Things We Said Today

8 July 2011: Rebekah Brooks told News Of The World staff she was aware of more revelations to come and they would understand in a year ‘why it is soon closing’.

15 May 2012: “One day the details of this case will emerge and people will see today as nothing more than an expensive sideshow and a waste of pulbic money as a result of an unjust and weak decision.” Rebekah Brooks’ statement just before the CPS announced she would be charged with three counts of conspiracy to pervert the cause of justice.

Shifting Perspective

The Queen’s Speech last week was variously heralded as marking Coalition 2.0, the relaunch of the Coalition, or the turning point of this Parliament.  The second session of a Parliament is often the grind, when one General Election is clearly past and the new administration has settled in, while the next Election is still too far away to make a difference.  But the introduction of fixed term parliaments shifts the perspective.

The two year opening session of this Parliament (to bring the annual parliamentary calendar into sync with the proposed fixed term) gave the Coalition Government an unexpected degree of latitude in the legislative programme, enabling it to pass some large and complex measures, as well as allowing the pause and rethink on the health service reforms.  From now on, with the return to single year sessions, it will be business as normal.  Furthermore, there is no prospect in future of a longer first session of Parliament, which may present its own difficulties in enacting the longer or more controversial elements of a manifesto.

We know the date of the next General Election: Parliament is set to dissolve on 31 March 2015 for the General Election to take place on 7 May 2015.  This surely creates a different perspective for Government business managers, giving them a greater degree of certainty over the time available. Equally, the opposition do not need to spend time on speculation or tactics around when the Election might be called.  What we don’t know is what might happen if it looks like the Coalition will not last the full term, or if the Conservatives decide to prompt an early election.  And even those of us who have experienced from the inside the shift of mood within the House of Commons as it realses an Election is in the offing can only speculate on how the tone and mood will change in the 2014-15 session when one is certain, not just probable.

It will take time for British politics to adapt to fixed election dates.  I doubt that many have realised how fundamental a change it is.

Talking to My Cat …

Don’t you think the London Mayoral election has been a disappointment?

Try as I might, I just haven’t been able to work up the enthusiasm for it – and I live in the damn city! The re-run of the Boris/Ken/Brian show from four years ago has been a completely sterile debate. I’ve given up on listening to the hustings debates in fury and frustration at the utter inadequacy and lack of engagement with the current moment. In fact, after the Newnight debate, I found myself seriously contemplating not voting at all for the first time ever.

The main candidates insist on campaigning in their comfort zones, fighting on the same tired old battlegrounds without anything particularly new or inspiring to say. There’s equal levels of disingenous politicking to sway sympathies, whether from Boris in promising to cut Londoners’ council tax by 10% without (as Michael White pointed out rather sharply in his Guardian video report) mentioning he only meant reducing the slice the Mayor takes; or Ken hinting that he will find a way to control rising private sector rents when he knows full well he doesn’t have the legal powers.  Brian Paddick seems to have gone backwards, and is, to me, less impressive, less of an alternative voice than he was in 2008.  He will doubtless suffer from the Lib Dems’ association with the Coalition.

To my surprise, the most interesting candidate has turned out to be the independent, Siobhan Benita.  Her campaign has been forged in her image, bright, fresh, intelligent, reasonable and frankly (I don’t necessarily mean this as a compliment) unobjectionable.  However, I fear she has made a strategic misjudgement in trying to run a traditional campaign and hoping to break through the glass ceiling to make headway with the voters.  This foundered when the broadcasters refused to let her onto the hustings, keeping the debate to the “nationally established” parties; her loss has probably been Green candidate Jenny Jones’ gain.  At the risk of sounding like I have been seduced by too many West Wing episodes and the Obama campaigns mythologising, I would have thought Benita would have been better off running a retail politics campaign, talking to people directly wherever she could and using social media to create a buzz and raise funds.

So if if I have to choose between Ken and Boris, it has to be Ken.  I admit that’s partly for tribal reasons.  But Ken is a London politician who has given his life to the city, and while he has a national profile has never really been comfortable on the national stage.  He is the only candidate who has a strategic idea of what London needs and he proved in the two terms that he could deliver it, with or without the support of central government.  Boris is an opportunist, engaging at a superficial level, masking a sharp mind and a ruthless manner behind the bluff and charm, who has an eye for the main chance and is using the Mayoralty as a stepping stone to national power.  I’m hard-pressed to think of anything he has actually done that has made a difference to London.  He’ll be forever associated with the bikes and the Olympics – but even these were Ken’s initiatives.

