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.
Tag Archives: Politics
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.
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.
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.
Why has the international community been so slow to help Pakistan? There is no doubt that that there is a genuine disaster underway. Some 20 million people have now been affected and reports suggest somewhere between 1600 and 2000 people have lost their lives.
Predictably, a scout around online forums finds some people ranting that ‘our lack of response’ is an ‘anti-Muslim’ thing. “There would be a far bigger deal if we didn’t lump Pakistan in with terrorists”. Equally predictably in forums, we find people with the opposite world view advocating that we not help precisely because “Pakistan is Harbouring Bin Laden”, “Pakistan can still afford a nuclear program”, “Pakistanis play both ways in the War-On-Terror”, etc. You find a strange mish-mash of some truths, some half-truths, some falsehoods and some outright racism. And that is before you add in the obligatory “We have enough problems of our own at home and a financial crisis” to the mix.
So, is Britain either consciously or sub-consciously doing less than it should to help Pakistan? A look at the figures would suggest not. The stark fact is only one other country on planet Earth has thus far done more to provide aid for the disaster –
Q. Who is this mega donor?
A. The supposedly ‘Muslim Hating’ United States.
As at 17th August 2010 the US has provided approaching $100m which is 38% of all relief money. The UK is at number two having provided 16% of all money (circa $40 million). You can see the full list here.
What is very curious when you look at this list is the absence of any co-ordinated response from fellow Muslim countries. On the face of it you would think these countries are beyond any ‘anti-Muslim’ charge. It is true that there have been gestures by both Kuwait and the UAE but neither registers in the top ten. Islamic States such as Saudi Arabia, Iran, Egypt, Oman, Qatar, Jordan and Libya do not even register on the donor list despite many having breathtaking petro-wealth. This does beg a question as to why? What has Pakistan done to so alienate itself from its brethren? – theories I’ve heard knocking around are:
- The Pakistani President swanning round Europe at the start of the disaster sent a message that the disaster wasn’t that bad
- Ironically, a sense by some Muslim States that Pakistani government has sided too much with the US and become a stooge. (Talk about being between a rock and a hard place!)
- No sense of scale/drama. Circa 2000 dead wouldn’t yet put the disaster in the ‘Top 10’ disasters for the last decade if you measure these things only by fatalities. There is an element of compassion fatigue.
- A knowing lack of faith that in a corrupt state any aid donated will reach the intended recipients
- Some subconscious or conscious racism by Gulf States? Pakistanis may be Muslim but they are not Arab. Likewise with Sunni/Shia divisions….
I’m not going to pretend to know the answer or how much store to put into any of the above. I’m also going to knock on the head the idea that the above should be used as some kind of perverse evidence for making the case the UK has already done too much. What I do want to get across is that we should be proud that we are leading the world in getting this tragedy on the global agenda rather than have some weird guilt-dripping angst that we’re part of a grand conspiracy to keep these people in misery.
Nick Clegg was right yesterday when he described the international response as pitiful. He is absolutely correct to try and shame nations to matching our response. We in Britain can and should stand tall for our doing the right thing when the innocent suffer.
As always it is also enhancing for us as individuals to help and not rely just on Governments to do the right thing. With that in mind if you want to help the situation in Pakistan then this appeal is one of the charities where you can have a high level of confidence that your money will reach the needy. The situation is bad. Please give generously: CLICK HERE TO MAKE UNICEF DONATION
The press this weekend has been full of coverage of news that the government intends to slash spending on speed cameras. This has predictably spawned gigabytes of commentary in the forums and the blogosphere – take a look at this post and follow-up comments at Iain Dale to get a feel for the way any ‘debate’ on the topic typically goes.
It strikes me that in these arguments two fundamentally different questions always get muddled up leaving folk debating at slightly cross-purposes. The different questions are:
- In striking the balance between safety and the freedom for drivers to exercise judgement are current speed limits appropriate – or too arbitrary?
- Are speed cameras then the best way of enforcing whatever the proper limits should be?
My opinion of the first one is that the blanket assumption that 30 is OK on residential roads is misguided. I personally support the increase in 20mph zones in residential areas that we’ve seen in the last few years and would be happy to see even more. Where I live there are many narrow residential streets where people double-park leaving only enough room for one car to drive down the middle and little chance to see a child stepping out to cross – yet people bomb down, quite legally – though to my mind criminally negligently – at 30. The exact opposite applies on motorways where 70 does seem an over-cautious limit (except in those areas where congestion is prevalent). The 70 limit was decided to be a safe speed over 60 years ago. With the increase in breaking technology and car safety equipment over those decades there is a compelling case that the motorway speed limit could be raised. There is also a good case for many city arterial roads and dual carriageways to have their limits raised above the current 30 or 40. Common sense could be applied. I sense that most people raging against speed cameras are really raging against the level at which speed limits have been set.
