Tag Archives: Labour

The Daily Cost of Servicing Our Debt

This diagram graphically represents the size of our daily spending on servicing our debt in comparison with our daily spend on other areas.    It is a sobering reminder ahead of today’s budget of why eliminating the structural deficit must be a priority.   The depressing thing is that controlling the deficit will not change the daily interest on the existing debt – it’ll just stop it getting bigger and bigger.   We’re going to be paying for the party in the 90s for a long, long time to come.

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Filed under Economy, UK, UK Politics

“1.6 Million Children in the UK Live in Severe Poverty”. Erm. Really?

Today there has been an alarming headline that 1.6 million children in the UK live in ‘severe poverty’.   Examples of the reportage can be seen at the BBC and Guardian.  Every now and again a news stat sets off a little alarm bell in my head.  This was one of those times – according to the Office of National Statistics there are somewhere around 12.1 million children in the UK (2000 census, I suspect little variation since then).   So according to today’s reports approximately 13% of children in the UK must live in ‘severe poverty’.   That little alarm in my mind was making a coughing noise which only thinly disguised the words ‘bull-shit’.   I usually go off on one when pointing out the rotten state the UK was left in after 13 years of Labour but even with blue-tinted specs on I would never claim that they left us with 13% of all kids living in ‘severe poverty’.    This figure needed some sniffing.

The original report is from Save the Children.  It can be downloaded here.  It’s pretty hard to find how they technically defined ‘severe poverty’ for their ‘research’. After a bit of digging it turns out they define it as those living in households with incomes of less than 50% of the UK median income (disregarding housing costs).   A median single income in the UK is circa. £20k. I have no idea how they then use their methodology to ‘disregard’ housing costs – but the top and bottom is that a couple with two kids who, after housing costs are paid, have an income of £12.5k a year are classed as in ‘severe poverty’.

When you look at the methodology the metric they use is not about poverty – it’s a about income distribution.  Without wishing to belittle the quest for more equitable income distribution- I can’t help but think that such loose use of language cheapens the words ‘severe poverty’ and so insults those millions in the world (including in the UK) who, very literally, do not know where their next meal is coming from.    We could have a very important national debate about income disparity and this data could be used to support the case of those who believe the gap is too wide – however to hijack the language ‘severe poverty’ is a distraction from all that is valid in that debate.

Now don’t get me wrong: that couple with those two kids on that income are going to have a horrible time.  The report does do a good job of highlighting the very real issues they face.   I am also under no illusion that genuine severe poverty exists in this country – the kind were parents go and beg on the street to feed their children – I see some of this here in Birmingham.   Some stories that happen right now in my City would make you weep – but to say ‘severe poverty’ is anything other than at the very margins of our society is a fantasy.  To suggest, as the words they have chosen do, that 13% of all children live in squalid, desperate circumstances is ludicrous.  By overstating it, all Save the Children have done is muddle two debates and distract some focus from tackling those very real cases that do blight our society.

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

Ed Balls: The Return of Brownite Economics

Let’s face it:  Ed Balls was to Gordon Brown as Laurel was to Hardy.  His return will no doubt lead to ‘another fine mess’.   This surprise reshuffle does change the calculus of Labour’s electability.   When Ed Milliband decided not to appoint Balls to the role in October it was a deliberate and calculated move.   It was possibly the only truly leader-like think young Ed has done since he got the gig.   The reasoning at the time was surely:

  • You would not want someone so intimately connected with the entire economic calamity facing this country back on point for economic policy
  • You could not want someone who has had an insider view (and leading role) in using the office of Chancellor to undermine and oust a previous leader, sitting there ready for another metaphoric stab.

Well, nothings changed.  Those reasons still stand.  Yet here Balls is.  He’s got the job he craved from the moment he realised he was out-of-the game for the last leadership shot, and young Ed will be feeling his breath on his neck from here-on-in.

To give him his due Balls is a bruiser.  A political big-beast.  From today George Osborne will be looking forward to his turns in Parliament with a tummy rumble.  Balls knows his stats and figures and will not be easy to trip up.  Worse, he’s more than capable of scoring some points through sheer statistical battery.   But that’s all just fluff in the Westminster village.   Balls fundamentally is the living, breathing embodiment of the leftish or centre-leftish vision of Big Government/Big State/Spend and Tax Labour.  As Shadow Chancellor he will push them more so.  Even with all the current national woes, when push comes to shove that positioning is simply electoral poison.   The ‘squeezed middle’ – the people who count – the very people who switched to Labour in 97 and switched away from them in 2010 – those floating voters just don’t drift in that direction.

And that is the reel rub for Labour.  The one man on the Labour front bench who could appeal to that ‘thinking middle’ was Alan Johnson.  He was simply impossible to dislike.  Even though he was struggling to catch-up with his brief, even though he talked rot – people, even me, warmed to him.   For a politician that curious ‘nice bloke’ charisma is the X-factor stuff.  It is priceless political alchemy.  Blair had it.  Johnson had it.  Brown didn’t.  Balls doesn’t.   And so the Labour party is a weaker party this evening.

