Friday, 17 April 2015

Tories set the (wrong) agenda

George Monbiot puts it very neatly:

The dominant Tory frame. . . is that the all-important issue is the deficit.  The financial crisis, it claims, was caused not by the banks but by irresponsible  government spending for which the only cure  is austerity. (Guardian, 15th April)

Monbiot may be going a bit far when he claims  that: "In reality the deficit should rank somewhere in the low hundreds on the list of political priorities." I would tend to put it somewhere  in the lower end of the "top ten," after:-

  1. low productivity;
  2. the balance of (external) payments deficit;
  3. growing inequality;
  4. unaffordable housing;
  5. destitution and misery of those on the bottom rungs of our society.
Apart from housing, these key issues are not receiving much attention in what passes for election debate.  Instead, each party offers us a daily "sugar plum" which is soon forgotten as we go on to the next minor treat.

The primacy of the deficit is so well entrenched that  even Labour dares not speak up for the poor who suffer most from this over-emphasised obsession.  And even on housing Ed Miliband last night refused to rule out discontinuing  the "right to buy," one of the most damaging legacies of the Thatcher era which, astoundingly, the Tories propose now to extend to those in housing association tenancies.

Another part of the Tory frame which Labour are too timid to challenge is the revival of the Victorian concept of the deserving and undeserving poor, through "dog whistle" references to "hard working families."  Twice last night, Miliband borrowed this Tory mantra is defining the people he hoped to represent.

Being retired, I am not hard working and, being single and living (quite contentedly) alone, I am not a family either.  But I am a citizen worthy of representation, and I'd like there to be party which appealed for my vote on the grounds it would try to create a fairer society in Britain  for everybody, young or old, fit or disabled, responsible or feckless; was  honest about the true state of affairs and the limits on its capacity to alter them; pledged to defend our human rights and civil liberties; and extended its vision to include working towards a fairer world and a sustainable future.

That party ought to be the Liberal Democrats.  Sadly we too have bought into the Tory frame. 

Monday, 6 April 2015

Life of a migrant on the margin

The church I attend in Leeds runs free classes in English for Speakers of Other Languages (ESOL) for migrants, refugees and asylum seekers, of which there are quite a lot in the area.  We have one professional leader and about half a dozen volunteer teachers, of which I am one.  Student numbers are irregular but we have about 70 on our books and I take the Tuesday session with an "intermediate" group of about a dozen.

The  topic last week was "holidays ": perhaps not the most tactful to choose for our clientele, but it was the next one in the book and I was too lazy to choose something more appropriate.  After dealing with the vocabulary and grammar involved ("will go,"  future; "went," past) I asked the class to work in pairs, discussing in English a holiday they had had, and then be prepared to report on what their partner had done.  There was one odd man out, let's call him Alfonso, so I "partnered" him.

When it was my turn to give a report I said that  Alfonso had been on holiday to Bridlington.  The weather was very sunny. He had walked on the beach but had not swum in the sea, nor paddled in it. He'd had a good time

When I had finished this brief account Alfonso looked at me sternly and said that I had missed out two things: he had bought an ice cream and taken a photograph.

Alfonso is usually  late to class, which commences at 10am.  This is because he gets up at five each morning, works for three  hours as a cleaner, then walks back home and goes back to bed for an hour before facing the rest of the day.

The trip to Bridlington was clearly the day trip the church organises with funds given to us be a charity.  This was clearly the only "holiday" he had had and the photograph and ice cream were clearly highlights of his year.

A different picture to that which Nigel Farage imagines for our immigrant population.

Friday, 3 April 2015

103 business executives or two thirds of macro-economists?

It would be nice to think that one or a tiny group of business leaders thought that George Osborne had done  a cracking job on economic policy, told their pals, and  another hundred or so spontaneously  jumped in to offer support and  put their names to  letter which claimed:

"We believe the Conservative-led government  has been good for business  and has pursued policies which have supported  investment and job creation."

They then go on to advise that voting other than Conservative would be a terrible thing and lead to economic chaos and collapse (I paraphrase this bit as I have not read the actual letter -   it was in the Daily Telegraph, aka the Torygraph.

