus on immigration and the EU in the news media. They have had a good run, topping the poll in May’s elections to the European Parliament, held under proportional representation. But this may be provoking a backlash. Polls tracking whether Britons would vote to leave the EU in a referendum have showing a growing proportion of people preferring to stay in, and they are now a comfortable majority. Perhaps people will tire too of the arguments over immigration, as they start to appreciate its complexities. The Economist published an interesting article suggesting that Ukip’s credibility is weak. Amongst other evidence it published a poll showing that more than 50% of people agreeing with the statement that “Ukip are a protest party with no realistic policies”, while 20% disagreed. Mr Cameron is fishing in a smaller pool than many in the press suppose.

If Labour spy an opportunity, it is that the public remains concerned about the standard of public services, and especially about the NHS. It could be that the Conservative promise of tax cuts will come back to haunt them. Today Simon Stevens, the new chief executive of NHS England, said that the NHS needed an extra £8bn of funding on top of inflation. Now Mr Stevens is no trade-union appointee, and is promoting radical reform of the NHS, including the openness to private and third sector providers that is being viciously attacked by the left. His plea for more funding is surely incompatible with the Tory promise on tax cuts. And yet it looks like the sensible centre, not the usual left wing ranting.

And here is the Conservative weakness. They are abandoning the political centre for a strain of populism that does not stand up to close scrutiny. Protest politics is not a viable route to power. As sensible, politically uncommitted commentators point out the flaws in Conservative plans, opinion-formers will turn against the party. And then some of its own members will voice doubts. Those of us with long memories remember something like this happening to the Labour Party in 1983. Its then leader, Michael Foot, pandered to a surge of left-wing populism in his party. Its manifesto in the election of that year was dubbed “the longest suicide note in history”, and resulted in the party’s worst election performance in living memory. Are the Conservatives going down the same path?

This seems fanciful. After all politics is much more professional these days, based on extensive polling, and carefully chosen “wedge” issues. And Mr Cameron’s core stance on Europe remains a popular one – those polls showing increased support for the EU do not undermine what he is trying to do there. But the real reason that Mr Cameron is veering off to the populist right is because that is what most of his own party wants. It isn’t a careful piece of political triangulation, it is force of political circumstance. To do anything else would cause a fatal backlash in his own ranks. That is a predicament he shares with Michael Foot in 1983.

Why has the public bought the Tory narrative on the economy? Labour hubris

Opinion polls show that the Conservatives are the most trusted party on the economy. This gives them a big advantage over the Labour opposition, which they are trying to exploit by promising reckless tax cuts. The Tories say that the crisis was caused by the recklessness of the previous Labour government, which necessitated firm austerity policies, which in turn have led to a strong recovery. Labour supporters are sore about this, but their party leaders seem forced to meekly accept the Conservative economic narrative – and promise strict fiscal discipline. And yet economics writer Ha-Joon Chang writes in the Guardian that the Tory narrative is a fairy tale. Why aren’t the political class trying to challenge the narrative?

I am tempted to pick apart Mr Chang’s own narrative. He denies that the record of the previous Labour government was irresponsible, with the crisis in public finances simply inflicted by changes to the world economy. He further suggests that the coalition’s austerity policies to meet the crisis were misguided, and that the current recovery is not as good as it is made out to be. A lot of his claims are tendentious, and there is some sleight of hand with the numbers. But it is perfectly literate in an economic sense, and there is deal of truth in his claims, alongside the disingenuousness. This sort of argument tends to a turn-off for many of my readers. I would like to address the question he raises more directly: “Why did Britain’s political class buy the Tories’ economic fairytale?”

