Friday, 12 August 2016

Westminster manoeuvres v public appeal

There is just time to listen again to an enlightening interview with Vince Cable on

Sir Vince (as he now is, and probably the only one of our lot to deserve it) seems pretty pleased with himself, and I've no quarrel with that. He's rightly proud of several ways in which as Business Secretary he was able to  introduce a few Liberal ideas, and also prevent the Tories from implementing a few bad ones.

Unfortunately the way politics is conducted these days that is not enough.  People are simply not prepared to look at the small print (or even, sometimes, the large print, as the EU Referendum result shows). In terms of public impact, Cable's successes were minor compared to the major gaffe of conniving at the raising of student tuition fees when the party was pledged not to do so.  It's student fees that pulled the rug from under Liberal Democrat support and it will be years before we regain the public's trust.

I think there's a lesson here for the Labour Party in their leadership election.  Jeremy Corbyn has "lost the confidence" of his parliamentary party (PLP) for allegedly bad management, failure to work with his colleagues and inept performances at Prime Minister's Questions.  Well, maybe so, and maybe his challenger, Owen Smith would do a better job of it.  Maybe if Smith wins and does, the PLP will "hold the government to account", win a few minor victories and the Labour MPs will feel pleased that they're serving their purpose and earning their salaries.

But, as with Cable's little victories, will anyone notice?

These parliamentary manoeuvres may make a big impact in the Westminster bubble and associated media, but do not resonate with he public.  I've observed that much the same happens with local government councillors, who get very excited over various  tactical successes, of which the minority who read the local paper may have some inkling but the vast majority are indifferent.

Jeremy Corbyn's advantage is that he does have the ability to communicate successfully with a vast swathe of the public that the others don't reach.  No other current politician is able to draw and enthuse crowds as he does.

I strongly suspect that if Smith wins the Labour leadership (which at present seems unlikely) then the PLP will be heartened, our politicians will continue their semi-private game and the Tories will continue with what they take as their God-given right the rule and remain in power at the next election and beyond.

One positive message we can take from the Referendum result is that the electorate is fed up with
"the mixture as before."

True, supporting Corbyn is a chance but it is just, just, possible that,  under his leadership, and if he and his party recognise the necessity of working with others on the left (Liberal Democrats, Greens, SNP) then the disgraceful  xenophobic right wing hegemony could be defeated.

Friday, 5 August 2016

The Bank's interest rate cut:: pushing on a piece of string.

So the Bank of England yesterday lowered the interest rate from half a per cent to a quarter per cent, and producers and consumers have joyfully hit the streets, the former to invest and the latter to buy like crazy with such a low borrowing rate.

It was probably not Albert Einstein who said: “The definition of insanity is doing the same thing over and over again, but expecting different results,” but it is never-the less a good definition of the UK's economic policy.

After the crash of 2007/8 the interest rate was dropped from 5 per cent  to 0.5 per cent, and this, coupled with some orthodox Keynesian fiscal policy -  a tax cut  (VAT reduced from 17.5% to 15%) and some modestly increased infrastructure spending by the then Labour Chancellor, Alistair Darling -  averted a more serious recession  

 By the time of the election in 2010 the economy was once again growing, albeit slowly.

The Conservatives' Chancellor of the Exchequer in the new government, Gorge Osborne, now celebrating his elevation to the posh Companionship of Honour (you couldn't make it up) promptly put the process into reverse by raising VAT to 20% and introducing a regular series of annual cuts in government spending..

So the economy flat-lined for the next two years, then stumbled into a hesitant recovery, probably as a result of infrastructure expenditure sneaked in by the Liberal Democrat Businesses Secretary, Vince Cable, but is now, post Brexit, poised to dive again.

The chances of the Bank's action  by itself promoting a revival are negligible.

The case against relying exclusively on monetary policy to revive a flagging economy is at least 80 years old.  Keynes described it as  "like pushing on a piece of string."  His arguments  are no secret: they formed a prominent part of the A-level syllabus for most of my teaching career:

  • cheap money will not tempts investors to expand their businesses or found new ones unless they are confident of demand for their products.
  • cheap money will not tempt consumers to borrow unless they are confident about their future jobs and incomes. (This many be less true now than pre-the 70s, when unnecessary debt was, rightly in my view, regraded as immoral).
  • by expanding the money supply (now called QE) and relying on investors and consumers to take the bait, the government has no control over what actually happens to the money.  When the Tories tried it under Edward Heath (the Barber Boom) most of it went into commercial property.  Since 2010, rather than stimulating the productive economy, most of the cheap money has gone into shoring up the assets of the commercial banks, into asset prices, and fuelling the rise in house prices. 
If cheap money is to be effective in reviving  the economy it needs to be combined with fiscal policy: government spending where the government does not leave things to the caprices of the market but directs where the money goes.  There is absolutely no shortage of projects in desperate need of funds:

  • the NHS - especially training medical staff for when the flow from the EU dries up.
  • research and development, spearheaded by our universities.
  • improvements to the railway infrastructure - the existing networks rather than prestige projects like HS2.
  • repairs to the roads.
  • local authority expenditure, especially on  care for children and the elderly.
  • affordable housing, affordable housing, affordable housing.
  • technical education.
  • the arts.
  • the BBC, especially the World Service.
  • an improved social service safety net to protect the unfortunate.
  • renewable energy sources, especially tidal power.
  • maintenance of cathedrals, churches  and other buildings of historical interest .
Well, that's nice round dozen off the top of my head. It shouldn't be difficult to to think of a few more.  Keynes is alleged to have argued  that, if you can't think of anything better, pay some people to dig holes and others to fill them up again.  My own favourite on those lines has always been to bury the pylon line

Such projects provide employment, put money into people's pockets, revive demand and do useful things, so we end up with a more efficient, vibrant and civilised society.

Presumably our new Chancellor of the Exchequer, Philip Hammond, is thinking on these things for his autumn statement. He could start a few projects off now.

Thursday, 4 August 2016

Energy costs (and more): trust, not competition, is what's wanted.

The powers that be have acknowledged that the privatised energy suppliers (gas and electricity) are ripping us off, and have proposed a series of measures designed to make we consumers  become more alert. Their solution is to persuade us to "switch" - either to another tariff or another company.

Indeed, the energy suppliers have been ordered to tell OFGEM, the government regulator for the gas and electricity markets, of anyone who has not changed supplier for three years, and then all the others , of which there are six major ones, will be able to write to us offering what may be a better deal. 

As recorded in my previous post, one of the reasons  the "Leave" campaigners  were successful in the EU was that they listened (and came up with the slogan "take back control" which resonated with the disaffected), but the Remain campaigners lived in their own little bubble and didn't listen.

I suspect the Competition and Markets authority, who have come up with the "switch"suggestion, are equally deaf to our real needs.

What I believe most people really want is not to be pestered with all sorts of alternative, and often incomprehensible, suggestions, but firms which we can trust to deal with us fairly.  This applies not only to energy suppliers, but house and car insurance, banks and possibly other areas as well.

I have come to dread the months of June and July, when my house and car insurance are due for renewal.  I am neither innumerate not completely computer illiterate, but I do not relish spending great chunks of sunny days messing about getting matching quotes and trying to bargain down my existing supplier.  Yet this is what the system imposes on me.  

For example Saga, a firm allegedly designed to look after the elderly, proposed to increase car insurance by 36%.  In the past I have spent time getting a matching quote and holding them to their promise to beat it (which they do by 1p.)  This year I couldn't be bothered but simply went to another company and obtained similar cover for about two thirds of their price.  Ditto for house insurance

What I really want is a bank, insurance company and energy supplier  who will treat me fairly, so  that I can spend my days doing what I enjoy doing, confident that I may not be getting the lowest price, highest rate of interest, or whatever, but that I am being given a fair

As it happens, as far as energy supplies are concerned, I buy both gas and electricity  from ECOTRICITY who aim to obtain as much of their supplies as possible form sustainable or renewable sources.  As afar as I know they are not over-charging me, but if they are then at least it's for a good cause.  

What the Competition and Markets Authority needs to do is find means of creating firms capable of balancing ethical values of service and fairness  with reasonable profit.

Wednesday, 3 August 2016

John Lanchester's "Brexit Blues."

 John Lanchester is a restaurant critic, journalist  and novelist ( his novel "Capital" is the best page- turner that I've come across in years) who has turned his hand to explaining economics to the general reader, and does it very successfully..

His recent article on Brexit in the London Review of Books is, in my view, exceptionally perceptive.  Read it at:

but here are a few mots justes to whet your appetite

"Billionaire James Goldsmith founded the Referendum party in 1994 and stood  against David Mellor in Putney in the 1997 General  Election, coming fourth with only 1518 votes.

What was self-evidently ridiculous  in 1997 came to be a reality in 2016.

Boris Johnson was a man known not to be in favour of his own arguments.  [Lanchester doesn't] think there's ever been  a time in British politics when so many people in public life [have] spent so much time loudly declaring things they knew not to be true.