It is however more likely that this was a wheeze thought up by Conservative Central Office, which has the resources and time to concoct these media opportunities. (They out-spend Labour by three to one, the Liberal Democrats by umpteen to one and other parties by even more.)  It would be interesting to know how many business leaders were actually contacted and what percentage  signed.  There are hints in today's paper that some of them with they hadn't.

By what I believe to be a genuine coincidence the Centre for Macroeconomics (CFM) published the results of  its monthly survey on the same day.  This month the question was:

 "Do you agree that the austerity policies of the coalition government have had a positive effect on aggregate economic activity (employment and GDP) in the UK"

For detailed results see

In summary:
  • no-one at all "strongly agreed"
  • a third , however "agreed"
  • but another third "disagreed"
  • and yet another third "strongly disagreed."
Perhaps it's no surprise that leading businessmen, who tend to have leading incomes ( signatory Stuart Rose pocketed about £1.3m a year whilst at Marks and Spencer; Duncan Bannantyne is alleged to have a net wealth of £175m)* tend to favour the party least likely to put up the top rate of income tax and most likely to lower yet further the rate of corporation tax.  Whether this is good for the whole economy is another question.  The Tories pretend to the "trickle down effect":  the experience of the last couple of decades tends to show "trickle up" rather than "trickle down."

The Tories have no shame in repeating ad nauseum the alleged success of their "long term economic  plan," and the claim goes unchallenged, even by the BBC.  So, without embarrassment, though at the risk of seeming boring, here yet again is what I see as being closer to the truth:

  • the "world" economic crash was sparked off in Wall Street, not Downing Street, through the reckless behaviour of the financial sector  made possible by deregulation introduce and supported by the Tories in the UK;
  • Gordon Brown was not unduly profligate, and saved, if not the world, at least the western banking system, by his prompt action through the G8;
  •  the UK's key debt/GDP ratio, though high, was not dangerously so, when the coalition took office:
  • and the economy was already  recovering when George Osborne became Chancellor;:
  • this recovery was stifled by Osborne's policy of austerity, fancifully called "expansionary fiscal contraction;"
  • the justification for "savage cuts" to reduce the government deficit was the claim, almost certainly false, that without prompt deficit reduction  the UK was in danger of losing the confidence of the markets in the same manner as Greece;
  • the economy then flat-lined for two years;
  • things picked up again when this "Plan A" was quietly abandoned in 2012 and some Keynesian infrastructure expenditure was injected into the economy. This probably stimulated the present modest recovery;
  • Osborne's two stated policy priorities were to retain our AAA rating and eliminate the deficit in one parliament.  He has failed on both;
  • the claim that the UK is now "walking tall" and "paying its way" is demonstrably false.  The balance of payments deficit is at an historic  high at nearly 6% of GDP, and productivity is shockingly low.  These are the deficits that are really important.
The Tories are relieved that, on some measures at least, the average family is now richer than it was in 2010. Using this measure, this means that the government  achieved an average annual growth rate of 0.2%.  Those of us with long memories remember ridiculing someone, I think  Alec Douglas Home, as "Mr 3%" since 3% annual growth, regarded as a pathetic level in those high and far off times, was all his government could achieve.


Monday, 30 March 2015

Vive les coalitions

I normally have a great respect for the opinions our former leader David Steel but was rather surprised to hear him reported last week as suggesting that in the event of another balanced parliament, if the party is in a position to make a choice  we should opt for offering "confidence and supply" to a minority government rather than enter another coalition.

Surely, as the party which believes that the main function of parliament is to represent the varied opinions of the people as broadly as practicable through proportional representation by STV we accept that, when parliament exercises its other function, as  an electoral college to select a government, coalitions are almost inevitable.

As we know to our cost, being inside and government and making a contribution is much harder and much less fun than remaining outside the government and just criticising.  Surely, and as Nick Clegg and Co wisely decided in 2010, the party exists to implement as many as possible of our policies, not just act as a source of useful suggestions. Think tanks can do that.

We have to our  credit a whole string of achievement which would not have happened had we been on the sidelines criticising rather than in government for the last five years.  To my mind by far and away the most important of these is the fixed term parliament, though our election strategists don't seem inclined to shout about this.  They prefer the raising of the income tax threshold, the triple lock pensions, the pupil premium, equality for mental health patients, the green investment bank etc.  (I have a list of another 17 if anyone is interested.)

