Occupy: a difficult bandwagon to ride

There was a strained moment at last night’s dinner at the National Liberal Club for the London Liberal Democrats, when the party was challenged by a member over the Occupy protests at the City of London.  Both the guest speaker, Paddy Ashdown, and the Mayoral candidate, Brian Paddick, said that the act of protesting was a wonderful, liberal thing to do, and that the party should engage with the protesters (and indeed has), but that there was too little in  the way of constructive proposals for the party to take on.  Given that the anger that drives the protests is shared widely across the population, this seems a rather inadequate response.  But politicians of all stripes struggle to say much more.

The Labour leader, Ed Miliband, has tried to ride the bandwagon.  It chimes well with his appeal for greater morality in commercial life.  This line seems to play quite well with policy wonks and political professionals, but just seems to underline Mr Miliband’s lack of grounding in the gritty “real” world – a lack which, of course, he shares with most politicians of all parties.  His ideas share with David Cameron’s “Big Society” a complete inadequacy when faced with the big issues highlighted by the protesters.

It is easy enough to accept the core of what the protests are about.  There has been a lot of irresponsible behaviour in world finance which has helped bring about the current economic crisis; these financiers still seem to be attracting outrageous levels of pay; and taxpayers still underwrite the whole show.  After this, however, practical politicians have to deal with four difficult facts in the search for policies.

First: world finance may have failed, but capitalism hasn’t.  To many of the protesters world finance is simply the purest form of capitalism and its failure represents the failure of the whole capitalist system.  Well greed and profit seeking, familiar parts of the capitalist way, had a lot to do with it – but as much of the problem was uncapitalist politics.  Governments borrowing too much money to develop public services; interfering with the market to extend home ownership (especially in the US); China’s distinctly uncapitalist but de-stabilising trade policies, to name but three factors.  The real problem was politicians trying to tilt capitalism to their own ends, even if these ends were quite laudable.  There is in fact no substitute for capitalism if we are to maintain the living standards in the developed world, and to roll back poverty in the devloping world.  Interfering with the workings of free markets is likely to make matters worse, not better.

Mention of politicians brings in the second awkward fact.  The public (especially in the developed world) is at least as much to blame for the economic crisis as the bankers.  Excessive borrowing was widespread, as was pressure on politicians to ride the boom and expand government.  It wasn’t only the bankers that were being greedy.  It is natural enough to blame the bankers, saying like children, “It wasn’t my fault, he made me do it!” – but this isn’t very helpful in the search for solutions.

And a third awkward fact is that banking and finance, apart from the greed and the excess, carry out a vital world function.  The process of linking savers to borrowers, which is essentially what finance does, is vital for economies to develop and poverty to be fought.  It is absolutely no coincidence that the growth in world finance in the last couple of decades happened at the same time as the biggest progress against world poverty that we have ever seen.  And the beneficial effects of world trade that finance facilitated completely dwarf the well well-intentioned works of government aid and charities.  The problem is that the bankers simply creamed off too much of the benefit for themselves.

Which leads naturally to the fourth, and awkwardest fact of all: the bankers are holding a lot of hostages.  We need bank lending to keep productive industries going.  Governments needs finance to keep public services going.  In the UK, and especially London, world finance includes many perfectly productive jobs which we can ill afford to lose.  Vindictive policies will hurt us all.

But finance does need to be tamed.  But doing so is a slow process which requires a great deal of patience.  There are two key sets of reforms, neither of which are quick:

  1. Separate investment banking from utility banking.  There are many abuses in utility banking, but the really dangerous stuff is in investment banking, and allowing investment bankers to run utility banks is a recipe for total disaster.  The Vickers Commission’s reforms are an excellent start here – and seem to be leading the way globally.  The investment bankers are patiently trying to undermine them – but politicians and the public need to stay on their case.
  2. Make investment banking much less profitable.  It is the profits that drive the excessive pay – and policy needs to focus on the causes of the disease rather than wasting time on the symptoms.  There are two main causes of excess profits: lack of competition and the failure of organisations to bear public costs (for example of the public’s underwriting of the banking system).  In investment banking, it is the second of these that is the most important (in retail banking it is the first…), and the most effective way forward is raising capital requirements.  This is being done, and banking profits are duly under a lot of pressure.  At first it will be the shareholders who feel the pain – but in due course it will be bankers pay, as shareholders get fed up with their overpaid servants.