The first point is that we should remember the sense of shock that both the public and the political class felt as the scale of the economic crisis became plain in 2008 and 2009. This followed nearly 15 years of continuous growth in Britain. The political class felt that the economic problem had been cracked by Labour’s policymakers (though the first part of the growth period was under the Tory John Major). Gordon Brown, the Labour Chancellor in their part of the growth period, declared “no more boom and bust”. That caught the zeitgeist. Political thinktankers argued over how to distribute the proceeds of growth, which was assumed to be in the region of 2-3% for the foreseeable future. Mr Brown believed his claim; he was inclined to lecture political leaders from other countries (especially other European countries) on how wonderful his economic leadership was. And so when the economic performance proved to be so vulnerable, even if we accept that the shocks came from outside Britain, it was more than shocking. Our whole outlook on the British economy collapsed. And it must be pointed out that the scale of the economic crash in Britain was worse than in any other major developed economy. Labour’s claims were based on hubris. Any narrative that does not acknowledge this hubris (and Mr Chang’s does not, in this article at least) will not be politically credible. This trumps the fact that Tory claims about Labour’s recklessness are overdone or misplaced (e.g. because they criticise welfare policy rather than cutting income tax rates).

And that leads to a critical question. Why was the British economy so vulnerable? Was is really just a slightly bigger blip on a standard economic cycle, or were there elements to the pre-crash economy that were unsustainable? There are plenty of reasons to think it might be the latter. Inflation had been kept in check by cheap imports and a high pound, and yet there was a large trade deficit. The tax system had been tilted towards property transactions and capital gains, and away from ordinary income tax – which meant that the bust hit revenues very hard, and were difficult to revive in the recession that followed. The economy as a whole depended heavily on bubbly international finance and oil (whose price had just rocketed); amongst other things this gave a false perspective on productivity. Productivity based on fake profits in finance is not the same as the majority of workers steadily increasing their output. If you believe that there were substantial unsustainable elements to the economy, then you also believe that simple Keynesian stimulus would not be a path out of the crisis – this would be flogging a dead horse. That still leaves room for a respectable Keynesian critique of coalition government policy (especially if stimulus is concentrated on investments), but it also points to austerity policies being inevitable at some point.

And then there are the secular trends. There are the technology changes that, for now at least, seem to push economic rewards into minorities who either have the right skills or who own capital. That is a global trend. There are demographic changes; it is a boon that people are living longer – but that does imply structural changes to the way society works, and especially the tax and benefits system. And there is the growing up of the developing world economies, especially in China, which are no longer a source of ever cheaper imports. With such trends – and I could go on – is it any wonder that economic performance has been weak?

And so it should become clear why the Tory narrative is left to hold the field. An alternative narrative is very difficult to construct. To be credible such an alternative must contain challenging elements – that we can’t just bounce back to 2% growth by reversing cuts to public expenditure, as some on the left appear to believe. It has to acknowledge failings in the pre-crash British economy, and that strong well-distributed growth will be difficult to obtain in the future. Labour do not want to develop such a clear narrative, because they are reluctant to face up to their own hubris. In fact, as I have argued, Labour’s need to hold together its fragile coalition means that it does not want to develop a clear economic narrative at all.

And if Labour won’t produce the alternative narrative, who will? The Lib Dems are part of the coalition, and as such are happy to go along with most of the Tory version. They would emphasise that the austerity policies were not as austere as billed, and that borrowing for investment would be a good idea – but they do not challenge the main thrust. Ukip have decided to base their narrative on opposition to the EU and immigration – and as a result their economic policies have no coherence – they do not want to upset their own coalition of the angry. The Greens have decided to be the “Ukip of the left”, and blame all our troubles on failed neo-liberalism. They are against austerity policies, and yet want to rebalance the economy towards green growth, which surely implies a leaner public sector. This is a have-your-cake-and-eat-it stance, which will not stand up to close public scrutiny.

A credible alternative to the Tory narrative is hard to construct, and no political party wants to take the job on, because it would undermine their own wider political strategy. Mr Chang himself seems to acknowledge the problem in his rousing penultimate paragraph:

The country is in desperate need of a counter narrative that shifts the terms of debate. A government budget should be understood not just in terms of bookkeeping but also of demand management, national cohesion and productivity growth. Jobs and wages should not be seen simply as a matter of people being “worth” (or not) what they get, but of better utilising human potential and of providing decent and dignified livelihoods. Ways have to be found to generate economic growth based on rising productivity rather than the continuous blowing of asset bubbles.

Amen to that. But what chance do our humble politicians have of constructing such a wonderful narrative, when this poses so many unanswered questions? Might I suggest that Mr Chang spend more time suggesting “ways… to generate growth based on rising productivity” and not just joining the whinge-fest about our inadequate politicians?