So I hope that we shall be in a position to form part of the next government, and I believe it is counter-productive to make too many hostages to fortune by  saying too much about who we will and won't join with.  We must, as Simon Hughes aptly put in 2010, "play the cards the electorate deals."

So it is not wise to rule out joining a government along with, say, the SNP.  They, like us, will have to make sacrifices, and if they will, in the short run, settle for Home Rule rather than immediate independence, well, that's been Liberal/Liberal Democrat policy for a century, so why not?  And, as I've argued before, they have by far the best economic policy.

Liberal Democrats joining a government that also relies on the support of UKIP doesn't seem very likely.  (This is one of the two issues on which I agree with David Cameron: they are best regarded as "fruitcakes.") But if their major demand is for a referendum on Europe it wouldn't be the end of the world.  We have, after all (though wrongly in my view) said that we would have one if there were a major treaty change which transferred further powers to Europe, so having one anyway wouldn't be a great betrayal and would help to clear the air.  We should, have course, have to do what the Tories did on Electoral Reform; concede the referendum and then campaign for IN rather than out.

Of course to maximise our potential for being in government we have to win as many seats as possible, and then, this time, "play our cards right.".  So there is all to play for: we should not settle for second best -sniping from the sidelines.  We can leave that to Paxman et al.

Saturday, 28 March 2015

The Prime-minesterial "Debates": three losers.

According to the one opinion poll I've seen, Ed Miliband was the loser by 54% to 46%, though my own impression was that  Miliband's performance, in both content and presentation, was far superior to that of David Cameron.  That is probably because my views are more in sympathy with Miliband's than Cameron's: it is hard to be subjective in these matters.

Nevertheless, I do think Miliband missed two open goals in.  The first was in the interview with Jeremy Paxman, whose hectoring and repetitive:" Did the Labour government borrow too much?" was crying out for a firm: "No, we borrowed what was necessary to rescue the financial system from the chaos caused by the deregulation introduced and supported by the Tories."   But Miliband was frightened to give it

The second open goal was when Paxman repeatedly demanded of Miliband:  "Are you up to being prime-minister?"  Here I was longing  for the response:  "At least I have the guts to put up and try, whereas you, Mr Paxman, a self-declared Tory, turned down the opportunity to run for mayor of London."

Sadly in our system it is easier to win fame and monetary fortune by mocking politicians who are, however mistakenly, actually  trying to improve things,  than to put your own  time and reputation on the line by trying to do something yourself.

The second loser was the truth about the economy.  True Paxman pressed David Cameron hard on the growth of food banks under his watch, and received  the pathetic answer  that they have grown because the Government permits the Social Security services to recommend them to the destitute.  And a response as to whether or not Cameron himself could manage on a zero-hours contract, was long in coming - he couldn't, though, would you believe it, "Some people prefer them! "  I wonder who?

But the monotonous Conservative mantra that the government has turned the economy round from the mess made by Labour,  that as a result of  "tough decisions" it is now recovering and we are once again on the road to prosperity, and that it would be economic suicide to interfere with the "long term economic plan" went unchallenged.

The truth is that the government did indeed turn the economy round, from the modest recovery which was under way when Labour left office to stagnation which endured for two years before the famous "plan A" was surreptitiously abandoned, thus now, late in the day, producing a recovery rather dangerously fuelled by private debt encouraged by a housing bubble.

Sadly, even Labour is not prepared to defend its record, but shuffles uneasily with half-hearted admissions about having got some things wrong.  True, not everything the Labour Governments did in the economic field was perfect, but they should boldly say, repeating it as often as the Tory misrepresentations,  that the economic crisis began in Wall Street, not Downing Street, and that Gordon Brown, if he did not exactly "save the world", did, by prompt action, rescue our dodgy financial structure from collapse, and that  the present government has not yet done much in terms of effective reform.

The third loser was Britain's (or is it just England's?) reputation for good manners.  It is not acceptable to ask someone, even in private, let alone or public television, why he is perceived as a "North London geek." Yes, similar, though less personal, jibes were aimed at Cameron, but that does not make the practice acceptable.  Tough questioning is necessary, but personal rudeness should be off limits.

