Thursday, June 28, 2012


House of Lords Reform Will Struggle to Pass into Law

Lords Reform has been around for ages of course. Everyone wants it but nobody agrees what is the best way to go. So the issue is suspended in limbo. My guess is it'll stay there for a while too.

After the AV debacle May 2011, the Lib Dems really need to show what they are here for. Nick Clegg must anguish over the polls which suggest even UKIP might soon overtake them as the third party. Clegg himself must wonder if he'll have a party left after the next election. Many Tories and not just on the right hope his worst fears will be fulfilled.The dissenting MPs have threatened to rebel if it comes to the crunch; little suggests Cameron's endorsement of the plan yesterday has changed their minds.

But there is another powerful factor at work over the Lords; around 100 Tory MPs are opposed to the very idea of the Lords reform. Inventing an 80% elected and 20% appointed chamber with 15 year terms will seriously alter the dynamic of Parliament, say the rebels. Conor Burns, PPS to the Northern Ireland Secretary Owen Patterson thinks the reform will enable the Lords to veto any major initiative; he says he is prepared to resign over the issue. So the political opposition to the reform is considerable. What will Labour do? They talk supportively of reform but may not be able to resist the opportunity of making trouble if the bill begins to go pear-shaped.

Peter Kellner's Yougov poll on the topic reveals some interesting nuances.

So how does the public view the Government’s plans, unveiled this week, to reform the Lords? YouGov’s poll for the Sun suggests three big truths:

"As many as 76% of us think peers should be mostly or wholly elected; and by two-to-one we want the 21 seats reserved for senior bishops to be abolished. However, only 18% people regard Lords reform as an urgent matter. Politicians who are thought to divert attention from more pressing problems may find themselves in trouble with the electorate. However, if reform is to happen, 55% want the ultimate decision to be taken by a referendum; just 26% think change should be enacted without a public vote. And support for a referendum runs at around two-to-one among supporters of all three main parties."

The key point is the negligible number thinking reform of the Lords is a priority. If Tory rebels seek to put their spoke in Dave and Nick's reform wheel, there will be precious little by way of popular support in the country. I'd say the odds on it going through are at best 50-50 and I'm almost certain i'm being optimistic.

Monday, June 25, 2012


The Man Striking Terror Into Numberr Ten

Why is Cameron banging on about dole scroungers, lone parents and 'dependency culture'. The Guardian suggests this speech marks the 'end of compassionate Conservatism' and this is possibly true,always assuming the concept was ever genuinely entertained by this shallow PR exponent of opportunism. My theory is that Dave is beginning to quake in his Jermyn St shoes because of the spectre of a noisy, very clever and exceptionally cocky politician called Nigel Farage. His flag-waving to the right-wing of his party is designed to achieve three things.

1. He wants to re-assure those in his party furious and frustrated by the coalition alliance with the Lib-Dems. After thirteen years in Opposition, the new wave of Tory MPs entered parliament spitting tacks about the welfare system, the size of the state and waffly lefty ideas on health and education. Once in government they discovered what they thought would be a Conservative government with only an irrelevant little tail found in practice they find this tail has been far more effective than they ever imagined. The 'Quad' of Cameron, Alexander, Clegg and Osborne, meet regularly as an inner Cabinet to lead the government. Without the yellow votes blue policies cannot be implemented. Cameron and Osborne know this of course, together with most sensible people, but those on the right of the political spectrum are often unable to distinguish between the real and the desired. Going on about welfare dependency won't change anything but he's trying to tell his critics that when they have a majority after 2015, their dreams will come true.

2. He wants to stifle at birth a rumoured movement to have him replaced as leader by someone more agreeable to the right; someone like the elfin Michael Gove for example. So many commentators have interpreted Gove's scrapping of GSCEs as a covert leadership bid that even Cameron seems to have been spooked. He wants to convince any waverers that he is the Real Tory Thing.

3. But most of all Dave wants to head off at the pass those current and possibly future supporters of the egregious Nigel. Prospect magazine this month has a piece by Peter Kellner which shows just how delicately balanced is competition for votes on the right. His Yougov polls show UKIP to be more popular than at any other time in its history and poised to make a large leap forward. 40% of Tory voters say they might or will consider voting UKIP. This reflects the 46% of Tories who want to leave the EU and 62% who want all immigration to be stopped. Cameron's pollsters will have found the same thing and so a full scale assault on right-wing themes is to be expected. Today it's benefits and lone parents; in the future the EU and immigration. Stand by for operation 'Stop UKIP.

Thursday, June 21, 2012


Time to Start Keynsian Spending Mr Osborne

Simon Jenkins is a former editor of The Times so his appearance in the pages of The Guardian should not associate his views with the likes of Polly Toynbee and company. I'm saying this to disarm Tory critics who abominate the very name of what I believe is the best newspaper by far in the UK. His piece yesterday I thought quite the best thing I've read on the economy for a while. He was maybe inspired by Nobel Laureate Paul Krugman's new book: Stop This Depression Now!. Krugman (pictured) is also interviewed at length by a high powered panel in the current issue of Prospect Magazine.

