Monthly Archives: October 2010

CSR: Coalition learn a trick from New Labour

New Labour used to do this thing.  If they wanted to do something they knew would be unpopular with the Unions they would ‘leak’ that something far worse was in the planning.  Once it was time to officially announce the policy they would then ‘retreat’ from the position that had been leaked to what they always wanted to do in the first place.  So if they wanted tuition fees of £3000 they would first leak that they would be £6000, let people rage about it for a couple of months, and then announce the £3000 figure.  Folk would think that this didn’t sound so bad and it would feel like a compromise.  The passion would then be taken out of any opposition.  They could  then implement exactly what they had always planned.  They did it again and again throughout their reign.  It was quite a trick.

I can’t help but wonder if the Coalition has learned well from this technique.  For months we’ve had this 40% figure of expected cuts out in the wild.  Today we learned the figure is actually 19%.    It really doesn’t sound that bad now does it?

The more tribal Labour supporters have had 20th October circled on their calendars for months.  It was supposed to be the day that the ‘True face of the evil Tories’ would be demonstrated by these ‘savage 40% cuts’.  Winter fuel for pensioners would go.  Schools and the NHS would be slashed.  October 20th was going to be Armageddon.   If you believed the hype they have been spouting then today was supposed to be about the Tories rolling back the state all the way to Feudal times.  Instead, we find out that the intent is merely to roll back the state all the way to the public spending we last saw way back in…………….   2008.   Yes, for all the bluff and fluster public spending is going back to the same level it was at after 11 years of Labour rule.   School spend is protected.  NHS spending will increase.

The appropriate response today from all the doom-mongers should be relief and a slight feeling of churlishness.  Not a bit of it.  Instead a quick search of the blogosphere shows they are wallowing in a curious mix of disappointment and denial.  My personal hopes that a spell of Coalition government would edge us away from our tradition of tribal politics sadly seem as unlikely now as at any point since May.

Our failure to pull everyone into a new ‘grown-up politics’ means that for our politicians the ‘X-Factor’ still matters.   This is a problem for Osborne.  He has little love from the press or public and his delivery today was cursed by a frog–in-the-throat that we haven’t seen since IDS was in his pomp.  In comparison Alan Johnson stood up and was a Mr Charisma Snake-Oil salesman.   If you were to score Osborne and Johnson you would give a 10-nil win to Osborne on substance, but you would have to give Johnson a 10-nil win on style.  In 2010, for right or wrong, style impacts the voters more.  We should be pleased that AJ did not stand for the Labour leadership as he has an almost Blair like capacity to get the public to trust and like him.  I even, strangely, like him myself – I couldn’t help but chuckle at his shot at Clegg about his change of mind ‘between the close of polls and opening of ministerial car doors’.  And on a chuckling note, I also laughed out loud at some random lefty’s ironic twitter shout that “We need these cuts so that people like the contestants in the Apprentice don’t leave the country”.

All said, the medicine has been dished and it doesn’t seem as bitter as we have been steeling ourselves for.  Time will tell if we have held back too much and perhaps should have cut deeper.   The challenge now having announced the cuts is to get out there and deliver them and get this country back on its feet quickly.

4 Comments

Filed under Center right, Centre Right, Economy, Politics, UK, UK Politics

Sir Philip Green: Great Report – Wrong Conclusion

We don’t need a Ministry of Paper-Clips, Open Data is the Answer.

Sir Philip Green’s report on government spending  is now online.  Unlike most Government reports it’s a succinct thirty page slide deck in big print that can be read in five minutes.   If that’s too much then I’ll give you the gist:  he finds the government wastes money then concludes we must centralise buying.

I’ve no issue at all with his findings.  The examples he cites confirm everything we already suspected about wasteful and lazy Government procurement.  Some of the examples are jaw-dropping.  I’ve also no issue with his central theme that the Government has failed miserably to take advantage of its scale or credit rating.  On that he’s right.  He  obviously knows a trick or two about keeping hold of money so I feel a bit cheeky calling him out here –  but  I have to:  The findings might be good, the theme sound, but his conclusion is wrong.