So I will vote, and I’ll vote for Ken.  He won’t win, but I’ll vote for him anyway.  And I might still give my second preference to Siobhan Benita, who I found I liked much more than I thought I would.  We could do with more nice, intelligent, reasonable people in politics.  I wonder what she’ll do next.

The Dangers of Believing Your Own Narrative

This graphic tells you everything you need to know about the Coalition Government’s economic policy:

While the prevailing opinion in the UK has been that the main objective has to be cutting the debt and reducing the deficit, I”ve listened to American commentators talking about “the British experiment” with austerity with a combination of awe and trepidation.  Even the right-wingers are starting to hesitate as they see America’s economy begin to pick up, however slowly, while ours flatlines.

The double-dip figure is more important in political than economic terms.  It’s only marginally negative, and is within the margin of statistical error, so it could be corrected in due course.  The point is that the economy is stagnating.  Much as I feared, the Government’s policies have sucked demand out of the economy.  Those who have cash aren’t spending it for the present or investing for the future.  Those who haven’t are struggling to stay afloat.  We are looking at several more years of bumping along the bottom.  And this is before an estimated 88% of the cuts to the public sector kick in.

So is the Government on the verge of a U-turn? Are Ministers planning some grand strategy to explain why they will shift focus in order to turn things around? Are they hell.

In a BBC interview following the release of the figures, the Chancellor said: “I’ve never disguised the fact that Britain faces a very difficult economic situation. We have these debts, we have this debt crisis; these debts were built up over many, many years.”

The economic crisis isn’t one of debt.  The debts are a consequence of the monetary crisis which provoked the recession in the first place and which continues to this day.  We need to get out of recession by getting the economy to grow and increasing employment.  This isn’t happening.

No wonder Ed Balls thinks he’s about to win the economic argument. No wonder Will Hutton is so furious at the Government’s inability to recognise the problem and think strategically about how to solve it.

Osborne and Cameron have convinced themselves of their own narrative.  They believe it is all about debt, so that’s what they will focus on, regardless of the impact on the economy and regardless of the evidence from elsewhere that it won’t work as a policy.  They expect it to come good in time for the next Election, just as the economy came out of recession in 1983 just in time for an Election.

Which suggests to me they won’t know what to do when it doesn’t.

 

1992 And All That

Now what was I saying?  I seem to have spent longer away from this blog than I ever intended.  Changing jobs and getting into a new subject (or rather back into an old one) took up more of my time than I expected.  Over the past few weeks I’ve been thinking about starting up again, and I have to say that I was curious as to what would finally drive me to the keyboard.

In the end it was the realisation that many of those on my Twitter timeline, many of whose views I respect, were watching the re-run of the 1992 General Election coverage on the BBC Parliament channel and tweeting nostalgically about it.  And few were Conservatives, who you would expect to have rosy memories of the night that John Major confounded the exit polls.

I remember the night of 9 April 1992 as dismal, depressing, disheartening.  Labour was supposed to win.  Everything pointed that way.  They had been ahead in the polls for most of the Parliament and were leading throughout the campaign.  I had been with a group of retiring Labour MPs the morning after the Sheffield rally, all of whom were deeply emotional having seen Neil Kinnock’s performance, which had convinced them that victory was within reach.

Few of the Conservatives I spoke to at the time thought that they stood any chance of holding on to power.  Even though they had removed Margaret Thatcher when it was clear that she had turned into an electoral liability, it was too soon to have removed the association from the voters’ minds.  The poll tax had been replaced, but not so long ago as to have been forgotten.  And the economy had dropped off a cliff the year before and showed little sign of reviving.  Major had done better than anyone expected, but few expected it to be enough.  Kinnock would be Prime Minister, possibly with the help of Paddy Ashdown and the Lib Dems.

Major apparently was unfazed.  He is supposed to have remained convinced throughout that the Tories would win and remarked that victory would be all the sweeter for contradicting the polls.  One of the Conservatives to whom I was closest at the time also maintained that the result would be a 20-30 seat Tory majority, based on his observation of his own marginal constituency.  On the morning of the election, I read the paper with a dawning sense that he was right.

I’m afraid I got very drunk as I watched the results, getting angrier and angrier, swearing loudly and impotently at Labour’s failure to win over the electorate and its mistake in abandoning socialism for anything which might appeal to the voters under the circumstances.  If they could not unseat the Tories now, when would they ever be able to?  I certainly detected a sense amongst the Conservatives that they were now effectively in power in perpetuity, that if Labour could not beat them now, they never would.

