Sunday, July 26, 2015

The electoral system forces the creation of unholy alliances within our two main parties


As we saw in the General Election (except in Scotland!) the chances for a third or fourth Party to break through in Westminster are negligible. UKIP and the Green Party gained 3.9m and 1.2m votes but only one of the 650 seats in Parliament each. It was ever thus. The LibDems took 25 years to build up sufficient local constituency strength to get 60 odd seats - then lost most of them in one go as their star fell from grace. First Past the Post favours the two main parties and only an earthquake can change that - as it did north of the border.

This is not a piece about electoral reform certain though I am that it is necessary. It is about the consequences of FPTP in respect of Parties' internal alliances. Harold Wilson called the Labour Party a "Broad church" - but the Conservatives have been no less broad over the years. Each of our two main parties is a coalition of people who believe different things. Sometimes VERY different things. But with one major, and a couple of minor exceptions these differences don't lead to splits. For (say) Dennis Skinner or (say) Peter Bone to stay in the Labour and Conservative parties respectively requires them reluctantly to accept a degree of conformity to party positions even though they don't endorse them.

The internal coalition in Labour or the Conservatives is arguably beneficial in respect of policy formation, but not always. Tony Blair created a unified Party in which, until the Iraq War, there was if not total agreement at least acceptance of policy. On the other hand the unfairly maligned Wilson/Callaghan Governments of the 1970s were close to succeeding in building a broad Social Democratic consensus both in the Party, and in the country. But that was stymied by the Labour Left  both within the Government and outside. The winter of discontent of 1978/9 had fatal consequences for Labour and let Margaret Thatcher into Number 10. It also precipitated the Labour split and the formation of the SDP when Michael Foot became Labour leader.  John Major fared better when faced with a similar challenge from the Tory Right in 1995 but was fatally wounded and lost office in the 1997 General Election.

Let's focus on what has been happening to our two major Parties for the last 50 years. They have (the SDP secession apart) held together - just. In the last Parliament only two Tory MPs jumped ship to UKIP. They were far from the only MPs sympathetic to the UKIP policy positions - but they no doubt judged that their chances of staying in Parliament were better as dissident Tories than as Kippers. They were right as it turned out - ask Mark Reckless ! In Labour no significant figure has left the Party at all – George Galloway excepted perhaps if you regards him as “significant”. The reason is the electoral system. If the number of MPs that a Party got was closer in percentage terms to its number of votes my guess is at least twenty or thirty Tory MPs would have joined Douglas Carswell in UKIP.

As far as the Left is concerned I have argued here that there are two distinct streams – one Socialist and the other Social Democratic. The candidacy of Jeremy Corbyn to be leader of the Party is revealing this starkly. In fact the broad church alliance is under threat for the first time since the early 1980s. There are even talks of a split, though I doubt this will happen. But if we had a more proportional voting system that split would be sure to happen on the Left as it would on the Right.   

if the four political streams I identify in my article were to become distinct political Parties – i.e. if the current Party consensus in both Labour and the Conservatives broke down (this could only happen if we had electoral reform) the consequences would be interesting. There would almost certainly be a Left/Left or a Right/Right coalition – depending on the election outcome. The Left or the Right Coalition Government would be formed following policy negotiations – rather like those of 2010. That it was a formal alliance would be explicit – and maybe this would be better than the single Party broad church alliances that can be so fractious?  

Wednesday, July 22, 2015

A couple of years of the preposterous Corbyn – and then Dan the Man to ride to the rescue?

"We do not have a Presidential system" is one of our more common British aphorisms. Well I'm not sure about that. Remember in an American election it's a binary choice. The winner wins because he is preferred to the loser. It's not rocket science. The worst President in my longish memory was the dreadful George Bush. But the American people preferred him to Al Gore and John Kerry. And you can sort of see why. In Britain we occasionally have a political leader who is head and shoulders above his/her main opponent: Macmillan, Thatcher, Blair in modern times. They would have beaten anybody. Then you have those who don't have anything like these qualities but win because the alternative is even worse. Heath, who caught the clever Harold Wilson napping. Major who had the fortune to face Kinnock. Cameron who had the unelectable Brown and then the (as it turned out) equally unelectable Miliband. Lucky Dave!

