Impressive Ed

Ok, alright, I admit it. Ed Miliband has impressed me.

The election of the Shadow Cabinet was always going to be heavily scrutinised to see how much of a break with the past Labour MPs were willing to stomach in the face of such a forthright speech from their new Leader.

It's a curious situation to have to be in - wanting to take your Party forward, and to stamp your authority on your appointments, but still being hamstrung by Labour's rather torturous election regulations. Full credit, then, to Miliband Jnr. for acting to ensure that Nick Brown, one of the archetypal links to Gordon Brown, will not be contesting the Chief Whip position.

There were those that said that in electing Ed, rather than David Miliband, Labour were lumbering themselves with the more ineffective brother. This kind of ruthlessness, however, is hardly the mark of an ineffective leader. Instead, it is reminiscent of the swift changes David Cameron made to change the focus of the Conservative Party after he came to power in 2005. After a slightly lukewarm Conference speech, it seems the Leader of the Opposition is finding his feet. Interesting...

A Letter to the Guardian - Brown vs. Darling II?

This letter appeared in last week's Epsom Guardian:

Quite apart from the fact that they didn't have the courage of their convictions to actually sign their name (though I can probably have a stab at the author), I felt the letter warranted a reply. I wrote into the Guardian, and am hoping to have my letter printed tomorrow. For the purposes of space, I had to reduce my original argument by about half, so the longer version is included below.

Personally, I think it is extremely foolish for Labour to continue to frame their economic argument in the crass terms of 'cuts vs. investment', though I imagine those like Ed Balls will continue to do. Given Ed Miliband used his debut speech yesterday to state that the Opposition will not fight against cuts they think are necessary/right, it brings up an interesting point of conflict between the two. Balls' name is, of course, being widely touted for the Shadow Chancellorship. Surely Labour would not get themselves into another situation where the Leader is saying one thing, and the Shadow Chancellor is thinking something different?

Anyway - the letter:

I read with interest the anonymous contribution in your last issue, (‘Budget Will Put People Out of Work‘).

The letter, as with much of Labour’s reaction to the Emergency Budget, seems to be based on the fallacy – in part put forward by a recent Institute of Fiscal Studies report - that cuts in the public sector will automatically lead to vast, lasting unemployment. A closed argument that fails to take account of the Coalition’s welfare and business policies; the emphasis placed on getting people off benefits and back into the workplace, and on rebalancing our economy.

This economic recovery will be one fostered within the private sector, and to ignore this forms a circular argument that implies the public sector is the only possible workplace in this country. Given the grossly swollen public sector that they inherited, with its accompanying pension liabilities to the tune of £1 trillion, not included in any Labour deficit projections, shifting the balance away from the public sector would seem sensible, and crass attacks such as this are unhelpful.

The argument also seems to fly in the face of the figures. The UK’s GDP grew by 1.2 per cent in the last quarter. The additional cuts announced by the Coalition that your writer finds so unpalatable amount to 0.1 per cent of GDP by quarter. Cutting in this way is not a cut in economic revival, it is merely a cut in the size of the State. A European Commission study on defecit reduction found that out of 74 consolidations, economic growth accelerated in 43 cases. You need only look at the examples of Finland and Sweden to see the benefits of growth in this way.

However, this private sector recovery will not succeed if, as your writer alleges, the Government is ‘pulling the plug’ on business. I think a local example will serve to oppose this. When the local franchise of Puccino’s risked going out of business due to rent increases, it was the Coalition’s rate cuts that ensured it could keep trading. Cuts in business rates to small and large businesses alike are offering real support whilst the recovery gets underway.

In a week when the IMF has said the Government’s plans for defecit reduction are ‘strong, credible and essential’; in a month when Moody’s Investors Service has endorsed George Osborne and stated that not sticking to his plans could affect our AAA credit rating; in a Conference season where Alistair Darling comes out in favour of a strong deficit reduction plan, it seems a nonsense to view the economic measures currently being taken by the Coalition as ‘reckless’. What this country needed after thirteen years of fiscal profligacy and staggering beurocracy was a Government prepared to take the tough decisions in order to ensure economic revival. In the Coalition government, I feel we have it.

James Tarbit
Deputy Chairman, Political
Epsom and Ewell Conservative Future

P.S. There is one thing the writer and I can agree on, however; their analysis of why ‘most people join the Tory party’ – because they wish a smaller state. After thirteen years of beurocratic interference with front-line services and degradation of civil liberties, I think many people would sympathise!

