Is “reforming the EU from within” realistic?

Today David Cameron announced – to the surprise of no one – that the EU Referendum will be held on 23rd June. He further stunned the world by announcing he would be campaigning to remain in the EU. This followed months of painstaking negotiations over some trifling ‘reforms’ he had cobbled together. This was concluded last night after a two day summit of EU leaders. The result seems to have been that Cameron can go away and say he has secured a ‘special status’ for the UK, while all the other EU leaders laugh behind his back and go home to tell their voters that nothing of import has changed.

So that’s where we are now. No one who is campaigning to remain – including Labour, the Green Party and the Lib Dems – actually say they are happy with the current set-up of the EU. ‘Reform from within’ seems to be the mantra. But given the tortuous mess that were David Cameron’s attempts to achieve his “thin gruel” reforms (as Jacob Rees-Mogg called them), what possible hope do the likes of Labour have for achieving a single reform they want going forward? They don’t have a cat in hell’s chance.

If we vote to remain on 23rd June, the EU will consider the matter settled and push on in the same direction they have been travelling for the last 40 years – towards greater and greater integration. I don’t know how anyone could vote for that.

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Chronic Kraftwerk tribute act blows starting whistle on boring battle of spending plans.

Meh. Labour and the Tories launched their election campaigns today, marking the start of what promises to be the longest – and on today’s evidence – the most boring campaigns in living memory. Oh and Nick Clegg said something about why coalitions are so great so don’t forget the Lib Dems. Yawn. Five members of the Empire launched a laughably awful ‘dossier’ on Labour’s spending plans. Here they are:

The dossier is about ‘Labour’s unfunded spending plans’, which is literally what every single governing party does with their opponents plans at every election. I was watching a discussion on Channel 4 News tonight between world’s most boring drone Matthew Hancock and Labour’s Chris Leslie, and incredibly, Labour seemed to be rattled by this piss weak attack, so to compensate, Ed Balls made it clear that Labour is definitely not on the side of the people with most reason to despise the Coalition. “Vote Labour! – You’ll get nothing from us.” Not the best election slogan.

I want to know what big ideas the parties have for the country, and what specific policies they have for the country that will improve all our lives and address some of the very real problems we face, but instead we’re just getting sums that politicians have plucked out of their arses. “We’ll spend an extra 50p on the NHS, but before we can do that, we must tax an extra 50p from the banks”, or “We’re going to take £27bn out of the welfare budget, so we can cut taxes for people who probably don’t need them cutting. Oh and the deficit”. “Unfunded spending commitments!” “Black holes!” “How are you going to pay for it!” Somebody make it stop.

And it’s only day 1… roll on May!

Which Lib Dem Ministers are most likely to lose in May?

Many people think the Lib Dems face being wiped out in May as voters punish them for their part in the Coalition since 2010. After looking at the current odds for the 59 Scottish seats in this recent post, I thought I’d have a look at the odds for the 16 Lib Dem MPs who are currently Government Ministers. This table display the current odds from Ladbrokes as of 4th January, and the probabilities of victory these odds imply.Screenshot 2015-01-04 at 11.25.54 AM

Of the 16, 8 seem pretty safe at the moment, including Nick Clegg, Vince Cable, and Pensions Minister Steve Webb. 4 are favourites to retain their seats, but have a less than 75% chance of doing so. These are Energy Secretary Ed Davey and DEFRA Minister Dan Rogerson, who are facing challenges from the Tories, and Simon Hughes (Justice) and Stephen Williams (Local Government) who are in relatively close fights with Labour.

That leaves 4 Lib Dem Ministers who are highlighted red in the table above. They have a less than 50% chance of winning in May. Three of them are women. Lorely Burt (Whip) looks likely to lose to the Tories in Solihull. Labour look likely to take Lynne Featherstone’s (Home Office) Hornsey and Wood Green seat, and Jo Swinson (Equalities) faces the fight of her life against the SNP in East Dunbartonshire. Finally, and leaving the best till last, it’s looking increasingly likely that Danny Alexander will lose his Inverness seat to the SNP. Ladbrokes estimate he has only a 33% chance of victory at present. If any Lib Dem deserves to lose, it’s him. Fingers crossed.

If the bookies are right, how many seats would each party win in Scotland in May?