It is nuts to propose that a problem of poor or lazy administration will be solved by more bureaucracy.   The Coalition Government is rightly extolling the virtues of localism at the core of its agenda.  There is an obvious intellectual contradiction between pushing localism and enforcing centralised procurement.  The last thing we need to do now is set up yet another Government Agency that would literally be the ‘Ministry for Paper-Clips’.  No matter how well intentioned it would fail.   I’ve spent long enough working with big business watching the pendulum swing back and forth from localised  business models to centralised models to know that the prize of lower procurement costs will come at the expense of agility and innovation.  It is in this agility and innovation that the very biggest prizes lie.

The diversity of Government activity is not comparable with running a chain of identical Top Shops.  If the proposal goes ahead you can imagine the scenario – a nimble cost-cutting  government department identifies a new way to deliver a service at a fraction of the cost of the existing way.  The project to implement it will need new kit.  Being new stuff, the central agency doesn’t have it on its catalogue – cue a tedious process to get into the approved kit list, another process to approve possible vendors, another process to then raise the purchase orders.  All these no doubt delayed because the new ministry is dealing with back-logs from every department and school and council and prison in the country for their regular stuff.  At the same time you would also be crushing the ability of SMEs to tender for government business as there is no way they would have the scale to operate at a whole government level rather than at a smaller niche.  Hurting that part of the British economy is not something we should be engineering.  Instead, we’re supposed to be marching into a brave new post-bureaucratic age and Green’s proposal runs counter to that end.

No, the answer to all the issues that Green has identified can be solved by removing the veil of bureaucracy  and accelerating proposals for complete transparency of  Government data on-line.   Every single contract and purchase order for more than £500 should be there for everyone to see.   It is our tax money so the spend data is our data.  Arguments by vendors about contract  ‘commercial sensitivity’ are a sham ,they don’t want it exposed they are ripping us off.  The public has a right to see that vendors are not charging the government more than they charge in the high street.  Overnight, by publishing all this data you would free-up departmental procurement officers to see what is the going-rate or a fair price.  More importantly you would allow commercial competitors to see the price they need to compete with. This more than anything  would continually drive prices downwards.  Rather than a procurement officer going to a vendor and saying “I need 10,000 of x what is our agreed price?”  You would have vendors ringing procurement officers and saying “I see you bought 10,000 x and paid y – in future I can do it z cheaper”.   You would stop at once the procurement officer who buys the slightly more expensive stuff because he gets more air miles or because the vendor sent him on a nice day-at-the-races during the bid.  The armchair auditors (or the press) would not allow it.  Transparency is to everyone’s advantage.  It will retain our localism agenda and leave space for agility and innovation in departments.  It will also mean we don’t need to waste time or money setting up a Ministry of Paper Clips.

6 Comments

Filed under Economy, Politics, UK, UK Politics, Uncategorized

Labour’s Bonkers Shadow Cabinet Selection

The road to hell is paved with good intentions.  I suppose that line could be New Labour’s epitaph.  However, it’s still alive and well in the party’s internal democracy.  As with the leadership election rules, the system for selecting their Shadow Cabinet is well-meaning and intended to be democratic.  That is a laudable ambition.  It is certainly something the Conservative Party hasn’t cracked.  Nevertheless, it is difficult to argue with Jack Straw that Labour’s means to this ends, when you take a step back, is frankly ‘barking mad‘.

Poor Ed.  He can’t pick his own team.  Instead he has to go through the next two years surrounded by a Shadow Cabinet put in place thanks to nods, winks and pushes from politicking Unions helping advise their members on where to put their 1s, 2s and 3s.   Straw is convinced the quality of the opposition benches are hurt, he says:

“And what it means is that of the 18 or 19 people in shadow cabinet, probably a dozen [are] capable of being in the Cabinet, half a dozen are not[..]”

So Ed is going into battle with a couple of even dudder duds in his armoury.

The other huge issue for Ed is that when you look at the top ten in the list as finally elected – not a single one of them backed Ed as first preference.  Think about that.  Not one of the top ten members of his team thought he was the best man for leader.

He has his work cut out and starts handicapped by his own party rules.   We should let him get on with it.  As Napoleon used to nearly say “Never interrupt your enemy when he is doing a good job of defeating himself”.

3 Comments

Filed under Politics, UK, UK Politics, Uncategorized

Conference Day 2: The Child Benefit Anomaly

Every single cut is going to hurt someone.   And nobody likes the ones that hurt them.  I have a daughter and another child on the way.    At conference today we got the news that the Child Benefit of 80ish quid we get each month is going to be stopped.  We’re far from rich but as a top tax-band family we are certainly very comfortable – I couldn’t look anyone in the eye and say that we either need or deserve that money.  It’s one we’ll just take on the chin in good spirit.

