Skipper

It's been a long drawn out yawn to be honest but there are just a few flickers of interest to be discerned at present. The commentatariat seems to have streotyped the Milibands as: Ed, leftish and Brownite; David, rightish and Blairite. Apart from Ed's popularity with the unions I can't really see there is a huge gap between the two in terms of values and policy positions. In his Guardian interview piece David seemed to agree. What has been interesting though is the intervention of the old guard, eager to revive old battles and settle old scores.

Mandelson, has attacked Ed as Old Labour because he thinks he'll take the party backwards. I suspect he's just trying to stop the person Gordon would want to see win:

"I think that Ed is wrong when he describes New Labour as a comfort zone," Mandelson told the Times at the Edinburgh book festival. "I think that if he or anyone else wants to create a pre-New Labour future for the party then he and the rest of them will quickly find that that is an electoral cul-de-sac."

Ed was also capable of being Gordon's bootboy from time to time since 1997. Rising to the challenge Neil Kinnock has weighed in, praising Ed and dismissing Mandelson as an 'atavist'... 'indulging a personalised factioinalism' 'He should stop it now'. I suspect Neil is smarting from Peter's comprehensive put down of the Welshman in his memoirs in which he describes Neil as unable to understand the issues, grasp detail or even communicate effectively to voters. Neil is notoriously sensitive to crticism that he's intellectually not up to snuff.

The publication of Blair's memoirs tomorrow (my copy on way Amazon tells me) will also revive old animosities. Tony is supporting David but I'm sure David will have the nous to distance himself from someone who, despite his astonishing talents and three election victories, is now a fearful electoral liability to any person or party. Meanwhile Polly Toynbee does not miss the chance to put the boot into those two New Labour titans who so disappointed her:

Blair and Mandelson, now trying to meddle with the future, have had no new ideas for a decade: they would do well to go gracefully into their platinum-plated political retirement. If David Miliband were wise he would pick up the phone and blast Mandelson for his intervention. He would seize the next mic and chop him up in public. Spilling anti-Ed poison to the Times, which paid Mandelson more than £350,000 for his memoirs, is about as helpful to the elder brother's campaign as a gushing endorsement from Brown would be to Ed's chances. For his own sake, David should also warn Blair to keep his tanks off the lawn. At the same time he should publicly rebuke him for the appalling timing of his book this week as an act of selfish disregard for the Labour party, to whom he owes everything

A Telegraph columnist recently described the situation we are in as a 'phoney war'. In the sense that we're in the 'lull before the storm', this has to be a perceptive point but my feeling is that the real 'political'storm will start once the various gambles taken by the Coalition begin to go down the plug hole. In politics, it seems to me, you take risks all the time but it's a bit like cricket; a batsman reverse sweeping the ball might get away with such an unorthodox shot once, twice or even three times but we know that sooner or later he will be undone. So what are the gambles which might unravel? I can see four obvious ones.

1. US econmy might enter a 'double dip' recession. Various signs suggest this will happen in the near future.

2. UK encomony will follow suit. In a Guardian article Nobel Prize winner Paul Krugman questions whether thre 'Austerians' have got it right. If they have not and we sink back into recession then the Darling strategy of cutting the deficit by half over the next four years rather than the whole of it, will come to be seen as prescient and the route we should have followed. Polls show the Coalition's strategy has high ratings right now but watch them tumble once the real cuts bite. With a new leader soon to be installed Labour will find this message becomes highly resonant.

3. The Liberal Democrats will cease to agree. We all know Lib-Dems furious at where Clegg has led them but so far it has not broken surface unity. Some think the 'glue' of power will hold them together but what if the economy has turned south and their ratings plunge even more the same way into singkle figures? The traditioonally anti-Tory wing of the party are bound to think again in such circumstances.

4. The AV referendum fails to come off. I note that Clegg has suggested the coalition will stay strong even if this fails. Has he already written it off? Seems to me it was to be the principal pay-off for the Lib-Dems joining the coalition so if, as seems likely, enabling legislation is defeated by a combination of rightwing Tories and opposed Labour MPs, then will Clegg's legion in the legislature remain loyal as thousdand more desert in the country?

It has also to be noted that the Coalition has lost one huge gamble already. They claimed their Emergency Budget of 22nd June was 'progressive'. In its wake Clegg said 'This time the richest are paying ther most...as a proportion of their inome'. It would be fair and seen to be so. The Institute of Fiscal Studies issued a report on Wednesday which flatly contradicted this view, identifying earlier measures as progressive and Osborne's add-ons as 'generally regressive, hitting the less well-off hardest.

