Monday, 15 December 2014

There is an alternative, but it's not on offer.


All three British political parties have now set out their economic policies for the election next May.  A BBC  commentator summarised them as follows:

Conservatives: continue with drastic cuts and austerity in order to achieve a budget surplus by the end of the next parliament.
Labour:  continue with cuts, but not quite so drastic, so as to eliminate the so-called structural deficit  by the end of the next parliament, but also spend on investment in the infrastructure.
Liberal Democrat: more like the Tories in the short run, but more like Labour in the long run.

That is, of course, a crude and unfriendly description if the Liberal Democrat position  - I hate our being defined by what the other two are doing - but that's what he said and this is above all an honest blog.

Unfortunately no one has the guts offer the alternative, a Keynesian stimulation of the economy, the effectiveness of which is authenticated by both economic theory and practical history, and supported by a pantheon of economists and informed commentators.

First, we need to challenge the assumption that "the deficit" is the most important issue in British politics and that to eliminate it is an urgent requirement  The government's spending deficit is largely an internal matter:  it is borrowing money from one group of Britons wearing one set of hats ( in pension funds, insurance companies, other financial institutions, unit trusts, holders of National Savings,   those  rich or bold enough not to bother with National Savings but who buy government securities directly.), and paid back by much the same people as taxpayers.  So we pay as taxpayers and receive as pensioners etc.  The only part of government debt is that could be a problem is that fraction of it that is held overseas.

In my view, a far greater potential economic  problem is the Balance of Payments deficit. That is all owed overseas  and a supposed deficit (revised figures showed that it wasn't) brought down the Wilson Government in the 1970 election. Today  a very real deficit is  far larger and therefore more serious, but hardly gets a mention.

And there are other suggestions for "top of the bill." In an article in this weekend's Observer Bill Keegan takes the view that our most serious economic problem that of low productivity.

However, economics, though important (not least because I've earned my living teaching it) is not the be-all and end-all.  My own view is that the most serious problem facing our society today is growing inequality.  We are in grave danger of  becoming not one society but two: perhaps we already are.  This situation really does need urgent attention before it becomes dangerous, but it seems will hardly feature in the election campaign, other than to further blame and victimise the chief sufferers from the recession, that bottom 20%, while those who caused the recession continue to flourish.

Be that as it may, there is growing recognition that the main reason for the now returning deterioration of the government's finances is not profligate spending but the fall in tax revenues through continued business stagnation, unemployment , zero-hours contracts, part-time and low paid work, and that the way to restore balance is by a classic Keynesian stimulus which, along with growing prosperity, would increase the tax-take.

Not only is this increasingly understood but it would actual be popular.  In his blog Mainly Macro Oxford professor Simon Wren-Lewis quotes a You-Gov poll which shows that in response to the question :


Thinking about how the next government handles the issue of Britain's deficit, which of the following best reflects your view?

A.    The next government should prioritise reducing the deficit, mainly through making cuts to spending on public services

B.    The next government should prioritise reducing the deficit, mainly through increasing the level of taxation

C.   The next government should not prioritise reducing the deficit, and should spend more on public services or cutting taxes to try and promote growth instead.
only 27% supported Option A (broadly the Tory policy), 25% Option B, (broadly Labour) but a whopping 48% Option C, which ought to be the Liberal Democrat policy.

So come on, Liberal Democrat manifesto writers:  the policies of Keynes are not only right, but almost twice as popular as continued misguided, damaging  and unnecessary cuts in the  public services which make our society civilised.  Stop aping the outdated and failed neoliberal consensus and give us something to campaign on which is worthy of the traditions of our party.   Do that and we could win!

Monday, 8 December 2014

Pep talk for Liberal Democrat canvassers


About the only perk I get as Hon. President of my local Liberal Democrat Party is to give a little talk at each AGM.

Here's the  gist of last week's:

1.  We have absolutely nothing to apologise for in going into coalition with the Tories.   No principles have been abandoned: rather the reverse. As a party we are passionate advocates of proportional representation, which means that balanced (not "hung") parliaments are both likely and logical, and coalitions inevitable.  Natural justice demands that the party with the largest number of seats should make the first offer to the minority part(ies) and in 2010 it was the Tories.  As Simon Hughes put it: "You have to play the cards the electorate deals," and that is what we did.  In any case, the alternative of a partnership with Labour was not on:
a) because, although Gordon Brown was keen, Labour's tribal big beasts, with Jack Straw and David Blunkett to the fore, were dead against, like boys in the playground taking their bat home if the game couldn't be played according to their rules, and;
b) with the support of the nationalists and the one Green a "rainbow coalition" with Labour would have and a majority of only one.  On average three MPs die each year so such a coalition government would have been fighting for its survival at every by-election.