Heywood & Middleton: banging on about the NHS is not enough for Labour

There were two parliamentary by-elections in England last night. At Clacton Tory defector Douglas Carswell was re-elected under the Ukip banner with a massive vote. This is a very striking result, but one that was entirely expected. The Essex seaside town of Clacton has a unique concentration of the older, white blue-collar types that are Ukip’s best hunting ground, and not a few lower middle class older white Tory types that are also tempted to vote for the party. The more thought provoking result was in the other election in the Greater Manchester seat of Heywood & Middleton. Ukip came within a whisker of beating Labour.

The best place to see the result is on Wikipedia. After searching the BBC and the main newspapers, all give snippets and verbiage, but don’t present the result simply and clearly – which says much about the narcissism of modern news reporting. The Labour vote share held at 40%, and even increased by a small fraction, albeit on a reduced turnout. The Conservative and Lib Dem votes collapsed (though both parties retained their deposits, a relief for the latter party); the racist BNP did well in 2010 (7% of the vote) but did not stand this time. Ukip gathered voters from all these sources to move from 2.6% to just over 40%. Given that this was a very short campaign – Labour moved the writ before its former MP’s funeral – this is a very significant achievement.

Labour were taking some comfort from the way their vote share held up, while the Tory and Lib Dem votes fell. This pattern repeated across the country could gift them a number of Tory and Lib Dem seats. We should not be surprised that professional election strategists could take pride in winning a House of Commons majority with one of the worst popular votes in Labour’s history (as 2010’s was) – but what kind of a mandate would that give the party’s leaders? The truth is that Labour’s strategy has gone off the rails. The plan is to hang on to the hard core of voters that the party retained in 2010, and to take about half of the Lib Dem vote. That should have taken them well past 50% in this constituency. For every vote they won back off the Lib Dems (and Tories for that matter), they lost one of their core voters to Ukip. Worse: in seats were the Lib Dems are weaker, for every two votes Labour wins back from that party, another one or more goes to Labour’s main opponents. Labour’s appeal is simply to weak to win.

Labour’s campaign was one-dimensional. They banged on about saving the NHS, which they claim is being sold off to private companies. This seems to resonate with voters, even though its relationship to the truth is weak – and if Labour were in power they would not be able to help much with the NHS’s troubles. Ukip’s policies on the NHS are far from reassuring, so this seemed to be a safe strategy. So Labour did not talk about Ukip’s favoured issue: immigration. This strategy clearly failed. Labour’s core, working class voters clearly want to talk about immigration, and are feeling ignored. But Labour does not know what to say without putting off other voters, such as those from ethnic minorities and liberals, to say nothing of its activists.

The trouble is that Labour is a fragile coalition of people who are united only in their dislike of the Conservatives. As soon as Labour start to become clearer about what their programme for government actually is, the more this coalition will fragment. Worse still, their campaigning is a classic mix of dissembling, lies and the building up of false expectations. This cannot bridge the gap of trust that lies behind the rise of Ukip.

To bridge the trust gap politicians must do things that hurt – that are against the apparent interests of their party and electoral prospects. The Lib Dems seem to understand this, to give them credit – though the public is unlikely to appreciate this until after next May, and their leader, Nick Clegg, has moved on. Some Tories do too – though not their leader, who will seemingly say anything to achieve a short-term advantage. But Labour has no conception of this idea. To them bravery is simply folly.

In the highly unstable mix of British five-way politics (including the SNP), it is entirely possible that Labour will achieve an overall majority. It may turn out to be a victory they regret achieving.

#ldconf Nick Clegg needs to be clearer on the “smart, liberal and enabling state”

The Liberal Democrat conference ended yesterday on its fifth day with the party leader, Nick Clegg, giving his speech. By then I was on the train home, wishing to save money on fares as well as arrive home at a decent hour – though I have read a text version of the speech, and seen the comments. It ended an uplifting conference for the party. While good for the spirits, has it answered doubts over the party and its leader? It is a step forward.