So far, Clegg and Cameron have governed with the roar of a novel success in their ears. Commentators across the spectrum have praised Cameron's confident hold on the tiller and Clegg's (rather less) credible attempts to appear prime ministerial but what happens once(sorry about this non cricket followers) that swish outside off stump delivers and edge to the slips?

It's always interesting to see how 'we' are doing in relation to other countries. Newsweek has just compiled a study of countries which are the best to live in according to five indeces: health, education, quality of life, compoetitiveness and political environment. Top comes Finland, then 'the usual suspects' Switzerland, Sweden, with Norway ihn 6th poisition, though, my favourite Denmark comes as low as 10th. Canada is 7th and Japan 9th with USA on 11th.

The UK fared pretty well, I thought, to be 14th, coming 8th on education(99% literacy and 16 yrs average schooling); 17th in health; 19th Quality life(healthy life expectancy, 72); 4th on economic conmpetitiveness(hard to believe that one); and 33rd on Political environment(can't believe that USA should be as high as 14th on this index).

Funny how it doesn't necessarily feel that we should be that high up the list, but perhaps salutory that we remind ourselves wwe're not that badly off.

My picture shows fat-cat Sir Philip Green along with two very plumpish ones who are clearly his mates. The Tories had great fun slagging off the likes of Labour's Elliot Morley during the expenses scandal and Cameron adroitly seized the moral high ground on the issue by appearing to be mercilessly hard on offenders in his own ranks. However, just like New Labour, after 1997, when Bernie Ecclestone simultaneously made his £1m donation and self interested pitch for F1 exclusion from a ban on tobacco advertising, voters' nostrils can be tickled by the acrid smell of sleaze from even the most saintly of political parties. And so it has proved with two appointments in the last few days.

The first is billionaire David Rowland, appointed as Treasurer to the Conservatives way back in June. He has now turned down the offer, ostensibly due 'to the expansion of his global business interests' but the real reason is the unease expressed over his status as a tax exile. People who earn huge sums of money and pay clever accountants to remove their tax obligations are not looked upon neutrally any more. After all, every recipient of the minimim wage has to pay their fair share into the state kitty to pay for common public services.

Even more reprehensible is the case of Sir Philip Green, the astonishingly successful Arcadia entrepreneur, who seems to think he should be excluded from such obligations even though he has been appointed appointed a government adviser on efficiency:

Green banked the biggest pay cheque in corporate history in 2005 when his Arcadia fashion business, which owns Topshop, paid a £1.2bn dividend. The record-breaking payment was paid to his wife, Tina, who lives in Monaco and is the direct owner of Arcadia. As a result, no UK income tax was due.

That's a whole lot of money to take outside the hand of the HMRC and merely illustrates the arrogance of the man: making his wife the technical owner of his business is a s cynical sleight of hand whereby the community from which he so richly benefits is denied its proper due. I heard him on Today, spluttering that he already pays several hundred million pounds in tax. Not the point, Sir Phil. I earn from my work and a small amount from my book royalties. I have to pay tax on both sources; just because I pay for one does not exempt me from paying the other.

Clearly Green did not like being interrogated on this topic; he'd better get used to it as it already has status of a prominent stigma attached to the Coalition. Green's ability to run retail businesses is clearly phenomenal and his potential advice to government useful but I suspect his longevity in post will be no longer than the likes of Lord Digby Jones and the other 'goats' appointed by Gordon Brown in 2007.

Labels: political funding, sleaze, tories

'The middle ground' sounds kind of appealing, safe maybe. So perhaps it's a good thing 'extremist' ideas are shunned in British political culture and that ideas like communism and fascism have never really gained much purchase. So it's kind of good also that all three mainstream parties in UK aim to dominate the 'middle ground' as this keeps us safe and secure from Hitlers or Stalins? Well maybe this is true and we should be at least a teeny bit pleased. But I read this article by Greg Philo yesterday and had two thoughts.

The first one was that it sketched out a really appropriate response to the deficit and suggewsted a course of action that was both potentially effective and socially just. Philo bases his idea on this foundation:

The total personal wealth in the UK is £9,000bn, a sum that dwarfs the national debt. It is mostly concentrated at the top, so the richest 10% own £4,000bn, with an average per household of £4m. The bottom half of our society own just 9%. The wealthiest hold the bulk of their money in property or pensions, and some in financial assets and objects such antiques and paintings.

What's his idea?