 It also follows that we believe a coalition legitimised by a majority of the voters provides a better government than a single party supported by only a minority.  Even Polly Toynbee, no longer our friend, has admitted  (Guardian 07/10/14) that without us the Tories would probably have:

       1.    Scrapped the Human Rights Act.
       2.    Further emasculated the BBC.
       3.    Held a fire sale of the NHS.
       4.    Maybe “Brexit” from the EU.
       5.    Made state funded schools available for private profit.     

2.  The gibe that Liberal Democrat leaders will "sacrifice any principle for a  whiff of power and a ministerial car" is risible.   No one with that as their priority would dream of joining the Liberal Democrats.  Ours is the hard road.  Ming Campbell fought five times before he won his seat.  Nick Clegg was virtually offered a safe Tory seat by Leon Brittan, his boss when working for the European Commission, but turned it down because he, Nick, was first and foremost a Liberal.  Those whose first  priority is the trappings of power join Labour or the Tories.      

3.  So far I've counted 23 progressive achievements which would probably not have happened if Liberal Democrats hadn't been in government.  They are:
  1. The fixed-term parliament.
  2. The triple lock on pensions
  3. Raising of the income tax threshold.
  4. Pupil premium.
  5. Shared parental leave.
  6. Increased provision for child-care costs.
  7. Detention of immigrant children stopped.
  8. Free school meals for infants in first three years.
  9. Loans to part-time students.
  10. Protection of ECHR retained.
  11. ID cards blocked.
  12. Civil liberties defended against Theresa May’s advances.
  13. Target for 0.7% of GDP to aid retained.
  14. Green investment bank.
  15. More powers for Welsh Assembly.
  16. Proposals for increase in minimum wage.
  17. Employers’ NICs for under- 21s discontinued.
  18. Vince Cable’s call for limits to executive bonuses.
  19. Equal treatment for mental health patients.
  20. Tied pub landlords freed to buy from any supplier (per Greg Mulholland)
  21. £200m to encourage and make roads safer for cyclists. 
  22. £10m to promote electoral registration of students (rather than pensioners on the Costa del Sol).
  23. Unlike our government partners, we were and are unequivocally "the party of IN" on Europe, with the only leader prepared to take on Nigel Farage "head to head."
Some of these are more important that others.  In my view the achievement of a fixed term parliament is the most important constitutional advance since the extension of the suffrage  to women on the same terms as men in 1928, and £200m for making roads safer for cyclists is small beer compared with and extra £15bn for motorists, but it's better than nothing.

 It's not been the government we'd have preferred, but we're proudly confident of what we have achieved with our mere 57 MPs, compared with the Tories' 300+.

So off we go, to face the electorate "with courage high and hearts aglow."


Thursday, 4 December 2014

Osborne the closet Keynesian


So the country has money to burn and the government is going to splash out with an extra £2bn for the NHS,  for road improvement schemes including a tunnel under Stone Henge, for flood defences, railways in the north  and Lord only knows what else.  All this is possible, in Chancellor George Osborne's very words, because the economy is now "on course for prosperity."

But, just a minute, the economy was growing, when he took over the reigns from Labour and 2010.  And not only that, but the deficit was then falling as well: it's rising again now.  Had Osborne introduced this public expenditure stimulation at the time, the recovery could well have continued, real rather than zero-hour-contract jobs created, taxation revenues increased through rising prosperity and, most importantly, additional misery for the weakest in our society avoided.

Instead.Osborne put the  recovery he inherited  into reverse by cutting government expenditure and raising taxes (VAT from 15% to 20%) and we've endured four years of stagnation until a low-wage quasi-recovery fuelled by increasing private debt and yet another housing boom has finally emerged.

In fact Osborne has abused the the classic Keynesian mechanisms to achieve his political ends.    In 2010 he deliberately used the existence of a deficit at an allegedly dangerous level (it wasn't) to achieve the Tory goal of shrinking the state*.  Now he is using Keynesian expansion in order to win next May's election.

Integrity and devotion to the welfare of the nation are not descriptions which readily.spring to mind.

* For further and better particulars on this see http://mainlymacro.blogspot.co.uk/2014/11/destroying-state-is-no-accident.html

Monday, 1 December 2014

Privatisation of East Coast Mainline service: why no outrage?


Our  East Coast Main Line Railway is somewhat misnamed since most of it doesn't go anywhere near the coast.  Certainly the bit I use, Leeds to London King's Cross and back, doesn't.