 Paxman has developed a reputation as  an effective interviewer, and some commentators have declared him the true  "winner" in the so-called debates.   But, though undoubtedly clever,  he is, in my view, a bully, sneering at people when he knows that they can't answer back

Saturday, 21 March 2015

The economic conseqences of - the Greeks.

I'm reading with great enjoyment historian Richard  Davenport-Hines's recently published book  "Universal Man: the Seven Lives of John Maynard Keynes."  Davenport-Hines's  comments on the aftermath of the Versailles Treaty should, I believe, be noted by Mrs Merkel et al as they negotiate with Greece over the next few days.

. . .less than half of the £6.6 billion demanded by the Allies  under the Versailles Treaty was reckoned by (Foreign Office) experts to be  recoverable.  Consequently , throughout the 1920s the Foreign Office's tactics. . . sought to pacify Europeans tensions  by allowing reparations  and then war debts  to be winnowed, during thirteen years of wrangling, to about £1 billion.  'From the earliest years following the war,' explained a Foreign Office memorandum, 'it was our policy to eliminate  those parts of the Peace Settlement which, as practical people, we knew to be untenable and indefensible.' . . . . . It was not Keynes's polemic* that taught German voters  that the Allies were yielding diplomatists . .  . These reductions were not necessitated by Keynesian sophistry , but by the unenforceable provisions of which he had warned.

Here in Britain Osborne and the rest of the political establishment have refused to learn the lessons of the 1920s and 1930s  and so imposed unnecessary misery on some 20% or so of our population..  There is scope for the for the leaders of the Eurozone to be more enlightened and avoid even more severe misery for most of the Greeks.

*The Economic Consequences of the Peace

Thursday, 19 March 2015

The Budget: unto him that thath shall be given. . .

George Osborne's budget continues to give help to those who don't need it (but might vote Tory) and take it away from those who do need it.

Those of us with savings are to be allowed to earn £1 000 of interest per year free of tax.  Well, 2% is a pretty average rate of interest at the moment, so to receive (I won't say "earn") that £1 000  you'd need to have £50 000 stashed away.  Indeed, if you were daft enough to put your savings in a Lloyds Bank's "Easy Saver" account you'd need half a million, as Lloyds pays only 0.2% on that account  Either way, holders of those amounts of spare money are not the most needy in society.

Maybe this particular "give away" is not so generous as it looks, because  the astute and those with financial advisers will already have as much as possible of their savings in ISA accounts, which are already tax free.  But the offer makes a good headline for the target audience of those who have "worked hard,. saved and done the right thing."  Ugh.

Then there's the offer of a "gift" from the government of £50 for every £200 those saving to buy their first  house  put into a new "Help-to-Buy" ISA.  The maximum amount of savings for this bonus  is £12 000, to which the government will  therefore " gift" a further £3 000.  Indeed, if a couple are saving to buy, or have parents who can supply the money to enable them to pretend that they are  doing the saving themselves, that's £6 000 of government handout towards their first house.

As well as the  potential "dead-weight loss" of helping those who are probably saving anyway, the idiocy of this policy is that the problem in our housing market is one of supply, not demand.  The result will probably be to further inflate the housing bubble.

At the other end of the scale the government is not so free with its generosity.  Social security expenditure  (I do not use the term "welfare" which has become condescending and mildly pejorative) is to be cut by a further £12bn,  the police and legal aid will continue to be starved of funds, and guarantees of  no cuts to the health services mean little with a rising and ageing population.

Local government services for parks, libraries, street cleaning and other provisions which make our society civilised will be further pared to the bone in a desperate attempt to preserve care services.

The Israelites in Egypt are said to have revolted when they were forced to make bricks without straw.  Presumably Osborne thinks our ire will be mollified by the penny off a pint of beer - surely the most clich├ęd bribe in the  pre-election budget lexicon.

Sadly , Osborne's risible boasts about the "success" of his policies (our economy "walking tall" when a more apt description would be "struggling uncertainly back to its feet having been unnecessarily clobbered for five years")  is supported by the overwhelming majority of the media, described as mediamacro by Oxford Professor Wren-Lewis,and one in three of those likely to vote are deluded into supporting more of the same..