The doubts centre around the party clearly articulating what it stands for. To date it has been keen to identify itself as covering the “centre ground”, and to spend time justifying its role in the coalition government. The problem with defining yourself as being centrist is that that you are using other parties to define yourself. The party risks presenting itself as either or both of “Labour-Lite” or “Tory-Lite”. This is not a convincing rallying cry. Neither is a list of policy proposals; if they are popular, the other parties will steal them. The Conservatives are already “stealing” the raising of tax allowances, the Lib Dem signature policy of this parliament. Lib Dem whinging about this, and the Tories getting the credit for the economic recovery rather than them, is all rather pathetic and will win the party no credit with voters. The public does not give the party credit because they don’t know what it stands for – beyond winning the prestige that goes with being in government. The policies and the record of action are the supporting evidence for a proposition, not the proposition itself.

Lib Dem activists have a strong idea of what the party stands for: liberalism. This is not the economic liberalism of the 19th Century, but one where the state plays an active role in making sure everybody gets the opportunity to develop and fulfil their lives. That “everybody” is a central idea – it is not qualified by national, ethnic, class or other identity. This leads to clarity around a certain set of policies: human rights, written constitutions, distributed political power, strong social insurance and a degree of redistribution of wealth and income, to improve the chances of the less lucky. There is also a strong environmentalist steak.

Amongst the general public, who do the Lib Dems need to convince? There are two main groups. First are those who are liberals, but who are more convinced by other parties – mainly Labour and the Greens, as the Conservatives seem to have given up on liberals. The second group are people who are drawn to non-liberal politics, being those of identity, individualistic self-interest, or a large centralised state, but might be convinced otherwise, perhaps as a second-best. A socialist may be convinced that liberalism is better than conservatism, if Labour are locally weak.

How did Mr Clegg and his party do? Better than before. Mr Clegg’s speech contained more about liberal values and why they make sense. He called for a “smart, liberal and enabling state”. The party made a clear stand against illiberal policies of their Conservative coalition partners. The signature policy Mr Clegg chose was parity for mental health with physical health in the NHS. If this is a bit tangential to liberalism (you don’t have to be liberal to support it), it will at least serve to draw attention. It showed the party capable of fresh thinking.

But it is only a start. I would like to hear more about the “smart, liberal and enabling state” – and in particular how it contrasts with Labour’s vision of the state. Indeed I think the party is being too soft on Labour, and needs to find some “wedge” issues that will pull liberals away from it. There is a bit of paradox in political presentation; you need to get over a strong positive message, but contrast is needed for visibility, which means that attacking other parties can be one of the most effective ways of defining your own. You need to say what you are not, and how you are different. The party is doing this with respect to the Tories, and the Tories themselves are lending a helping hand. But to a Labour sympathiser it opens the question of why the party is in coalition with the Tories, and thereby letting in a host of nasty Tory policies. It isn’t enough just say that the party stopped the worst ones, and put through one or two ideas of its own. The main reason the party ganged up with the Conservatives was the hopeless state of Labour – something that went further than their electoral failure.

Labour is a loose coalition of values and interests, albeit with a strong tribal solidarity. Liberals are an important part of this coalition, alongside public sector workers, state dependents, working class conservatives, left wing intellectuals and northern city council mafias. Lib Dems need to show that this Labour coalition is unable to produce coherent policies for government, still less implement serious liberal reforms. This means developing the vision of a “smart, liberal and agile” state, and showing how this is different from the Labour and Tory versions. At this conference the policy paper on public services presented some interesting new thinking on just that. That is only one piece of a jigsaw.

The Green Party is also worth a bit of attention in my view. It has moved on from a focus on environmental policies. In its current statement on values the first two of its three policy bullets are its opposition to austerity and to privatisation for public services – and only then does it cover climate change. This is no more coherent than Ukip’s policy stance. In Scotland the Greens supported independence in spite of the fact that the Yes campaign’s economic strategy depended on getting carbon out from under the sea and into the atmosphere as fast as physically possible. The party’s leader in England leader, Natalie Bennett, has also said that the party wants to avoid the responsibilities of government, and to limit any cooperation with a future government to case by case parliamentary support. All this is half-baked and could break up quite fast under scrutiny. Still I’m sure the professionals would urge that ignoring them is the best way of handling them. But they picked up a lot of liberal votes in my neighbourhood in the European elections this May.