As to whether speed cameras are then a good way of enforcing sensible speed limits my answer would be that if deployed properly yes they are. Strategically placed they can and do save lives. However, when “over-deployed” or put in places where there is no obvious safety issue they actually detract from getting people to think about their speed intelligently and adjusting their driving accordingly.
As someone whose life has been blighted twice by the crushing, overwhelming loss of an immediate family member in a motor accident I need no lectures on road safety – I am always guarded against those who bleat about speeding tickets. However, I do think there is a strong case for putting more thought into getting the right speed limit for the right road, something to my mind the authorities have failed to do – presumably to ‘keep things simple’. Get this right and I suspect speed cameras would have far more support.
One other quick point, there is a curious anomaly in this whole story – the popular wisdom is that speed cameras are “cash cows” yet the premise of the announcement suggests cameras need ‘funding’. If that is true they must not be self-sufficient, never mind profit generators. I’m trying to get my head around that. Something doesn’t stack up.
Michael Gove had, to put it mildly, an uncomfortable week. I can understand the frustration and rage that schools in Sandwell must have felt thinking their new build project had a green light to find out the next day they did not. Over the past three years I have grown used to such emotions as either the Government or the LEA decide they are going to do one thing for the future of the School where I am Chair of Governors, announce it to the press, and then change their minds. It’s not fair on staff, teachers, parents or pupils. I had hoped that such cock-ups would end with the new Government, but the week’s events show they have not. This was an open goal for Gove’s many naysayers and so in school report terms he ‘must do better’.
Gove did at least give an object lesson in Ministerial accountability. He will not personally have drawn up the detailed list that was released – that will have been delegated to junior officials. Nevertheless, they report to him and the list was being released in his name. After thirteen years of a ‘never apologise, never explain’ attitude from Labour Ministers it was refreshing to see someone stand up in the Chamber and say that ‘the buck stops with me – my mistake – I take accountability – I am sorry’. Good though it is to see genuine contrition when something goes wrong I would still rather be able to say that this Government are better administrators not just better apologisers than the last one. This is Gove’s first strike. But he must not allow it to deter him from pressing on.
The worst thing Gove can do now is to retreat with a bloody nose. He has to learn from the experience and stick with his reform agenda. One of the first things he has got to do to quieten the ‘noise’ is make it clear what mechanisms for capital spending in schools are going to replace the BSF Program. Nothing quite encapsulates the mismatch between’s Labour’s laudable ambition and its lack of capacity, capability and means to deliver than the bloated way ‘Building Schools for the Future’ was muddling along. The program needed killing and doing so was always going to cause upset to those whose hopes had been cynically played with. That said there will still be demands for capital expenditure on Schools in the coming years – and in certain cases this will mean rebuilds – not because they would be ‘nice-to-have’ but because they are ‘must-have’. Gove needs to be clear the level of funding – however low – available for this and a streamlined process to fairly prioritise the release of funds.
With a wider perspective my fear now is that Ministers will have watched what happened to Gove and fear what will happen when they make what knowing fans of ‘Yes Minister’ call ‘Bold’ moves. To get the country out of the mess ‘Bold’ moves are exactly what is needed. There are so many unhelpful dynamics at play:
- Quangos and Civil Servants that the administration has inherited, like it or not, are crucial to Ministers ability to deliver. Their reason for being, their way of life and their empires are under threat as we try to draw back-in the State machine. There are unlikely to be many supportive stakeholders in these organisations. As Gove has seen a Minister can find himself at their mercy; either they chose not to play with a straight bat and wittingly causing mischief or they unwittingly display incompetence. Either way the minister is harmed and their ability to implement their agenda is diminished.
- Every tough decision the Coalition has yet made has revealed real twitchiness from the left of the Lib Dems. This will get much worse when the implications of the spending review begin to hit home. Clegg has a monumental battle ahead to keep his own team onside long enough for us to see the job through.
- The advantage of opposition – you only have to talk rather than ‘do’ – necessary difficult choices sadly make open goals in the sound bite news cycle. Labour will understandably exploit this – and it will put more pressure on the Government.
The lesson for Gove and every other new Minister is that they need good supporters around them at the moment to help them hold their nerve. They know what needs doing. They must act for the good of the country rather than the good of their careers. The right thing to do is not always the popular thing to do and the essence of leadership is driving on with that in mind. They need to look around them and figure out quickly who within their extended teams are really working against them or not up to the job? Then they need to be brutal and replace them. This is no time to go wobbly.