Politics UK – Page 56 – thinking liberal

Is Vince Cable right about AV?

The AV referendum campaign is hotting up. The No campaign are throwing a lot at it, and seem to have captured the initiative. By and large they are deploying the same old arguments (e.g. “save one person, one vote”), which are nonsense to those that know about the system, but which still serve to muddy the waters. What has changed is the weight of campaigning. David Cameron is taking a very high profile; it looks like the full Tory machine is distributing literature. The Tory friends in the press, like the Evening Standard here in London, are throwing their weight in. Opinion polling seems to show this is paying off.

But the campaign looks more Tory by the day. So perhaps it is natural for Vince Cable to hit back to suggest that first past the post (FPTP) is a Tory plot to win power against “the progressive majority” of Labour, Lib Dem and (not usually mentioned, but relevant) Green voters. What helps this argument is that the Conservatives clearly seem to believe it. They are so vehemently opposed because they think it kills their chances of ever winning a majority. One of the Tory papers (the Mail, I think) suggested with horror that Mrs Thatcher could never have won under AV. Mr Cable clearly thinks that Tory voters are beyond hope, but that the Yes campaign may be able to do a better job of mobilising Labour voters. Given that the Conservatives seem to command about 40% of the vote, and that many Labour activists and older voters are sceptical, this looks like a bit of a gamble. But how solid is his argument? Just because the Conservatives believe it doesn’t make it true after all.

The “progressive majority” is an old idea, hatched in the 1990s (if not before) when the Conservatives were last in power. It is founded on the observation that if you add Labour and Lib Dem votes together they pretty consistently get a 3:2 advantage over the Conservatives. Certainly, it is difficult to see that small-state Conservative policies (much lower taxes, much lower benefits abd public spending), beloved of the Tory right, will ever command majority support. There is an anti-right-wing-Tory majority. But to call this majority “progressive” is a stretch. Much of the opposition to such a right-wing agenda is conservative – something that characterises large parts of the Labour party (and dare I suggest some Lib Dems?). Remember Tony Blair railing against “conservatism” in his own party? It may be truer to suggest that there is an inbuilt conservative majority that opposes radical ideas, left or right.

Semantics, perhaps. Would AV permanently stop the Tories? It wouldn’t have stopped Mrs Thatcher. The SDP-Liberal Alliance would have picked up some more seats from the Conservatives, no doubt. But the Labour party of the time was so distrusted that they would not have picked up enough second preferences to take enough further seats off the Conservatives; they may even have lost one or two more seats to them. AV is good for a political party with momentum (which sways second as well as first preferences) – and Mrs Thatcher had that. She won because the Labour Party was strong enough to block the SDP-Liberal Alliance, but too weak to be a credible alternative to the Conservatives. This dynamic would have been almost as deadly under AV as it would under FPTP.

But the Labour Party is a much superior political machine now, that knows it has to win votes at the centre. For the Conservatives to beat them under FPTP and get a full majority they need other parties to undermine Labour, be they Lib Dems, Greens, or a future left-wing threat. Meanwhile they need to hang on to at least 40% or so of the vote themselves. This is a tall order if the Tory right was in the ascendant…but it would be more difficult for them to pull this off under AV, provided that the Labour Party made some attempt to attract middle ground voters. Strategically Vince is mainly right.

Tactically – by which I mean up to the next election – the picture is much less clear. As I have observed before, the Conservatives will be under attack from left and right simultaneously. UKIP are showing real resilience and are gradually earning the right to be seen as a proper political party (like the Greens, but unlike the chaotic BNP). The Lib Dems will want to make the best of their coalition nightmare with the voters by appealing to softer Tories. The more Mr Cameron tries to appease one group, the more he will put off the other. AV would make this situation much easier to manage. So far he is keeping this nightmare at bay quite successfully – but there’s a long way to go.

AV will help stop a radical party on either side of politics take exclusive power without genuine near-majority support. Mr Cable is right about that. But there is no progressive majority. And the effect of AV (or FPTP) on the next General Election is much too hard to call. The best reason for voting Yes is that AV is a fairer system that preserves the essence of the present one (single member constituencies; likely one party government). Voting Yes or No because it will be good for the party you support is the road to disappointment. For all three main parties.

