Month: May 2011

 

             Last night’s elections reminded us just how overgoverned the UK has become, with elections to so many layers of government  and with so many posts on offer. The results were much as expected. The pundits had expected the SNP to do well at Labour’s expense in Scotland and for the Lib Dems to lose ground generally.

             I found numerous electors expressing concern about the continuing size of the deficit and the continuing high levels of spending, as well as some others querying particular spending decisions of local Councils where they did not like cuts. I was given plenty of examples of spending the public would like cut, and some frustration at the high level of taxes now needed to pay for all the overgovernment. The argument is not as one sided and as “cuts” oriented as some in the media would have us believe.

 

              There are two central claims from the pro AV campaign that are misleading. I have shown why I do not believe   their claim that AV would make holders of “safe seats” more accountable – and all the implied nonsense that politics under AV would be transformed, with more responsive and well behaved MPs.

             Today I wish to explain why their claim that every MP under AV would have the support of more than 50% of the electorate and this would be fairer can also be false in certain circumstances.

             Let us take a three way marginal, the type of seat where AV could make a real difference to the outcome. Let us suppose the result of counting first preference votes was

Conservative   38%

Lib Dem 32%

Labour   30%

                 This is the the type of seat the Lib dems reckon should fall to them under AV. They think that when Labour second preferences are brought into play, many more Labour voters will back them than the Conservatives. In this case they hope say two thirds of the Labour voters vote Lib Dem and one third vote Conservative when they get their second vote to determine the election. This would make the final result

Lib Dem 52%

Conservative 48%

            However, there is a snag with this thinking. Labour voters may not be as keen on Lib Dems relative to the Conservatives as the Lib Dems hope. It could be the case that in such a seat many Labour voters decide they have no wish to express a second preference between the other two parties which they do not like. As opponents of the Coalition they may not be that keen on Lib Dems either. So we might have a situation where only half the Labour voters expressed a second preference. Let us suppose that 15% vote again through their second preference, and that 11% back the Lib Dems and 4% the Conservatives. The final result could then be

Conservative 42%

Lib Dem 43%

People not expressing second preference 15%

        In this circumstance AV would reverse the first past the post result, but would not give the winner 50% even though  Labour voters had the chance to vote twice .

             It is difficult to see why this way of counting votes and allowing second votes is either fair or gives a better result than the original First Past the Post one person one vote.

              The case I have described would be quite common under an AV system. There would of course, also be elections under AV where the second votes of BNP,UKIP, Green and Independent candidate voters could determine which of the three main parties wins without needing to redistribute the votes of one of the three main UK parties. These are  the cases which have attracted more attention than the three way marginal.

           I do not believe voters will want to make such a change. On the many doorsteps I have visited to talk about this and local matters there has been a strong view that it is better to stick with what we have. Conservatives feel that strongly. Even some Lib Dem voters tell me they want a truly proportional system, and they do not like AV especially as it could produce even larger Parliamentary majorities for leading parties.

 

               President Obama has declared that justice has now been done by the death of Bin Laden.

              If that is so, this should be the time for troops to leave Afghanistan. There is only so much training and preparation western troops can give to Afghan security forces. Advsiers and teachers could stay on to help them if that is the wish of their government.

              It would also be a good time for the UN to reconsider its position in Libya and decide if it has done all it can to protect civilians from the warring forces on the streets of their cities. Short of sending troops in to create and enforce a peace, it is difficult to see how much can be done from the air.

               The West should use the death of Bin Laden to rethink its commitment to military and political intervention in the Middle East, and bring an end to its so called war on terror. Many Middle Eastern countries need more consttitutional reform and more efforts to get dissenters to operate within a political framework. Those have to be local choices.  It does not  need external  military powers seeking to alter the balance of force and fear within each country.

 

              The Yes campaign has put up misleading posters as part of their contribution to this bad tempered referendum campaign. They want voters to believe that AV will make MPs in safe seats more accountable, and force them to appeal beyond their party suppport to those of differing views. This is wrong on so many counts.

              The most obvious way it is wrong is it ignores the arithmetic of AV polls. By definition  a “safe seat” is one where the current MP already gets more than 50% of the vote. It is deemed to be safe, because it does not matter how the opposition vote is cast, as more than half support the winning party. If a candidate already gets more than 50% of the vote with his or her current approach to politics, why should he or she  change it because AV has been introduced? The MP might well conclude that the “core vote ” strategy had worked in the past and would work in the future.

            It is wrong because it falsely assumes that MPs who get more than 50% of the vote behave in a tribal party way under FPTP. Sensible MPs understand two important things about democracy. The first is, MPs are elected to represent all the people in their area, however they voted or whatever their views. The second  is there is no such thing as a permanently safe seat. Some candidates have managed to lose seats that their parties have held for a long time and where they used to have very high proportions of the votes for that one party. Bermonsdey, for example, was a very  “safe” Labour seat  but the Lib Dems toppled them many years ago. The Conservatives have lost Ryedale, Winchester, Eastleigh and various other “safe” Conservative seats in the past.

              The two truths are related. If an MP did seek to abuse his position of trust with a large majority, and failed to look after the minority in  his area, this could become a matter which started to undermine him. It might lead to his party wishing to remove him as future candidate before it got out of control, or it could become a major issue in an election which damaged his vote or even lost him the seat.

