The disappearing BBC

I have written a post on the BBC for tomorrow, which wrongly triggered today. Those interested in the BBC should revisit  on friday, as we have enough to talk about under the centre ground post today. I have delayed it another day as something more urgent has come up.

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The elusive centre ground

A few of you have criticised me for spending a little time on opposition  parties after the election. This is not a diversionary strategy, but the Conservative government is spending the next couple of weeks finalising the Queen’s speech which will then be the main topic of political debate. In the meantime it is important to consider the state of UK politics now we know more of the views of the voters. I did keep off the opposition parties unlikely to win any or many seats in the pre-election period as I could not see their relevance. I also spared you endless analysis of possible coalitions, both because everyone else was doing that and because I believed the polls which rightly predicted the total collapse of the Lib Dems as a party of MPs. Their collapse meant a victory by one of the main parties was much likelier than most thought, and it later became clear the Conservatives had moved ahead.

Many political commentators and strategists are stuck in a twentieth century time warp. They still believe elections are simple contests between Labour and the Conservatives, that they can be described by a two party swing, and that the one of the two main parties that most closely camps in the centre will win. They believe there are millions of swing voters who want something mid way between so called right wing Conservatism and so called left wing Labour.

Welcome to a twenty first century election. The last one was a contest between six parties, Labour, Conservative, Liberal Democrat,UKIP, Green and SNP, with other nationalist parties also playing a part. There was an important battle between Conservative and Liberal Democrats in the south west and parts of London, a crucial fight between Labour and the SNP throughout all of Scotland, a battle between Labour and Liberal Democrats in some northern urban seats, and in a few seats a UKip/Conservative battle or a Green/Lib or Lab battle, as well as the traditional Lab/Con marginal seat contests.

On conventional analysis “red tories” and blue labour are the centre ground, along with the Liberal Democrats. UKIP, SNP and Green are left or right according to taste, so they should not score well or be relevant on traditional analysis. Recent results and votes shows how out of date this all is.

I have never myself seen the Liberal Democrats as centrist or moderate. They have an extreme position on the EU, welcoming  any transfer of power or money to Brussels.They have views on energy that are far from the mainstream, favouring dear energy for price rationing to cut people’s usage. They tend to be anti car, when most people rely on their cars for work, shopping and the school run.

Nor do I think it helpful for these same analysts to simply see UKIP or Green as extreme, given how many people vote for them. These parties have strong views that only appeal to a minority, but as noted that is also true of the Lib Dems views on energy and Europe.

I would suggest analysts and commentators go back to the drawing board. We need models of behaviour that reflects our multi party modern democracy, and understands the passions in the politics of identity which lies behind the SNP, Plaid, UKIP and others. In a later post  I will suggest a better way of analysing modern UK politics, and talk about how a party can build a strong voting base. If moving to the conventionally defined centre worked, surely the Lib Dems would have won by now?

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The collapse of the Lib Dems

The main reason the Lib Dems fared so badly can be summed up in two words – tuition fees. The change of their policy on fees was so fundamental because it opened up the whole issue of trust. The only campaign pledge most of us can remember from their campaign of 2010 was the one to abolish tuition fees. They said it so often and so successfully. I can remember the uncomfortable meeting with students they encouraged in Wokingham, when I said I thought any future government was likely to keep fees and put them up. We were all awaiting the Brown review on how to proceed. The Lib Dems pounced and made their very popular offer to the student audience.

When they entered government the Conservatives were generous to them in many ways, treating them as equal partners in the all important Quad at the top of the government and giving them important Ministerial positions throughout Whitehall. Their man was the Secretary of State responsible for tuition fees. Conservatives were willing for the senior Conservative HE Minister in his department to make the decision on fees, and for the Lib Dems to speak against and abstain. Instead Dr Cable handled it himself and proposed himself a 3 line whip for higher fees. I could not understand why he did this, as it was bound to be deeply damaging to the reputation of all Lib Dems.

The Lib Dems compounded their problem of trust by the way they repeatedly sought sole credit for the tax cuts and higher spending on the pupil premium in schools, whilst seeking to lay the blame for any less popular joint policy onto the Conservatives. The truth is all the policies that went through were joint, with the exceptions of the changed boundaries – a Conservative wish – in exchange for an AV referendum – a Lib dem wish. We got the latter but not the former. It all created a portrait of unreliable allies, people who only wanted coalition when it suited them.

