What to watch out for in the Autumn Statement

Five key points from the Institute of Government: What to look for

The plight of the CBI

An academic friend asked me recently why I had not returned to my early work on the CBI. (Grant and Marsh, 1977). My answer was that the organisation was a shadow of its former self. Its heyday was in the days of tripartite economic policy in the late 1960s and 1970s. It suffered a body blow under the Thatcher Government when it was seen as a throwback to failed corporatism and more ideologically attuned organisations such as the Institute of Directors found favour. Influence was regained under the Major Government and New Labour, but in some respects the organisation had been ‘hollowed out’ like other British institutions. Now it finds itself in a dilemma over the referendum of British membership of the European Union.

Opponents of membership, two of whom turned up with a banner ‘Voice of Brussels’ when David Cameron addressed the CBI , argue that its pro-EU stance misrepresents the views of British business. Scepticism was expressed about a survey which favoured continued membership. It was only a survey of CBI members and Eurosceptics argue that many of its claimed members are not direct members but only indirect ones by virtue of their membership of trade associations affiliated to the CBI. Nevertheless, the CBI is reasonably representative of big business (even if it has failed to publish a list of members) and, leaving aside some hedge funds and private equity businesses, most big businesses think that Britain would be better off inside the EU than outside it.

Chief executives of some of the Britain’s biggest companies linked to the CBI have been targeted in letters by Eurosceptic campaigners urging them to remain apolitical ahead of the EU referendum. The Scottish referendum has encouraged some business leaders to speak out on the issue. However, other chief executives are remaining neutral in order to avoid getting drawn into a partisan debate. Dave Lewis, the chief executive of Tesco, has said that the retailer would maintain an entirely neutral position in the referendum out of respect for the diverse views of its stakeholders. However, Tesco does not really need access to the internal market and would be less impacted by a Brexit than a manufacturer.

Paul Dreschler, president of the CBI, has said that it has been subjected to a ‘series of systematic and sustained attacks’ by Eurosceptics designed to undermine its credibility. Vote Leave issued an ad campaign to coincide with the CBI conference with the words ‘Wrong on ERM, wrong on euro, and wrong on EU.’ Addressing claims that the CBI was EU funded, Mr Drescher said that only 0.6 per cent of its income came from the European Commission. These were contracts won in competitive tenders.

John Cridland is about to step down as director-general. An insider with 33 years service, he was promoted from deputy director-general in 2010, the first time this had happened in the organisation’s history. In manner and appearance, he reminds me of an old style civil service permanent secretary, perhaps recalling the days when Sir Norman Kipping was the long-serving head of the predecessor organisation, the Federation of British Industries and was a familiar face in the corridors of Whitehall. Indeed, the CBI’s old offices in Tothill Street reminded me of a rather run down out station of a government department Cridland appeared to be in the same wavelength as the coalition Liberal Democrat business secretary Vince Cable who favoured an industrial strategy. His Conservative replacement, Sajid Javid, has a more free market orientation and rebuked the CBI for coming out in favour of the EU before the renegotiation process had even started.

The new director-general, Carolyn Fairbairn, is formerly of the BBC. A consultant and journalist, she is untried in such a high profile post. Katja Hall, Mr Cridland’s deputy and policy chief, is leaving after she failed to get the top job.

Paul Dreschler has just taken over as president, replacing Sir Mike Rake, chairman of BT. Mr Dreschler chairs Bibby Line, a family-owned shipping group. He only got the job when the president-in-waiting. Paul Walsh, the former chairman of Diageo was judged to be too openly Conservative.

A cloud on the horizon is that new Labour leader Jeremy Corbyn refused an invitation to speak at the CBI’s annual conference. There has been no contact between the CBI and Mr Corbyn or the new shadow chancellor, John McDonnell, since they took on their roles in September. Any contact has been through Angela Eagle, the shadow business secretary.

Things aren’t what they used to be!

Reference: Grant, W. and Marsh, D. (1977) The CBI (London: Hodder and Stoughton).

Stop demonising debt

The head of the Association of British Chambers of Commerce, John Longworth, has said that politicians should stop demonising debt. He has called for infrastructure spending to be excluded from national debt targets.

He argued that infrastructure spending was an investment rather than a cost. He commented, 'Politicians are well versed in telling the electorate that we shouldn't leave today's debt for tomorrow's generation. It would be equally calamitous to leave the next generation with an economy ill-equipped to compete on the global stage.'

A BCC report called 'Bursting the Bubble' stated that current levels of investment were inadequate to deliver transport capacity, energy security and digital connectivity: Bursting the Bubble

George Osborne argues that either the deficit goes down or the country goes down. However, the current low interest rate environment offers an opportunity to improve infrastructure. If the Northern Powerhouse is to be more than just rhetoric, urgent investment is needed in transport infrastructure to replace 40-year trains made up of bus bodies welded on to bogies.