Actually progress is rather good.  We don’t need gimmicks like the “Tobin Tax”.  we need vigilance and patience.  I am proud of the way the Liberal Democrat ministers have been keeping the pressure up (Vince Cable is the star, but Nick Clegg is clearly on side).  The bankers are waiting for the Occupy bandwagon to move on.  It will, but I hope and trust that the Liberal Democrats will still be on their case.

The tricky politics of an EU referendum

Last night’s drama in the UK parliament over the call for an EU referendum is over.  Will it all blow over?  For now, maybe, but the issue will come back.  Wise politicians will be thinking ahead about what they should do when it does. For David Cameron, it looks like trouble.

The starting point is that there is mounting pressure for a referendum on the European Union in the UK.  Why should this be?  We operate a representative democracy, after all, and the issues are complex – not the sort of thing that referendums are supposed to be particularly good at sorting out.  But there is a substantial body of public opinion who believe the country’s membership of the Union is an outrage to our constitution.  This has always been so – but while in the 1970s these were overwhelmingly older people, scepticism is now more widespread.  The Tory Eurosceptics who entered Parliament last year are a younger breed, and to many a focus on Europe has reached obsessive proportions.

This scepticism has been fanned by the press.  Why?  Clearly newspaper proprietors don’t like the EU for their own reasons – but surely it goes deeper than this.  The EU is an easy target for our frustrations, in much the same way as ethnic or religious minorities used to be.  They don’t answer back.  Exploiting this is one way to sell newspapers.  Add to this the growing frustration with the Union right across Europe, and the steady fading of European idealism, and you have a ready explanation for rising scepticism.

It all looks very different, of course, once you are responsible for running the government.  Here the thought of operating outside the EU, or even taking a detached stand within it, looks plain silly.  And so you have a tension between the governing elite and a substantial body of public opinion.  A referendum campaign seems to be one of the best ways of bringing this to a head.  A campaign in the right circumstances has the support of many Europhiles too.  They are sick of their steady retreat in face of the Eurosceptic onslaught, and long to turn and fight, even at seemingly hopeless odds – like the British soldiers retreating to the Marne in 1914.

So far so good.  Now it gets complicated.  Europhiles want a straight in-out referendum.  This would force pragmatic sceptics, including large parts of the Tory hierarchy, into the “in” camp.  To them, this is the basic question of principle anyway.  Trying to have referendums on carefully negotiated treaty changes is a misuse of this method of democracy.  Extreme Eurosceptics would be happy enough to go along with this, convinced as they are that the country would be much better off out, and that the public would rally to their cause.

But pragmatic Eurosceptics don’t want this, for exactly the reason that the Europhiles want it.  What they aim for is a changed relationship between the UK and the EU – and that a pre-emptive referendum on an in-out question would weaken their negotiating position.  For them the main job of a referendum is to put a spanner in the works of the EU itself, by blocking any changes they dislike to the treaties.  Pretty much everybody accepts that a UK referendum would have rejected any of the previous treaties (Maastricht or Lisbon in particular – though the former might have been quite close, in my view).  The idea of a three way referendum, with a renegotiation option, in yesterday’s motion was an attempt to win over these pragmatic sceptics.  But it didn’t really stand up to close examination – one of the bigger reasons why the motion fell so heavily.

But it is possible to see a the outlines of a deal coming out of this.  First negotiate a new deal with the EU, then have an in/out referendum on its outcome.  Sounds simple enough, but the renegotiation idea is fraught.  Is it a new deal for Britain, or a more general rebalancing of Europe?  I think the government has in mind the latter, drawing in allies from across northern and eastern Europe.  The idea would be to use the Eurozone crisis as leverage.  If the Union’s constitution needs to be changed to make the Euro work, then this can be made conditional on other changes.