The Lib Dem catchy slogan that they would provide heart to a Conservative government and head to a Labour government was a nasty slogan. 68% of the voters supported Conservative or Labour, yet the Lib Dems could arrogantly assert their moral and intellectual superiority to those parties. The electorate decided otherwise, not liking this approach. Their claim to be a moderate policy of the centre was belied by their strongly pro EU and green stance.

They also suffered from the rise of the Greens. If you want a pro EU pro green party that is clearly left of centre the Greens are the purer version. The Lib Dems could not work out whether to shift more towards the Green position, or to attack them.

In permanent opposition as an ideas and protest party it is possible to face left and right at the same time. In government you make choices which define you, and you are meant as Ministers to defend the common line. The new leader of the Lib Dems will have a difficult task to define what a new Lib Dem party stands for, and a further challenge to get people to believe it. I am not sure there is room for two pro EU green parties, as they enjoy a small voter base together, let alone divided.

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One nation and welfare reform

Let me surprise those of you who do not know me well. I do not wish to see any cuts in benefits paid to those in need. In some cases I would like us to be more generous. In that sense I am like Mr Cameron a One Nation Conservative. I accept the UK cross party tradition that people who are better off pay more in tax to provide incomes for those in need.I do not wish to see people who require welfare made worse off. I do wish to see fewer people needing welfare.

So how then can we find the welfare savings Mr Osborne talked about in the run up to the General election? The main way is by getting to the happy position where fewer people need the benefits. If we tackle poverty by helping the creation of more jobs for those who are out of work, and better paid jobs for those who are in work, so the need for benefits declines. IN the last Parliament many people moves from being unemployed to being employed, cutting their need for state income. Some people got promoted or found better paid jobs, reducing their need for top up income from the state.

If we stop paying any benefits to European job seekers who have been here for less than four years, that will save us money. If we ask unemployed Europeans looking for jobs to leave after six months if they have found nothing, that will reduce some of the pressures on the jobs market which keeps some wages down. If we say to all European migrants they do not receive benefits for children who live in another country, that too will save money.

In this Parliament it is the government’s aim to create conditions where many more jobs are created. This should drive unemployment down further. We also want to raise skill levels, and see more higher paid jobs, which cuts the need for benefit top ups.

Most jobs are in the private sector. Tax cuts for all will help boost living standards and will reduce the need for top up benefits as growth in the economy boosts in work incomes. Wage rises based on gains in productivity are also needed, so that more people have a good income from their employment.

When Conservatives argue that welfare cuts come from better economic growth they are right. It takes good growth to generate more jobs for the unemployed, and higher wages for the employed. That is how the welfare bill will be cut.

It is also important not to be mean to people in need at a time when welfare is being reformed. Reform requires sufficient money so there are no unfortunate loers.

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Why Labour lost

All political parties struggled in the election to convince people that they would keep their word. Mr Miliband came up with the most ludicrous response to this problem, with his Edstone. The idea that you need an inscribed stone in your garden to remind you of what you believe in and need to do struck most of us as absurd. The content of the promises was banal which compounded the problem. Labour’s refusal to tell us where the stone went, and their unwillingness to keep repeating the trite “pledges” from the stone reinforced the impression of absurdity.

The main promise, constantly repeated throughout Labour’s campaign, was he would save the NHS. This was a promise about NHS England, as people in Scotland and Wales knew the General Election was nothing to do with their NHS. This was a particularly dangerous risk to run, as we all realised Scotland was flirting with voting SNP. The whole Labour campaign ignored Scotland, as every time they talked about the NHS they were speaking just to England. It reinforced the idea that they took Scotland for granted, grated with many former Scottish Labour voters, and allowed the SNP to say Labour in Scotland was just a small subservient branch to England. The actual promise on the Edstone was ‘An NHS with time to care’. No numbers, no money, no meaning.

This central promise was based on a lie. Conservatives under Mr Cameron have no plans to introduce charges for the NHS, or to make people take out private health insurance, or to sell off hospitals. Both main parties agree the current settlement of the NHS, largely free at the point of need, with a mixture of private sector and public sector provision – public sector hospitals, private sector GP contractors. Neither party wishes to change this. Parties spent the election competing with each other over how much extra money to pledge to the existing NHS. Labour will discover this year there is no secret Tory plan to privatise or damage the NHS as we currently know it. Many electors had worked this out and were bemused by the Labour campaign.