And now its Geoffrey Howe

Former Conservative Chancellor Geoffrey Howe has died at his Warwickshire home at the age of 88: Geoffrey Howe

Denis Healey likened being criticised by him to being attacked by a dead sheep, but Mrs Thatcher's downfall began with his resignation speech.

Introduced to him at a dinner, he said 'Ah, one of those.' Make of that what you will.

Denis Healey

BBC2 ran an excellent Michael Cockerill programme on Denis Healey last night. Most people were probably watching the Great British Bake Off but it can be viewed on BBC I-player. Healey was referred to 'as the best prime minister Labour never had', but a central message was that he was too volatile and temperamental for the top job.

One of Healey's great merits was his belief in the concept of 'hinterland', that one needed a life beyond politics. With a double first in Classics, he was an erudite individual and was well complemented by his wife, Edna.

I remember once being at a function, I think in the 1980s. The wooden Edward Heath was there, but as usual had no small talk. I turned to Healey, who recited a poem he had recently written.

Cameron's conference speech

My thoughts can be found here: Cameron at Manchester

How voters see the economy

An interesting essay which suggests that voters are more influenced by media reporting of the state of the economy than their own direct experience of it: Voter perceptions

England's first pop up university

With financial pressures on universities increasing, and a constant search for more market oriented solutions to provide higher education at a lower cost, England is to get its first ‘pop up’ university. Capital costs will be avoided by using the infrastructure of the Bakerloo Line. On paying their £9,000 fee, students will receive an Oyster card in the university’s colours already charged with £20 worth of travel.

Tutors, who will be on zero hour contracts, will travel in the last carriage of the train. They will wear a distinctive dark brown fleece with the name of the university in gold lettering, accompanied by a specially designed baseball cap. Off peak they will travel between Waterloo and Paddington, but during peak hours they will be available from Elephant & Castle to Stonebridge Park.

The setting of the university will provide unique learning opportunities. A MSc in urban travel management will require students to show from their Oyster card that they have travelled on every underground line, the Docklands Light Railway, the Overground and Boris Johnson’s ‘Dangleway’.

Psychology students will be able to study crowd behaviour under stress in the rush hours. Urban housing students will be able to interview rough sleepers at Charing Cross. Medical students will be able to run tests on volunteers who have run up the long stairway at Marylebone.

London Mayor Boris Johnson has welcomed the scheme as showing once again that London was a great world city that was coming up with innovative solutions to contemporary challenges. He hoped, however, that students would surface to study bicycle routes and the feasibility of an airport on an island in the Thames. He also hoped that once it had got established the university would consider establishing a branch campus on the Metropolitan line to Uxbridge.

Ask the Chancellors

I can't imagine this attracted a large audience live on a Monday afternoon, but, of course, what matters is how it is 'spun' in late news programmes. I thought each slot was going to last an hour, but in fact it was half an hour and George Osborne was cut off in mid flow by a commercial. The use of boom mikes did affect the sound quality sometimes. I thought that the young woman who asked George Osborne a question about zero hour contracts said she came from Greenwich, but George Osborne seemed to think she came from the Midlands. To me, she had a London accent.

The audience seemed to be predominantly made of small business entrepreneurs and this meant that Ed Balls seemed to get a rougher ride, but I thought that he acquitted himself quite well. He had two (tougher) questions from social media and George Osborne had one. At the beginning, Ed Balls seemed to fall into his old trap of seeming to bluster, but became more convincing as time went on, particularly on the question of Europe.

George Osborne gave a smooth and confident performance, reiterating his basic messages although there is a risk that he can seem complacent. He was most put under pressure by the young woman student on zero hours contracts. It is not the case the majority of jobs take that form, but they do particularly affect the young, women and some older people. Ed Balls acknowledged that they perform a useful function for some, but felt that some employers had pushed them too far.

What struck me was that throughout both interviews, no questioner nor either respondent referred to the most fundamental structural problem facing the British economy: low rates of productivity. Neither really had a good answer on getting more houses built. Ed Balls was under some pressure on the mansion tax, but managed to put up a defence, although it isn't going to raise enough revenue to provide more doctors and nurses (the issues there aren't just financial anyway).

Coalition and minority government options

The last calculation of each possible coalition/minority government scenarios after the general election by Populus/Hanover gives seven options as likely (the others such as 'Labour majority' are ranked at 1.4 per cent or less):

• Labour/SNP 26.9 per cent
• Labour/Lib Dem 16 per cent
• Labour/Lib Dem/SNP/left minority 15.1 per cent
• Labour/SNP/left minority 11.6 per cent
• Conservative/Lib Dem/DUP 10.8 per cent
• Labour/Lib Dem/left minority 8.9 per cent
• Conservative/Lib Dem 5.1 per cent

A further complicating factor is that Lib Dem 'elder statesman' David Steel has claimed that the mood within the party is to accept nothing more than a 'confidence and supply' agreement with anyone.

My own take on the situation can be found here: Minority government

How much do you know about purdah?

The Cabinet Office guidance isn't out yet, but here are its implications for academics and politicians: Purdah

Who would benefit from lost Lib Dem seats?