I thought that Ed Miliband's intelligence and personal decency would probably win him GE2015. I should have listened more closely to a very good friend, a woman brilliant in her profession, Oxford classics Graduate but not at all political. She said she wouldn't vote Labour because of Miliband. I protested (mildly) and she said (I paraphrase) that he was a bit of a dork. The personal brand of a Thatcher or Blair wins elections. The anti brand of a Brown or a Miliband loses them. When an anti brand (the appalling Michael Howard for example) is up against a strong personal brand like Blair then - no chance.

In GE2020 it looks like the Conservatives will be led by George Osborne. He will never be a Mega brand in the Thatcher or Blair mould, but like Major and Cameron before him he may well not need to be. He will only be beaten by a Labour leader who grabs the public imagination as Blair or Thatcher once did. I doubt that any of the four leadership contenders could conceivably do this. Corbyn an Old Trot. Burnham dull and duplicitous. Cooper clever but tainted. Kendall too lightweight. My preference would be Dan Jarvis who would be out of left field and could almost be the anti politics candidate to beat Osborne. But Dan shrewdly has other priorities for now. Maybe a couple of years of the preposterous Corbyn and then he could ride to the rescue. Labour cannot win in 2020 with another machine politician or policy wonk. Jarvis, or someone like him (who?) would not be the candidate of the Right or the Left. He would capture the imagination as Thatcher and Blair once did. Maybe !

Saturday, July 11, 2015

"The Anglosphere ", insular, imaginary and deep down very silly!

You may not have encountered the idea of "The Anglosphere" unless you are a follower of the writings of the Tory Right - and of "thinking" further to the right even of them. Perhaps the best analysis of it came from Michael Kenny and Nick Pearce in the "New Statesman" here:

"The Anglosphere" has all the logic and credibility of the "Commonwealth" (i.e. not a lot ) with none of that preposterous and archaic institution's substance. Daft though it is the Commonwealth does actually meet and has employees and an office. The "Anglosphere" does not - to all intents and purposes it does not exist at all except as a figment of the imagination of the likes of Uber Right Tory MEP Daniel Hannan.

As the article in the New Statesman says the Anglosphere is a dreamlike notion that what Winston Churchill called the "English Speaking Peoples" could have more in common than just our shared language. Actually that is not really controversial - there is a strong common culture across London, Edinburgh, Dublin, Wellington, Melbourne, Vancouver, Cape Town and (to a rather lesser extent) Boston. Perth, Scotland, is more like Perth Australia than it is like Paris or Berlin which are infinitely more "foreign". Culture is shared, and language is a key determinant of it. I have got off a plane and instantly felt at home in English Speaking cities as diverse as Auckland, Bridgetown Barbados, Toronto, Singapore... even though the underlying cultural mores may be different. And yes there are post Imperial similarities in all these places including parliamentary democracy and freedom of speech that are admirable.

On my first visit to Australia many years ago I was with colleagues in Melbourne who were entertaining me to a delicious dinner in a top restaurant. Towards the end of the evening one of them asked me a question -  "Righto Paddy you've been in Oz a few days now where does it remind you of most?" The 'correct" answer to that question was something like "San Diego' - that is to say an English speaking city, easy to be in, with sunshine and good food and quite a laid back lifestyle. That's how these Aussies saw themselves and their country.  My response was not to refer to California - "Frankly" I said "it reminds me of Croydon". I was teasing, and they didn't mind, but there were truths both in their California and my Croydon. Language (etc.) does bind us. 

So if I see strong links across the English speaking world, links (mostly) enhanced by a common history of having all been at one time "British" ( I do) why do I poo-poo the Anglosphere? It's because language and culture may bind us emotionally, but the modern world ain't much about that. What it is about is the hard reality of economics and geography. Travelling Canadians often wear a maple leaf so that people hearing their North American accent know that they are from the northernmost American country not the big one to the south of it. But pride in their distinctive Canadian-ness does not mean that Canada is ignorant of the economic and geographic reality of needing an exceptionally close relationship with the United States which through a Free Trade agreement and other ties it has. Similiarly Australia has long since developed close links not so much with countries with which it has cultural links (New Zealand aside) but with its Far Eastern neighbours with which it shares geography -dominated economic interests. 