Vickers Commission: so far, so good

I have deliberately paused before commenting on the interim report of the Vickers Commission on UK banking reform. I wanted to read more about it; it didn’t help that the post office delivered my Economist several days late. Unfortunately I still have not had time to read the report itself; let me come clean on that. Most of the commentary seems to be that the banks have largely got away with it, and are heaving a sign of relief. My answer is “not necessarily”. It may be clever politics not to go for the more totemic ideas, like a full split between retail and investment banking, since that clears the path for the reforms that really matter.

The report primarily concerns itself with two things: preventing a future UK government being forced into bailing out or underwriting banks, and increasing competition between the banks. The latter was behind one of the more controversial recommendations: the breakup of Lloyds Bank. But I don’t think that’s the main battle. I despair about the lack of competition in UK retail banking, but I don’t see that the costs to the economy are that large. The main game is preventing the next bailout.

The suggested strategy makes plenty of sense. Ring-fence retail banks, force them to hold more capital, and leave investment banks to their own devices. The significance of the second part of that proposition needs to sink in (as this article from John Gapper in the FT (£) makes plain). An investment bank may be “too big to fail” in global terms, but the UK government will say is that this is somebody else’s problem, so long as our retail banks are protected. This is an entirely realistic admission that the UK government is now just a bit part part player in the world of global banking. If one our big investment banks fails, then we don’t mind if it is bought up by foreigners. This is a striking contrast to the approach taken by the Swiss government.

But it leads to an obvious issue. How do you prevent a meltdown in investment banking infecting the supposedly ring-fenced retail banks? The collapse of Lehman’s in 2008 caused such chaos not because it was so big and important in its own right, but that it was too entangled with banks that had big retail deposit bases. A retail bank will gather in lots of retail deposits; the question is where does all this money go? If the bank is to make money it needs to get lent out. If this lending gets into fancy investment banking products, then the ring-fencing has failed. There must be some pretty heavy restrictions; the assets don’t need to be absolutely safe, but we want to insulate these banks from the complexities of the investment banking melee. This will not be easy, as John Kay points out (in another FT paywall article, I’m afraid); all that is needed is an oversized treasury department, which is supposedly there just to oil the wheels of the machine. Mr Kay knows this from bitter experience; he saw (as a non-exec director in the earlier days) how a runaway treasury department at the former building society The Halifax took that institution down a route that led first to demutualisation and eventually its own destruction; each step presented as innovative and sensible. The detail must be subject to intense scrutiny.

But what of those excessive bankers’ bonuses and all the outrage that goes with them? To the extent that this is a retail banking problem, the Vickers reform surely deals with it adequately. The only way of tacking with it properly is to turn these banks into less profitable, lower risk utility organisations which can’t afford to pay big bonuses. That is what ring-fencing and higher capital requirements should achieve.

But the bigger problem is investment banking. This is an international issue, and Vickers is really about damage limitation. As I have said before, the answer is not directly regulating remuneration, but cutting the profits. This industry must be made much smaller and less profitable. The two most important ways are through increased capital requirements and choking off its finance (or “leverage” as they like to call it). The Basel committee is already making headway on the first. Retail ring-fencing, if it is done properly, will help a lot with the latter.

Banking reform is a long hard road. There is a danger that we have “wasted a good crisis”, and the passing of the crisis’s worst peak means that the pressure on politicians to deliver has eased. But the crisis has not passed, though many financial types waving graphs seem to disagree. A lot of banks are still in a shaky condition – and so are many governments’ finances, including those of the USA and UK. There may well be a steady stream of aftershocks to remind our leaders that the journey is not over. So far the Vickers Commission is playing its part.

Why vote no to AV?

In my earlier posts on the alternative vote (AV) in advance of the forthcoming referendum, I have focused on the positive case for the reform, and considered some of the practical consequences. Now it’s time to consider some of the arguments being put forward by people advising us to vote No, in support of first-past-the-post (FPTP).

The leading argument from the No camp, to judge by the reporting on the BBC, is that AV undermines the principle of one person one vote. Partly this argument is used simply to confuse matters, alongside the idea that AV is complicated. But the more serious point is that idea that people who vote for candidates who are eliminated get another go, so it seems like they get a bonus. Meanwhile, as my local Conservative leaflet puts it: “This means that supporters of the major parties, the Conservative Party and the Labour party, will not have their votes counted more than once”. This is a candy floss argument that disappears if you try to think about it. AV is in effect a succession of run-off elections, with the loser of each election being eliminated between each round. The voters of the top two parties are counted in every vote, without their votes needing to be transferred. Far from being disadvantaged, they are setting the agenda.

