Friday, January 28, 2011

The government's economic plan

"An economy based not on consumption and debt but on savings and investment."

Simple when you think about it.

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Tuesday, January 25, 2011

Double dip?

Do today's GDP growth figures tell us that we're on our way to a double dip recession (read as a Labour dream scenario)?Personally I would like to see John Rentoyl nominate this for his Questions to which the answer is no series although something tells me he isn't likely to agree it should make the list.

Today's figures of a 0.5% contraction are disappointing, have given us a day of concealed Labour gloating and certainly not what we really wanted to see at this point, but...

And There is a but here although some people see it as just an excuse (on Twitter someone described it as the British Rail excuse) but you may have noticed we had a spot or two of bad weather in the last quarter.

This is what the Chancellor has been pointing to today ending with the fantastic line (I'd love to know who came up with it because it's genius) of "we won't let bad weather blow us off course", which has begun to stick.

By comparison Ed Balls, who has probably done better than Alan Johnson would have done today, pointed to Bobert Barro and Ricardian equivalence as to blame, throwing in a bit of stagflation for good measure, proving he still knows how to communicate in catchy voter friendly soundbites. In voter speak though he basically pinned the blame on a fall in confidence.

In reality it's probably a bit of both, but to suggest there's a fall in confidence to blame alone, and that this is a result of government cuts which have been announced but not yet taken effect (public spending is up on this time last year by something like 5%, not cut yet) is rubbish when business confidence surveys all say otherwise.

The ONS, who say their data is iffy at best this quarter, and likely to be significantly revised later (this is the first of three estimates they will produce), have said that discounting for the snow, growth would have been flattish (so somewhere around zero but maybe a little higher).

So, conclusion. Does this mean double dip? No in my humble opinion, because of the weather, other indeterminable factors and the fact we expect growth to slow during a climb out of recession. The weather depressed sectors such as construction significantly and on top of that confidence is just not taking the beating that Labour would have you believe these figures suggest. Basically this is the equivalent of a rogue poll, the numbers alone don't capture what's really going on out there. Businesses I talk to, particularly smaller ones who will be the real driver for growth, are feeling positive, a little nervous perhaps, but generally they feel like things are on the up and are seeing then as such. I suspect that the ONS early estimates collect data from big businesses first, as they have better data collection and feedback processes, and that these are most affected by working for the public sector and a fall in potential future revenues hence the low figures, which were then compounded by the snow.

Basically though we'll just have to wait and see what the next quarter brings us and of course hope that the weather stays warm.

Bootnote: I think Osborne won the communications battle today with a catchier line and a message people can understand and relate to. For most people they can think yes, the snow got in the way of me getting out and spending, whilst far less will be thinking, well I spent less because I'm concerned about future cuts in my income.

What is concerning in the ongoing Comms battle though is how the message that there's no plan for growth is sticking. There's a lot of policies out there, but no document or plan with a catchy name bringing them together or a Comms strategy for telling people about it. This has to change, especially as even out own side had started jumping on the bandwagon.

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Monday, January 24, 2011

Clegg – You shouldn’t believe what the Lib Dems promise

Lib Dem Leader Nick Clegg was on Marr this weekend and talked very openly about the Lib Dem tuition fee promises and why they couldn’t be delivered.

Clegg responded to Marr’s question on the backlash on tuition fees by saying:

“Firstly, of course when you say you want to do something in politics, particularly during an election campaign you do it on the assumption you can get elected in office in your own right.”

To which Marr replied rather brilliantly, saying exactly what everyone was thinking:

“Doesn’t that mean almost anything you say in an election campaign doesn’t count... because you’re never going to be in charge”

At the end of the day the electoral math currently makes it practically impossible for a Lib Dem majority unless the leaders of the Conservatives and Labour are found out to eat babies the week before an election. So therefore you can assume that everything in the Lib Dem manifesto is just an idea to be taken with a pinch of salt.

Or maybe there’s an alternative, perhaps in 2015 their manifesto pledges and promises could be colour coded, with little red and blue dots next to them. Red for those that will survive a Labour coalition and Blue for those that would survive a revival of the Tory-Lib Dem coalition. Anything without a dot (as the Tuition fee promise would have had) you would know is just a hollow electioneering stunt.

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Sunday, January 23, 2011

On Coulson

Busy day Friday, and weekends are family time which means no blogging so I haven't had a chance to write anything on the Coulson resignation until now. Personally I was surprised to see that he's offered his resignation and that the PM has (this time if you believe the papers) accepted it.

Why? because Coulson was a vital member of the no 10 team, not as many people think in terms of keeping Steve Hilton and his "crazy" ideas in check but in terms of the dynamic equilibrium that is a vital part of being a modern vote winning political party.

And by dynamic equilibrium I don't mean as David Davis has apparently just pointed out that he was the one from the poor background who could understand poor people as a result. Frankly that's an offensive argument that suggests you can only empathise with people and their issues if you are the same as them. Utter rubbish.

In my mind the dynamic equilibrium at the heart of no 10 was this 1) Steve Hilton came up with the ideas that can get the Conservative Party elected again. By this I mean the ideas that appeal to the floating voters and ex Labour / Lib Dem voters. As most readers will no I really don't believe that a swing to the right would have won us a majority. It was Hilton's detoxification strategy which meant people felt comfortable voting blue again. The problem was not enough of them felt comfortable.