Labour did not promise to end austerity, which many left wing voters took up as their mantra. I found this odd. I myself was happily saying I am against austerity. Surely the whole point of the election was to choose a government which can help the country fashion greater prosperity. The problem arose owing to the use of the word austerity. Austerity to the political classes means limiting the rate of growth in public spending below the level of previous plans, and below the level many politicians and officials would like. Austerity to most normal people means having less money to spend themselves.

Labour had no positive message for strivers, for private sector workers, for people who want to get on in the world. Their obvious enthusiasm to tax anything that comes from success and their wish to manage any market they did not like sent out the clear signal that they were anti enterprise, anti wealth creation, and therefore a threat to jobs and growth.

The Edstone offered us a “Strong economy foundation”, “Higher living standards for working families”, “The next generation can do better than the last” and “Homes to buy and action on rents”. It summed up the lack of ambition and the lack of a specific government plan on what to do. Every recent generation has been better off than the one that went before. Why were the higher living standards confined to working families and not also offered to single people and pensioners? There will always be homes available to buy. The issue is how many, where and at what prices?

It is true the Edstone was soon dropped and turned out not to be central to Labour’s campaign. The underlying banality was however central. What was Labour’s economic approach? How would they make us more prosperous more quickly than the Conservative plan? Their failure to answer that question left them in difficulty.

Their final pledge on the stone was “Control on immigration”. It was something many potential Labour voters wanted. There was no detail on how they would control immigration, and no numbers placed on what is at base an argument about how many people we can accommodate.

Their campaign by design had nothing to say to Scotland. It also failed to reassure possible Labour supporters in England that Labour did have answers on immigration, the economy and aspiration.

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Early work for the new Parliament – settling the UK constitution

56 SNP MPs will be demanding early action on the devolution of more powers to Scotland. They will be pressing on an open door, as the three main Westminster parties as they call them will want to honour their promises and to get this business out of the way promptly.

I hope the new government will be generous to Scotland in the powers it gives, and will want to add substantial fiscal devolution to the agreed list. The aim should be to let Scotland decide how more of her taxes are fixed and collected, and to spend that money in Scotland. This would all then be removed from the bloc grant from the UK.

To match this the new Parliament must also offer the same opportunities to England. Wales and Northern Ireland could choose how far they wish to go down the Scottish path to fiscal devolution, and how much they wish to stay with the bloc grant and common tax pool approach they currently use. The SNP MPs should see the fairness of England enjoying comparable devolution to Scotland’s, though England will exercise her greater self government through the votes of English MPs sitting at Westminster. The business of England and the business of Scotland are two sides of the same devolution coin, and need to be tackled urgently and together.

The new Parliament should also be invited to complete the unfinished business from the last Parliament to establish fairer boundaries with fewer seats for the next election.

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One nation

 

David Cameron was right to talk of one nation after his re election as MP for Witney. The new Parliament  has much to do to reassure the nation and to bring it together after a long election campaign that stresses the differences and accentuates the  disagreements.

One nation is one of the phrases that means several things. Today it has something to tell us about our economic policy, about the stresses on our union within the UK, and about  our relationship with the European Union.

Some interviewers and commentators are already trying to pit Conservative against Conservative in the new Parliament.  They should not underestimate the wish of all Conservatives to provide leadership that can reduce tensions and strengthen our nation. The Conservative party is at its best when it does seek the national interest.

There will be no disagreement about the need for an economic policy which generates more jobs, more better paid jobs, and continues the recovery. There is no disagreement that the rich and successful should pay more, and those in need should receive help from the state. Conservatives also believe it is no crime to be successful , that people at all income levels should keep a good  reward for their hard work and enterprise, that tax cuts for all can fuel more growth. Many voters in England did reject parties that proposed various tax rises and new taxes.

Nor is there any disagreement that we need to find a new settlement for the union of the UK that meets the aspirations of many Scots, and of  the rest of the UK. Only the Conservatives of the major parties spoke of England. As  the new Parliament goes about the task of honouring pledges to Scotland, and enters discussion with the SNP about what they want for Scotland, so we will need to look after England,Wales and Northern Ireland as well. Devolution has to be fair.