But one thing is going for the Liberal Democrats. The main parties are concentrating on a core-vote strategy, leaving space on the centre ground. If the party can spell out its liberal vision more clearly, it can surely advance from the 7% support that it currently languishes at. It is gradually winning more respect, to judge by newspaper editorials. Its conference in Glasgow was a step forward.

 

Ed Miliband is Labour’s John Major. Short term success presages long term disaster

Britain’s two big party conferences are over, setting out the battle lines for next year’s general election. I keep seeing parallels with the 1992 election, which the Conservatives won unexpectedly. In the past I have drawn direct parallels between the two main parties then and now. But in interesting ways the Labour party resembles the Conservatives in 1992: pulling off an unexpected victory, leading five years later to its worst ever defeat.

The Labour conference was shocking. This was supposed to be a party with its blood up, ready for a battle to crush those hated Tories and despised Lib Dems. Instead we witnessed a subdued Labour Party, simply hoping that the other side would lose. The plan is to win the General Election in May 2015 by default. There are three elements to this plan. First hang on to the hard core of voters that were loyal at their low point at the last election in 2010. Second, snaffle up an extra 5-10% of voters who voted Lib Dem last time and are fed up with that party. Third: allow Ukip to eat into the Tory vote. Labour strategists think that these three things will be enough to give Labour an overall majority. The party does not have to spell out a clear policy vision, just create some mood music by talking tough about the nation’s finances, and “saving” the NHS.

It could work. This kind of strategy reminds me a lot of John Major’s strategy for the Conservative Party that he led from 1990 to 1997: visionless, and relying on its opponents’ weaknesses. This led Mr Major to that spectacular and unexpected victory in the 1992 election, followed by the Tory party’s worst ever defeat in 1997. Something like the same fate awaits Ed Miliband’s Labour Party. At Labour’s conference he failed to address doubts about his leadership. His speech was a disaster. It was an overlong, rambling, whinge-fest, full of speechmaking clichés. His act of not using a script and teleprompt drew much praise the last time he tried it. This time it meant that he forgot to include some vital messages on the deficit and immigration, passages that it is hardly surprising his subconscious suppressed.

Over the four years or so of Mr Miliband’s leadership, the Labour Party has proved remarkably united, and in London at least, its local organisation looks in good shape. After three terms in power, this is a remarkable achievement, considering what happened to the Tories after they finally ended 18 years of power in 1997. But this achievement looks more like Mr Major’s clinging on to power after Margaret Thatcher was ousted in 1990. It comes at cost of not resolving conflicts within the party. In particular much, if not most, of the party’s grassroots thinks that austerity is the malicious pursuit of class warfare by the rich, and that capitalism is an utter failure. They are egged on by a collection of intellectuals untroubled by the responsibilities of ever having run anything. But the party’s leaders, who have genuine ambitions to govern, realise that this is mainly nonsense. Though they have been clear about this in their speeches (when they remember to mention it), there is no sign that their followers have actually taken it on board, such is their detestation of the current government.

And that’s not Labour’s only faultline. Labour are under attack in their working class strongholds. Ukip are taking votes from the party in northern towns, where the party is not used to being challenged. The SNP made a very successful appeal to the working class voters in Labour’s stronghold in Glasgow in Scotland’s referendum. Labour’s leaders are being urged to respond to this by sounding “tougher” on such touchstone issues as immigration and human rights, which is taken as meaning undeserved privileges to migrants, terrorists and criminals. Labour have made some mealy mouthed concessions, especially on immigration. In particular they suggest that the Labour government was mistaken in allowing free immigration of east European migrants after their countries entered the EU. This is very muddled. The tension between liberals and working class conservatives is palpable.

For now Labour are papering over the cracks. Even if they hold together until the election, there is sure to be an explosion after it. If they win, a Labour government will be utterly unable to reconcile the conflicting ideas of their supporters. They will simply pick up where the last, deeply unpopular, Labour government left off. If they lose, their supporters will be unable to understand why, given what they see as the self-evident failures of the coalition years. And if the party is forced into a coalition with the Lib Dems (if that party does better than expected), or a grand coalition with the Conservatives, the reactions of Labour’s supporters can only be guessed at.