So what's the equilibrium then you say? Well 2) Coulson was the one who knew what would get the media onside and not piss off the traditional voter. Every Hilton strategy from the original Husky trip, back in those early days of Team Cameron, through to the Big Society was and generally is ridiculed by the papers, even if the voters like it. Coulson was there to make sure they were fed traditional red meat Tory fodder, because without that dynamic equilibrium between the two we can't win an election. You can't get the media to take you seriously, you can't mobilise the base and you can't win the floating voters.

The issue at the election wasn't that we needed to go one way or the other more, it's that we didn't get the equilibrium right, and haven't quite got it right since May. Was that Coulson's or Hilton's fault? If they hadn't been fighting (allegedly) would it have been better? Probably not, because every dynamic equilibrium needs both co-operation and competition, without both you've got no equilibrium.

So replacing Coulson will be tough, not because he provided a council estate counter balance to the Eton playground but because he provided that competition and co-operation we need.

A final thought on whether this will damage the PM. Personally I don't think so, the Left are trying to spin this as bad judgement on Cameron's part. This story just won't stick with the public though. They don't care (unless they already hate Tories or News International). They didn't care that Ed Milliband showed spectacularly bad judgement by putting Phil Woolas in his Shadow Cabinet, when remember, there was a pending court case that he subsequently lost and they won't care or remember about this. To date Coulson hasn't even been charged with anything, so really who's showed the worst judgement?

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Thursday, January 20, 2011

NHS hypocrisy

Speaking on Sky News today Ed Milliband said
"The health service has a very low settlement in term of its financial position"

Suggesting that the government's plans to increase health spending in real terms (not just cash terms) year on year just don't go far enough for the opposition.

Which is odd considering in June Andy Burnham said "It is irresponsible to increase NHS spending in real terms" whilst in the same month now ex Shadow Chancellor Alan Johnson said "There is no logic, sense or rationality to it at all in the current economic climate, and it will do great damage to other parts of the public sector. You can make savings in the NHS and you can ensure those savings go into frontline care."

So does Ed Milliband want to lead a Labour party that is pro NHS cuts or has he decided to join the pro NHS Coalition government?

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Tuesday, January 18, 2011

Inflation hits 3.7% - King changes his tune

Today's inflation figures show that CPI has hit 3.7%,  1.7% above the Bank of England's target rate of 2% and since January an increase of nearly one percenatge point.

What's interesting is that back in January, when I was clearly wrongly saying that an interest rate of 2.9%, (The result of the biggest single one month rise in history of one percentage point) was bad news for Labour's re-election, Meryn King was saying that interest rates would almost certainly have to rise to control it. Not only that but that the patience of Britons would be "sorely tried" as a result of stagnant pay and a real terms decline in living standards.

Fast forward to today and with interest rates at an even higher level is he saying the same thing? No he's silent and the MPC have again voted to keep interest rates where they are. In fact he has been arguing that the current level of inflation is a blip despite evidence showing it clearly isn't (Thanks to Spectator Coffee House for the graph).

The big question though is why is there no government reaction to the continued failure of the MPC to hit their legally mandated  2% target. In fact the PM's spokesman this morning said that he had complete confidence in the MPC. There are two ways you can look at the government's silence on this issues either:
1) They support the MPC's position to keep interest rates low and agree to risk inflation running away in order to prop up the housing market and give the economy a false boost (a dangerous game)
2) They really believe that interest rates should be the domain of the Bank of England and not politicians so believe that they must support them and trust their judgement on the matter.

Of these I think option two is the least worst of two evils, but it's hardly a poplicy for a stable economy.

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Fili-what? The Filibuster hits our shores

There's suddenly a new word in British politics, a word which is normally only heard on the other side of the Atlantic.

1. U.S. Politics .
a. the use of irregular or obstructive tactics by a member of a legislative assembly to prevent the adoption of a measure generally favored or to force a decision against the will of the majority.
b. an exceptionally long speech, as one lasting for a day or days, or a series of such speeches to accomplish this purpose.
c. a member of a legislature who makes such a speech. 
For many people their only knowledge of Filibusters is from The West Wing Episode - The Stackhouse Filibuster, which shows an elderly senator giving an extended length speech in order to stall a vote on a Family Wellness bill on which his autism centre ammendment had been defeated. It turns out that his grandson has autism (hence why he is so determined) and of course after the Whitehouse realise this they support him and his fillbuster and the bill is (we presume) ammended. The episode leaves you with a feel good that the system works and that the right things was done.

Of course as we watch fillibusters appearing in the British political process for the first time you look at that episode in a slightly different light. Was it right for Senator Stackhouse to hold up an otherwise acceptable bill for what was effectively personal gain?

If looked at in that way then someone in the Labour top tiers did indeed get The West Wing for Christmas as I previously suggested (It's series 2 episode 17 so they clearly haven't had time to get far through it), as this is exactly what Labour Peers have been doing in the House of Lords.

The idea appears to be to talk for as long as possible in order to draw out the length of time of the debate whilst claiming that all you are doing is properly scrutinising the bill and offering helpful (read as 200 plus) ammendments. In reality peers are just waffling, as this well reported example from Lord Harris of Harringey at 1:45am this morning:

“So what were the reasons for choosing 600 (MPs) as opposed to 650, 630, 575 or 585? I was tempted to say that there was some sort of arcane numerology about this. Noble Lords will be aware that 650 is the product of three prime numbers: two, five squared and 13; 630 is of course the product of four prime numbers: two, three squared, five and seven. I defy anyone to find a similar formulation or number that involves five prime numbers. Maybe my noble friend Lord Winston, or some such person could come up with something.”