But this argument leads to a more subtle one. Voters of the eliminated candidates influence the outcome, and these voters are less deserving. This is endlessly backed up by a quote from Winston Churchill that AV would give power to “the most worthless votes for the most worthless candidates.” A group of prominent historians were somehow persuaded sign a letter to The Times in support of the No vote, that managed to put this quote alongside the argument that AV undermined “one man, one vote”. We can summarize this juxtaposition so: “FPTP means one man, one vote as long as you are not worthless.” Supporters of AV argue that it is precisely the principle of one person, one vote that means that we must count the views of people who initially back less popular candidates. Even if they support the BNP. Far too much has been said about the BNP in this debate already; the BNP does not support AV for reasons that I talked about in my last post on AV.

There are rather better No arguments on offer, though you rarely hear them. Brendan O’Neill of Spiked offers two. The first is that AV will tend to promote insipid middle of the road candidates. He doesn’t try to justify this claim very hard, but I think the argument goes like this: when making their choices voters will put less offensive candidates above ones that are more offensive to them. That means that major parties with a real chance of winning a seat have an interest in selecting inoffensive candidates. A conservative candidate, for example, will be trying to pick up second preferences from both UKIP and Lib Dems; Labour candidates will be after the Lib Dems too, and the Greens and any fringe left candidates, as well as hoping for some of the UKIP votes; this might be done simply by being less offensive than your main rival. But it is hard to make the case that this is any more true under AV than FPTP, where the major parties fight hard for these voters’ one and only vote on the basis that only the top two parties count. Also if a candidate is too insipid voters won’t preference them at all. There is a more strategic argument too: FPTP suppresses spoiler candidates (i.e. breakaways from the major parties) because by standing these candidates might simply let the real enemy in. If it is more likely that major party candidates will be challenged by breakaways, as would be the case under AV, won’t politics become more dynamic? Mr O’Neill spoils his own argument by praising the spikiness of Australian politicians, which he puts down to compulsory voting. But since Australia uses AV, this shows that at worst AV is not much of problem on this front. Australian politics is full of challenges by independent candidates, many of them successful; AV helps them. (Incidentally there is an interesting analysis of the impact of AV in recent Queensland and New South Wales state elections here, important because they use the same system that is being proposed in the UK, rather than the full preferential system used in Australian federal elections.)

But Mr O’Neill also fields a much stronger, if less tangible, argument for FPTP, which comes close to the real reason why most ordinary No voters are going that way. FPTP is simple, direct and dramatic. The voter focuses his or her mind on making a single, dramatic choice. The votes are counted and the election resolved in a very clear process. This strengthens the bond between the system and the ordinary voter. AV is by no means a complicated system, but it does reduce the immediacy and drama of the process. Is this enough to tolerate the problems of FPTP, with the power it gives to unaccountable party machines? I say no. And if it was, I would replace FPTP with a system of run-offs, like they use in France and Italy, which have the best of both worlds, but are much more expensive.

Which leaves me with the real reason that major party establishment types want a No vote. FPTP makes it very hard for rebels in their own ranks to challenge the officially selected candidate, for fear of letting the opposition in. AV makes it much easier for party rebels. Candidate selection processes are subject to heavy influence from party hierarchies and give the established order real power over our political system. Now, ask yourself, is that a good reason why ordinary voters should vote No? Ed Milliband is very brave to see through this to wish for a more democratic political process, and support the Yes campaign. He is consistently under-estimated by the politicos that dominate what passes for political debate in Britain. It will be good for the country if he wins this vote.

The anti academy movement is its own worst enemy

Yesterday, as a school governor, I attended a seminar on converting schools to academy status, organised by the London Borough of Lambeth. The paradox of the education profession was clearly evident; however good they may be at teaching the nation’s young to be clear and rational, the profession’s members seem unable to promote a rational debate about the future of education.