A one-off tax of just 20% on the wealth of this group would pay the national debt and dramatically reduce the deficit, since interest payments on the debt are a large part of government spending. So that is what should be done. This tax of 20%, graduated so the very richest paid the most, would raise £800bn. A major positive for this scheme is that the tax would not have to be immediately paid. The richest 10% have only to assume liability for their small part of the debt. They can pay a low rate of interest on it and if they wish make it a charge on their property when they die. It would be akin to a student loan for the rich.

Philo claims the idea is very popular with 74% endorsing it in a Yougov poll of 2000 people with the very rich being more supportive than the poor and the over 55s more so than any other age band. So here is a way of paying off the deficit, disproportionately by the very peoiple who have benefitted most from the boom which went bust. But the idea is unlikely to get any further than the bottom column of Monday's Guardian. Why? Because it is off the 'middle ground' agenda.

It will be seen as too 'radical'- yet the Coalition prides itself on being just this- and too 'maverick' because it originates from a rather leftwing academic. The result is that women, the poor and children will suffer most from what the Coalition has opted to do and which it seems the majority of the middle ground opinion seems to be endorsing. Now and again it would be nice if really radical solutions to intractable problems are genuinely examined on their merits. We might even surprise ourselves.

One thing one can say about the Coalition: its PR is good. Or maybe it's just the rightwing media being so delighted to get rid of 'New Labour'. Anyway, The Economist's verdict of the government's first 100 days could scarcely be improved upon; indeed a reforming incoming administration in 1997 would have been delighted with such an accolade.

It's obvious the journal does not regard as the enforced imminent assault upon the city walls of Labour's public expenditure an altogerther unalloyed disaster. Under Gordon Brown the UK became the Napoleonic home of dirigisme. A chart shows its spending by central government at 70% of all government spending as second only to New Zealand and above Germany (20%) and France(35%).

Labour ran a deficit even during the boom years, and stuck to its expansive three-year spending plans after recession hit. Fiscal stimulus on top of this took the deficit to a record high of 11% of GDP in 2009-10; the IMF forecast in May that it would be the biggest this year among G20 economies. Whoever won the election would sooner or later have to slash the deficit.

Osborne aims to pay off the deficit by 2014-5, less intense than some EU countries, like Ireland or Greece, but a big ask by any standards. But the journal praises the radical energy of both parties in their desire to shrink the state: 'Decentralisation has now found a home'. Education, the police and healthcare face major restructurings to make them more accountable to their local communities. Whilst aware of the dangers of precipitating the collapse of a fragile recovery, The Economist, offers a warm round of applause:

Yet with all these caveats, the new government’s vision of a looser state, and its determination to reform virtually all the public services at once, is boldly outlined. Add in the even more daring plan to cut the fiscal deficit, and Britain is in for a breathless and convulsive few years. Now and then, British elections are epochal, setting the tone for other countries, too. One such took place in 1945, when the modern welfare state got going. Another, in 1979, loosed Margaret Thatcher on a waiting world. By producing a ruling coalition that is as radical in redefining government as it is in cutting it, the election of 2010 may prove another turning point.

It's a bit hard to discern the motives for the press conference yesterday, paid for by the coalition(so it was essentially a 'political' event), in which Energy Secretary, Chris Huhne and Tory Chairperson, Baroness Warsi offered a curious double act. They both combined in an attempt to demonise the forthcoming public expenditure incisions as 'Labour cuts' when they are announced 20th October. Warsi condemned the Labour leadership candidates for not coming up with their own plans for reducing the deficit and demanded they repay their £20K ministerial severance pay.

While the latter is straightforward political attack rhetoric, the former is risibly false in that Labour has a plan- it was Alastair Darling's and has been articulated by him several times since the election: introduce cuts at a slower rate and remove the deficit by 2016-7 rather than two years earlier as the Tories-Lib Dems have decreed. Moving onto the main charge that these cuts are 'Labour cuts', the accusation is so palpably absurd it won't stick for a moment. Most voters must be aware Labour preferred and offered a more sedate route to eliminating the deficit and those with some insight into the events of the past tweo years will know a significant proportion of the deficit was the result of the necessary 'fiscal stimulus' to catalyse the failing economy, the need for which was occasioned by the US originating banking crisis 2007-8.

I had rather liked Baroness Wari hitherto as a bright new talent, but this shameless exercise in, effectively, lying to voters is deeply disappointing. To try to pin the blame on Labour for the recession when they supported the major planks of most of what Gordon Brown did as Chancellor, plumbs depths of political cynicism of which even I doubted the Tories capable. Allegra Stratton in the linked article suggests the initiative was caused by a worry that, despite being leaderless, commands a respectable 33% in the polls which is too high for the coalition's comfort.

