Turning the Nice Party into a successful political force

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

Why healthcare may grow to 50% of GDP and still be affordable

I can’t over-emphasise how important the concepts in this article in last week’s Economist are: An incurable disease, and I would urge my readers to try and get to grips with it.  If you want to understand how our economy is changing, and the implications for public services, the idea it describes is critical.  It ranks alongside Ricardo’s law of comparative advantage (gains from trade) and Keynes’s multiplier (fiscal policy) as a counter-inituitive idea that explains so much.

What it describes is something usually referred to as “Baumol’s cost disease”, and reviews a book by the eponymous William Baumol, “The Cost Disease: Why Computers Get Cheaper and Health Care Doesn’t”.  It stems from the observation that productivity grows in some parts of the economy faster than in others.  The paradox is that the more productivity in a sector advances, the smaller its share in the the economy at large.  Thus agriculture used to dominate the economies of the current developed world – but as agriculture became more productive, it needed less people and so shrank to a negligible propertion of GDP – while generating ever larger larger quantities of agricultural produce.  The same effect is clearly visible in manufacturing industry – producing more goods than ever, but from a shrinking workforce.  The more these areas advance, the bigger less productive sectors bulk in the economy as a whole.  It is, misleadingly, referred to as a “disease” because these less productive sectors, within the service economy, then act as a drag on economic growth as a whole.  It is not in fact a disease, but a symptom of success.  The failure of economists to understand the difference between creating wealth and realising it (i.e. turning that wealth into something that actually benefits humankind) is one the biggest failures of the dismal science, and it is a shame that Mr Baumol perpetuates it in the title of his book.

The most important of these unproductive services are healthcare and education.  Personal contact go the very heart of what these services are: to succeed these services must accept that people are individuals, and that a solution which works for one person may well not work for her superficially similar neighbour.  But, while productivity grows only slowly, if at all, costs, i.e. rates of pay, must reflect the increased productivity of the economy as a whole.  So costs advance faster than productivity.  Sound familiar?  But this only happens because we can afford it.

The eye-catching claim in the book is that on current treads healthcare will take up 60% of the US economy in 100 years, and 50% of the UK one.  But this is all paid for by the fact that other parts of the economy have become more efficient – and in fact it only takes up such a large part of the economy because these parts of the economy have become more efficient.  Actually this projection is a bit silly.  I think the advance of conventionally measured productivity will slow, as technological change now affects quality rather than quantity.  Also other sectors of the economy will reverse productivity as people value personal content more (think of the return to craft food production).  But it is rather a good way to make the point.

Which means that the challenge with healthcare and education is not that growing costs are unaffordable, as various right-wing types claim, but something much more subtle.  There are three issues in particular:

  1. A lot of healthcare is indeed inefficient, both in the UK and the US, and political pressure must be brought ot bear to address this.  But don’t expect it to halt or reverse the share of health costs in the economy in the long run.  The NHS “Nicholson challenge” in the UK may therefore be a valid policy goal, but it will not solve the long-term funding needs of the health service.
  2. The larger the share of the economy healthcare takes up, the more difficult it will be to fund it entirely from tax.  In the UK this either means that a parallel private sector will flourish and undermine the NHS (as has already happened in dentistry), or that the NHS will need to be a lot less squeamish about co-payments.
  3. There is a temptation for the owners and workers in the highly productive parts of the economy to keep the rewards to themselves, creating inequality and undermining public the public sector.  And yet we still want productivity to advance so that we can all afford a higher standard of service.  Higher taxes are part of the solution, but only part.  Again this points to the fact that a higher proportion of healthcare (and education) services will have to be delivered and paid for privately – allowing the remainder of the public services to pay decent wage rates.

I hope that provides food for thought!

What is the core Liberal Democrat identity?

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

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

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

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

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

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

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

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

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