Lambeth tried to put forward a balanced debate with four speakers broadly supportive of conversion in the right circumstances, four vehemently opposed and one complete fence-sitter. Of the supportive speakers, one, Bill Watkin of the Specialist Schools & Academies Trust (SSAT) was a model of clarity, addressed his arguments to the audience (headteachers and chairs of governors), and was easily the most impressive speaker of the day. The others included a head and deputy head who had taken their schools into academy status and somebody from the Cooperative School Society promoting a particular model of academy operation; their focus was quite narrow and presentation tended to be a bit plodding with too much PowerPoint. All four managed to be pretty dispassionate, and none was evangelical for the academy model or government policy. Each had different light to shed on the issue.

The “anti” speakers were awful; they seemed to be addressing the public or feeding the paranoia of staff, rather than trying to influence senior school management. Two stood out, though neither stayed for the panel session. One, Phil Beadle, makes regular appearances on TV and writes for the Guardian. His arguments were as chaotic as his hair, and amounted to a rant about the way the academies he had worked in were run, mixed in with tribal anti-Tory paranoia. The other was Alasdair Smith of the Anti Academies Alliance; his grey suit, purple lanyard, grey/white hair, general bonhomie and habit of laughing at other speakers,during their presentations, all put me in mind of an archetypal UKIP candidate. His arguments were no more coherent than UKIP ones either: a general rabble rouse about how damaging academies would be to the overall education system, how all academies were run like grasping businesses, that it was a lonely world out there for academies, and nothing about how senior managers should weigh up the pros and cons. The other two speakers, one a headteacher and one from the Campaign for State Education basically said the same thing, but were a little duller. The arguments were polemical rather a serious review of the evidence, scattering numerous horror stories to support their arguments. What Lambeth thought it was doing by inviting all four to speak is a bit mysterious.

A few important and interesting points did manage to emerge. There isn’t much money in converting to academy status; for that you need an outside sponsor. Since education departments are being cut back drastically (Lambeth is no exception, with the key decisions all being taken before last year’s election, not as a consequence of the Coalition’s cuts) the amount of support they can offer to LA schools is pretty minimal. Most of the things that schools might want to do (including forming relationships with their neighbouring schools and local authorities) can be done under either model, which cuts both ways. The best part of the process, one of the academy heads said, was that it forced the school to think about its vision and strategy, and how to carry it through.

But the standard of debate was pretty awful. Most speakers complained that the government wasn’t offering a clear vision, but they had little or no vision to offer themselves. The antis seem to want the outside world to go away, so that schools can bumble in their own comfortable little worlds as before. There was no horror at the awfulness of so many schools, unless they happen to academies, of course. And then there is the hate and anger. Mr Beadle quoted extensively from former Conservative education secretary Ken Baker to prove that this was all an evil Tory conspiracy to destroy public services. I am not so much horrified that he says this sort of thing, but that so many people seem to be listening. I have seen something similar on local forums about our proposed new “free” school in Wandsworth: a complete inability of the leading anti-campaigners to listen, or to weigh up arguments and evidence – even if they are at least more polite and better tempered than some on the other side of the argument.

But leaders of schools need to do the best for their children and communities schools by working with government policy as they find it. The academies decision is a delicate process of weighing up pros and cons, often with no killer argument on either side. What is coming out of the anti academy movement is no help. It is so tempting to think that if that is the best their opponents can do, academies must be a good idea. The movement is its own worst enemy.

How would AV change UK politics?

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

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

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

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

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

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

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

Cuts: where will all the anger go?

Today the TUC is orchestrating a big demo in London against the cuts. Yesterday the Labour party hosted a “People’s Policy Forum” on the cuts. The focus of both events is anger. The idea that the cuts are unnecessary is actively promoted; all that’s needed is for the rich to pay their due in taxes. The Economist’s Bagehot gives an excellent description of Labour’s forum. The anger is palpable, but where will it all lead?

The Guardian’s Polly Toynbee thinks this will be a turning point, leading to the complete rejection of government policy by the majority of British people. After all, the cuts have hardly started to bite yet. An alternative view is that the anger will transmute into depression, in the classic pattern of grief. And from the depression will come a new consensus about the role of the state in our society.