There have been a lot of stories recently about opinion polls north of the border showing a huge surge in SNP support at the expense of Labour. This article in the Guardian last week is a good example, which predicted that the SNP could win up to 45 of the 59 Scottish seats next May. With this in mind, I thought it would be interesting to see whether the bookies (and their punters) agreed with these dire (for Labour) predictions. Ladbrokes currently have odds up for every Westminster contest, and I’ve reproduced the odds for each Scottish seat below (click on each image to enlarge). I’ve only displayed the odds for the parties Ladbrokes currently have 1st and second in each race. Odds are correct as of 31st December. As you can see, the current odds don’t reflect the polls.

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Based on the bookies’ current odds, in this next table I’ve indicated what this looks like in terms of number of seats won.

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The headline numbers don’t look too bad for Labour. They have 40 seats at the moment and remain favourites to win in 33 of those in May. They current odds suggest they will lose just 7 seats to the SNP, who in turn will all but wipe out the Lib Dems, leaving them with just 3 seats, while the Tories retain their only Scottish seat. In a further 3 seats, Ladbrokes have the SNP tied with Labour.

A closer look at the odds though should give Labour less cause for complacency however. I have called a result ‘likely’ if the current odds are 1/2 or shorter. This is the case for all of the SNPs current 6 seats, but also 7 more (including interestingly, Danny Alexander’s). For Labour however, this is true of only 21 of the 40 seats they currently hold. The other 12 in which they are favourites are still very much up for grabs according to Ladbrokes, and they have all become Labour/SNP marginals. The Lib Dems meanwhile can only be confident of winning 2 of their 11 Scottish seats.

The third line on the number of seats table shows those seats Ladbrokes feel are ‘slam dunks’. I’ve called a seat a slam dunk if the current odds are 1/10 or shorter. There are only 7 Scottish seats in this category, 6 for the SNP and one for the Lib Dems. Labour currently have no slam dunk seats, which must be a cause for concern. It will mean they will have to spend a lot more money in Scotland on campaigning than they are used to.

Based on the above then, here are some prediction bands for the number of seats each party could win:

Labour: 21-36

SNP: 19-32

Lib Dem: 1-3

Tory: 1-2

These are only the current odds of course, and they will undoubtedly change before election day. So will the polls though. The SNP are doing fantastically well in the polls are the moment, but surely they will narrow somewhat between now and May? It seems fairly set in stone now that the Lib Dems will be almost wiped out in Scotland in May, while for Labour, it could still go either way.

UPDATE: On reflection, I think I’ve been a bit harsh on the Lib Dems here. They have a chance of winning up to 7 seats in May on current odds, so they do have a chance of avoiding a wipeout.

Lib Dems announce ‘big’ funding increase for NHS

The Lib Dem Conference started this weekend, and the first big announcement was that they would increase funding for the NHS by £1 billion. When I saw this earlier today, it brought to mind the scene from Austin Powers where Dr Evil doesn’t realise $1 million is no longer a particularly big number.

In the context of the NHS’s £110 billion budget, and extra £1 billion is pretty insignificant, as was Labour’s announcement of an extra £2.5 billion a couple of week’s ago. The announcement today seems to have got the response it deserves – a collective shrug.

Another reason Labour don’t deserve your vote

From The Guardian:

“In a speech intended to address Tory claims that Labour cannot be trusted with the economy, the Labour leader will stress that balancing the books will be a key element of the party’s plans for the five years after 2015.”

The article goes on to quote extracts of Miliband’s speech which contains this passage:

“You and I know we won’t have the money. For all of the cuts, for all of the pain under this government, Britain still has a deficit to deal with and a debt to pay down. That’s why our programme starts with a binding commitment to balancing the books in the next government.”

You might ‘know’ that Ed, but I and an increasing number of people know that is bullshit. There is always as much money as is needed. That’s not to say Labour should go mad, but the money will never run out. It’s stuff – people, physical resources and our ability to innovate and create new technologies – which sets the bounds of the possible, never money.

Britain has a deficit, but the things it has to ‘deal with’ are its unemployment problem, its low wage problem, its housing problem. Miliband’s focus on things that are irrelevant, but which undermine attempts to deal with things are relevant, doesn’t inspire a lot of confidence in what a Labour Government under his leadership could achieve.