I suspect I’ll be in the minority in my acceptance though.  The Government is living its promise to do the right thing rather than the popular thing – and I suspect that this will be wildly unpopular.

One genuine issue that people have been quick to highlight is that there is one group who this will impact more than others:   This is single income families who earn just over the threshold.  They lose the benefit whilst families with a double income of salaries just less than the upper threshold retain the benefit.   In the very worst case example a couple who both earn 43k and so have a family income of £86k will keep the benefit, the single income family earning a fraction more the £44k will lose the benefit.   This anomaly is manifestly not equitable.

That said, people who are getting on some very high horses about this need to take a step back and reflect – this same anomaly has existed for years (including the entire 13 years of Labour rule) in that marginal rates already led to the same unfairness via income tax.  In the exact same examples above the couple with the single income has already been walloped at 40% for every extra pound they bring in, while the double income couple have only been banged for 25%.   I make the point to give context rather than as a justification.  Two wrongs don’t make a right – and obviously this new anomaly adds insult to injury for those people.

The anomaly aside (and by very definition any anomaly is an exception to the norm) George Osborne has still done the right thing.  He was between a rock and a hard place – to correct the anomaly and move to a solution that took total house-hold income/means-testing into the equation would have added an administration nightmare  – more forms, more IT systems, more opportunities for fraud all of which would eat away at the savings to be made – and the savings after all are the whole point of the move.   The solution adopted is pragmatic rather than perfect.  It can be very easily be implemented with existing tax data.  Those people with double incomes  just below the threshold should think of themselves as accidental winners rather than single income families just above it thinking of themselves as targeted losers.  The principle that high income earners do not require welfare support from the state is sound.

7 Comments

Filed under Center right, Centre Right, Conservative Conference 2010, Economy

Reflections of a Delegate – Conservative Conference Day 1

The 2010 Conference was always going to be a tough one to pitch. Jubilation at being a party of Government rather than opposition was always going to be balanced by disappointment that we didn’t win outright and the sobering reality of the difficult choices ahead. Although the biggest Tory conference ever (apparently 13,000 registered delegates) – it actually doesn’t feel that busy. If anything before kick-off things felt quite muted.

The conference started by revisiting the theme of the ‘Big Society’. This was a bit of a risk. As we found on the campaign the issue with the ‘Big Society’ idea is that whilst people intuitively support the sentiment, they have difficulty in articulating what it means in practice. As an election slogan it fell a bit flat. Without the urgency of the election it is now worth another stab at getting the message over to the voters – the reality is that the philosophy that underpins it is at the core of Cameron’s thinking and guides every aspect of our policy agenda.

The first Fringe event I attended was promoted by the TRG and explored real examples of the ‘Big Society’ in action. Later the main conference began with another hotch-potch montage of the kind of people and action that the phrase is intended to embrace. We need to do more of this. My hope is that the comprehension gap will be made easier over the next year or two as the enabling legislation is implemented and the pool of ‘real’ examples increases.

The set-piece speech of the introductory session fell to Baraness Warsi. I’d briefly chatted to her the night before and she was a wee bit nervous about being first up. It was a good speech throughout – she spoke with humility about the day she was called into the Cabinet – and with honesty and humour about her first perception of having been offered what she described as “a non-job”(minister without Portfolio) and a “Job Share” (Co-Chairman). It shows good self-awareness that she tackled this directly as I’ve heard her critics chuck those exact descriptions of her role at her. But she hit her  real stride and carried the hall when she reached the passage reflecting on Labour – I can’t paraphrase it any better so will just quote direct:

“They say we want to make spending cuts. They say we are letting down the poor. But it was them who left us with this mess. So let me say something to the Labour Party.
We left you a thriving, buoyant economy in 1997… and you brought Britain back to the brink of bankruptcy.
You hammered the working classes by scrapping the 10p tax band. You left an economy where people who are black or brown are twice as likely to be unemployed. And you let down the regions by creating an economy where for every ten private sector jobs created in the South, just one was created in the North and the Midlands.
So Mr. Miliband, Don’t you dare say you are a friend of the working classes. Don’t you dare say you’re a friend of minorities. Don’t you dare say you’re the friend of people in the north. Because I am all of those things and you are no friend of mine!”

Great Stuff.

3 Comments

Filed under Uncategorized