Labour claim that their issue is the bundling of the AV referendum with the redrawing of constiuency boundaries and the loss of 50 MPs as a result, and have previously tried to block this by making out that it was hybrid legislation. An initial challenge that was defeated. In reality it makes sense for the two aspects (both of which will come into affect at the next general election) to be in the same bill as they both relate to the reform of our electoral system.

In reality they're playing the numbers hoping that in the end the government will given in and split the bill on the basis that failing to deliver an AV referendum in May will cause unrest on the Liberal benches and amongst their activitsts. If this happens they then hope to be able to delay the boundary changes, possibly indefinitely but definitely too late to be implemented for the next election. Why? Because as everyone knows the current boundaries are uneven and favour Labour. It is after all the current system that means that the Conservatives could get a national vote share that means they fail to win a majority but which would result in a Labour majority if the situation were reveresed.

So the Filibuster continues, unhindered by the guillotine and business order motions that mean we never see these in the House of Commons. The Lords are certainly earning their money at the moment, or they would be if they were paid.

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Friday, January 14, 2011

What does the Old & Sad result mean for the coalition

With the Tories pushed to a distant third place and a massive Labour majority of 3,500 delivered in Thursday's by-election in Oldham and Saddleworth does this result really have any bearing on the future of the coalition?

I'm coming a bit late to this, with pretty much every politico under the sun having passed their judgement already, but for what it's worth here's my two cents.

The Oldham result strengthens the Coalition and increases the chance of it surviving for two reasons:
1) The Lib Dems actually increased their vote share, proving that being in coalition with the Conservatives hasn't actually damaged them electorally. Quite a lot has been written about whether these were traditional Lib Dem voters or tactically voting Tories, but from an electoral point of view who cares. When you're expecting you vote to collapse (as national opinion polls suggest) because of who you've been associating with then an increase in your vote share can only show your your worries were unfounded.

This increase will stop back benchers from grumbling (well Lib Dem ones anyway!) and reduce the risk that they'll stop supporting the government on the grounds they want to protect themselves at the next election.

2) Overall more people voted for the Coalition than Labour, by a long way. If there had been a coalition candidate (and I'm not suggesting there should have been) then they would have walked it. This proves that voters overall like what the coalition are doing, it's just that the vote in favour is split two ways.

So in my view the Oldham vote only strengthens the Coalition, and reduces the chances of a Lib Dem back bench revolt which brings down the government. The only danger is that with such a fall in the Conservative vote share we risk giving the grumblers in blue yet more to grumble about. The so called "mainstream" Conservatives (a phrase I think couldn't describe the grouping less) will just add this to their long list of reasons why the PM and the party should swing further right. Sadly they're wrong but it won't stop them trying.

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Thursday, January 13, 2011

Oldham East & Saddleworth - Undecided voter experiment

So it’s election day in Oldham East and Saddleworth so let’s play a game and pretend I’m an undecided voter sat at work trying to work out who to vote for, so what do I do? Of course I Google the candidates and take a look at their websites to see what they stand for.

Debbie Abrahams - Labour
First up Labour Candidate Debbie Abrahams. Well I struggle to find her website as searching for "Labour candidate Oldham East" just comes up with loads of news stories about Debbie Abrahams being selected, not her site. After a bit of work I find her site and look for an about me page to read all about her, except there isn’t one. So then I look for her priorities or policies page, except there isn’t one. So I read the text on her home page which says:

“The LibDem-Tory Government is making the wrong cuts, at the wrong time.

In Oldham East and Saddleworth they’ve let down local people. The axing of nearly 1,400 police officers, the increase in tuition fees and the VAT rise are just three of the Lib Dem broken promises we need to expose.

It doesn’t have to be like this. There is an alternative. This by-election is your chance to send a message to the Lib Dems and to Nick Clegg."

It doesn’t say a lot so I watch her video and it says the same thing.

Conclusion: Vote for me because I’m not a Lib Dem. My priorities are exposing broken promises, but I don’t have any policies or local priorities and not just because my party’s policy book is a blank sheet of paper.

Elwyn Watkins – Lib Dem
Next up Liberal Democrat candidate Elwyn Watkins. Good start for Elwyn when his website appears as the first hit on Googling for Lib Dem candidate Oldham East. Then it all goes a bit wrong again as like with Debbie Abraham’s there’s no obvious about me page (it’s tucked away under contact Elwyn & the Team for some reason) or a policies or priorities page.

So I’m left reading the home page text which says:

“Elwyn is well known locally as a straight talker. He has proven he will fight for what is right for local people. He lives locally in Delph.

As our new local MP, Elwyn's priorities will including fighting for more jobs, better health services and to keep our streets safe.

The by-election looks set to be a photo finish between Elwyn Watkins and Labour. There were just 103 votes in it last time!”

Conclusion: Vote for me because I’m local. I’ll focus on jobs, the health service and crime. Don’t vote conservative because otherwise you’ll get Labour.

Kashif Ali – Conservative
It doesn’t start well for Kashif after Googling "Conservative Oldham east candidate", as the first two hits are all about how low key the Conservative campaign has been in Oldham followed by an article on Labour Uncut about how David Cameron forgot his name. His website comes in at number 6 on the Google, but at least I don’t have to know his name as I do with Debbie Abrahams.