The trouble is that it is difficult to understand what the shape of this deal might look like.  To the the EU core members (Germany, France, Italy and so on) the EU constitution is carefully balanced, with a free trade area on the one hand, and regulation to prevent a disorderly race to the bottom on the other.  Besides a treaty change will have to go through referendums right across the Union – a nightmare as European politicians learn that a rejection of a treaty can earn them extra goodies.

And so the risk is that the government returns from the “renegotiation” without very much to show for it, and then be forced to hold a referendum on it.  The prospects for a Britain-only renegotiation are even bleaker, as our bargaining position is so weak.  This will place the pragmatic sceptics, like David Cameron and William Hague, in an impossible position.  Yesterday’s debate has reduced their room for manoeuvre, as the Economist’s Bagehot column points out.  They will have to produce something relatively soon.

One of Mr Cameron’s main achievements has been to de-toxify the issue of Europe for the Tories.  But the issue could yet return to destroy him, his government and his party.  It will be the greatest test of his leadership.

 

Lib Dems and the Quality of Life

One of the more entertaining episodes of the last Lib Dem conference was the debate on the party’s new Quality of Life policy paper.  This paper had wended a long but largely uncontroversial path through the policy formation process, including extensive consultation, before reaching the conference – and I was a member of the working group – interest declared.  And generally policy that has followed this path gets more or less nodded through.  Not this time.  The motion and paper got the backs up of many representatives, and there were a number of well-delivered and entertaining speeches against.  For a flavour of this ire see Alex Wilcock’s blog – scroll down past the Dr Who stuff to 20 September.  If you click through to the comments page, you will find Alex describing yours truly as “not so much a thinking liberal as a sneering one”!  The paper was passed, but the margin was quite narrow by the usual standards of these things.

And that’s a bit of a problem.  This is policy that stands behind other policy – important not so much for its direct recommendations as its influence on subsequent policy.  I hesitate to call it philosophical – since it does not attempt to develop the core values of the party, but rather to apply them in a new way.  But if it is considered contentious, it may get ignored.  And for all that it is official policy, this would be quite easy.

What’s the fuss about?  The starting point of the paper is that public policy is too dependent on “hard” economic statistics, such as income and economic growth, to measure success.  But these are only intermediate measures – in other words we like them because they lead to good things, rather than being good of themselves.  That is because of the difficulty of measuring success in itself – the hitherto rather woolly concepts of wellbeing and quality of life.  But social science has been advancing rapidly and it is now possible to measure wellbeing in a rigorous way – mainly through asking people to make subjective judgements on their state of mind.

What the paper recommends is to make wellbeing an explicit policy goal, alongside the traditional economic measures.  To ensure this is done rigorously, it recommended that a National Institute of Wellbeing is established to promote standards. Various other devices (a cabinet champion, for example) were recommended to get it embedded into the business of government.

So far, so good, perhaps – but for liberals some loud alarm bells should be ringing by now.  This could be a charter for highly paternalistic government.  And especially when you come up against the evidence that many people seem to have a poor understanding of what is good for their wellbeing.  So the beating heart of this policy paper is the insight that individual autonomy (“agency” in wonks’ jargon) is central to wellbeing.  The idea is to help people help themselves, and not bullying and cajoling them into making better choices.

Education is central.  And, to make a small digression, this takes you in a very interesting direction.  A lot more is understood about life skills – emotional intelligence, resilience, and such – and the wellbeing insight gives these a much higher priority at all levels of education.

Fortunately there is a wealth of evidence to support the liberal view.  There one further thing – the measurement mechanism of choice for social sciencists, self-reported wellbeing, is a thoroughly liberal idea.  Wellbeing is what the population says it is, and not an arbitrary idea imposed by policymakers.  It’s like voting.

What were people objecting to?  One faction distrusted anything with so little in the way of concrete recommendations – especially when those few recommendations sounded like more bureaucracy and a new quango.  At best they interpreted it as harmless, and so a cost-free policy to rebel against; at worst they thought it was opening the party up to being criticised for being irrelevant in times of widespread economic hardship.  Others, Alex was amongst these though he was not called to speak, understood how dangerous the the quality of life idea could be in the wrong hands, and felt that it was too toxic to touch.  Or, possibly, that the detail of the policy paper did not live up to its liberal intent. At any rate that is my reading of what they were saying.