My back of the envelope calculations suggest that of the seats that the Lib Dems have very little chance of retaining, 11 would go to the Conservatives, 10 to Labour and four to the SNP.

There are two seats I am genuinely uncertain about: Fife North East (where Ming Campbell is retiring) and Argyll & Bute which is a genuine four way marginal. The winning candidate could have just about a quarter of the votes cast. The SNP is arguably in the best position to take both seats, but it is far from certain.

A lot depends on how the SNP vote holds up between now and election day. If it starts to fade, the Lib Dems could hold on in one or two more Scottish seats. Someone who knows the Highlands thinks that Charles Kennedy could hold on Ross, Skye & Lochaber, given the time and effort he spends on going to social events in the constituency. (It's almost like a seat in the Irish Dail).

If the Lib Dems do badly, then the 50-50 seats I identified yesterday would break six to the Conservatives, two to Labour and one to the SNP.

Looking at Lib Dem seats

Given that they are currently tanking in national polls, the Liberal Democrats will depend on incumbency and local factors to retain seats in the House of Commons. 'Go back to your constituencies and prepare for holding more seats than the polls say', as one wag put it.

Where incumbents are standing down and the majority is small, they are likely to lose, e.g., Berwick, Somerton & Frome. Even where the majority is large, the seat may fall, e.g., Bath.

What follows is far from scientific and has been done largely for my own interest. I don't know most of the constituencies personally. However, I reckon that the Lib Dems have 11 bedrock seats and another eight they will probably retain. That give them 19. They have a fifty-fifty chance in another nine, so if they retain five of those, they would have 24 seats which is in the middle of most forecasts. They may gain one seat which would bring the total to 25.

90 per cent + chance of holding

• Twickenham (Vince Cable)
• Orkney & Shetland (Jo Grimond’s old seat)
• Westmorland & Lonsdale (Tim Farron, possible new leader)
• North Norfolk (Norman Lamb has a 11,000+ majority)
• Yeovil (David Laws has a 13,000+ majority)
• Leeds North West (Big majority, opposition split)
• Southport
• Colchester (Bob Russell has a big personal following)
• Thornbury & Yate
• Ceredigion (Welsh fastness)
• Bristol West (11,000+ majority)

75 per cent chance of holding

• Sheffield Hallam: Labour think they can come from third place to take Nick Clegg’s seat, but this was historically a Conservative constituency. There are plenty of students and university staff, but I’ll let you into a secret: by no means all of them are left leaning.
• Lewes: Norman Baker is popular enough to hold on
• Edinburgh West: Lib Dems can probably hold on in this former Tory seat
• Cheltenham: Liberal Democrat since 1992 and a popular local MP, losing it would be a big blow
• North Devon: Lib Dems are well dug in in Jeremy Thorpe’s old seat.
• Eastleigh: Held in by election, polls suggest they should hold on.
• Cheadle: A lot depends on how many voters go back to Labour.
• Caithness, Sutherland and Easter Ross: Aristo John Thurso can probably hold on in this remote seat

50 per cent chance of holding

• Carshalton & Wallington: Charismatically challenged Tom Brake is well known and well liked locally.
• Kingston & Surbiton: Tories think they can unseat energy minister Ed Davey, but he may just hang on.
• Hornsey & Wood Green: Labour may be able to edge out Lynne Featherstone.
• St Ives: Friends on the Isles of Scilly think that Andrew George is toast and that he knows it. However, there are few votes left of the Conservatives on the islands and although George has a small majority, a poll shows him just ahead.
• Chippenham: Duncan Hames may be able to hold on despite a small majority. However, one well informed individual has subsequently told me that this is unlikely. Unfortunately, his wife Jo Swinson, a campaigner on women’s issues, is unlikely to hold on in her Scottish constituency.
• Bermondsey & Southwark: Labour are confident that they can finally unseat Simon Hughes in what should be a Labour seat, but he may just be able to hang on.
• Berwickshire, Roxburgh & Selkirk
Despite forecasts of the SNP wiping the board in Scotland, the Lib Dems may be able to retain David Steel’s old seat, but the Conservatives could sneak through.
• Torbay: A strong personal vote may enable Adrian Sanders to survive.
• Hazel Grove: Incumbent MP is retiring, but Lib Dems may be able to hold on.

Possible gains

Montgomeryshire, a traditional Liberal seat, now free of Lembit Opik. Watford, where the Liberal Democrat mayor is standing, is a another possible gain. An outside chance is Bosworth where the Conservative majority was just over 5,000 last time. The MP is not too popular, the Lib Dems have a strong local candidate and there is a substantial UKIP vote.

Labour and the general election

I will be writing a weekly commentary on Labour and the general election for this blog: Election prospects

I did ask why I had been given Labour, but didn't get a clear explanation, other than that they thought I could do it.

For the debate on television debates go here: Debate Dispute

The general election in the Heart of England

I discuss the prospects for the general election in Warwickshire here: Heart of England