At last I cry an about page, where I learn that Kashif is local, and is a barrister, first candidate who is happy to clearly say what they are doing at the moment (Elwyn turns factories around apparently, and who knows what Debbie does, I’m guessing she works for a Union). No priorities page but the about page points out :

“Kashif's key priority is the economic regeneration of the constituency. "Jobs, businesses, and better public transport are the key to prosperity and the key to a better future for residents."

Having benefitted from a good education himself, Kashif realises that good schools and educational opportunities are essential to unlocking the talent in our communities and families.

Tackling drug crime and guns in many parts of Oldham needs a concerted effort. Where drug dealing is concerned Kashif wants zero tolerance policing as well as a renewed focus on re-cooperating the proceeds of crime, a much greater police presence on the streets, harsher sentences for those convicted and for communities to start reporting suspected dealers.”

Conclusion: Vote for me because I’m local. I will focus on improving the economy through improved public transport. I will also focus on education as well as tackling drug and gun crime through zero tolerance policing and a greater police presence. I also want harsher sentences for criminals.

Overall Conclusion
The websites of all three candidates are rubbish, none of them give that election day floating voter the information they need to make their mind up. Particularly poor is that of Debbie Abrahams which fails to tell you who she is or give you a positive reason to vote for her. Elwyn Watkins’ is a little better but fails to give any meat to how he will achieve his priorities. Of the three Kashif Ali’s is the best of a bad bunch as he actually lays his cards on the table and tells you who he is and what he believes in.

In the end though  if I was an undecided in Oldham today that exercise wouldn’t have helped me one bit.

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Wednesday, January 12, 2011

Only 15% of students make the academic grade

For years we've been hearing of the success of our education system. Standards have been going up year on year with the league table pass rates (5 A*-C grades which must include English and maths) at their highest ever level. It's evidence of the success of our education policies said Labour over 13 years.

Except it's not, it's simply evidence of the dumbing down of education that has left us in the shocking state we're in today. You see Michael Gove has just introduced a new league table measure, which show's things rather differently. This new measure, the English Baccalaureate, is the percentage of pupils attaining 5 A*-C grade GCSEs to include maths, English, science, a humanities and a foreign language. A measure of a rounded education you could say. What's shocking is that only 15.6% (1 in 6 pupils) in the UK managed to achieve that. Compared to 53.4% under the old system.

Of course Head Teachers are complaining. This is an unfair measure, they say, our students (read as the Head Teachers) didn't know that this measure would be used 3 years ago when they picked their options. The previous government pushed our pupils towards vocational courses in other subjects yet more grumble. What about diplomas a small minority call. Won't somebody think of the children a Head from an inner city school screams from the back.

At the end of the day though head teachers and teachers have participated in this deceit. None of them questioned the league table measures and whether they measured real attainment, or indeed were useful for employers, colleges and universities. None of them complained when languages were dropped as compulsory GCSEs. As a result of this (and it not being in the league table) One of our local schools has all but dropped languages from the curriculum. Pre GCSE you'll do one term of French, with one one hour lesson a week, then switch to German for the next term. In the final term you'll do no languages. Last year less than 20 pupils took the French GCSE, those that did unsurprisingly obtained less than stellar results. I haven't even looked up the school's baccalaureate score, I know it will just be depressing. I'm willing to bet languages will get a bit more focus now though.

What these figures show is that school's haven't just been teaching to the test, they've been teaching to the league table. I don't think anyone could argue that pupils shouldn't leave school with GCSEs in the core subjects of English, maths, science, a humanity and a foreign language so this new measure is certainly a valid one regardless of what the Head Teachers may be claiming.

These figures also banish another great myth which falls alongside the abolishment of boom & bust. That Labour spent 13 years improving education for the better, in fact they spent 13 years destroying it.

Bootnote: One has to wonder if all these failing schools that have been turned around have done so purely by changing the curriculum mix. If you were making everyone do real GCSEs in the core subjects and then you swap that to softer subjects and GCSE equivalents, your league table scores would improve immeasurably. Something to look into I think.

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Quote of the Day

"We've ended up with a Shadow Chancellor who can't count and a Labour Leader who doesn't count"
  - The Prime Minister, PMQs

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Is Steven Gerrard really worth more than Bob Diamond?

Bankers bonuses are in the news again as banks start to announce their bonus pools and the general public fails to understand why they’re so big.

First up to announce bonuses appears to be Barclays, a bank which remember, didn’t take a government bailout. To thunderous condemnation from the left their Chief Executive Bob Diamond will apparently receive a bonus of approximately £8m on top of his £1.35m annual salary and the overall bonus pool for all staff will be £2.5bn.

By comparison it’s estimated that Liverpool captain Steven Gerrard earns a weekly salary of £120,000, equating to £6.24m a year. So what you say, Bob earned more than that in bonus alone this year.

But let’s look at it another way. In theory the highest paid person in an organisation is the one that should be most responsible for the performance of that organisation so how have Barclays and Liverpool, or Bob and Steven performed?

In 2009 Barclays made a pre tax profit of £11.6bn, much of this was due to selling off Barclays Global though, so if you discount that then pre-tax profits were actually £5.3bn. Full 2010 figures aren’t available but the first half of 2010 saw pre tax profits of £3.95bn so as a guess let’s double that to reveal profits of £7.9bn. As a reward for creating those profits Bob Diamond (who earned no bonus last year or the year before) has earned a total of £9.35m which is 0.1% of the profit.