I am reminded of a change management course I went to as a manager. I was taught that any serious change initiative had to go through four phases: denial (a muted initial reaction as people think the change applies to somebody else), anger (the moment when indivuals realise that the change really does affect them), chaos (the dysfunctional early phases of change) and finally renewal (you finally start to make headway). It is a mistake to think you can jump straight into the renewal stage. Anger is a good sign, because it means you have got beyond denial; and, indeed, it may even help to provoke it a bit (though be careful, as this may prolong the chaos phase). The art of change management is to get through denial quickly, and manage the anger and chaos phases as well as you can. Having to put through a number of change programmes myself, I found this advice very helpful. I would add that it is usually a good idea to take the time let the anger burn out before attempting anything complicated; that way the chaos phase is shorter and less damaging. The fact that the anger is burning bright now is not an unhelpful sign for the government.

The problem for the cuts-deniers is that there is no way out. Taxes on the rich have already been jacked up to beyond the point of sustainability (the 50p tax rate, capital gains tax, reforming pension taxes, the banks tax). It is absurd to think that we can pull in much more from clamping down on tax evasion; if it was that easy, Gordon Brown would have done it ages ago. Jacking up corporation tax will do nothing for jobs. The Keynesian argument may bring in Nobel prizewinners, but it doesn’t offer much comfort either. This runs that if the impact of the cuts is slowed down, the level of unemployment in the transitional period will be less, and this in turn will be less wasteful to the economy as a whole. The same cuts have to be made, only more slowly. Unless a private sector renaissance comes to the rescue, in which case extra taxes come in, which will stop the need for some of the cuts. That seems completely infeasible. It is a wonderful irony that those fighting the cuts are largely anti-capitalist, and yet only capitalism can save them. The fact is that either the “squeezed middle” gets squeezed even harder for more taxes, or the public sector has to suffer some fairly drastic cuts.

And here’s the political problem for Labour. To turf out the government they need the squeezed middle and the outraged public sector workers to gang up – but their interests are opposed. Nothing will stop the cuts. Not even a shock Labour victory in an unscheduled election later this year. The anger has to turn to depression.

And it is not a given that this will rebound on the two governing parties. For most voters, the world won’t end. Labour’s credibility problem will be cruelly exposed in any election campaign. If they want to restore the cuts, they will have to answer who is paying? If they don’t, they will be saying that the coalition was right all along. If the economy flags, as it well might, and the government doesn’t manage to cut the deficit as much as it plans, Labour’s dilemma will be all the more acute. They might be able to say “told you so”, but they won’t be able to restore the cuts.

Labour are trying to recreate the anger of the 1980s against Margaret Thatcher’s government. But this government is nothing like so reckless. Unemployment is still much lower – there no swathes of closed factories and coal mines. And Mrs Thatcher won.

AV: why I am voting Yes to a beautiful British compromise

Referendum Day approaches and the polls are tightening. The public at large has yet to show much interest, but the referendum on the Alternative Vote (AV) is an important event in our political history. Yet nobody can be surprised that the quality of public debate is abysmal. If the arguments put forward by the Yes campaign, desperate not to lose people in technical detail, look a little weak, those of the No campaign seem like a calculated assault on our intelligence. The campaign is being fought on emotions: natural British conservatism pitted against the feeling that our current system is part of a stitch-up perpetrated by the political establishment on the people. I hope this post lifts the level of debate a fraction.

Not that I want to deny the importance of emotions in making decisions like this. I will start with mine. My views about proportional representation (PR) have fluctuated a bit over time; but my views on AV, from the beginning political consciousness in the 1970s, have always been in favour. First past the post (FPTP) is an outrage; a primitive system that belongs to the age of rotten boroughs and not a modern democracy. AV is an elegant answer to its most egregious features, and the one that is most appropriate to the British culture.

We start with the system of single member constituencies. This is embedded deeply into the British political culture, though I do not regard it as sacred. This carries with it the idea that an MP represents her whole constituency, not just the party and voters that put her there. This is indeed what most MPs claim to think. But if the election is contested by more than two candidates with broad appeal then the process rapidly degenerates into farce and the winner can be elected on quite a small minority of votes. You need a degree in game theory to make your you are voting for the right candidate. This is so obviously wrong that in most elections for an executive office, where you choose one candidate from a diverse field, the system has been abandoned, if it was ever used – from small societies up to presidents of countries, and even Mayoral elections in the UK. The job of an MP is a serious job, and surely exactly the same logic applies to them as to the London Mayor or the Leader of the Conservative Party.