Litmus - Rainbow Coalition Blogging

Coalitions come in many shapes and sizes. If the one put together in May took people by surprise, then how about a combination of Tim Montgomerie, Will Straw, and Dr. Mark Pack to add to the confusion. Conservative, Labour and Liberal Democrat hand-in-hand? Whatever next!

This powerhouse combination, though, is not holding sway at Westminster but rather in the publication of a new political magazine for the Conference season, Litmus.

Quite aside from the clever name, Litmus promises to be a very interesting publication. A partnership between three major blogs – Conservative Home, Left Foot Forward, and LibDem Voice, it has considerable clout when polling for contributors, with Tom Watson, Lynne Featherstone, Damian Green and Chris Huhne amongst the commentators on topics as diverse as Immigration, Climate Change, and Electoral Reform.

I was particularly interested to read David Boyle’s argument on income tax. Disregarding the LibDem insistence on progressive taxation, he instead called for a movement away from income tax to a programme of corporate reform and energy taxes.

“Increasing income tax these days just serves to entrench the separation of the mega-rich”

Indeed!

Thought has also evidently gone into distribution strategy. The first issue of Litmus is available for free if you promote it for them on Twitter; very savvy. With no cost involved, there seems little more to say other than go get it.

Paleolithic politics

I have watched the grandstanding from the TUC over the past few days with a sense of both sadness and deja vu.

I fully understand the right of individuals to petition their employers for improvements in circumstance and pay. When, however, Bob Crow can stand at the lectern and call for a campaign of 'civil disobedience' in the face of cuts that all Parties agreed were necessary to differing degrees, and garner support from the floor, then something is deeply wrong.

Yesterday, Mark Serwotka - head of the PCS Union - called for not only a moratorium on public sector job cuts, but even an increase in public sector funding to lift us out of recession. Failing to see that it will be the private sector - in particular small/medium enterprise within this sector - that will most likely provide the growth we so need, misses the point entirely and risks a further decline into deficit and debt.

The most glaring hole in the Unionist argument has been posed very effectively by City Unslicker - what would they do instead? In the face of almost unilateral agreement on the necessity of spending cuts - Labour's plan was to halve the deficit within four years - how would they ensure their aims?

The Unions obviously feel that the time has come to show their hand. It remains to be seen whether the result is similar to that of 1974, where industrial action had the result of bringing down the Government, or of the early 1980s, where the Unions' power was crushed by a government organised and determined enough to face them down.

Balls to Keynes

One of the fascinating elements of the current Labour Leadership campaign has been watching the various candidates make their pitches for what the Coalition Government is doing wrong, and what they would do differently. Much has been made of the spending cuts that Cameron, Clegg et al. have instigated this year, and the risks it could cause in terms of a double-dip recession. None of the candidates, however, have gone quite as far as Ed Balls. In an article for the Guardian today, Balls continued to press forward with the notion that 'any' cuts are wrong. According to Ed, even Labour's plans to halve the deficit in 4 years were foolish.

Balls' article is founded solidly in the Keynesian economic mould with its (effective) critique of past recessionary spending constraints in the 1930s and 1980s. I would argue, though, that the whole-sale deployment of a Keynesian model which he seems to call for in his the final paragraphs of his article brings a risk equally as significant as the return to recession he sees as the danger with the Coalition's plans.

For a start, it is unclear as to whether Keynes ever envisaged his concepts being applied to public finances in quite such a parlous state as the UK currently faces. Pulling interest rates down and increasing government investment on infrastructure might bring about eventual economic recovery through Keynes' multiplier effect, but at what short and mid-term cost in the current climate? Previous fiscal stimuli deployed by the Brown Government created an anaemic recovery at best and the danger with advocating further spending, or markedly restrained cuts, is that the interest rates on leveraging current debt become unmanageable. It is all very well for Ed Balls to dismiss the UK falling prey to the same issues which affected Greece, but how can he know for sure? How can anyone in fact?

Indeed, the Keynesian spending multiplier only works when the additional liquidity placed in the market is spent on consumption goods. i.e. When individuals spend the money they have saved/gained, this drives demand and increases employment. Perhaps one of the reasons the recovery engendered by the recent fiscal stimulus was so weak is that in the current climate this simply isn’t something close to tax-payers’ hearts in the UK, particularly when the current financial crisis came out of individual debt caused by people living beyond their means. As President Bartlett had it in the West Wing, upon hearing that his own aide had spent an advance tax rebate on paying down debt:

"Would a trip to Banana Republic have killed you?"