Meanwhile the Conservatives are sharpening their knives. This party’s divisions are even greater than those that Labour is troubled with. But their leader, David Cameron, delivered a strong conference speech, setting out a very clear strategy for undermining Labour’s passive electoral hopes. This is the familiar “two-horse race” theme, so that Mr Cameron’s leadership skills can be compared favourably with Mr Miliband’s. And then there is tax. Labour’s ambivalence over reforming the public sector and benefits can be linked to the prospect of higher taxes for the majority.  Interestingly the Conservatives are making no attempt to woo middle of the road liberals, attacking the Lib Dems for stopping their illiberal ideas on civil liberties. This is no doubt part of their strategy to woo back Ukip defectors. But they may also calculate that raising the liberal credentials of their coalition partners may help the Lib Dems win back some of their defectors to Labour. This vigorous Conservative attack on Labour will put the latter under severe strain – though it is difficult to see how the Tories can win outright.

The outlook looks dire for Labour. Things are no better for the Tories. It is difficult not to think that Britain’s traditional two party politics is on its last legs.

Is austerity an economic failure or a fact of life?

The British Labour Party conference proved a bit of an anti-climax. After the excitement of the last week’s Scottish referendum this was probably inevitable. All the more so since the Labour leadership did not want to talk about the important issues that referendum has raised on for the British constitution. But this conference marked in important stage in the evolution of the Labour leadership’s policy platform. They have finally, publicly and unequivocally accepted austerity as the centrepiece of their economic policy. This is rather muted, of course. The right wing press, who still set the country’s news agenda, do not want to give Labour any credit for this. Labour’s left wing supporters still think that austerity is a failed economic strategy, promoted by a “neoliberal” elite as a means of shrinking the power of government. These supporters do not want to be too vocal this close to a General Election; besides they were soothed by some diversionary promises regarding Britain’s National Health Service (NHS) and the minimum wage. But this left wing critique of austerity bears further examination.

It is expounded with some clarity in today’s Guardian by the journalist Seumus Milne: Austerity has failed, and it isn’t only Labour’s core voters who want change. To start with Mr Milne points out that Labour’s core voters, working class people, are unhappy and Labour can’t take them for granted. In Scotland they defected en masse to the SNP’s Yes campaign – and its claim that Scottish independence meant that they could roll back austerity. In England Ukip is making inroads into Labour’s core vote. Labour can’t simply take these voters for granted and then go after the “centre ground” voters who are liable to be swayed by the right wing press. This is perfectly true, of course, but not very helpful in its own right.

He then goes on to the familiar critique of austerity (cutting back public expenditure), which is that it has failed both in Britain and elsewhere in Europe. In Britain, growth is based on shallow foundations: unfunded consumer expenditure; average living standards are still sinking and many poorer people are suffering real hardship. In other European countries, notably France, there is no growth at all. This critique builds on that of Keynesian economists. In the earlier years of the government’s austerity programme they suggested that by cutting demand, or refusing to stimulate it, austerity simply created a doom-loop of shrinkage – or failed to ignite a virtuous circle of positive demand. The cuts were simply too early. This critique was eagerly seized on by the left. The trouble is that in Britain it has been overtaken by events. Growth has returned, mainly as the result of increased consumer borrowing, but also through higher business investment. There is not need to use public money to stimulate the economy further. Now is the “later” that the Keynesians were talking about when they said the cuts should be made later. It is does not matter that the initial spurt of growth was based on shallow foundations, as Keynesian fiscal stimulus is open to exactly the same criticism.

In fact the government’s application of austerity never lived up to the rhetoric. The cuts have been relatively modest, and as a result the deficit (excess of government expenditure over taxes and other income) has not been reduced by anything like as much as the original plans. The government finances still look very shaky and unsustainable. To a large extent things have been propped up by the Bank of England buying up government debt (“Quantitative Easing”, or “printing money” as some economists would have it). This only works when inflation is not a serious threat, and the Bank has indicated that continued purchases are no longer sustainable.