And that should be enough. But the consequential results of the system don’t make it any better. As this video using animals explains, the system soon resolves into a two party system. Any candidate who wants to challenge the party machine and stand against the official candidate usually fails, and worse, lets in the candidate from the opposing party. So a lot of the process of democratic choice is handled by two party machines which do not have a strong incentive to be democratic themselves, for example in the way they select candidates. Of course, if you are a party machine politician you are inclined to think that this is a wonderful political system, but it is fundamentally undemocratic. It is quite clear from the declining combined vote share of the Labour and Conservative parties that the British are losing confidence in the two party system.

So what is the solution? PR is popular, but brings with it plenty of problems of its own which are not directly relevant to the debate. If you support PR the risk of voting No is that a No result is likely to kill the question of electoral reform for generations. The Americans have developed a system of primary elections, which have the effect of undermining the party machines and making them more democratic. It has the major virtue of making all safe seats competitive. The odd Tory proposes it for the UK. A second alternative is to stage run-off elections in seats where there is no overall winner – the French system. Both these systems require a second full-scale public election. They both have the advantage of simplicity: electors make a single choice at each election – the most attractive aspect of FPTP. But two elections mean doubling up the cost, and campaigning costs in the US system are astronomical, giving rich candidates a big advantage. And they both seem un-British. They require a more prolonged period political campaigning. The British like the drama of a competitive General Election (such as last year), but quickly tire of the electoral process. And anyway, neither system is being offered to us in the referendum.

Which leaves AV. This is a built-in run-off system, requiring voters to think ahead about how they would vote if there was a run-off. It loses the simplicity and immediacy of the single decision, but the whole process is decided in a single, easily comprehensible process in a day. How quickly the British would take to it is less clear (we can guarantee that the political parties’ campaigns will try to confuse the picture rather then help explain it), but they would get used to it eventually. It has settled down well enough in Australia, a country that has a very similar attitude to politics to Britain, though its effects there are difficult to disentangle from those of compulsory voting. Incidentally, the suggestion made by David Cameron that polls show that Australians would prefer to move back to FPTP does not stand up to close examination. What many Australians in fact dislike is being forced to mark a preference against all candidates for their vote to be valid – and we are not proposing that in the UK. In Australia AV has not undermined the two party system, as it happens, but it has surely made the two main parties more sensitive to the risks of breakaway groups and so more democratic themselves. Australia’s parliamentarians are a quirky, spiky lot – the sort of people to hold an executive to account, even if it is often not a pretty sight. All in all AV is a beautiful British compromise and I will be voting for it.

I will look at other arguments in the AV debate in later posts. This one is long enough!

Off balance

The think tank Reform is a master of guerilla tactics. It claims to be one of the most influential of right-wing think tanks, but it cannot be described as heavyweight. It flits from one subject to the next, making eye-catching claims and recommendations based on very thin research. Its reports contain thought-provoking insights alongside assertions based on air, amid lots of right-wing waffle. Its most recent offering Off Balance, which looks at economic growth, is a case in point. Based on its headline claims, I had intended to use it as base to blog on the subject of the conflict between economic growth and the pursuit of happiness. But there was nothing in the report that I could get any traction on. I’m afraid this doesn’t say much for the quality of national debate on the economy.

That’s a pity because the report does contain a very interesting idea, on monetary policy, in its final chapter. The muddle and confusion within which this gem is set will unfortunately detract from it. This idea is that interest rates have been set too low in the US, UK and Euro zone (for different reasons), which distorted the market for savings and investment, and that this was the prime cause of both the financial crisis and the unbalanced world economy. Because interest rates were too low, there was too much borrowing, too much consumption, asset bubbles, and not enough proper investment in the developed economies. Interest rates will need to be higher if our economies are ever to rebalance properly. This means that the conduct of monetary policy over the last two decades, including the development of inflation targeting, has been fundamentally flawed. Loyal followers of this blog will recognise something like this case being advanced by this humble undergraduate economist (Time to rethink the Bank of England). Unfortunately the report’s authors have little to say on how monetary policy should be conducted in the future, beyond better prudential regulation of financial services.