Conservatives also strongly believe that Europe is our continent, not our country. The EU should be a set of agreements with other European countries, not an override on our democratic government. We do not wish  the EU to have the power  to prevent the will of the British people being implemented by a UK government on matters as diverse as borders, migration,tax, benefits and the other important issues which the EU increasingly controls or influences.

I would sum up the huge task of this new Parliament in one simple phrase. The new Parliament has to do no less than establish the primacy and good working  of UK democracy. To do so it needs to continue a recovery to bring rising living standards for the many, to find a new settlement for our Union, and to work out a new relationship with the EU which ensures the important issues are settled here in our one nation, the United Kingdom.

Doubtless there will be many arguments on the way, within parties as well as between parties. That is healthy. It is called democracy.

 

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The tasks for the new Parliament

I go to London  today in the knowledge that we face a period of constitutional upheaval. The new Parliament has to complete the settlement for Scotland, offered by all three main parties of the 2010 Parliament. It has to deal with the growing powers of the European Union, as the Euro area seeks to complete its political union on top of its currency union. Above all the new Parliament needs to tackle the problem of England.

The General election was mainly fought around the issues of the UK economy and England’s health service. The Labour campaign largely missed the main points that the new Parliament has to settle. The English NHS was not under threat of privatisation and cuts in the way Labour claimed. Labour’s popular offer of a freeze on energy bills was overtaken by tumbling oil and gas prices, and recommended a solution which is likely to make the energy position worse.

The Conservative campaign concentrated on the economy, with a popular offer of tax cuts. Conservatives also mentioned the question of England and the need for a renegotiation and referendum on the EU, though this did not become the main issue of the election.

Today the reality needs to set in. The UK’s union has been badly damaged by Labour’s lop sided devolution policies of the last 18 years, with Labour once again providing a lead in offering a more lop sided devolution in the Scottish referendum campaign which was cross party.  Conservatives have proposed English votes for English needs. The official party position offers England a veto over all English matters. I wish to see a positive power for England MPs to propose and decide budgetary, tax and legal matters that apply only to England ( with Wales and Northern Ireland where the matter is only devolved to Scotland).

Labour and Lib Dem wishes to delay justice for England by a constitutional convention should not be allowed to hold up English votes at Westminster. Nor should England accept just devolution to cities and counties. England herself needs to settle the distribution of the England block grant, to fix her own taxes where they are devolved elsewhere in the Union, and pass her own laws.

As pressing is the need to engage the Euro area in discussion, to ensure the UK is not dragged into their political union, and to extricate ourselves from many powers which have already been given away without referendum endorsement under Nice, Amsterdam and Lisbon. As these Treaties are no longer separate documents, we need to review the full consolidated Treaty and seek exit from its federal controls, or negotiate trade arrangements and other co-operation agreements  in place of the Treaty.

The Greek crisis is revealing that of course the richer parts of the Euro area have to come to aid of the poorer parts. The rich parts have to stand behind the banks of the whole. The UK did the Euro a great service by staying out. Had we been in during the 2007-8 UK banking crash, I suspect we would have brought the Euro down, just as surely as we brought down the Exchange Rate Mechanism. It is now time the Euro area showed its appreciation of that wisdom, by agreeing we should not be part of the many controls and financial arrangements that a single currency area needs.

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China’s ambitions

 

On the other side of the world China is emerging as a major economic force. The administration in charge is progressively liberalising the Chinese economy, and bringing it more into the world marketplace. The new Connector between Hong Kong and the mainland permits more foreigners to buy Chinese shares and more Chinese to buy Hong Kong quoted shares.  China is working towards her currency being one of the big five in the IMF’s SDRs, and is out to establish the renminbi as the world’s second largest trading currency after the dollar. The Silk Road projects will spread China’s economic relations into the Middle East, Africa and Eastern Europe.

China under her previous administration showed she could become the world’s largest manufacturer. Her make it and sell it abroad model powered growth and allowed the country to build up large foreign exchange reserves. The  current ten year plan wishes to do the same with services, expanding them greatly. The money China has in reserves will help her build large financial and banking services businesses with global reach.

The west has to respond intelligently to these important developments.  The USA is seeking to construct a trade club built around Japan, her leading ally in Asia. The US will discover that China’s networks will also attract considerable support, as China’s advance is backed by substantial investment cash and a willingness to think big and take the long term view.

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Election Day

 

Today is the day for the voters to speak through their votes. I will not be posting about the UK today, until after the polls have closed.

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  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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