Things get worse when you look at the details more closely. The Economist points out that the country’s tax revenues are not keeping up with the country’s growth rate, making the deficit harder to cut. The reasons are not entirely clear, but two contributory factors should cause those on the left to worry. The first is that the government has been rapidly advancing tax free allowances, a flagship policy of the Liberal Democrats. This has helped relieve the economic pressure on the oft-forgotten marzipan layer of Britain’s poor. Those who are working and do not qualify for state benefits. But it also means that if wages are stagnant the government sees little benefit from growth. The second, related, factor is that Britain’s tax take is heavily dependent on the very rich. The Economist says that the top 1% of earners are thought to contribute 28% of income tax receipts. The position of other taxes may not be so very different. That means that pressure on the very rich, and notably the banking sector, is choking off tax receipts. All this suggests that raising taxes without hurting the ordinary working classes will be very difficult to achieve.

The serious economic case against austerity is not quite dead, though. The FT’s Martin Wolf, for example, suggests that prolonged fiscal (and trade) deficits may be required to counterbalance the insistence of some countries, notably China, to run export surpluses, and so create a surplus of savings. But his suggestion is that state funded investment is the best way of achieving this, not the continued propping up of the benefits system and a high volume of public services. That still leaves the most painful aspects of austerity intact.

The fact is that some very powerful forces, global and local, are bearing down on economic growth. These include demographics, the evolution of the Chinese economy (reducing the supply of cheap exported manufactured goods – so important to developed world living standards in the 1990s and 2000s) and (perhaps) by a focus amongst the slightly better-off on quality of life rather than income maximisation. It was once thought that any well-functioning developed economy could grow at 2% a year. That now looks infeasible. Which makes the management of government debt (and private debt for that matter) a serious long-term problem. It gets worse, as to achieve any sort of growth requires the economy to become more efficient, not least in public services. This involves the sort disruptive changes that the left’s core supporters hate most of all.

To be fair on the left, though, one of the causes of low growth is the excessive accumulation of wealth by the very rich – and this can only be tackled using an agenda that looks leftwards. But chasing down this wealth is increasingly a global problem, that needs global solutions, and not socialism in one country. This is ironic, as one of the symptoms of working class disillusion is a rejection of internationalism. It is no coincidence that the right wing press is happy to undermine international institutions, though.

Mr Milne calls for some kind of post capitalist economic reform, with increased state intervention. It is hugely unclear what this reform agenda would comprise, and whether it could work. The last country to vocally reject capitalism was Venezuela, whose oil wealth allowed it to cock a snook at the capitalist world. That is ending in utter economic and social disaster. Starvation and oppression in North Korea, and terminal economic stagnation in Cuba offer no better way forward.

The world is changing, and many Britons hate it. But with large trade and fiscal deficits Britain must embrace change or face economic catastrophe. That is the truth that Labour’s leaders are facing up to – and it is not a spineless surrender to the forces of big business.

 

So: who will lead the Con-Lab Grand Coalition that will be formed in May 2015?

Things aren’t going well for the Westminster political machine. Their short-term, focus-group and opinion poll led campaigning has missed or ignored the changing mood of voters. Things were bad enough with the rise of Ukip; they got a lot worse with the Yes-surge among former Labour supporters in Scotland. At this week’s Labour conference the party is desperately trying to get the political agenda back to familiar territory. It is failing, and in doing so it is losing the political initiative. In this unfamiliar political territory I want to indulge in a bit a bit of political fantasy. But ask yourself: just how unrealistic is it?

Roll forward to May 8, 2015, the day after Britain’s General Election. The Westminster parties lost control of the election agenda. In England Ukip have surged forward to take 30 seats, taking votes from all sides. In Scotland, angry and unreconciled Yes voters have moved in behind the SNP, who take another 30 seats. The Lib Dems, through a lot of hard local campaigning, luck with voter splits, and a dead-cat bounce, are relieved to end up with another 30 seats (a bit over half their 2010 tally). The Greens do well in national polling, though only pick up a small handful of seats. The Tories are the main victim of the changed situation in England, losing seats directly to Ukip, but also to Labour. They fall back by 40 seats to between 260 and 270. But Labour’s gains in England are partly neutralised by the advance of the SNP in Scotland. They end up with a very similar number of teats to the Conservatives, with a net 15-20 gains.