By comparison Liverpool made a profit in 2008 of £8.3m on a turnover of £159.1m (This is the only year I can find figures for although 2009 turnover was apparently up to £184.8m). Presuming 09 profits went up in line with turnover to £9.6m and generously 2010 profits went up by the same percentage again to £11.15m (unlikely), then Steven Gerrard was rewarded for creating those profits with 55.9% of them. (I know he wasn’t technically because his salary was in the costs, but go with it)

So Bob Diamond who created £7.9 billion pounds worth of profit was rewarded with 0.1% of it, whilst Steven Gerrard who was responsible for just £9.6m was rewarded with 55%. Even if you say he was responsible for turnover (given that profitability was not his responsibility but management’s) then he was still paid 3.4% of turnover (30 times what Bob earned as a percentage of profits) .

I know the comparisons aren’t really direct but you don’t see everyone in the country, and especially the media screaming in the same way that footballers shouldn’t be rewarded the sums they are. Despite the fact that they produce significantly less economically than bankers and are rewarded significantly higher percentages.

Bootnote: Harriet Baldwin MP just tweeted a reminder that for every pound of bonus paid the revenue will get 62.8p in income tax and employer’s National Insurance contributions so those £2.5bn of bonuses will net the exchequer £1.7bn of cash to play with.

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Tuesday, January 11, 2011

Oldham East - a visiting activist reports

Yesterday I made the 270 mile round trip from Stratford to Oldham to do my bit to help our candidate in Thursday's by-election.

I spent some time out delivering (just under 150 leaflets delivered by my own good hands) and hung out in the campaign HQ for a bit whilst I finished up some work and helped out.

The big question on everyone's lips coming through the door was how's it going, are we going to win? To which I'm afraid the answer from those within the campaign was a rather limp, "yeah, it's good, it's ok, we'll see" . This was the impression I was left with overall about the campaign, there was just a lack of energy. I know much has been made of the perceived lack of support from CCHQ but in my view there was just a lack of energy from the campaign team at the HQ, nothing to do with central support. It certainly didn't feel like our campaign HQ did 4 days before polling day and we were a safe seat.

As far as central Party support goes Baroness Warsi was there when I arrived and telling someone she would be there all week, and I saw a few familiar MP faces coming through the door. There certainly wasn't a lack of support from activists from all over the country as well, who were turning up throughout the day, all keen to help our guy get elected and to not help the Lib Dems.

Speaking of Lib Dems their posters were everywhere (apparently only having gone up this weekend). As I drove to my delivery area I only saw Lib Dem posters in front gardens. If they're behind in the polls it's not affecting the support of their core voters and activists who are still keen to show their allegiance. I also saw a UKIP billboard (Interestingly with an anti-immigration not anti EU message) and two pubs proudly displaying large UKIP posters on their outsides. There was also a smattering of Labour posters on a few houses (a vote for Labour is a vote for fairness apparently), but not a single Conservative poster. (the large ones were going up that day, but I think it's the garden ones that matter. Where were the local Conservatives showing their support?)

In terms of other activists I saw a group of 4 Labour activists out and about proudly wearing their rosettes and clutching literature, but no Lib Dems and no other Conservatives. To be fair they could have been there but hardly anyone from our side was wearing a rosette (I wasn't offered one, but brought my own) which coupled with the lack of posters made the campaign feel somewhat invisible on the streets. The fact that people seemed to be being sent to delivery areas individually, and only in groups if they came as a group also meant less impact in an area. In my view you want the residents of an area to know the campaign has arrived when it rocks up to a street, even if all it's doing is delivering leaflets!

And there lies another concern for me, the efforts of all these imported activists and MPs are being used just to deliver leaflets. Presumably they have a canvas from May, but things have changed a lot since then, or maybe they've already completed one earlier in the campaign. Regardless you've got MPs (and activists) who have successfully convinced voters on the doorstep to vote Conservative who aren't getting the chance to do that in Oldham. You have to ask is this the best use of such a valuable campaigning resource?

Also in terms of targeting resources, I'm a big fan of targeted campaigning. Trying to match your message to an area and its demographics is important, but this didn't seem to be happening with literature. To an area filled with massive houses with stunning views and BMWs and Mercs on the drive I was delivering a leaflet on how Labour want to tax lower earners to keep child benefit for higher rate taxpayers (I.e we've taken away your child benefit), whilst back at the HQ someone was coming back from delivering a leaflet on the housing benefit cap to an area of social housing (this leaflet didn't really go down very well, was her feedback). The process of campaigning, i.e we must deliver 3 bits of literature to every household, seemed to be taking over from an intelligent campaigning approach, which was a little disappointing.

So in conclusion how's it going to go? Difficult to call, and the polls don't tell the whole picture, there's one thing to tell a pollster how you'd vote in advance but I think on election day in the booth, the fact you're not electing a government but just am MP to represent you might change things. If that's the case then local issues will take over (a post on that tomorrow).

Bootnote: Something I was disappointed in was the fact that as I arrived (along with a few more people) Kashif Ali our candidate was there, but he then disappeared off without introducing himself or thanking those who had journeyed to help him. It's a small but important point for candidates. You may be tired, you may be focused but you've got to thank those people who are working for you.

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Monday, January 10, 2011

That's Mr Prime Minister to you Ed

The beginning of the second series of The West Wing depicts how, then Governor, Bartlett, got elected for the first time and how his team of advisors came to be. There’s a fantastic scene where his early advisors (who are subsequently sacked in favour of Josh, Sam and Toby) are telling him that he has to stop calling his opponent by name. “Well what should I call him then” cries a frustrated Bartlett. “My Opponent, or the Senator from ...” they reply.