The Tories deserve to lose next year and the Lib Dems deserve to be wiped out, it’s just that Labour don’t deserve to win. Expect low turnout records to be broken again next May!

IPPR Report – Another Case of Garbage In, Garbage Out

Labour leader Ed Miliband launched a heavily-trailed new report this morning produced by Labour’s favourite thinktank the Institute of Public Policy Research (IPPR) called “The Condition of Britain”. It has been said that it’s a report that will “define social democracy in the coming decade” and that it is “a Magna Carta for social democracy in the 21st century“. I think some people are too easily impressed.

The report (all 280 pages of it), contains 28 recommendations, which Labour seems to be largely adopting as party policy. The recommendation that caught the headlines was the one recommending scrapping benefits for 18-21 year olds, and replacing them with a means-tested “youth allowance”. This is so similar to Tory Party policy that George Osborne’s bitch Matt Hancock accused Labour of stealing their policy. Reading through the other recommendations though, it’s striking just how unambitious they are. Nothing is a great departure from the current direction of travel, and any of them could be adopted as Tory or Lib Dem policies without any eyebrows being raised.

Why is this? The IPPR label themselves as “centre-left”, and Labour should be looking for some eye-catching policies to differentiate themselves from the opposition. I think the problem is one of GIGO, or “garbage in, garbage out”. The underlying assumption before the report was even written was that austerity is a given, there is no money and every new commitment must be matched by a cut or tax hike elsewhere. So they paint themselves into a box and then say to themselves “within these constraints we have arbitrarily imposed on ourselves, what can we suggest to be different from the other lot? Answer: not very much it seems!

It seems to me that if they actually want to make a difference, the starting point needs to be “what would we like to do in an ideal world”, and work back from there. So in an ideal world, we might like to build everyone a mansion. Unfortunately, there is not enough land, building materials or labour to achieve that, but there may be enough of those things to ensure eveyone can live in decent accomodation at an affordable price. So what’s the IPPR’s recommendation on housing?

£Councils should be able to retain and reinvest a share of any savings achieved by local action to reduce housing benefit spending in their area. In addition to their existing powers, they should also be given greater freedom to borrow responsibly against their housing assets and income.”

We have quite a convoluted suggestion where somehow it is worked out a council has “saved” on housing benefit through their actions, and they can then use some of these savings to build houses, or they can borrow money to do the same. I’m not sure we should be encouraging councils to borrow more. They can go bust, and won’t be able to borrow at as low rates as central government (who can always borrow at 0% should they wish). Implicit is the IPPR’s recommendation is that there is enough land, labour and materials to build enough houses. If that’s so, wouldn’t a better suggestion be that central government just gives the money to build housing directly to local councils? Why over-complicate things?

Similar criticisms can be levelled at other recommendations. If you start with garbage assertions about the inevitability of austerity, the solutions you come up with are bound to be severely limited. It just makes Labour look a bit, well pointless.

Some policy ideas for Party Conference season

It’s Party Conference season again, kicking off with the Lib Dems this weekend. While the main parties will doubtless be floating radical new policies like voluntary codes for zero hour contracts, voluntary codes for private sector landlords or how best to ‘nudge’ people to behave in ways not in their long term interest (mainly borrowing more money), I thought I’d float just 3 alternative policies I’d like to see introduced.

1. No surprise to regular readers, number 1 is a job guarantee. While David Cameron and George Osborne are high-fiving about unemployment falling by 24,000, long-term unemployment and youth unemployment both remain high. Even if we now have a strong recovery, hundreds of thousands are going to be left behind, as employers are unwilling to hire people without recent job experience. To fix this, the government should create jobs to act as a transition from unemployment to regular paid employment. These jobs should be available to anyone struggling to find a job, but who is willing and able to work. This would also render the whole zero hours debate moot.

2. Housing affordability and availability is a real issue for millions. Nasty policies like the bedroom tax don’t help, and the Government’s enhanced right to buy is exacerbating the problem. We need 250,000 new dwellings per year to meet demand. At the moment we are building less than half that number. To address this, central government should award grants to local authorities of £200 per resident, for the building of social housing. These homes should be required to be built to passivhaus standard. Building regs should also be amended to prevent some of the worst residential building we see today.