Both main parties are badly bruised: their share of votes has fallen; they are not in control of the political agenda. Only the inherent electoral bias towards incumbency has left them with so many seats. Both feel as if they have lost. And the parliamentary arithmetic is horrid. To form any kind of stable coalition government with smaller parties they will need to round up two of the Lib Dems, Ukip and SNP. For different reasons none of these parties want to play ball. For the Lib Dems it is a moment of reckoning, with open revolt against the party leadership, and a desperate feeling amongst the membership that they need to rebuild in opposition. Ukip are too toxic for the main parties, and their terms of engagement are too high. The SNP have no interest in the governance of the UK as a whole. If there is no natural governing majority, there is a comfortable and motivated opposition majority against any government led by one of the two main parties.

Meanwhile the fiscal deficit and the national debt remain large. The financial markets are jittery, which puts the financing of the deficit in question. The pound takes a tumble. With its yawning current account deficit Britain needs foreign financing. But this in turn requires a strong government able to keep the fiscal deficit in hand. The fragile recovery is in jeopardy, as investment is drying up, and property prices start to fall, as foreign investors take fright. The Treasury civil servants are worried and quickly set to work on their political contacts.

There is an obvious solution. One that has been tried in Germany, Austria and Greece. A Grand Coalition between the Conservatives and Labour. It slowly dawns on the senior figures in these parties that this is the only way out.

What would be the organising principle of the new Coalition? As Labour realises that it is no longer practical to use its Scottish MPs to ram through reforms of English public services, they are at last able to contemplate some form of new federal settlement for the UK. They also accept that the UK’s relationship with the European Union needs to be reset. Both sides agree to a Constitutional Convention. The idea is that this will come up with one or more referendum propositions in Autumn 2017, after which the country will move towards a new General Election. All this will secure the Conservative participation in the government. In return Labour will insist on a choice selection of its core policies: halting “privatisation” of the NHS (though not wholesale unpicking of the previous coalition’s reforms); perhaps the freeze on energy prices and reform of energy markets; maybe further rises tot he minimum wage; surely the reinstatement, in some form, of the 50p top tax rate and termination of the “bedroom tax”. Their proposed Mansion Tax is unlikely to make it though – such a significant change to the tax system hardly seems appropriate in a time of constitutional transition. Both sides will agree to something tokenistic on immigration.

But who will lead this government? Both Party leaders will face revolts from their own side. Mr Cameron will surely find his position untenable. Mr Miliband may even have lost his seat to the surging Ukip. The natural thing would be for the Prime Minister to come from whichever party is a nose in front in parliamentary seats. The popular vote can be used as a tie-breaker. The other party will no doubt insist on the Treasury.

On the Tory side, the obvious choice would have been William Hague. But he is stepping down at the next election. Other senior figures are: Theresa May, George Osborne or Boris Johnson. Ms May stands the best chance of these, though she does not come across as a particularly gifted politician. The other two are surely too blatantly political to be trusted enough by Labour. Another idea is to summon up a former senior figure from the back benches; Malcolm Rifkind would be an obvious candidate.

It is even harder to think of Labour candidates with the appropriate stature. Harriet Harman has the seniority, but I can’t see her as having enough clout. I’m not even sure if Margaret Beckett will be standing, and she is a bit old at 71 – though since this is something of a caretaker role, that is less of an obstacle than it might be. The existing front bench all seem to be lacking to some degree. Gordon Brown’s reputation may have been enhanced by his intervention in the referendum campaign, but there is no way that he can lead a coalition. Meanwhile Alistair Darling’s reputation has been diminished.

Is there a serious point to this fantastical speculation? Yes. As we see the rise of anti-politics, of political parties who are only interested in causing trouble, and not solving problems, then we must get used to the idea that previously bitter opponents will have to cooperate in government. The current coalition between the Conservatives and the Liberal Democrats may be foreshadowing the future of politics in ways that the current political chattering classes don’t yet understand.