What of the the rest of the report? At headline level it all sounds quite sensible: we need more free market policies, with three priorities in particular: reducing the deficit, reforming public services, and a better business environment. Sensible, but potentially highly contentious in each case – but you won’t find much in the text that takes the debate forward. In particular there is a deep confusion over the concept of competitiveness, most apparent in its airy claim that:

The future competitiveness of the UK economy demands a move to a high-wage, high productivity workforce.

This is candyfloss economics; its reasoning collapses as soon as you touch it. Businesses compete; countries don’t (except warfare and sport). If the country’s productivity stagnates, for example because our system of education is weak, then overall living standards will suffer: we will be able to consume less. Period. The exchange rate takes care of competitiveness. The are very good reasons to improve our education system (the context of this quotation), but competitiveness is not among them.

I could go on, but honestly the report isn’t worth it. At a turning point in our economy it is such a pity that so much of our debate about the subject is so lightweight.

Losing voters we never won

Any Liberal Democrat activist will have been nearly buried by comments from people saying that they will never vote for the party again. Mostly these are genuine, and polling shows that the party has lost half its support. But I have long had a feeling that many of these complainants never voted for the party in the first place. Nice to get some evidence of this from this post in politicalbetting.com . It seems that in at least one poll, more people said they voted Lib Dem at the last election than voted Labour! So many people want to join the betrayal bandwagon that they have actually forgotten they did not vote for us. No doubt they thought about it, and the sense of betrayal comes from even thinking of voting Lib Dem!

The strange cohesion of the Liberal Democrats

I was at the Liberal Democrat conference in Sheffield last weekend. The most striking thing about it was how upbeat it was. Disagreements were downplayed; discussion was civilised; people didn’t seem to be spooked by the polls, still less the demonstrators outside the conference hall. And yet the party has lost half its popular support, performed atrociously at the Barnsley by-election, and comes under daily attack for supporting what are seen as vicious Tory policies. “You’re shafted,” a (perfectly friendly) local member of the public told me when I was walking between venues. What’s all this about?

The obvious explanations don’t seem to be strong enough. The novelty of being in government has certainly not worn off; and attack, especially of the vitriolic sort we saw on display by the demonstrators, tends to induce solidarity. But a lot of members and activists are genuinely unhappy about the policies of the coalition government; it is often said that policy has been captured by an unrepresentative rightwing clique surrounding Nick Clegg.

The party’s democratic constitution helps. To many political pros no doubt these processes look like weakness, conceded to encourage people to join and stay as members. But they give countless opportunities for members and activists to feel consulted and involved.

The party’s leadership deserves some real credit here. The party’s internal machinery for policy making has been generally respected, in contrast to Paddy Ashdown’s leadership in the 1990s. Many critics have been co-opted in the policy formation process. Predictions that party conference would quickly be made irrelevant have proved unfounded (I remember Mark Littlewood, former director of communications, almost gloating about this in the coalition’s early days).

The leadership’s sensitivity to criticism, and wish to avoid needless confrontation from within the party was on display at Sheffield. The biggest issue faced by the conference was the NHS reforms. These are radical, controversial, and seem to go well beyond the coalition agreement. A rather defensive motion was put before the conference by the leadership, and an amendment submitted that was highly critical of the direction of government policy. The leadership quickly conceded defeat. Previously Paul Burstow, the health minister, who proposed the main motion, had been highly supportive of coalition policy. But he quickly said that he was in listening mode and accepted the amendment. At an earlier consultative session, Norman Lamb, part of Nick Clegg’s inner circle, appeared to admit that mistakes had been made over health policy, among other things. What the consequences of all this are for coalition policy in health and elsewhere is unclear, but we are expecting changes.

The leadership’s basic narrative is not seriously contested. The Liberal Democrats had no alternative to the coalition that would not have done even more damage. If they had declined the opportunity, the party would have “bottled it” and suffered disastrously at a rapidly called second election that the Tories would have won outright. And the Lib Dems have won a lot of concessions, and are managing to turn a lot of party policy into law. You only have to look at what the Tory right is saying. All this is difficult to translate into a clear message for the public, but it helps instill a degree of confidence among activists. The feeling is palpable that things will turn the party’s way in due course, and party’s critics will be confounded. Again.