3. A debt jubilee. Current policy seems to be to ‘recover’ the economy based on pumping up private debt levels once again. This is clearly unsustainable. Debt levels are already too high, and much of it probably can’t be paid back. We should accept this and hit the reset button. Each household could be given a one off payment of £10,000, which must be used to pay off debt, be it mortgage debt or unsecured debt. Those who do not have any debt get to keep the £10k to spend on whatever.

Pie in the sky? In the current climate yes, obviously these things won’t be implemented, but in terms of the ideas being practical, affordable and beneficial for the majority? Yes, I think these policies are all those things. Got any of your own? Leave your ideas in the comments.

 

A Look Back at some of Nick Clegg’s Economic Clangers

In this post I will be making fun of Nick Clegg for his gross misunderstanding of the way the economy works, but it contains a very serious point.

The Lib Dems, through their coalition with the Conservatives, are facilitating the systematic trashing of the UK economy, including many of the things we had to be proud of about our country like the NHS. This is being done, we are told, because the problems in our economy are so serious, if the Government did not take the action it is taking, the results would be catastrophic.

There are many reasons why this story is false (which I have tried to outline elsewhere), but Nick Clegg seems to have swallowed it whole. When you listen to him talk about the economy though, it quickly becomes clear that he is very confused. He has made a lot of statements that are just flat out wrong, and in another time, the general response to these statements would be ridicule. Clegg’s lack of understanding is a danger to the well-being of the public at large, because as the Lib Dems blunder on in support of the Coalition, more and more long term damage is being done.

Here then are 4 of Clegg’s greatest hits from the last year.

1. “…we must never forget that tackling the deficit is a means to an end and the end we all seek is growth. Our goal isn’t balancing the books for the sake of it, but doing so to meet our real aim: jobs; businesses investing; entrepreneurs getting off the ground.” – Speech on the economy, 8th May 2012

The clanger here is the unspoken assumption that balanced budgets are some sort of panacea – that only then can we get back on our feet. But balanced budgets are not an appropriate economic aim. Find out why here.

2. Because of our action on the deficit we have kept the markets at bay while our neighbours have been picked off one by one. We’ve kept interest rates at record lows. Because we have stuck to our plan, the UK – the country which had the biggest budget deficit in any advanced economy, bigger than Greece, Portugal, Spain – will, by the end of this Parliament, have a deficit lower than the G7 average.” – Speech to the IoD, 25th April 2012

This is a clanger for a couple of reasons. First, he is comparing the UK’s fortunes to those of the Eurozone countries. This is stupid because the UK has its own currency, while the Eurozone countries gave up theirs to join the Euro. This means the two just can’t be compared. Find out why here. The second reason is that he is claiming the UK’s low interest rates can be attributed to the action taken by the Government. This is highly dubious. Find out why here.

3. I think we have a moral duty to the next generation, to our children and our grandchildren, to wipe the slate clean for them. We set out a plan, it lasts for about six or seven years, to wipe the slate clean.” At same event as No. 1 above, 8 May 2012

This is a pretty unforgivable clanger. Clegg is confusing the deficit with the debt here. The Government’s plan is to shrink the deficit, but the overall debt pile will increase year on year. In no sense can this be called wiping the slate clean. The children and grandchildren stuff is bullshit too as I outline here.

4. “So to those who ask, incredulously, what we – the Liberal Democrats – are doing cutting public spending, I simply say this: Who suffers most when governments go bust? When they can no longer pay salaries, benefits and pensions? Not the bankers and the hedge fund managers, that’s for sure. No, it would be the poor, the old, the infirm; those with the least to fall back on.”  Lib Dem Conference speech, 25th September, 2012

Here, Nick Clegg is talking about the possibility of the UK government actually going bankrupt. This is incredibly stupid. He should have been laughed out of the conference for saying this. Here’s a good take-down of Clegg’s conference speech and why it was so idiotic.

You would think after two and a half years in government, Clegg would have picked up some understanding of the economy, but the above suggests he remains dangerously ignorant. I guess Upton Sinclair was right: “It is difficult to get a man to understand something, when his salary depends upon his not understanding it.” This sums up  Clegg and the Lib Dems pretty well. Finally given the chance to be part of government, their political survival now depends upon going along with the very worst policies the Tory Party have to offer, in the vain hope that it will all turn out for the best before 2015. That is looking more and more delusional by the day. Happy New Year everyone!