Twenty years on, it is easy to say that the messge from the voters was that they were not sufficiently convinced by Labour and Neil Kinnock as an alternative and so would give Major and the Conservatives one more chance.  It was not that they would return Conservative governments regardless, as some by their arrogant behaviour in the years that followed appeared to assume.  The seeds of Blairs 1997 landslide were contained in Major’s triumph five years earlier.

I sobered up, and came to terms with the fact that however strong my emotional longing for a truly socialist campaign to elect a genuinely socialist government, it would not have given the Labour Party the edge it needed.  The lesson I learned from the 1992 is that idealism is not enough.  Politics is about power and its exercise.  And to exercise political power, you have to win elections first.  My interest turned from political theory towards the practicalities of getting things done.

Timeo Danaeos

Suppose George Papandreou had done what his fellow EU and G20 leaders expected of him? Suppose he had accepted that the Greek Government had to implement the bailout deal as it stood? Suppose the Greek people refused to accept the consequences of that, austerity upon austerity, and took to the streets to resist? How would that increase certainty in the eurozone and in the global markets?

The Greek Prime Minister seems to be the one person who has thought about managing the domestic politics of the bailout. He wants to get a clear statement from the Greek people that they understand and accept what has to happen to secure the external support for their economy. It may be that the opposition to the deal in Greece is running at 60% at the moment. Papandreou has given himself a month to shift public opinion enough to claim a genuine mandate. He says that he believes the Greek people are wise and mature enough to take the correct decision, and that it is “crucial we show the world we can live up to our obligations” and “crucial for our future in the eurozone”. It is a risk. But it is a risk he has to take, and I am baffled as to why mainstream opinion appears to think that this undermines last week’s agreement.

Too much political and economic capital has been invested in trying to keep the eurozone together to allow Greece to fail or the eurozone to collapse. It is nothing like as simple as allowing Greece to drop out and return to the drachma so we can all go on cheap holidays and reflate their economy. The impact of the other eurozone countries would be drastic and would, I fear, pull them apart, with devastating consequences to the rest of Europe and ultimately to the world economy.

You might take the view that it would be better to hold an election rather than a referendum. Perhaps it would. You might take the view (as Angela Merkel clearly has) that if the Greeks are going to have a referendum it should be a straight question on whether to stay in or get out of the euro, since one of those will be the eventual outcome. You can pick holes in te decision all you like. It doesn’t change the fact that the best hope for the future of the European economy at the moment is to support Papandreou in his campaign to get popular endorsement of the deal.

A-Level Economics

“That’s A-level economics.”  If one politician wants to dismiss the economic views or policy of another, what easier way than to suggest that they really don’t have a proper understanding of the subject?

A-level economics is much maligned.  Over the years, I’ve been hugely grateful to Mrs Goodson, the fierce Scottish lady who spent two years nagging, cajoling and berating the “idle fellows” before her towards an understanding of supply and demand, the theory of the firm, national income, the circular flow of money and (in 1981) the differences between the Keynesian and Friedmanite policies followed by recent governments.    I try not to over-reach in the presence of those who clearly do know more about it than me, and I don’t use phrases like “post neo-classical endogenous growth theory” in everyday conversation (but then who outside Gordon Brown, Ed Balls and the members of the Monetary Policy Committe does?).  While I haven’t scaled the heights of some of her other students (one of whom is now Group Chief Economistand head of global research for HSBC), I’ve found the level of understanding it has given me to be incredibly useful.

Perhaps my little knowledge is a dangerous thing.  But there are times when I wonder what it is that those who apparently have a more sophisticated understanding of economics can see that I don’t.  So, as I have said elsewhere on this blog, I don’t understand how sucking the demand out of the economy is a recipe for recovery, and I was consequently astonished by the shocked reports last week that senior executives who had expressed their support for the Chancellor’s approach were now concerned about a retail recession, as if it was a revelation that now most people’s finances are under pressure, they are not intending to spend as much. 