The point being that using your opponent’s name just helps the public to know who he is, increases brand awareness for them, and therefore doesn’t help you.

It’s an interesting idea and clearly someone on Ed Milliband’s writing staff was given the West Wing box-set for Christmas and has got to the beginning of series two in their break. However they’ve decided to take a different message from it.

Regular blog readers will know I love to Wordle a speech or article to see what the key words are and last week Ed Milliband wrote a piece for the Times in which he attacked the “Conservative Deceit” over the deficit. The piece has been taken apart left right and centre for just how wrong, and indeed deceitful it was, but what interested me was the way he talked in it.

There wasn’t one primary word that popped out above the others (see below), but there were instead a handful of common words, Labour, VAT, growth, Osborne and most interestingly Mr.

It turns out that every time he referenced the Prime Minister or Chancellor he called them either Mr Osborne or Mr Cameron and this is something I’ve seen Labour doing elsewhere as well. Clearly someone in Millband’s team thinks that reminding the public that they are the PM and Chancellor and therefore in charge and therefore making these tough decisions isn’t a good idea. It also to an extent belittles them somewhat and I suspect someone thinks there’s a touch of class warfare in there too.

Bootnote: Interestingly I’ve noticed that Tim Montgomerie  has done the same thing in a recent article reviewing the PM’s performance on Marr, only calling him Prime Minister once. Does this say something about how he views the PM as well?

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Friday, January 7, 2011

Control orders should be replaced... with prosecution

I’m against Control orders. There I said it, now the right wing of the party can call me a Liberal Conservative, but I read Tom Clancy (whose new book
is really rather good and probably as right wing as you can get) and am very much in favour of dealing with the Terrorist threat in a way that works (but then who isn’t).

The problem with Control Orders is that they curtail civil liberties and they are just a replacement for something else, either surveillance or prosecution. The problem is that surveillance costs MI5 money, and isn’t always effective, but then neither are Control orders with 1 in 6 slipping away are you really telling me that if you’re watching someone 24/7 that more than 1 in 6 will get away from you? The other advantage with surveillance is that you can see who else they’re visiting, who else they’re communicating with and pick-up more suspects. Basic Tom Clancy spycraft 101. If the issue is cost or resources then give MI5 more money, you’ll be hard priced to find someone who will vote against more money to catch terrorists, even if it means less money for another area.

However the alternative is obviously prosecution, which is also a powerful tool for disruption. Lawyers and GCHQ have traditionally been against the use of intercept evidence and covertly gathered intelligence in courts but a way around this has to be found so that the judiciary can prosecute, if the evidence is strong enough to take away civil liberties indefinitely then it must be strong enough to prosecute in some way.

But there’s another side to prosecution that is pointed out by Dominic Raab MP on Comment is Free today. In 2007 MI5 stated that there were an estimated 4,000 terrorist suspects and we are always hearing about how many plots are foiled (a number were apparently foiled over Christmas including one which would have involved an attack on Parliament) the threat is increasing however against this are we seeing an increase in prosecutions for terrorism? Or an increase in the usage of control orders? No in the last 4 years prosecutions have reduced by 90% and at present we have only eight control orders the lowest number since their introduction.

As Dominic Raab says prosecution is something both sides of this arguement should be able to agree on. If I was Clegg I’d be announcing that Control Orders are being abolished today in favour of the creation of a new specialists court that allows the use of intercept and covertly gathered intelligence. It’s the sensible choice which can unite both sides of the coalition.

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Thursday, January 6, 2011

Why Andrew Lansley was right to cancel the vaccination advertising campaign

"The Health Secretary has been silent. The only attention he’s paid to preparations for this winter’s flu outbreak was to axe the autumn advertising campaign to encourage people to get vaccinated and make them aware of the risks." said John Healey Shadow Health Minister about the flu which struck just before Christmas and continues today, but was The Health Secretary right? Would an advertising campaign have made a difference?

Lansley has already jumped on Healey for his other comments in relation to choosing not to vaccinate under 5s for what he described as "cost reasons", but has been less strongly defended his decision to axe the annual advertising campaign. He's only said that he didn't believe that an advertising campaign would have made a difference.

Well according to the Interim Chief Medical Officer who was on Radio 4's PM this evening new Department of Health figures show it wouldn't have. Why? Because it turns out that at risk group vaccination levels are now at the same level as last year. In fact if supplied doses of vaccine are anything to go by then 14.7 million doses (roughly last year's number) have been delivered and 98% of them were delivered to GPs for use by the end of November.

In December the uptake rate was seen to be roughly 2% lower than last year which seeing as uptake is now the same was hardly a concern then and certainly isn't now. Also I can't find anything to say if that is 2% lower than last year or December last year which is important. Plus don't forget last year saw mega media coverage thanks to swine flu.

But people have died because the campaign was cancelled Labour supporters scream. However the figures before Christmas don't seem to bear that out with 39 deaths, 38 of them under 65 so not in what is the largest at risk group (although there has today been a horrific case of a recently pregnant woman dying due to complications due to swine flu and pneumonia, and there is now evidence that pregnant women died in the 09/10 outbreaks due to clinical failures to diagnose and treat swine flu quickly enough)

So in my view Lansley made the right choice. Government advertising spending was out of control (up from £59m in 1998 to £232m in 2009) and had to be cut. I've seen two figures for the cost of this campaign one said £1.5m the other £180,000. I find it hard to believe you can get much of a national ad campaign with significant reach for £180,000 though, but even if it was only that, it was still the right choice. If we keep everything just because it doesn't have six zeroes after it the deficit will never come down.