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As I say, for reasons I cannot put my finger on I like Alan Johnson despite his politics.  I have no idea why he has stepped down.  I wish him well and sincerely hope that whatever the personal issues are they are the kind that can be put right and have a happy ending by making this move.

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Filed under Economy, Politics, UK, UK Politics

Oldham & Saddleworth Result: Thoughts

So that’s that then*. A solid result for Labour.  A hold with an increased majority. I think the result was about as expected – you could, I suppose, argue the Tories did slightly worse and Lib Dems slightly better than expected – if that is correct then it is a function of:

  • The Conservative CCHQ seemed to do no more than the bare minimum to support their candidate – there is suspicion that a tactical decision was taken not to allow a result that would undermine Clegg and this meant not fighting too hard. I’m sure there will be some angst between the grass-roots and the tacticians in the Party about this over the coming weeks.
  • Partly as a result of the above, and partly regardless, many Tories will have tactically voted Lib Dem this time around. Clearly not enough to compensate those switching Lib Dem to Labour.
  • The turnout was down but I would expect this to be spread evenly between the parties.

All in – no real news. Easily a good enough result to keep Ed knockers in the party on the leash, but not quite good enough that they wont still be straining on it.  As by-election swings go it is pretty undramatic.

*Full Result: Labour: 14,718 (42.1%) Lib Dems: 11,160 (31.9%) Conservatives: 4,481 (12.8%) UKIP: 2,029 (5.8%) BNP: 1,560 (4.5%) Green Party: 530 (1.5%) Monster Raving Loony Party: 145 (0.4%) English Democrats: 144 (0.4%) Pirate Party: 96 (0.2%) Bus Pass Elvis Party: 67 (0.1%)

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Put the armour on. 2011 is going to Hurt

Happy New Year.   Or is it?  The reality is that 2011 is going to be pretty miserable for the whole country.   Any honeymoon period for the Coalition (if there was one) is up.  The reality of austerity measures are kicking-in.  Turning the economy is like turning an oil tanker.  Things will get worse before they get better.  We will see more public sector redundancies, we will see more cuts to other services,  the VAT rise will trickle to the till,  we wont see pay rises in the private sector, even the employed will feel  -and actually be in real terms – poorer this April than April two years ago.  Health and education reforms will spook the Unions.   Protest will spread.

The Government has to accept this and hold its nerve.   It cannot do what it needs to do and be popular in the immediate or short term.  It needs, in the national interest, to do the right thing rather than the popular thing.  With eyes wide-open it needs to understand that its popularity will fall this year and it needs to carry on regardless.  The instinct and philosophy of this government is the right one.  The challenge now is to be competent in delivery.   The quicker we get the pain over, the quicker we start the recovery.  If we start the recovery then the short-term unpopularity will dwindle and we have a fighting chance of re-election in 2015.  Dither and spread the pain over the whole five years and even if the objective of shoring up the economy is met it will just gift the country back to Labour to mess up again.

Labour will blame the Coalition for the pain. They’ll say: “They’re in Government.  We’re not.  It is their choices, it is their fault”  This is a bit like blaming a doctor for making you ill with chemo rather than the fags you only gave up six months earlier.  Nevertheless, while the pain is there the public will buy their argument.  The Coalition needs to see its program through and see it through quickly.

The lessons are there in History.  Those who remember the 1981 budget may spot certain parallels with today.  For the whole period between of 80 and 82  it was inconceivable that the Conservatives would be returned to power.  Nerve was held.  The budget worked.  Britain, after the pain, prospered.   Thatcher would have won even without the Falklands.   But we must also learn from that period.  Nobody would want to see the likes of the Brixton or Toxteth riots again.  That’s why it is so crucial that we don’t just deliver on the miserable austerity side of the program –  but also on the social side – IDS has made his case well for welfare reform – he needs to be allowed to now get on and deliver .  This is the year to get moving.   It’s also critical that we strike the right balance in the way we police inevitable protests.  Get that wrong and the Government could doom itself.

So on that dour note, I say again:  Happy New Year.  Put the armour on, 2011 is going to Hurt.

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Filed under Economy

Tuition Fees D-Day: Final Thoughts

There will not be a  single Coalition MP went into politics to triple tuition fees.   Yet here we are.  A depressing truth of wielding power is often-times the only responsible choices boil down to picking ‘the least worst thing’.  I wont repeat in any depth my own sad feelings on today’s vote – you can see them here.