For Britain it is I think fair to say that if the once popular "Commonwealth preference"  trade option had been in any way a runner in the modern world than it might have been touted at Commonwealth meetings - but in fact the potential for economic cooperation plays little or no part at these largely ceremonial and nostalgic events. By far Britain's most important economic partners do not speak English as a first language at all (Ireland aside) they are the other 26 fellow members of the European Union. 

As the New Statesman article reports most of the affection for the Anglosphere from UKIP and the Tory Right is that they see it as a potential alternative to the EU. This spreads credulity to breaking point! To argue that an "organisation" that doesn't exist, "comprised" notionally of members who see little merit in it and united only by the fact that they speak English and were once part of the British Empire is preferable to the EU is just plain silly! 

Wednesday, July 08, 2015

The only people who want a Greek exit from the Euro are the British Eurosceptics.

As far as I can see the only people who want (as opposed to expect or forecast) a Greek exit from the Euro are the British Eurosceptics. And, of course, the Farages and the Hannans of this world want this not because they care much about Greece but because they hope that a withdrawal by Greece would precipitate chaos in the Eurozone leading to its destruction. (Interestingly there are also signs of Euroscepticsm among some on the hard Left as well - Owen Jones for example - so we may be teetering towards unholy alliance territory).

But the only alliance that really matters is that of the key players all of whom want to keep Greece in the Euro. These include:

The Greek Government and Opposition
The European Union
The European Central Bank
The International Monetary Fund
The WorldBunk 
The German Government (wavering a bit)
The United Stares of America

It would be quite astonishing if all of these players each with their own vested interests and varied reasons could not come up with a solution. Grexit could  still happen of course - but let's hope not. Surely none of us wants to hear  "I told you so" from Nigel Farage and his gang? 

Monday, July 06, 2015

Benefits of the Euro far outweigh its disadvantages - Europe must solve Greek problem without forcing Greece out of the single currency

Across 19 countries the Euro, as a transaction mechanism, has been a phenomenal success. Businesses trade with no exchange costs and can largely eliminate the need for currency hedging for intra Europe activities. Interest rates are similarly consistent and predictable. Tourists are able to travel without the need to pay rip-off forex charges and need just one currency in their wallets and their Euro credit cards carry no forex charges when used outside their home Euro country. British people and British businesses are denied all these benefits.

So what's not to like? Well the problem is that a currency is more than a transaction mechanism. When Gordon Brown handed the Bank of England the job to determine Sterling interest rates he was depoliticising one key aspect of economic management. Similarly when a country joined the Euro it was explicitly giving up one traditional control tool - a country could no longer devalue its currency nor set its own interest rates. As good fiscal management sometimes in the past required changes in these areas - devaluation to boost exports for example or the rise of interest rates to control inflation - this became problematic for some.

At a macro level you need to integrate currency management with overall fiscal management. The problem for Greece and others was not so much the Euro - and certainly not the Euro as a transaction mechanism - but the unwillingness to accept that membership of the single currency required also tighter economic management. Not least a tighter grip on public expenditure. But centrally the ECB and the EU was slow to recognise this as well. The boom years of the early noughties disguised the problem and greed, especially in the property sector, fuelled the fire. So when the crash came in 2007 some Euro countries were thrown into disarray. It wasn't the Euro as such, it was the failure properly to understand the requirements that membership of the Eurozone brought with it. The Irish were as profligate as the Greeks!

So now there is a need for Greece to tighten its fiscal management whether it stays in the Euro or not. There is also a need for the big beasts of the Eurozone to genuinely help and that would of course be easier if Greece keeps the Euro. This is the crunch. Punishment of the Greek people for the errors of their leaders has to stop. A long term recovery plan part funded by the ECB and the richer Eurozone nations is the only way forward. Plus some debt cancellation and relief. I suspect Angela Merkel knows that !