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The Labour Twitter Ghetto

I'm a sucker for a great visualisation and yesterday I came across a great one which used Tweetminster's political twitter data to visualise the connections between different groups.


It shows some quite interesting features. Firstly that the Lib Dems are far less clustered on Twitter than any party (and far less prevalent as well) but also that Labour Tweeters are far less likely to be connected to other non Labour Tweeters than any others and so are one of only three main clusters. The blogger refers to it as the Left Ghetto.

Not that there isn't some ghettoisation in the Conservative tweeters also but it appears significantly worse for Labour supporters. Why does this matter, well during the election, which was as you may remember Twitter obsessed, Labour were applauded for having the most success with Twitter and therefore winning the online campaign (although of course subsequent research has shown that taking into account Facebook, websites and email this wasn't the case). However this data shows what we always suspected during the campaign, there may have been more people Tweeting from the left, but they were mainly talking to each other, not the public.

The other surprising thing (for him anyway) that came out of this analysis though was that Channel 4 News Presenter Krishnan Guru-Murphy is the centre of the Political Twitter universe, connecting more people to each other than anyone else!

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Wednesday, January 5, 2011

Fair fuel stabiliser - you read it here first

According to Cathy Newman of Channel 4 News the Prime Minister just took a question at a Cameron Direct event on high fuel prices and responded with details of the Fair Fuel stabiliser. A conservative manifesto pledge that fuel duty would go up and down in line with the price of oil, thereby stabilising pump prices.

What's slightly strange is I blogged about this just the other day in relation to how to fix the issue that high pump prices correlate to low poll numbers for governments.

What's stranger still is he apparently mistakenly called it the Fuel Duty Escalator (which is the policy that put fuel duty at the levels it's at today) which is what I accidentally called it when I first wrote the post. Coincidence, evidence that the PM reads this blog or evidence that I'm far closer to no 10 than you thought? I'll let you decide!

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House Price stability: Why Grant Shapps is right

A few days ago an interview appeared in the Observer in which Housing Minister Grant Shapps, said that the era of roller coaster house prices was over and that the market needed to return to stability and level house prices. There were few levers government could pull he pointed out, but they’d like to try.

Never mind that he was restating something he’s said before, the Daily Mail and the right wing Twiterrati went ballistic. He’s anti capitalist they screamed, he wants to play with the market, how can he call himself a Tory?

But let’s face it house prices are over-inflated, you only have to look at the gradient of the house price graph to see that over the past decade they’ve had an unsustainable rise.

Ultimately though house prices are a bubble that government and the Bank of England can’t let burst. Why? Because the owners of the assets in that bubble are so heavily leveraged. Other assets are rarely purchased by such a high percentage of borrowing, so property as an asset is far removed from equities, and isn’t a traditional investment. Ultimately if the bubble bursts then too many loans (read as bank balance sheets) are in negative equity causing significant problems to capital ratios.

They’re also different to equities in other ways too, in that their price is not related to any underlying economic value being created. Although equity values are related to confidence and supply and demand they’re also linked to the success of the company, i.e. the value it added to and created in the economy. If a company generates a large amount of economic activity (turnover) and is efficient and therefore creates a large amount of profit (and hence tax revenues) then its share price goes up and owners of the equities see their initial investment increase in value. Therefore an increase in asset value relates to some underlying economic activity.

However in the housing market this isn’t the case, house prices have just gone up, and up and up, unrelated to any underlying work. Last week I watched a decade of Location, Location, Location with Phil Spencer and Kirstie Allsopp, who gleefully told us that at the height of the boom many people made more money just by owning a house than they did going out to work. What did this mean? It meant that people, got lazy and subsidised their incomes with borrowing from their home which then created an artificial bubble of consumer spending and economic growth that was again unrelated to any real work done in the economy.

So roller coaster house prices are not only pricing an entire generation out of the market they’re economically dangerous. What Grant Shapps is suggesting is right, that house prices shouldn’t really be increasing at a rate greater than inflation or salary inflation, so in real terms they are steady, or perhaps even dropping slowly.

He’s also right to say that government has little control over this market, as it has little control over any market. There’s no chance that it is going to implement a house price regulator (OffHouse anyone?), all it can do is hope that the changes its making to planning rules will increase supply and try to nudge people into using other vehicles for investment purposes. It doesn’t even have control of interest rates to try to stem prices, that’s the job of the Bank of England (who are currently too busy focusing on using them to keep growth going to worry about house prices, and hardly have a great record in the past anyway).

The challenge with this policy though is the same as with nearly any radical policy, communications. Middle England and the Daily Mail will respond to any suggestion that house prices shouldn’t continue to sky rocket with horror and outrage, “it’s our right to make money from our homes, they’re our biggest and best investment, Phil and Kirstie told us so” they say.

The challenge is therefore immense, how do you change an entire section of society’s mindset to the idea that a home is just a place to live not an investment?

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Apple vs the UK Government

I read an amazing fact about Apple yesterday. It is sat on cash reserves of $51 billion. Yes that’s right it has liquid assets of $51 billion dollars, which is approximately £32.73 billion pounds.