It is also interesting to note that Labour's use of the Keynesian model has been imbalanced. Increased government investment in a down-turn is one half of the model. The other, however, is putting up taxes and cutting government outlay during a boom to suppress inflation. Tax rises there certainly were, but rather than constricting the rate of spending Gordon Brown as Chancellor seemed happy to continually increase it. Part of this can be explained by the political necessity of redressing years of Conservative prudence/underspend (call it what you will) on the NHS and Education, but it seems to have gone much further than that with the result that both the RPI and CPI rates of inflation have been on the up since 2001.

At the end of the day, it is clear that political ideology is at the heart of any economic argument, whether Keynesian or Classical/neo-classical. Labour prefer to advocate the Keynesian view of higher taxes during a boom and high government spending during a bust as it fits best with an economy largely controlled by the government itself. The Conservatives argue for a more Classical economic view, as this works best under the much smaller government they strive for. In his article, Balls side-steps the fact that Government spending is still set to rise during this Parliament. He merely points out that there are constraints being placed in areas that he finds unpalatable. Rooting his economic arguments in politics makes good sense where he has to differentiate himself from other senior Labour figures in the Leadership elections. It does, however, blunt the intellectual thrust of his argument and increases the likelihood that it can be dismissed as political points scoring.

Surrey Labour Leadership event - Balls out

So it seems candidates will be even thinner on the ground tomorrow evening than previously thought. Questions to Ed Balls' campaign team bring the answer that Ed won't be anywhere near Surrey tomorrow.

Ben Bradshaw is going to be very lonely up there...

Labour Leadership hopefuls snub Surrey

So, the Labour Leadership contest is in full swing, with the candidates rushing around the country speaking at everything from public debates and think tanks to the opening of an envelope.

At a mere 17 miles from Westminster, you would think that the would-be Leaders of the Opposition would be keen to show their faces in Epsom and Ewell as a quick round trip. Sure enough, the Chair of the local Labour Party sent a letter to all members last month with the exciting news that David Miliband would be gracing Bourne Hall with his presence on Thursday 1 July. The other candidates were as yet unconfirmed, but would no doubt fall into line to avoid D-Mili hogging the limelight. In even more exciting news, this was to be the only event in Surrey during the entire campaign!

Sadly, all has not worked out well. An update e-mail went out today informing Members that the main Mili-man would not be able to make it down to the event, but was instead sending the smooth-talking doyenne of TV political chat Ben Bradshaw in his place. The other candidates are still unconfirmed.

But why wouldn't people go anyway, after all - "with no World Cup football on TV, there's no excuse!". No excuse indeed, but seemingly little point either. It seems that the Labour heavyweights are loathe to put themselves out even a few miles to speak in areas where their vote isn't high. A pity.

UPDATE:

In other news, rumours are circulating that local press are not being allowed to cover the event tomorrow night, in whatever form it takes. What have they got to say that's so secret?!

Post-election 1: Epsom & Ewell

So now that I've actually managed to get some sleep in after a mammoth Thursday night's electioneering, I thought it was high time I added my two pence in about the results, both locally and nationally. First up - the local area and campaigns I was directly involved in.

It was good to see that the Conservatives did so well in Epsom. My slightly bullish prediction of a 20,000-plus majority for Chris was always in doubt after the Liberal Democrat surge in the polls (which actually led to an increase in their vote in Epsom, unlike elsewhere), but to increase our percentage of the vote and poll above 30,000 votes is no mean feat. Full results were as follows:

Chris Grayling - 30,868 (56.2% of vote +1.2%)

Jonathan Lees - 14,734 (26.8% of vote +5.3%)

Craig Montgomery - 6,538 (11.9% of vote -8.1%)

Elizabeth Wallace - 2,549 (4.6% of vote +1.1%)

Peter Ticher - 266 (0.5% of vote)

Labour saw its vote all but disappear to the Liberal Democrats, who ran an aggressive campaign in the area. Our unfortunate independent cabinet - Peter Ticher from 'Radical Reform' - had a disappointing night, and didn't even bother to stick around for the count.

These results mean that next year's Borough elections could be very interesting. The controlling Residents' Association will be sure to come under increased pressure from all national political parties. The LibDems will hope to make inroads in the Town and Stamford Wards. Labour will look to add another Councillor in Court (perhaps even the former PPC if the rumours are true and he decides to stick around?). Finally, the Conservatives will be hoping that the increase in their vote translates to further successes following their recent by-election victories in Ruxley. It's going to be interesting!