I woke up this morning to financial experts on the today Programme reckoning the chances of a double-dip recession had reduced from one on four to about fifty-fifty.Mervyn King has predicted a much lower economic growth rate for 2011 than had been forecast; 84% of people interviewed believed we are already in recession; and house prices have continued to plummet. Moreover the US economy, we hear, is enjoying the nmost brittle of recoveries and there is talk of more fiscal stimuli being needed.

On Sky TV Barclays' head of global banking told Jeff Randal the risk had increased though added he did not think it would happen. Hmm. Labour's Alistair Darling claims his prescribed antidote of sustained borrowing combined with tough measures to remove half the defict in four years from 2011 was the way to go.

At the moment such claims are vitiated by the fact the party's leadign figures are involved in the leadership contest and the fact that voters will mostly ignore such claims on the grounds that 'they would say that wouldn't they?' But should the double dip arrive suddenly Labour will achieve credibility, Osborne will lose his along with his boss and the unhappy Cable. Then I wonder how long the coalition will have left to run...

Vince Cable gives a revealing interview today with Decca Aitkenhead in The Guardian today offers a revealing interview with Vince Cable, the Business Secretary. Before the last election Cable was the person many people thought should have been leader; he was perceptive, prescient and admired for his wit and low key, 'humble' personality. Indeed, so popular was he that his party sent him along in the early days of the campaign to be alongside trhe untested Clegg to convey a little of his own magic to the youger man.

He comes over as:

1. Admiring of Osborne as 'able'- I agree. I've been imppressed both times when I met him personally at conferences I organised and I think he's shown resilience under a lot of pressure to date.

2. Arguing his volte face over 'cuts not and not later' was the result of the early summer crisis in euroland.

3. Defensive about the coalition's achievements. He hands over a list of his department's achievements to date 'like a schoolboy handing in his homework'.

4. Equivocal on his own acceptance of the coalition arrangement:

"I think the whole situation – well, it's not comfortable. And it would be dishonest to go around like an American politician with a bright grin the whole time, because what we're managing is quite a difficult situation. So I'm just being rather transparent."

and

"I think what I'm doing is worthwhile, I think I'm making a difference, and so I'm committed to it." He pauses again, and smiles weakly. "But that doesn't mean to say it's, you know, wonderful."

All this for confirms that the lifelong anti-Tory Vince, though he is trying hard to deny his own denial, is the Lib Dem bunny least happy with his taste of power. So far it's merely not 'wonderful' and not 'comfortable' but just wait till the real pressure hits this government. As Aitkenhead speculates:

In the worst-case scenario, a year from now his party will have taken the flak for Tory cuts, been abandoned by its supporters in disgust, and lost the campaign for AV. If the coalition fails to deliver electoral reform, I wonder if Cable would feel his party's extraordinary experiment will have been worth it. "I think," he says firmly, "it would still be worth it."

D'you know, I don't really think he believes that last point- nor do I believe the bulk of his fellow MPs do either.

I've always thought it a bit churlish to criticise those who give with great generosity. Some also accuse such people of 'selfishness', of indulging their desire to 'do good in order to feel good'. Well, I say, hooray for their contribution and lets not worry too much about the motivation as they could always have kept their money for themselves. But it is possible to detect a selfish motive behind acts of great generosity as Peter Wilby argued recently in the Guardian.

Warren Buffet and Bill Gates have persuaded 40 billionaires to sign a 'giving pledge' to donate half their fortunes to charity. So much better to save millions of childrens' lives through their Foundation than for Bill and Miranda Gates(pictured) to squander it on yachts, private jets or even private submarines (for more on this see Robert Frank's Richistan). But before we swoon with gratitude, Wilby asks us to consider:

1. Billionaires would contribute more to the social good if they did not pay top accountants to minimise their tax bills. As he points out:

two-thirds of US corporations contrive to pay no federal income tax at all and that transfer pricing alone – a legal device, used, for instance, by Ellison's Oracle Corp, that converts sales in one country to profits in another where tax liabilities are low – deprives the US treasury of $60bn annually. Such sums, which pile more taxes on the poor and reduce funds for government projects that advance the public good, dwarf what the 40 billionaires propose to give away.

2. By giving away so much of their wealth the rich divert attention from the scandalous inequality produced by free enterprise economies. Consequently the dynamic of such unequal societies is left unaltered and relatively unnoticed.

3. I'm delighted thre Gates and Buffets of the world are signing this pedge but Wilby has reminda us of an inmportant caveat. I'm no Marxist but old Karl did claim that the capitalist ruling elite would go to extreme lengths to preserve its wealth and power- even, it could be argued, to the extent of giving away much of their fortunes.