For comparison the UK government held net assets of $38.1bn in November 2010 of which only $701m was cash, so Apple has 72 times the cash reserves of the UK government. If it wanted to Apple could not just buy those 2 aircraft carriers that the MoD can’t afford but actually pay for its entire capital and operating budget for a year with a bit of change left over  to run the Energy and Climate change department.

Perhaps we should start taking economic advice on how to run the country from Steve Jobs.

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Tuesday, January 4, 2011

The jobs tax is back

One of the most successful attacks against Labour during the campaign was the branding of Labour’s budgeted National Insurance rise as a tax on jobs. The term stuck, looked great on posters and in headlines, talked to the growth agenda and was a definite policy redline between the two parties.

Fast forward 8 months and unbelievably it’s back. In case you missed it, today saw VAT increase from 17.5% to 20%, and Alan Johnson took to the airwaves to say it was the wrong choice and that instead we should be raising National Insurance (which would mean about a 4% jobs tax rise).

And knowing how catchy the phrase “tax on jobs” was Labour have also been out and about trying to brand VAT as a tax on jobs (because people will buy less, even though a 2.5% decrease didn’t really make people buy more) and therefore companies won’t make as much money so jobs will be lost. Do you follow the odd leftie logic there which avoids the growth / disincentive to employ arguement completely.

To back them up they have the CIPD saying that the VAT rise will mean 250,000 jobs lost by 2015-16 three times the jobs official figures say will be lost as a result of the NI increase (not forgetting other measures predict 2.5m new jobs created). Except it turns out that the CIPD got those figures by their head, who happens to be a Labour party member, ringing up a few friends and asking how many jobs they thought they’d lose, multiply it up and there’s your quarter of a million you were looking for.

So the tax on jobs is back and here to stay, you can have either the Labour or Conservative flavour depending on your political persuassion.

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Monday, January 3, 2011

Swinging further right won't win an election

There's a great post on Spectator Coffee House (again) which points out an important point, best highlighted by this paragraph

"Let us be clear. The idea that a more right-wing strategy would have garnered more votes at the last election is simply not borne out by recent history or polling. It would win an outright majority on Coffee House and ConservativeHome - but not in the country."

It's right, this idea that the party should be more right wing and then it would have won a majority is pure delusion. As is the idea that the Lib Dems are forcing the coalition too far left. The right wingers screaming from the papers and ConHome that the party needs to go further right are just undoing the brand detoxification and making the wider pubic think that underneath the new branding we're just the same old Tories. If that sticks then come 2015 we'll lose, simple as that.

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Sunday, January 2, 2011

High petrol prices equals low polling numbers

Peter Hoskins over at the excellent Spectator Coffee House Blog has pointed out the history of high petrol prices correlating to low government polling numbers.

Apparently when petrol was at it's previous highest we had our largest lead over Labour and when it was at its lowest they closed the gap to just 1 point.

As he points out VAT increasing and an increase in fuel duty is about to drive what is already a high price even higher. This could be bad news for the government.

You can see why this correlation happens when there's significantly less correlation to overall inflation (which has also been rising). Petrol is the one thing most people buy exactly the sane amount of every time, and being creatures of habit, normally from the same place, as a result they are incredibly sensitive to price changes. When your tank empties you go fill it right up again and if it cost you £60 last time and £65 this time you feel that you have less money in you pocket. By comparison it's a rare family that buys exactly the same things every week in the supermarket so price increases are much less noticeable there even if month on month they may be higher.

So what can the Government do? At the moment very little. The manifesto, but not the coalition agreement, included a fair fuel stabiliser which would fluctuate fuel duty up and down based on the underlying price of petrol. This is a fascinating idea but difficult to implement at s time of deficit reduction as fuel duty is a flat pet litre rate not a percentage so it results in fluctuating revenues for the exchequer.

My prediction is that if underlying petrol prices continue to soar then this will be announced in this year or next year's budget to come into force in two years time therefore giving a temporary polling boost and delivering a pre election lower petrol price related boost as well.

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Saturday, January 1, 2011

2011 predictions

My predictions for this year

1) The coalition will hold together. After all it's a coalition of views not everyone has to agree all the time and the sensible people in both the Conservative Party and the Liberal Democrats know that being in government in coalition with compromise is better than not being in government.

2) Ed Milliband will become more effective as opposition leader, not because he himself will become more effective but because his team will. You only have to look at how reactive his new Comms team has been to Bookstart and other stories since they were in place (and technically they don't start until the new year)

3) Inflation will become an issue (see this week's spectator for why it really already is) which probably means an interest rate rise and perhaps falling house prices (especially if house building gets off the ground and supply is increased).

4) There won't be a reshuffle, and certainly not of Secretaries of State in the major departments. Most ministers such as Gove, Lansley, Pickles and Duncan-Smith and their teams know their briefs inside out and have shadowed them for years. They have passion for their areas and are determined to deliver the headline reforms necessary.

5) Gove will go back on something else, probably another spending cut which will make delivering his CSR settlement difficult.

6) the AV referendum will fail to ignite the interest of the public until the last minute. This will mainly be driven by a lack of media interest, until the last minute when they start running stories about how uninterested the public is in it.

7) A devolution of power through the localism agenda will be seen by the media to have failed somewhere when one area gets something another doesn't. Postcode lottery will be screamed by the headlines and the left will scream that this is why we need central control and targets. The government will wobble on its commitment to localism as a result but will pull through it after a cohort of new backbenchers lead the charge against the old guard.

So all in all it's going to be a tough year but all in all a good one.

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