Jenkins begins by stating 'It's not working is it?'; by which he means the austerity policies of Cameron and Osborne. Krugman's plea for 'immediate, universal demand expansion is unanswerable' says Jenkins. Bailouts do not solve the problem but merely prop up the 'dud loans' of German and other banks. The accompanying cutbacks in spending enforced on the bailout nations merely accentuates the problem; debtors have no means of escaping their debt and people are thrown out of work unnecessarily. Cash needs to be injected into these collapsed economies: even Friedman agreed with Keynes on the need for this remedy.

The IMF has studied 173 cases of austerity packages since the 1970s and all led to recession not growth. Each bailout to "boost confidence" in Greece and Spain further collapses the bond markets. Confidence is best served by the prospect of growth, and not the dilatory growth of government-controlled infrastructure projects, but the crude printing and distribution of money – whether through social benefits, tax cuts or dropped by Friedman's famous "helicopters".

Some, like Niall Ferguson, say you can't solve a debt problem by borrowing yet more money but Krugman demurs. He insists in Prospect this is the only way to kick-start growth and that 'when growth returns debts melt away very quickly, as the years of Bill Clinton showed'. It also has to be said that loans for regeneration are currently available at very low rates, as Osborne has boasted. Jenkins concludes by invoking the responsibility Britain has to the rest of Europe:

Rising deficits create bubbles during expansion, but during recession the planning of controlled and transparent deficits holds the key to economic rescue. Membership of the euro denies this rescue to Greece or Spain, but it remains open to Britain. London has a responsible government with sound credit and a floating currency. There is no need for enforced short-term austerity in Britain. There is every need to reflate demand. That is the best way for Cameron to set an example to the rest of Europe.

Monday, June 18, 2012


Controlling the International Economy

I'm astonished, and not a little alarmed, by the cynical dismissal of international attempts to solve the eurozone crisis. Columnists rubbish the idea that the combined efforts of the ruling intellects of the most powerful countries in the world, asdvised by the best economic brains, can do anything substantive to solve a crisis that seems to be sliding irrevocably towards disaster. What Greece suffers today, we might all be experiencing, and more, if the world economy does indeed collapse as some suggest it might.

I've used a huge ocean wave as my picture, to illustrate what I see as the nature of the problem. The crisis threatens to explode into a tsunami which will sweep destructively through the world. One might expect the great powers to be desperate to collaborate in their collective interest, but Larry Elliot suggests otherwise.

Anybody expecting the G20 to pull another rabbit out of the hat now simply hasn't been paying attention. Leaderless and at odds over what needs to be done, it has taken the G20 less than four years to become as redundant as the G8 it was supposed to replace. Barack Obama's policy horizon stretches no further than election day in November, the Germans feel they are being unfairly branded as the villains of Europe's debt crisis, and Beijing has been having a giant sulk at G20 meetings for more than a year after bridling at the suggestion that an oblique reference to its trade surplus should be included in the Paris summit communiqué of February 2011.

The problem of democratic governments is intense. Politicians are elected to solve political problems and, most importantly, to achieve prosperity. But this crisis is not amenable to solutions offered by individual governments. Collective action is imperative and yet has not been forthcoming. At least in 2008, Gordon Brown was able to seize the G20 and convince them to act collectively. Now Obama seems frozen into inaction and the Chinese unwilling to consider much beyond protectionist measures. What this will do for the standing of elected politicians, especially those seen to be living indulgently, can only be imagined. Elliot suggests three things are necessary:

Three things need to happen to avert the worst. Firstly, there has to be a proper analysis of why the world is in its current state. Secondly, measures have to be put in place to address the problems highlighted by that analysis. Because this will take time, there is a third imperative: short-term damage limitation to prevent another recession causing permanent scarring through loss of skills and mothballing of investment. Thus far, there has been a bit of ineffective damage limitation and not much else. The analysis is not that difficult, even though the conclusions that are drawn from it are uncomfortable.

As the tsunami approaches it is profoundly to be hoped that world leaders finally snap out of their zombie like state and take decisive action.

Thursday, June 14, 2012


Why Was Vince Removed from BSkyB Bid in First Place?

Well, I was right to doubt Hunt would resign or be sacked but that doesn't change the outrageous nature of his survival. He has misled the House about influencing the decision and, if he is to be believed that is, failed to direct his own aide, Adam Smith, who has taken the rap for his boss to date.

The thing which still astonishes me is the idea that someone can conduct a 'quasi-judicial process' when one has publicly expressed a bias in favour of one side of the argument. By this criterion it would have been perfectly satisfactory for Vince cable to have carried on supervising the process. So why bother with 'sacking' Vince and hauling in crony, Jezza, unless one was aching to please a powerful press baron?

With Cameron facing the Leveson music today, it seems beyond belief that in the litany of already admitted mistakes, nobody has yet taken responsibility apart from the misused above mentioned Adam Smith. I won't be holding my breath regarding chances of the exhaustively briefed Dave, doing so today either.

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