Thursday, 29 October 2009

You ain't see nothing yet

A seminar at the British Academy yesterday on Andrew Gamble's book The Spectre at the Feast reiterated the unreal quality of the present political situation in the wake of the global financial crisis. As Andrew Gamble pointed out, the suffering had not been so great yet, but ultimately it would lead to heightened conflict and rougher politics. The crisis would shine a sharp light on who gains and who loses.

This theme was taken up by Peter Riddell who pointed out that there was not quite as acute a feeling as at the time of the rise of unemployment in the early 1980s. Was there a sufficient shock to stimulate change? In terms of Gamble's categories in his book, the preponderant response was that of muddled regulatory liberals: the reaction was 'let's regulate a bit better.' Riddell also noted that David Camerons' anti-state rhetoric had many ambiguities in it.

A widely shared view was that the global financial crisis was being seen as a technical problem to be solved by technical means. In part this was a consequence of the lack of any new thinking of the kind that had been stimulated by earlier crises.

Wednesday, 21 October 2009

Facing up to hard choices

Talking the talk is one thing but walking the walk is another. For all the talk of facing up to hard choices, politicians are shirking chances to reduce public expenditure. Pensions and other benefits are going up by 2.5 per cent next spring. The Financial Times estimates this will make state pensioners 4 per cent better off given that there is a negative RPI.

The 'inflation rate or 2.5 per cent whichever is higher' rule was introduced in 2000 when there was a political storm when New Labour increased pensions by only 75p. The public finances were in a healthier state then, whilst holding back the increase now would save a substantial £5bn. But no party wants to be seen squeezing pensioners, a sizeable slice of the electorate with a high propensity to vote, in the run up to a general election.

Now the influential NIESR has pitched in with an argument that the retirement age should be raised to 70 by 2015: Retirement . The NIESR said that the structural budget deficit was running at an unsustainable level of 6 per cent of GDP.

The alternative to a pension age rise was freezing public sector pay for five years whilst losing 120,000 jobs a year for the same period; a 7p increase in basic tax rates; and an expansion in the VAT base to include everything but food and children's clothing.

The Office for National Statistics has reported that government borrowing rose to £77.3bn in the first six months of the financial year - more than double the debt racked up in the same period last year - as tax revenues tumbled by 10 per cent.

Such a sharp and sudden increase in the pension age would not be politically feasible. But then some hard choices are going to have to be made. At some point the phoney war on public expenditure will come to an end.

Sunday, 11 October 2009

The 1959 show

BBC Parliament has been running programmes from the 1950s over the weekend. On Friday night they presented a (somewhat edited) version of the 1959 election results coverage with a young looking David Butler and a chain smoking Bob Mackenzie. They were assisted by a clunky looking computer and a team of stattos with slide rules among whom was spotted Richard Rose (who doesn't look very different today).

Despite some rather quirky results from Lancashire, Butler was able to call the result earlier. Mackenzie was somewhat obsessed with the Liberal performance which in part resulted from the fact that they were contesting seats they had not fought before.

The perils of outside broadcasting were demonstrated by one from a pub in Wrexham. First there was a long statement by a Welsh Nationalist, a rare breed in those days, who declared that he wouldn't be interested in the results until the one from Merioneth which might showed that the Welsh were prepared to be a nation again (it didn't). The interviewer then attempted to talk to someone who was clearly half cut and the slot finished with a woman jostling the interviewer and shouting 'Let the woman speak!' (She wasn't allowed to).

It was particularly poignant for me to see the first declaration from Billericay where I was in what was described as 'a rather youthful crowd' outside the Archer Hall that day. I saw the returning officer Alma Hatt, who was a good friend and died relatively young, as well as Joyce Norris from the council.

The suave Conservative MP Edward Gardner (later MP for Fylde, but never to hold ministerial office) was elected with a reduced majority, a good result given the growth of Basildon New Town. He later invited me to the House of Commons for tea and my first chance to see a live debate. The Labour candidate Rita Smythe was described by the commentator Raymond Baxter as 'a socialist', a term used throughout the night. She was defeated again in 1964 and Eric Moonman finally won the seat for Labour in 1966. The Liberal candidate was Sheldon Williams, their spokesman on the arts, and a denizen of Chelsea.