In all the noise we’ve had on the subject you can break down the core theme into two parts:

  • The fact of a raise in the cap on fees three-fold  (Boo)
  • The funding arrangements for their payment (Yay)

The removal of the cap stinks for everyone who will be impacted.   I have two kids to think about and the figures terrify me.  That said, given the nation is skint the realistic choices were always to either:

  1. have fewer people go to university (when it was free for all we only sent 10% of the population)
  2. keep aspiring to allow 50% of the population to benefit from higher education but revisit funding to ensure we can afford it.
  3. no change, keep the current funding arrangements regardless and keep adding to the structural deficit

Only 1 & 2 above were realistic (unless we wish to end up like Ireland).  We chose 2 (as would Labour).    And here we are.  Even the right choices can have unpopular consequences.

Which then brings us to the arrangements for payments.  One of the things that has got lost in the debate due to the understandable focus on the headline price increase is the new repayment regime.  This is a great leap forward from what we currently have in place.  There is an excellent website here which covers this in depth and debunks an number of the myths floating about.

Away from the nuts and bolts of the proposed legislation the other thing that fascinates me about today’s vote is the Lib Dem position.  They really are between a rock and a hard place.  As I noted last week they need this Coalition to work.  One of their fundamental beliefs is Proportional Representation.  PR would make coalition government the norm not the exception.  Coalition requires compromise.  They either stick to their coalition agreement, vote with the Government and take an electoral beating else they pander to the public noise and surrender any future argument on the viability of governing under PR.   It must be a nightmare choice for them.   I’m hopeful that Clegg will carry them over the line in choosing to do the right thing over the popular thing but have no doubt that if an election was called tomorrow they would be wiped out as a result of this issue.  This means if the vote does pass then they will need distance between today and the next election so that they have positive achievements to point to as counterbalance to today’s resentment.  For this reason, IF the fees vote passes today I am more confident than ever that this Coalition will go the full distance – any Lib Dem recovery will depend upon it.


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Filed under Centre Right, Education, UK, UK Politics

Insider View of Coalition Negotiations

On Tuesday I attended a fascinating seminar at Portcullis House on the nuts and bolts of the Coalition negotiations in May.  The speakers were Lib Dem David Laws and Tory MP Rob Wilson, both of whom are peddling their respective books on the subject*.  For me, it was a unique chance to get a perspective from people who were ‘in the thick of it’.

A  blow-by-blow account of the evening has been done by a Lib Dem blogger here and I wont try to better that.  I will just summarise my take-away points:

  • The Lib Dems were genuinely knocked backwards by their election showing.  Nothing in their private polling had led them to expect so few seats.  Before polls closed Danny Alexander (then Clegg’s chief-of-staff) was briefing his colleagues to expect 80-85 seats.  He was way out.
  • The Lib Dems were between a rock and a hard place.  Although many of their key players would have felt more comfortable in a ‘progressive coalition’ with Labour – the Parliamentary maths and Labour’s attitude made that a no-go.  At the same time if they couldn’t form a coalition with the Conservatives we would enter a period of unstable Government with another election in November.  They reasoned a) they would do worse and b) a short-lived impotent hung parliament would be very damaging to their long term aspiration for PR – a system which would lead to hung parliaments as the norm rather than the exception.
  • The Labour party machine seemed to have done literally no planning for the eventuality of a hung parliament.  Laws had the sense they were making it up as they went along – a sense that Wilson confirmed through his interviews with the key players on their team.
  • The Conservatives had done proper planning for the Hung Parliament scenario.   They were very quick to produce a document that conceded so much the Lib Dems had no choice but to take them seriously.   Laws’ view was that the Tories essentially came into discussions with a ‘cut-to-the-chase’ final position.   The only thing that was unacceptable in the first offer was on electoral reform  (the proposal being to simply to set up another Commission to look at the subject).  I pressed Laws on whether with hindsight – if the Tories showed they had wiggle room on Electoral reform, perhaps there was wiggle room on other areas had he pushed harder.  He didn’t think so.   I personally do wonder.  Wilson made the point that for many, if not most Tories the ‘key concessions’ – the no tax on first £10k and the pupil premium were not any wrench to concede – most would have loved those policies in their manifesto in the first place.
  • Laws and the Lib Dems struggled in the negotiations to figure out how to navigate so much so quickly whilst still staying within their internal party processes.  When Laws observed the Conservative Party was spared these constraints with the leader being an effective ‘absolute monarchy’ William Hague knowingly shot back that the check and balance was “our monarchy is qualified by frequent regicide”.
  • On the final day Brown had lost the plot so much he even offered the Lib Dems 50% of Cabinet seats.

It was a good event and the second time that I have heard Laws speak.  He does impress and seems a very good counter-balance to the more loony fringes in the Lib Dem party. It underlined for me the sadness that through his wrong-doing he excluded himself from Cabinet.   If you do the wrong thing for the right reasons, you still do the wrong thing.  His replacement is not half as able.  I noted yesterday that Cameron was asked if he wanted Laws back: “Yes, and soon” was the reply.   On reflection, I could live with that.

* Rob Wilson has released 5 Days to Power while David Laws book is 22 Days in May.

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Filed under Centre Right, Politics, UK, UK Politics