All this put the promoters of the motion in a bit of a difficulty – it is really quite difficult to push abstract ideas in this kind of debate.  In a short speech you don’t really have much opportunity to say more than “I think this is a good idea” rather than why you think it is good – at least not in a way that will connect to more than a minority of the audience.

Does it matter?  The problem is that the wellbeing agenda is slowly but surely infiltrating itself into the public policy process already.  The word (or “well-being”, the spell-check compliant variant which I don’t like) and quality of life come up with increasing frequency in all kinds of public policy contexts, and especially in health.  The concepts, if not the measurements, lay behind so much of the last government’s meddling in people’s lives.  And David Cameron is an enthusiast too, though with an entirely different agenda -but no doubt paternalist in  a different way.  Liberals need to get into this debate and push back hard against paternalism – but using the language of wellbeing, and not just pronouncing the plague on all its works.

And there is something else, even more important in my view, which the paper doesn’t really touch.  And this is the usefulness of the idea in promoting a more environmentally sustainable economy.  It is important to break through the tyranny of current economic measurements to show that a more sustainable way of life does not equate to poverty – and indeed that it can be better for everybody.  This is why the New Economics Foundation is so interested in wellbeing.  I particularly like their paper on Measuring our Progress.

So we need to keep pushing.  As one of the motion’s supporters said to me afterwards “Who remembers how close Nick Clegg’s margin of victory was for the party leadership?”.  Still, we that understand and support the policy have a selling job on our hands.

 

Time the British woke up to the crisis in Europe

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

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

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

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

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

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

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

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

Memo to Miliband: break some eggs

As a political insider it’s very easy to be carried away by partisan emotions, but very dangerous.  Thus I have been watching (not literally) the Labour conference with a great deal of caution.  I want to scoff, but my better self tells me to be more careful.  And that applied especially the Labour leader Ed Miliband’s speech delivered yesterday.  After reading the commentary in the papers I decided that I had to read the text of it too.

Let’s start with the good bits.  It set out a clear narrative for the past present and future. His starting point was Mrs Thatcher and the 1980s.  Some good reforms but she started a culture of heedless self-advancement.  New Labour was a step forward because it invested heavily in public services and in tackling poverty – but it didn’t do enough (anything?) to change a reckless business culture, and this brought the whole system down in the financial crash of 2008-09.  After the crash the current government is doing nothing to address this underlying sickness, and its austerity policies are choking off growth and making things worse.  For the future, Mr Miliband wants to transform society by making government more moral, and finally taming the monster that Mrs Thatcher unleashed.

Mr Miliband’s core constituency, the “squeezed middle”, remained firmly at the centre of his narrative – although he wisely did not use that phrase.  These are people who are neither rich nor poor, and whose living standards are being steadily squeezed, as government largesse is focused on those who are poorer.  Mr Miliband identified this key group at the start of his leadership, and he is maintaining his aim.  He is clearly more successful in this than the Liberal Democrat leader Nick Clegg, who has identified the same group as decisive (using the phrase “Alarm Clock Britain” to describe them, to general derision), but has struggled to hit the right note.

It is easy to pick holes in the narrative, but that would only hint at its main weaknesses. Firstly that to most people it will sound abstract and irrelevant, and second that he failed to tackle the hard choices that would show he meant business.

Irrelevance?  Britain stands in the middle of a global financial crisis, lurching towards another episode on a par with the crisis of 2008.  The Euro zone is at the heart of this crisis, and thus the European Union, this country’s main diplomatic and economic partner, is facing the biggest challenge in its history.  And Mr Miliband’s answer to this global challenge?  To fiddle with VAT rates and implement the government’s cuts a bit slower.  The world situation got hardly a mention.  No doubt the idea is to set a time-bomb for the government, so that as the economy fails to approve he can say “told you so”.  But since Labour’s explanation of the 2008 crisis was the world economic situation, what answer do they have if this government says the same thing?  As George Osborne and David Cameron  scurry round the globe trying to stave off disaster, Labour stays at home and whinges about VAT.  This doesn’t look very convincing.