On Saturday night there was a press conference in which the equable Jo Grimond was questioned intensively by three leading political journalists. It was rather like facing three Jeremy Paxmans at once.

'Who Goes Home?' was a kind of early question time featuring Conservative Julian Amery and Barbara Castle. As Anthony Howard noted introducing the programme, the audience was anything but passive and deferential as we had been led to believe.

Friday, 9 October 2009

Stage managed conference does what it is required

What was a very stage managed conference for the Conservatives generally went well. At the beginning of the week it looked as if there might be a damaging row over Europe, but this was averted. It wasn't possible to stop everyone drinking champagne, but the small touches generally went well: for example, Samantha's £60 Marks and Sparks dress compared with the £600 designer outfit worn by Gordon's wife.

The intention of Dave's speech (and that of George Osborne) was to provide the appearance of a 'government in waiting' and it that it largely succeeded. David Cameron was also able to establish a connection with a wider audience by talking with effective feeling about the death of his son. The personal truly is the political.

The speech was in general short on specifics and that was expected. There are a lot of policy gaps to be filled in and more will have to be said before the election if the Conservatives are to retain credibility. There are also fears that by applying the brakes too sharply they could bring the weakly recovering economy to a juddering halt and even send it into reverse.

Their fundamental problem remains that much of their poll lead is built on negative feelings about Labour rather than real enthusiasm for the Conservatives.

Wednesday, 7 October 2009

Gideon's dilemma

The polls tell us that the public are in the mood for cuts, but it's one thing to be hypothetically in favour of them, it's a different matter altogether if the pain lands on your doorstep.

This was George Osborne's dilemma at the Conservative Party conference yesterday. The Conservatives have come under pressure to provide details about how they would deal with reducing the mountain of public debt, but the more detail one offers, the more hostages to fortune are provided.

It seems to me that the main problem with the speech is that it didn't go anywhere near far enough if one assumes one has to find £100bn (as a ball park figure). For example, families earning £50,000 a year (not large an amount in Southern England where one can easily have a £1,000+ a month mortgage) will lose their tax credits. However, this will only save £400m, but it still risks upsetting a group of potential Conservative voters. There has been talk of cutting tax credits and child benefit for those on over £30,000 a year which would save £13bn.

Accelerating the advancement of the retirement age to 66 is necessary in the context of an ageing population, indeed it probably needs to go to 67 sooner rather than later. However, this will not produce any savings in the medium term and may offend those affected.

A public sector pay freeze is more or less common ground between the parties, but it would affect 4 million public sector workers and their families. Talk of saving £3bn on 'bureaucracy' has little detail attached to it.

What this does lead one to believe is that the Conservatives must be contemplating tax rises and the most likely candidate is a rise in the rate of VAT, or even the removal of zero rating on some items.

Monday, 5 October 2009

Champagne ban at Conservative conference

Apparently the bars have been told not to serve champagne at the Conservative conference as it might suggest a mood of triumphalism - although it was possible to get it at the New Statesman reception last night.

I wonder what would be an appropriate drink to suggest a subdued mood of controlled anticipation? At the moment I cannot think of anything, although perhaps a rather dull red wine might fit the bill.

Any suggestions welcome.

Tutu wearing alien seen in Hampshire

Lembit Opik warned us against the threat from asteroids, but now a new threat has been identified by a Liberal Democrat councillor in Winchester: a tutu wearing alien who has a penguin like walk: Ballerina

It is clear that neither of the main parties is addressing this type of threat.

Sunday, 4 October 2009

Dave reveals some of his plans

Dave Cameron has revealed some of his plans for government, well a few anyway, via the Conservative's new backers The Sun. This report comes from the Daily Mail and some of the comments underneath are interesting: Cameron

I wish someone would explain to me what is meant by 'political correctness' and how one clamps down on it. Some of the objections to whatever is seem to be directed at measures intended to stop the treatment of women or ethnic minorities as second class citizens.

Freezing council tax would be popular, particularly given that it has consistently gone up above the rate of inflation and is in many respects a flawed tax, but how one would cut public services in response would pose an interesting dilemma for councils, given that many of them are imposed by legal obligations.