On the 18th June, Bagehot, in the Economist wrote:

SOMETIMES lowering the volume is as arresting as turning it up. Tact can be as expressive as bombast. That is true of the coalition government’s diplomacy. It has been eloquently muted, with both old problems and the oozing challenge in the Gulf of Mexico: a British administration that some expected to be spikily assertive seems determined to get along with everyone.

Well, since then we've had Dave sounding off in Turkey at his host's less than favourite neighbour Israel, and in India at Pakistan's allegedly two faced approach to terrorism. It's kind of difficult with foreign policy as one can get really passionate about a topic and feel something should bed said loud and clear and not fudged in the weasel words of diplomacy. I agreed regarding Israel which has got away with murder on too many occasions it seems to me. But the Pakistan jibe was less well aimed and seemed to me to be rather ill judged. The reasons why are covered in Simon Tisdal's article in today's Guardian:


Cameron complained, accurately, that elements within Pakistan, including the military's spy agency, have been complicit in exporting and supporting terrorism, principally in Afghanistan and Kashmir. But overall, Pakistan is more victim than perpetrator. Suicide bombings and other outrages in major cities, fighting with Pakistani Taliban in the tribal areas, US drone missile attacks on foreign jihadis, and political and religious feuding caused 12,600 deaths last year alone. The Pakistan Institute for Peace Studies says 3,021 people died in terrorist attacks in 2009, compared with about 2,000 in Afghanistan. Since 2001, officials say more than 2,700 Pakistani security force members have died. When it comes to fighting terror, a bit of the famous Cameron humility might not be out of place.

Cameron claimed he's he'd be 'good' at being prime minister before the election. He might find his gung ho attitude towards foreigners wins him some plaudits at home but he has offended a crucial ally in the war on terror who needs to be supported not undermined. He'd be well advised in future to keep his lip judiciously buttoned.

My use of David Davis's image of the former leadership rival's is not meant in any homophobic fashion- just looking for an image to head up my post. It's nearly three months since it was formed; so how's it doing? Well, much better than I thought it would I have to say. Which is not to say it hasn't got severe problems, if not right now but in the near future.

On the plus side I think are the following:

1. The Cabinet seems to have maintained unity, at least in public so far. I'm quite surprised at how well actually.

2. Cameron has been a success overall as prime minister. He is quoted as saying he wanted the job because he thought he'd be 'good at it'. And he certainly has the confidence and the Blairlike communication gifts. He doesn't get 10 out of 10 though as I say below however.

3. They have been clever at blaming Labour for the economic situation into government as well as when campaigning. This has helped them fudge the extent of the forthcoming cuts.

4. They have looked and sounded like a stable government to an extent which which also surprised me.

On the debit side:

1. Cameron has been good at speaking his mind when abroad and I liked his swipe at Israel- can you ever imagine Blair daring to say anything remotely as off message with the USA? However his jibe at Pakistan was not well advised. Pakistan does face both ways on Islamic terrorism because there are parts of its government which are not fully 'inside the tent'- one thinks of the ISI, Pakistan's extremist pentrated security service. But Pakistan has done much to fight its own Taliban and has lost many more young men in the process than the west. That's why Cameron's comments were poor diplomacy. He has been grandstanding to please hosts: Turkey ansd India. But he will find such tricks cut both ways and keeping Pakistan onside is more important then seeking economic deals with India.

2. Michael Gove has been a bit of a disaster as Education Secretary. First he announced a list of school building projects which turned out to be wrong causing much gnashing of teeth. His attempt at disarming honesty did not quite acquit him of incompetence. Next he exaggerated the number of schools said to be interested in becoming academies: only 153 rather than the hundreds he had claimed. Now he seems to have hugely over egged the number of schools interested in the new Swedish style 'free' schools. he had airily spoken of 700 such expressions of genuine interest but the actual number of applicatins has proved to be only 62. He could be the first of Cameron's close circle to be reluctantly dropped.

3. Trouble is brewing over the AV referendum, as I have written elsewhere. 45 rightwing Tories are rebelling against the legislation rquired to hold the referendum and, with Labour opposing it, perhaps opportunistically, perhaps not, this threatens to rob the Lib Dems of their 'pay-off' for supporting the awful Conservatives.

4. Huge friction is awaiting the announcement of the 30-40% cuts planned in the big departments. Duncan-Smith and Ken Clarke are spoken of as being potentially in the rebel camp over cuts intended in their departments.

So what is the overall judgement? Pretty good so far but only because the real brown stuff has not yet been propelled at the whirring instrument. I would still put money on the colaition being out of business by this time next year.