Similarly, I have been at a loss to understand the calls for interest rates rises to combat inflation.  Yes, inflation is almost double target.  As far as I can see, much of that is as a result of temporary factors, which will work their way through the system.  There is a global rise in commodity and input prices pushing up costs.  But there is little prospect of wages rising to match this in the near future, and this will act as a brake to prevent it running away.  So it’s hard to pass those costs on in prices; business are having to accept a squeeze on their profit margins.  Inflation has been the main economic concern of our lifetime, but I can’t see how anyone can argue that it is the major factor at the moment, and turning economic policy towards tackling it would be foolish.  Increasing the cost of mortgages and debt at this stage would just put more households and businesses under even greater pressure and push more towards the brink.

And then yesterday’s inflation (down) and employment figures (up) moved in the right directions, and all of a sudden all the fears were dispelled.  The first green shoots appear and the Tory blog- and Twittersphere ask where Ed Balls is when he’s proved wrong.  As I recall, when Norman Lamont first saw his green shoots, it turned out that he was mistaken.  One month’s figures do not show the tide has turned.  Do they?  Or do they know something I don’t?

No doubt the big brains at the Treasury will be thinking about this.  But the Treasury’s economic forecasts are often (usually?) wrong.  Perhaps Margaret Thatcher, in her own Yes Minister sketch, had the right idea:

“Thatcher: I want you to abolish economists … all of them. They never agree on anything. They just fill the heads of politicians with all sorts of curious notions, like the more you spend, the richer you get.

Hacker: I see your point, Prime Minister. Can’t have the nation’s time wasted on curious notions, can we?”

Indeed not.

Asserting The Privilege

Hell is the ingenuity of clever lawyers, paid fortunes by their clients to dream up ways to protect them from the full light of public gaze.  You might have thought that the idea of a superinjunction, which prevented the media from reporting its existence, was obnoxious; but apparently they are the latest legal trend.  According to the Times, thirty celebrities now have their blushes spared by this device. 

 Paul Farrelly MP used the privilege of freedom of speech in the House of Commons to reveal the existence of a superinjunction against Trafigura in 2009; in so doing, he enabled the press to get round the injunction because it was covered by the qualified privilege of reporting what was said in Parliament.  The lawyers, confounded, saw their stake matched and decided to raise the game.

So they gave us the hyperinjunction, which prevents those subject to it from discussing its existence, save with their defence lawyers.  Lib Dem MP John Hemming has rightly raised the implications for parliamentary privilege, because in preventing someone from discussing the matter with their MP, it strikes at the heart of the relationship between Parliament and the individual.  Members of Parliament may enjoy the privilege to speak out, but what use is it if those for whom they are entrusted with this right cannot speak to them?

Did the judge who first made this kind of order not think through the constitutional implications?  Did it not occur to him that he was effectively using the powers granted to a lower court to bind a higher one?  If this isn’t a contempt of Parliament, then I’d like to know what is.

Without the clear separation of powers between the Executive, Legislative and Judicial branches of government as exists in America, it is easy to get into the habit of thinking they are all part of the whole.  However, the truth is that the Executive and Judiciary have a nasty habit of trying to boost their own power by trespassing on the supremacy of Parliament, and Parliament too often allows them to do so.  It is vital that Parliament asserts its ancient privileges and makes clear that anyone who wishes to discuss anything with their MP has the right to do so, and the only court that can restrict that right is the High Court of Parliament itself.

The Poverty of Debate on Electoral Reform

I’ve been waiting for the electoral reform debate to catch light.  How we vote and the consequences that emerge from those individual decisions is a question of huge national importance.  However, the debate, such as it is, seems to be largely confined to a small, self-selecting group of political obsessives (amongst which I include myself), and has not risen above the level of “Yah Boo Sucks!” 

The Yes to Fairer Votes leaflet came through the letterbox yesterday, as part of a national mailshot by the Yes campaign.  It’s a pretty thin piece, and seems to focus more on celebrity endorsement than on the strength of the case.  The leaflet’s main arguments are:

• Because the re-allocation of second preferences under the Alternative Vote (AV) means that candidates will be elected when they receive the support (at some level) of at least half of the electors, ranking candidates gives the voters a stronger voice, as votes is not simply discarded if they aren’t cast for the candidate who gets the most first choice votes.  Fair point.
• MPs will have to work harder for their constituents and reach out beyond party loyalists becasue they will need to garner second and third preference votes.  But most modern MPs are assiduous with constituency casework (sometimes to their own frustration as they would rather concentrate on their policy interests than being “a glorified social worker“), and the rare few who aren’t get pretty short shrift.
• It will put an end to safe seats, or as the leaflet puts it, “jobs for life in Westminster”.  But I can see some safe seats becoming more entrenched under the alternative vote, as those voters who will not vote as first choice for the party with greatest support in their area may still give it their second preference rather than another party to which they are definitely opposed.