And he did not have much else to say that would help his squeezed middle voters in the pocket, rather than replicating their complaints about benefit cheats and fatcats.  In fact he did not have much to say on specific policies at all.  He wants to cut university tuition fees (which would in fact help the better off more than anybody) and that’s about it.

The problem is this: change hurts.  People know that instinctively, so that to convince them that you are serious you have to do painful things.  Tony Blair did so by taking on a number of Labour shibboleths: Clause 4 of the party constitution, not raising income taxes and (as few now remember) sticking to the then Tory government’s austerity plans to tackle the deficit.  David Cameron did similar things on socially liberal issues, while eschewing tax cuts.  What will Mr Miliband do to show that he is serious about his mission to transform Britain, and win back trust?

Here are some things he might do:

  • Accept more publicly the logic of the Government’s austerity policies in order to create the funds for tax cuts to the squeezed middle as the economy improves.  We did get statements that they could not reinstate all the government’s cuts, but the delivery of these was so muffled that I don’t think most Labour activists noticed them, still less become angry.
  • Call for reform of the European Union so as to address the unfolding financial crisis, throwing down the gauntlet to Tory Eurosceptics.
  • Pick a serious fight with the trade unions about public sector strikes and participation in Labour politics.
  • Call on the government to get serious about coasting schools and sub-standard health services by in the first case getting tougher on teachers and the second closing sub-critical hospitals and putting serious heat onto GPs.
  • Challenging ordinary voters by pointing out that they also contributed to the crisis by living off credit cards and going for ever bigger mortgages.

Each of these would require a lot of courage – but that’s the point; he must make a lot of people  in his party angry.  Instead we get some rather bland ideas about favouring “good” rather than “bad” businesses.  But these sound rather like things that the coalition is already putting forward on banking reform and reshaping the economy towards manufacturing and green businesses –  Mr Miliband even quoted Lib Dem Business Secretary Vince Cable in his support on the radio this morning.  Other ideas sound like more bureaucracy.

To make an omelette, they say, you have to break some eggs.  Until Mr Miliband starts breaking eggs nobody will take him seriously.

The strange cheerfulness of the Liberal Democrats

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

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

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

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

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

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

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

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

 

Could the hacking scandal threaten David Cameron?

Am I being too sanguine?  I asked this of myself a week ago after posting on the Euro crisis.  Now I’m asking myslf the same thing over my recent posting on the hacking crisis.  Could there be a lot more trouble than I was predicting for David Cameron and the Police?

Consider this article in Lib Dem Voice on Cameron.  This develops the idea that there was a lot of railroading of the rules when the PM hired Andy Coulson as his Downing Street (i.e. Civil Service) press adviser.  The pressure building up on this story could prove intolerable.  Of course the public at large won’t take a great deal of interest in this, but it’s sort of thing that can obsess people in the  Westminster bubble.  And this bubble, to switch metaphors in midstream, is the pond in which Mr Cameron swims; he can’t survive if it becomes poisonous, even if the world outside is fine.

I also bought Private Eye for the first time in years this week.  This is thick with innuendo about actual police bribery, using travellers’ cheques, which goes against my suggestion that this is quite rare in the modern force.  And lots of innuendo about the closeness of the Murdoch empire to both the Police and government.

The problem is that I share a characteristic with Mr Cameron – my first reaction to trouble tends to be to play it down.  This can be be very useful; it tends to calm people down, buy you time for a more considered view, and stop time-wasting.  Too many people have the opposite tendency to panic at everything.  But it can leave you flat-footed on those occasions when trouble is both real and unexpected.  I remember being most senior person in our Moorgate office when the 7/7 bombs went off; for the first few hours I was behind the curve.  To compensate what you need is to have some good advisers close to you who can challenge your assessment.  Ironically this was one of the things that Mr Coulson did for Mr Cameron, and did very well, as far as I can make out.  In fact it’s because he was so effective in the job he was employed for that Mr Cameron has difficulty in understanding that the fuss amounts to much.  But if Mr Coulson used his privileged position to improperly advance the interests of the Murdoch empire, then there’s real trouble.