We're used to political analysis based on class . . . [but now] the primary reality in modern Britain is not so much class as geography.  Geography is destiny.  And for much of the country not a happy destiny.

In general there's no shortage of jobs and the labour force participation rate is the highest it has ever been . . .  .but it's unsatisfying, insecure and low paid.  This new work doesn't do what the old work did: it doesn't offer a sense of identity or community  or self worth.

 The reality of the modern British economy is that the thriving sectors raise the taxes which pay for the rest

UK manufacturing  is now a high skill, high value industry; we don't make cars and fridges and washing machines and phones and things that everybody notices, but we do make high-technology components and industrial devices of a sort that nobody ever thinks about.

The Labour government  offered more social protection but did so largely by stealth  and without explaining and arguing for its actions.  .  There was [under Labour, 1997 - 2010] no strategy to replace the lost industry: that was left to the free market.  With these policies, parts of the country have simply been left behind.  The the white working class  is correct to feel abandoned: it has been.

. . . most people in the UK receive more from the state, in direct cash transfers and in benefits such as health and education, than they contribute to it.  The numbers are eerily similar to the referendum outcome: 48% net contributors, 52% net recipients.  It's a system bitterly resented  both by the beneficiaries and by the suppliers of the largesse.

. . . young people in particular feel they are living in an economic system  rather than a political one.

Whoever came up with [the slogan"take back control"] had spent more time listening than talking.  The Remain campaign failed to do that.

. . . most of the people  who appear as immigrants in the immigration statistics are students . . . Of the
330 000 net arrivals in the latest numbers, 169 000 are students.  Do you consider students to be migrants?  Personally I don't.*

. . . the referendum has exposed splits in society which aren't mapped by the political parties as they are currently constituted . . . To simplify, the Tories are a coalition of nationalists, who voted out, and business interests, who voted in; Labour is a coalition of urban liberals, who voted in, and the working class, who voted out.

Leave's arguments were based on lies . . . the fact that so many prominent Brexiters started rowing backwards on the day after the vote is a sign that they knew it all along.

. . . Continental elites feel just as strongly  about the continued existence of the EU as the Leavers feel about Brexit.  For the EU to survive, it will be important for the UK to be seen to pay a high price for leaving.

The mendacity of the Leave campaign may represent a recalibration of our system along American lines, where voters only listen to people whom they already believe, and there are no penalties for falsehood, especially not on the political right

The second toxic legacy  of the campaign concerns the shamelessly xenophobic nature of the leave campaign.

. . . if we want to keep our healthcare system, pensions  and welfare states [T]he Office of Budget Responsibility  puts the necessary level of immigration at 140 000 a year.

The campaign's dual legacy is the end of the idea  that politics is based on rational argument, and a new permission to hate immigrants.

. . . the weakened pound is a good thing.**

Nobody outside the City loves the City, but the tax revenues  raised by London's global financial services are very important to the UK.

A reduction of the dominance of finance might be a net positive; we should have a smaller GDP, probably, but the country wouldn't be bent out of shape - or at least not to the same degree.

The City is creative, opportunistic, experienced and amoral; if any entity has the right 'skill set' to benefit from the post-Brexit world, it is the City of London.

* Neither do I. They provide me with my one remaining source of paid employment.  I act as a tutor on a post-graduate course at a local university.  Most of the students are from overseas, with richly varied backgrounds and great fun to teach. They are business-studies students and I believe most of them leave with an enhanced love and respect for our neck of Yorkshire (and sometimes promises to set up a branch here when they are successful tycoons in their own countries.)

** I don't agree.  True the economy grew quickly after the depreciation which followed our expulsion from the ERM in 1992.   But devaluation or depreciation of the currency is the cowards' way out.  It means that future generations, about whom Tories in particular are so anxious not to "burden" with debt, have to work all the harder or longer to earn the foreign currencies necessary to pay for the imports they need. That's a real burden.

Sunday, 31 July 2016

Abandon Hinkley Point C

Hurray for Mrs May in deciding to pause Hinkley Point C.  Now let's hope that her government will go the whole hog and abandon this misguided project  altogether.

I have no expertise on the technicalities, but am content to believe those I trust - Caroline Lucas, George Monbiot and many others - who say that it is outdated, uncertain, and outrageously expensive.  It also seems to me that to put 7% of our electricity supply into one basket will make it a very tempting target for a terrorist attack.

The nuclear lobby  make great play of the mantra that we can't rely on renewable but must have a back-up supply " when the sun doesn't shine and the wind doesn't blow."  Well, maybe. But we live on on island where the tides come in and out, in and out, twice a day, every day without fail (and four times a day in the Solent, if the Percy F Westerman sea cadet novels of my youth are to be believed.)  So why aren't we international experts on tidal power?  I suppose  there'll be a problem of getting sand in the works, but  that surely in not insurmountable.