Sadly, this was nothing but a damp squib.  So I thought I should look at the No campaign’s website to see if its case was any stronger.  I was appalled to find it was every bit as poor.

• The referendum is a costly exercise at a time of squeezed public finances; the money could be better spent elsewhere.  Perhaps that’s true, but the pass has already been sold.  The referendum is going ahead, so its cost is irrelevant to how I judge the issue.
• AV is a complex and unfair system in comparison to First Past The Post (FPTP), and  effectively creates a “loser’s charter”.  I think calling ranking choices complex is over-egging it, and ignores the fact that AV is already used in elections in the UK – the Mayor London and the Labour leadership to name but two.  As for the “loser’s charter”, that rather depends on how you define the winner.  Securing the largest plurality of votes is an intuitive system, but it’s not the only way to decide an election.
• AV will lead to fewer clear majorities, more coalitions, more backroom deals and “politicians’ fixes”.  That implies that coalition government is an intrinsically bad thing.  I for one disagree.  And anyway, no single party has commanded an absolute majority of votes cast since the 1930s.  If the election result reflects more closely the votes of the electorate, so be it.

The No campaign’s strongest argument to my mind is that those who are in favour of a change of voting system would rather have proportional representation in some form, and that AV is not PR.  In fact, it is the least proportionate of  the alternative systems.  So, it maintains that voting No is voting against AV, not voting for FPTP.  I would be much more swayed by this were it not for the number of high profile No campaigners who are clearly campaigning for the retention of FPTP.

Both campaigns claim that the other will let in extremist parties, particularly the BNP.  Democracy can be difficult.  People don’t always for for who they’re supposed to.  Does that mean we should rig the electoral system to compensate?  If a sufficient number of people vote for a party, however unpalatable, surely they have the right to be represented.  Margaret Hodge’s 2010 election campaign in Barking showed that the best way to defeat extremists is by confronting and exposing them, not by feeding their inherent sense of injustice.

Campaigners for a No vote have also claimed that changing the voting system will mean an end to the drama of Election night.  I love Election night every bit as much as the next political saddo, but that’s hardly a reason for retaining a voting system which has produced landslide majorities on progressively reducing turnouts.

My conclusion is, with much regret, that neither campaign has built a convincing intellectual case.  So I’m left where I started.  I believe that FPTP has demonstrated over the years that it does not fairly represent the totality of the votes cast across the country at General Elections, and its distorting effects produces unrepresentative governments.  It needs to be changed.  I am not convinced that AV is the right system for the future, and would ideally prefer a more proportional option.  This has led me to consider voting against, but I am not prepared to allow my vote against AV to be claimed as supporting the retention of FPTP.  So I have to vote tactically against FPTP, rather than for AV through a sense of conviction.  And that is why I will vote Yes on 5 May.

Probably.

The Firecracker Budget

It’s five days since the budget and I’m still not sure what I think of it.

Normally I have a response by the end of the day, if not the following morning.  A snappy headline to summarise, a few sharp insights, a comment on the impact on the industry I represent.  What you’d expect from a trade association chief executive.

This time round, I just couldn’t get an immediate handle on it.  I’ve finally reached the conclusion that this is because it’s unlike any Budget I can remember.

It’s essentially a series of political firecrackers intended to distract from the key facts that the growth forecasts are reduced, inflation is up and the full impact of the squeeze is still to come.

Many of the announcements were familiar mantras – reform of the planning system, deregulation, support for first-time buyers, increasing apprenticeships – and I’ll reserve judgement on them until I see the practical effects.  There’s the crowd-pleasing measures – the reduction in fuel duty was clearly a response to what is reported as the single greatest immediate concern of the squeezed middle and of business, but the gratitude is tempered with the sense that it is too little, far too late.  There’s some clever bashing of groups no one likes – oil companies, bankers, non-doms – but not to the extent that it loses their overall support.  There’s some technical changes which could have significant consequences: the shift to CPI as the inflation measure for uprating allowances means that housing costs have been taken out of the equation, a move which could have huge consequences if the market rises again.

All the key decisions in this Budget were taken last summer and are still working through.  The Chancellor continues to work on some heroic assumptions as to how his policies will improve the economy, and claims he is not thinking of an alternative strategy should they not work out.  I, for one, look at the economy, and particularly the construction sector, in which I work, and frankly do not share his confidence.