Still, I may have been right on the Euro crisis.  The can has been kicked down the road again.  There was a lot of relief after last week’s summit of the Euro leaders; no doubt as the detail comes to light people will be less reassured.  In one sense it gets more and more difficult to kick the can each time – but it is equally clear that the Eurozone’s leaders have the political will to do the necessary.  Gradually a new architecture for managing the Euro zone is emerging.  It is one that condemns the UK to the sidelines, but that’s another story for another day.

AV referendum – the return of the old politics

So the Nos won the UK AV referendum comprehensively, with 68% of the vote, on a higher turnout than expected.  Their campaign only seemed to gather momentum as time went by.  This is a bitter blow to me, as I actually liked AV – while having reservations about proportional representation (PR).  Now it will be considered politically toxic, probably forever.  It doesn’t help that most people that voted No did not understand what they were voting against.  In fact very few voters seem to have understood the system or its implications.  It is highly frustrating that so many nonsense arguments were tolerated, and even encouraged by the media (turning back on hundreds of years of history; would cost £250m; gives some people but not others more than one vote; and so on).  What went wrong?

There were clearly tactical errors by the Yes campaign.  They failed to find compelling reasons to change.  Their two favourites, making MPs work harder and ending safe seats, were very weak as AV would not make a huge difference.  They took a tactical decision not to explain the system to voters, on the basis that it would turn them off.  So they left that to the Nos, until finally they found a good way of communicating it (the Dan Snow broadcast with pub vs coffee shop).  That broadcast proved that you can communicate new ideas if you apply enough thought and creativity to the task.  There seemed to be too much time spent online, and not enough trying to get through to proper floating voters.  It is more difficult to say whether the later idea to portray a Yes vote as an anti-Tory one was right; it certainly swayed some.

Why was the No campaign so effective?  The use of the Tory machine clearly helped.  The campaign was very well funded, so they were able to put much more, and much better produced literature.  They weren’t even trying to win the argument, simply repeating a whole series of misleading sound-bites endlessly.  But particularly striking was their use of of mainstream politicians.  David Cameron and the Conservatives put on a strong, united front.  And enough Labour politicians supported them to rally many traditional Labour supporters.  By comparison, the Yes campaign had only the much weaker Lib Dem machine behind it, and tried to use non-politicians much more.

So the voters were not engaging with the arguments and trying to make sense of them, but taking a lead from people they trusted.  Conservative supporters rallied to a very impressive extent behind the official Tory line (80-90% according to one poll).  The newspapers may also have helped.  If all these respectable people were reinforcing even the more spurious No arguments, people thought there must be something to them.

So people actually have quite a lot of respect for good old-fashioned politicians when it comes to political arguments.  A year ago we thought that disillusion with politicians was ushering in a new politics.  The surge for the Lib Dems after the election debates.  The coalition with political enemies coming together in the national interest.  But this new politics seems to have been a mirage.  People are happier in the more familiar, tribal territory.  They will follow the old politicians, who don’t seem to care what they say in support of causes they think are in their interest.  The expenses scandal is completely forgotten now.

There also seems to be a deep conservatism amongst British voters.  They are sceptics of almost any change, though they are quick enough to get used to changes when they happen.  This is quite comical at times.  I remember huge resistance to the London Eye being erected; now nobody would want it taken down.  David Cameron’s and Boris Johnson’s appeal to “hundreds of years of history” to support FPTP is comical in the same vein, given how recent our democratic institutions actually are.  The idea of a “progressive majority”, popular with some on the left, is a nonsense.

A further lesson is that we should be highly suspicious of referendums to decide constitutional changes.  If people just follow the politicians, then shouldn’t just let the politicians decide?  Independence for Scotland – yes to a referendum; electoral systems, European Union treaty changes – no.

So the old politics is back.  What does that mean for progressives?  And what does it mean for the Liberal Democrats?  Topics for another day.

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.

The real meaning of the Barnsley result

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

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

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