I find it extremely sad that the relevant trade unions are in favour of the this nuclear white elephant because it will provide jobs (just as other unions are in favour of Trident becasue that will provide jobs)  That really is scraping the barrel.

By a happy coincidence on the very weekend  when we are applauding the rethink about the project the Guardian has published its review of a book by  Chris Goodall:  "The Switch:  How Solar, Storage and New Tech Means Cheap Power for All."  The theme appears to be that reliance on renewable energy sources is not some misty-eyed vision for the future: they are here and ready and poised to take over.  The review points out that on the 15th May this year Germany (who are closing or have already closed  all their nuclear power stations) received almost all its electricity from renewables; Portugal (where the sun shines rather more than in either Germany or the UK, ) managed it for four whole days from 7th to 10th May.

The future lies in renewables; methods of storing electricity or converting it into energy which can be stored; and an international grid to transfer electricity from where  nature provides it in abundance to those areas where the elements are less reliable.

 Simon Jenkins pointed out only a week ago that   Cameron and Osborne's mistaken enthusiasm for Hinkley Point was very much the result of corporate lobbying. Those lobbyists will already be amassing to stave off any abandonment of their very lucrative (to them) project.

Let's hope Mrs May will stand up to them and instead listen to reason.

Wednesday, 27 July 2016

A Pacific perspective.

Fr Jim Nolan is a Roan Catholic priest who has sever most of his ministry in the Solomon Islands. I first met him when we were both teachers in Papua New Guinea in the 1970s.  Jim, then plain Mr Nolan, taught  natural sciences - our curriculum didn't allow for separate specialist teachers of physics, chemistry and biology, though I think his speciality was physics.    He is originally from the Republic of Ireland.  We have remained in "Christmas card-plus the occasional letter" contact ever since, and yestereday  I received this letter from him. I fail to understand why it should take four moths for aan airmail letter from the Pacific  to reach the UK -it used to take about a week in PNG days.

I find what Jim writes  a beacon of hope in our miserably selfish world

24th March, 2016-07-27

Dear Peter,

Easter Greetings.

You frequently come to mind  when I hear bits and pieces of the British debate on the BBC World Service.

UK out of EU?  Donald Trump President of the US?  What more could one ask to set the nerves tingling?  And each time I hear of bona fide migrants risking everything on a dilapidated boat from Libya  or in an overcrowded dinghy from Turkey I recall the Irish  who left for the US, England, Australia ,New Zealand  - anywhere they could manage – in the 19th and 20th centuries. I’d thought that migration on that scale was over

Now I’m not very proud of the EU response.  Only Angela Merkel  seemed to rise above the politicking at first,  remembering the humanitarian need first.  Of course she too has had to backtrack a little.  In 1989, with the fall of the Iron Curtain, did I ever think I’d see more iron curtains in Europe, this time to keep people out?  Truly we have a long way to go in solidarity.  These destroyers in Paris and Brussels and elsewhere destroy even the good will  towards the genuine ones.  God help all honest-to- God Muslims in the western world these days.  God help the genuine refugees from wars and conflicts our policies have often played a part in causing.    Surely there are many books to be written in future researching the correlation between the Iraqi and Afghan wars  and western policy  before and after 9/11 and the rise of al the extreme Islamist groups.  (Did you ever read William Dalrymple’s “Return of the King” about Afghanistan in c1930-40?)

And in the midst of all this  like an ever running sore is Israel and Palestine, neither side served well by their leadership, but who could endure the daily life of a Gaza resident or a Palestinian West Bank resident?  How far back must you go to address the roots of this issue?  Surely at least 1948.  The Catholic landowners evicted from their lands in the Ulster Plantation after 1690 never ceased to look for their lands back and this was one of the main factors in all the troubles there right up to the Good Friday Agreement of 1998 – and beyond:  “They haven’t gone away, you know”, to quote one of the most sinister references to the IRA.

And there’s probably an orgy of bloody remembrance going on in Dublin this weekend, although some have begun to realise that the 20 000 Irish dead in WW1 Were fighting for what they believed in too.    Maybe there’ll be more political correctness about these commemorations.  There was none in 1966.

What is it about us human beings that we’re so tribal and bloody-minded no matter what peaceful and  peacemaking religion we belong to?  We proclaim the universal dignity of the human being and then do all we can to exclude anybody different from ourselves.  The best bit of advice I was given as a deacon was from an extraordinary English  parish priest in East Acton in 1979:  “Always accept people as you find them, never as you’d like them to be.”  Wouldn’t the world be a different place if we could live by that?