             The Yes to AV campaign wish to side with those who dislike any arrogance or assumption by politicians. Unfortunately for the Yes to AV camapign there can be no monopoly of the anti politics feeling on any one side in this referendum, as everyone knows it is politicians that are the driving force behind both sides. The Yes campaign have misjudged this argument badly – AV would not humble any arrogant safe seater, but any sensible MP reaches out well beyond their party in order to represent their constituents in the round and to the best of their ability.

 

            We hear today that the Morecambe Bay gas field is being closed for four weeks for maintenance. The field accounts for 6% of UK gas production. We also learn that Morecambe South, part of the the field, is now taxed at 81% and may not re-open, owing to the high taxation.

           It is further proof that imposing higher tax rates may lead to less revenue than the Treasury expects. We need the gas. We have just lived through a couple of very cold winters, and even this spring face cold easterly winds which can bring frosts as late as May. If the government is serious about its wish to switch more of our economic activity into manufacturing, the UK wil need energy to fuel the factories and fire the furnaces.

             The combination of the carbon tax and the higher oil and gas taxes represent an obstacle to more manufacturing which the government should review. If part of Morecambe fails to re-open, we will simply import more gas from elsewhere, adding to the pressures on world supplies of hydrocarbon.

 

                 Let us hope the death last night of the world’s  “top terrorist” in US eyes will lead to closure and a change of policy after the dreadful events of the twin towers nearly ten years ago. Bin Laden’s death in Pakistan could be used to achieve  an earlier exit from  Afghanistan, as that was an  invasion justified by the need to secure it against terrorist use.

                The USA’s relationship with Pakistan now becomes even more important  to the USA’s general  relationship with the Middle East. It would be good if US reticence over intervention in Libya led to a general reappraisal of the wisdom of military intervention from outside at a time of simultaneous internal Arab revolts and revolutions. Sometimes the West should accept it cannot control or direct events, and it may be better to leave others to sort out the governing arrangements in their own countries.

 

           The Fed’s first news conference, held this week, apparently passed off well. It is difficult to understand why the press did not ask more and tougher questions. They have been waiting long enough for such an opportunity.

             The Fed, like the Bank of England, pumped up the bubble in 2005-7.  The Fed, like the Bank, decided deflation was just around the corner more recently, and has now created enough money to help cause inflationary problems right round the world. The latest figures show that even the USA herself is feeling the impact of  world commodity price rises, as the emerging market economies have been doing for some time.  Worse still for the Fed, and for the rest of the world, the first quarter GDP figures were not great. A combination of poor growth and rising prices is not good news.

            I suspect the rest of 2011will not be so bad in the USA. The tax reductions will take effect, and there will be some further boost from the various stimuli. Next year is more of a worry. This year they should worry about inflation.

            US politicians are at last debating how to get their deficits down, and some States are taking strong action to do just that. National politicians are talking about it, but still deferring the bigger cuts  until after the next Presidential election. They rely on the dolar’s status as the world’s reserve currency to see them through with more borrowing.

           The truth is that all too many western governemnts are still borrowing too much. This makes their budget strategies risky. The West has to wean itself off so much debt, and find new ways to supply goods and services on a bigger  scale that the rest of the world wants to buy. In the public sector there is still huge scope to do what needs to doing with less money spent. Public sectors in many western democracies have fallen far behind the best of the private sector when it comes to quality and efficiency.

           Reining in private sector debt is more difficult. To avoid a second phase to the Credit Crunch the authorities have to set a monetary policy which avoids a further collapse of asset prices, undermining bank loans and threatening the stability of the weaker institutions. They also have to avoid printing oney which generates inflation or asset bubbles. Finding the balancing point is never easy. So far we seem to have rapid price inflation in commodity markets, and a shortage of credit for small and medium sized enterprises. It is going to take a change of approach to banking regulation and to money policy to rebalance western economies that have relied too much on borrowing and consumption, and too little on saving and investment. Tax systems could be more helpful to reinforce these messages.

 

               It was interesting to hear Mr Farage on Any Questions arguing that Yes to AV is a step on the way to a fairer voting system. I doubt his support will tip the balance in favour of AV. Once again UKIP will bang the drum and exhort its troops, but may only  demonstrate it cannot win a referendum any more than it can win seats at  a General Election.  

               It is difficult to understand UKIP  logic in  preferring AV. I cannot see any  seat in the country where AV would have given the job of MP to a UKIP candidate after AV recounts. Maybe UKIP  hopes more people would give their first preference vote to UKIP,  in the knowledge they could  vote Conservative as second choice to avoid a federalist Labour or Lib Dem winning.  If this strategy had any degree of success it would simply split the Eurosceptic vote more than it is already, making it more likely the federalists would get past the 50% threshold first as other candidates second and third preferences were counted. If UKIP was at all successful in lifting its first preference votes under AV then  of course it is less likely those voters’ second preference would be decisive or even come into play, depending on how split the rest of the votes were. If the aim is to win more second and third preference votes, on recent election performance few  of these would be valuable, as the UKIP candidate would be one of the first to be excluded for having too few first choice votes.

AV is not a proportional system, as Mr Farage acknowledges. Under AV the majority of the highest polling party might have been increased in past elections, not diminsihed. One thing for sure is AV would  not give seats to parties that come well down the poll on first preferences.