However, its geographical position is not the cause of the present outrage, or, rather, the lack of any.  Like the rest of dear old British Rail it was taken out of public ownership and privatised by the Tories in 1993.  Since then two private companies, GNER and National Express, have had to pull out because they couldn't make enough profit, and the running of trains on the route had to be taken back into public ownership  in 2009.

Since then the trains have been operated by Directly Owned Railways (DOR), a public body responsible to the Department of Transport.  They seem from my experience, albeit I'm an infrequent user, to have made a thoroughly  good job of it.  Trains to and  from Leeds are every half  hour rather than the hourly service the private companies offered, they are punctual, and the fares, if you book early enough, are very reasonable.

And they also make a profit, which is handed over to the exchequer.

So on the splendid maxim of "if it  ain't broke, don't fix it"  why not leave things as they are?

But no, our ideologically fixated Tory government has insisted that it be re-privatised, and last week a consortium of two private companies, Sir Richard Branson's "Virgin" and Brian Souter's "Stagecoach," were  awarded the franchise.  DOR was not even allowed to enter a bid  - so much for fairness and the level playing-fields of Eton.

There was a time when the Tories accused Labour of being soaked in ideology whilst they, the Tories were pragmatic.  Now it seems they are tarred with the same brush, with a complete lack of evidence to support their case.

What I cannot understand is why this outrageous decision has passed almost unnoticed.  We seem to have lost our will to react.

For further and better particulars of the failure of Mrs Thatcher's supposed  triumph of privatisation read James Meek's excellent book: "Private Island: why Britain now belongs to someone else," - but only if you have no problem with high blood-pressure.  Most bizarrely, many of the utilities privatised by Mrs Thatcher to encourage eider share ownership have been renationalised, but not by the British government.  Our electricity supplies are now largely owned by EDF, an arm of the French government, and, back to railways,  Arriva UK Trains is actually owned by the German government's Deutches Bahn.  You couldn't make it up. a chunk of our railways is now owned

Saturday, 29 November 2014

Plebgate et al: what is it about bikes?


When last Tuesday I went to the church in Leeds where we run classes of English for Speakers of other Languages (ESOL) for immigrants and asylum seekers, there was a bicycle chained to the rail by the South Door.  I thought little of it: it certainly didn't impede access.  But half an hour later the caretaker interrupted my class to demand if it belonged to anyone and a young Somali chap said it was his (given later events in the week I might have thought  "pleaded guilty.")  He was asked to move it and did so without any fuss, though for all I know he may have muttered a few Somalian imprecations under his breath.

Then last night I rode my own bicycle to the little  amateur theatre where the drama group to which I belong operates.  I was there to help with the bar rather than to watch the performance, so arrived early.  Normally I chain my bike to a drainpipe outside, but as there was a slight drizzle I took it inside and parked it in the lobby.  No-one complained, even though, with my glasses covered in rain-drops I couldn't see very clearly and, in manoeuvring the bike accidentally knocked the star from the top of the Christmas tree.  Indeed, people seemed to think this rather a joke, and the house manager for the evening,  a gifted young cartoonist, quite cheerfully climbed onto a chair to put it back again amid general merriment.

However, shortly before the performance began our president asked me to move the bike.  I explained that I'd brought it inside in order to avoid a wet saddle, which I believe can lead to piles, and was invited to store it back stage. This involved getting it through a door way with a heavy door, then wriggling it round a corner and down some steps.  It was difficult enough with the help of the gifted young cartoonist (who felt that the bike by the Christmas tree enhanced our lobby with the air of a John Lewis advert) and even more difficult getting it out again at the end of the performance when, after remaining behind fora bit of washing up, there was no one around to help.  However both operations were carried out without any ill feeling or bad language.

Not so poor Andrew Mitchell, ex-Tory minister, who some two years ago was prevented by a policeman from riding his bike through the main gate of Downing Street, which he claims he normally did, and ordered by a policeman to wheel it through a side gate.  Strangely enough it was not that in the resulting angry exchanges Mitchell used some very rude adjectives beginning with f. . .  that resulted in a court action, but that he allegedly called the policemen "a pleb."

A judge has ruled that he probably did, and he's probably right, since, although "pleb" is not used as a term of abuse by most of us, I'm told it is so used in some of our posher public (ie private and fee-paying) schools, and Mitchell went to Rugby, the one made famous by "Tom Brown's Schooldays."

In coming to his decision the judge claimed that the offended policeman" "would not have had the wit [or the] imagination. . . ." to invent the disputed term.  Frankly I'd find that rather more insulting than being called a pleb.