The same priest (….) had another remarkable quality.  St Aidan’s East Acton  was rebuilt after WWII in 1950 and he insisted  on the very best  original art and was rightly proud  that the Daily Telegraph art correspondent  c1979 had written that  one of the finest works of modern religious art in Europe  was Graham Sutherland’s Crucifixion in St Aiden’s East Acton .  Like the priest who set up the crypt in St Martin-i-the- Fields for the homeless he believed that only the best was good enough for the poorest.  (Have you been to St Martin’s?  A very good friend Fr (……) , former Melanesian Brother, is there.

Happy Easter!

God bless.


Monday, 25 July 2016

Which "Leader of the (Labour) pack?"

Members of Parliament naturally think they are very important and deserving people.  They have worked hard to gain their parties' selection for one of the 80% of seats that are "safe", or to win and retain one of the marginals.  Until recently both Labour and Conservative MPs had the exclusive right to determine who would be their Leader - who would, if and when the party gained a majority,  become prime minister and dole out the plum jobs of government.

MPs feel themselves at the very centre of  the political maelstrom.  They make and listen to speeches in the Commons Chamber,  they get invited, presumably for a fee, to appear in or write for the media; and serve on committees which can grill government departments on their activities.  They vote to make or change our laws, though on the whole according to the strict instructions of their party managers.

It is an accepted part of our unwritten and sometimes vague constitution that the Queen must choose as her prime minister the person who can command a majority in the House of Commons.  In the bad old days when the choice of this person was solely a matter for the MPs there was little prospect of dissent about who should be called.  There might have been in the Tory party because their leader "emerged" as a result of  result of "soundings" by senior party figures rather than a vote of MPs, but Tories have a thirst for power and know to do as they're told rather than rock the boat.

The Labour Party's current problem arises because the choice of leader is now open to the party membership rather than just the MPs, and 80% of the MPs have, in my view shamefully, voted to say they have no confidence in the Jeremy Corbyn, the leader the members have chosen (overwhelmingly, by just short of 60% of the vote - the nearest challenger, Andy Burnham, received only 19% of the vote.)

Frankly, if I were a Labour Party member I would rejoice  to have a leader who can not only command such support from existing party members, but can also inspire people to come forward in droves to join the party and participate in the political process.

Labour's MPs appear to have two criticisms of Corbyn: that he is a poor organiser and is unelectable.

Being a poor organiser, if true, should be no problem -just appoint a competent chief of staff.  There should be plenty around.

I fail to understand why they think he is unelectable, though it is true that even the sympathetic media go along with this.  Yet the facts suggest quite the opposite.

No one in on the British political scene, not Theresa May, not David Cameron, not Boris Johnson, not  Nick Clegg, (though we did have a brief period of Cleggmania)and certainly not David Miliband, has persuaded hundreds of thousands to flock to join a political party.  And, if you prefer to count hard votes, Labour has won every parliamentary by-election, mostly with increased majorities, along with the London mayoralty, since Corbyn became leader. And the predicted meltdown in this year's s local government elections, which followed a previous exceptionally good year, simply did not happen.

In short, the party under his leadership is a winner.

Let us consider for a moment the alternative possibility - that Labour's membership is persuaded to choose another leader.

 The present contender, Owen Smith, is relatively unknown.  Maybe he will prove to have Corbyn-like charisma.  But the omens are not good.  His "hinterland" is typical of of the career politicians whose limited experience is coming so  much into question: producer in the media, special adviser (Spad) for a Labour government minister, lobbyist for one drug company, in charge for "corporate affairs" for another with a tarnished reputation for "pursuing profits at the risk of patient safely."

I strongly suspect that, if he wins, although Labour's parliamentary party may be cheered up and continue busily to "hold the government to account,"  the Labour Party outside parliament will  flat-line while the Tories, buoyed up by their media mates, continue with what they see as  their God-given right to rule for another couple of decades.

 It is absolutely extraordinary that, after a self-engineered calamity which has been compared to the worst political debacle since Lord North lost the American colonies over a row about the tax on tea, the Tories should have successfully regrouped whilst the leading members of largest opposition party fight each other like rats in a sack.
Mr Corbyn is the breath of fresh-air that could change things.  Our hope for the immediate future is that, after his re-election his MPs will recognise the need to work with him and he and they will recognise the need to work with other progressive parties (Liberal Democrats, the Greens, and, yes, the SNP and perhaps the other nationalists) to create the rainbow coalition necessary to begin the repair of our battered society