As another Tory MP has pointed out, had Mitchell left Downing Street in the official chauffeur-driven car to which he is entitled none of this would have happened, and he wouldn't be saddled with the loss of his reputation (he was quite a well respected  and effective  Secretary of State for Overseas Development) or saddled with a ludicrous £1.5 million legal bill.

Just what is it that make people "clothed in a little brief authority" want to take it out on cyclists? 

Wednesday, 26 November 2014

Ukip euphoria


Those of us who have lived through the ecstasies of Torrington and Orpington can perhaps be forgiven an indulgent smile at UK's euphoria over its recent by-election successes.

In 1958 the Liberal Party achieved its first by-election success of the post war period when Mark Bonham Carter snatched Torrington form the Tories with 38% of the vote.  However this first of many "Liberal Revivals was short lived.  In the general election of the following year we were back to 5.9% of the vote and just six MPs,who could proverbially hold their party meetings in a telephone box.

Four years later, in 1962, Eric Lubbock thrashed the Tories with no less than 52.9% of the vote and gained Orpington. This did prompt the then prime minister Harold Macmillan  to sack a third of his cabinet in the "night of the long knives," but in the following general election, 1964, although we polled over 3 million votes, we still had only nine MPs, needing, perhaps, a Tardis rather than a phone box for their meetings.

When the Gang of Four formed the Social Democratic Party in 1981 our Alliance briefly led the "Old Parties" in the opinion polls, but in the next election,1983, although together our total vote nearly beat Labour's, we still had only 23 MPs compared to Labour's 209 and the Tories 392.  The "mould" was hardly cracked, never mind broken.

So from  the first green shoots of revival in 1958 to actually  forming a very minor part of the coalition government (57 Liberal Democrat MPs to 305 Conservatives) in 2010 took just over half a century.

Has UK the stamina for the struggle?

Actually, if they can keep it up  it may not take them quite so long.  Way back in the 1950s the two dominant largest parties between them took 96.1% of the vote.  Today things are much more fluid with that same two parties' share falling to only 65.1% of the vote in 2010 on, by coincidence, a  turnout of only 61.5%.  On the other hand, there are more mouths eagerly open to receive the protest vote: Nationalists, Greens, and perhaps the odd "save the NHS" independent.

My belief is that UKIP may poll well in the next election whilst the euphoria lasts, but is unlikely to win more than a handful if seats, if that, and them will fade away.  Its policies now seem to be reduced to two: withdrawal from Europe and halting immigration, maybe even sending some back  The arguments in favour of both are fallacious. and so, I fervently hope, unable to withstand the passage of time and serious scrutiny.



For lots of home truths about immigrants from the EU please see this very well informed post on a blog by Jon Danzig

 http://neweuropeans.net/article/527/home-truths-home-secretary


Monday, 24 November 2014

Flags and White Vans


Like it or not it is a fact that for many our two national flags have become symbols of some of the less attractive features of our society. The Union Jack tends to be associated with the British National Party (BNP) and other extremists on the xenophobic far-right, and the St George's flag with football hooligans.

Whereas the French and US flags have always been proud symbols of their countries, historically the British, at home at any rate, have not been great flag wavers.   Even during the war I can't remember much flag flying.  I think the Union Jack was supposed to be flown on public buildings on the King's birthday: maybe this was abandoned for fear of identifying useful targets for enemy aircraft.  And I can recall the flag being flown at my primary school only on one Empire Day (24th May: I know that because it was my Auntie Ada's birthday, a fact of which she was very proud), sometime in the late 1940s.  And the St George's flag was rarely flown at all until the churches started to display it at Easter and on "red letter" Saints' Days.

And unfairly or not, it is a fact that drivers of white vans are often regarded as doing so with less consideration  for the welfare of other users than the Highway Code might demand, and may well indulge in businesses in the "informal|" economy in which the payment of taxes is minimised, though perhaps with not quite the ruthless efficiency of some of the major international corporations.

So I have some sympathy for  Emily Thornberry and her tweet from the Rochester and Strood by-election campaign, and feel the Ed Miliband has grossly over-reacted in forcing her to resign as Shadow Attorney General.  Politics will never gain the respect it deserves if political  leaders jump through every hoop held up for them by the tabloids.


Poor Ed Miliband.  he and his party are being subjected to the same ridicule as scuppers Labour and  Neil Kinnock in 1992.  This is not grown up politics: we should be able to do better.

 Of course, it may well be that the owner of  the house with two St George's flags draped on its walls and a white van parked outside is an enthusiastic member of the Church of England whose business is all set to grow into the Marks and Spencer's of the 2060s.