Archive for March, 2012

George Galloway:Labour Crashes:Tory Relief

Friday, March 30th, 2012

Nobody saw the Bradford election sensation coming.

Things have been going so badly for the government in a mayhem of budget disasters, pasty challenges, funding scandals, jerry cans and petrol queues, that  many have been asking whether the Tory party can recover.

For it is the Tory party which is in trouble. Suddenly it has fallen from its perch as the party of One Nation, to scratch in the dust as a party of out of touch toffs. This is the kind of political mishap, or string of mishaps, which create an aura which does not go away. Profumo, Heath’s U Turn, the Winter of Discontent, Sleaze were all critical factors which, when added to other issues of policy, brought the government down at the next election.

All of this current collapse of government authority is connected to the Tory half of the coalition. It began with Coulson, which was not a one off, but turns out to be part of a pattern of poor judgements of public opinion on the matter of political integrity and ministerial competence. Labour, meanwhile, has been making hay in its own sunshine, advancing its lead in the polls, with Milliband, Balls and Cooper at last appearing for the first time on message and incisive.

Few voters were aware that there was a bye-election in Bradford. Nobody expected a Labour defeat. The nation suddenly wakes up to the astonishing news that Respect has not just beaten Labour, but by a landslide.

For Milliband and Co this is a disaster, as it throws once more into question the ability of Milliband himself to connect with the mass of ordinary voters suffering from the economic hard times. It is, of course, a freak result, but it does contain a serious message. Labour’s centre of gravity has, in the last twenty years shifted from the grimy back streets of the poor, in towns like Bradford across the land, to trendy Islington in the heart of the new money of the South East. It has taken what used to be called the working class vote, for granted. It must reconnect with these roots, because without those votes it cannot win a general election.

The Tories meanwhile have been rescued from their own debacle by George Galloway, itself a significant humiliation for them. We now have to watch the political playing field carefully to see how and if the two main  parties score their way out of trouble. Both suffer from a lack of public  trust and neither has among its leadership anybody who stands out among the others. Unlike Mr. Galloway, whatever your view of his opinions.

Tory Woes

Monday, March 26th, 2012

At a time of austerity and cuts it is very difficult for people to stomach the idea that companies are willing to pay vast sums in order to meet leading members of the government with a view to influencing policy. Unlike the huge American political fund raising industry, the one in Britain is covert, creepy and tacky.

The tone of bragging, the assurance of impact, the childish reference to ‘premier league’ all grated badly when the Sunday Times recording was played in every news bulletin wall to wall during Sunday. However this is not the only problem facing the Tories. There is a malaise about the prime minister’s friends, quite a few of whom seem to have been arrested in connection with phone hacking. Once again this raises judgement issues. There is also a malaise about government policy implementation. The budget should have been a success; instead it was a PR disaster. The NHS reforms, though in many ways right, have been chaotic in implementation and parliamentary process, ending in a Act as fat as a telephone directory. Anybody who thinks an organisation can be successfully run on such a basis is a fool.

We hear increasing talk of aircraft carriers with no planes; they now appear to be incapable of carrying any planes because they lack any means by which various different designs can land and take off. They are also powered by cruise ship engines needing 8000 tons of oil on board, when every other carrier at sea from friend and foe alike is nuclear powered and needs refuelling not every few thousand miles, but every twenty five years.

The jury is still out on the education reforms, necessary as they undoubtedly are; will they work? What about the welfare reform programme? Is that drifting off course too? And then there is growth. Soon we will know more about that. It will need to be good news.

This is all beginning to add up to something. An aura of inefficiency, miscalculation and murky doings. It could all come right in the end, but at the moment it is beginning to look like a one term government. Not only will that be a disaster for the Tories; it will end voters’ brief honeymoon with the idea of coalition government.

Budget 2012: The Verdict

Saturday, March 24th, 2012

Simply put the verdict must be fiscally sound but politically inept. Because of the political ineptitude headlines about a mysterious Granny Tax abound. There is no such thing. What has happened is both simple and fair. The very generous £10,500 personal allowance for pensioners will not now rise with inflation until the increasing personal allowance for everyone else catches up with it, when the two will merge. So far pensioners have been well treated by the government; it is the young and the low paid who have been hit hardest by the cuts. It is perfectly reasonable that pensioners, I speak as one, do something to help. Pensioners on the lowest incomes will not be affected and those who are will not be poorer in cash terms; it is just that they will not get any more increases in their allowance for the time being.

The increase in the basic personal allowance which benefits all other taxpayers is of huge benefit to the lowest paid. It is fair, progressive and economically beneficial. The easing back of the level when higher rate tax comes due is not unreasonable, given the state of the economy. The changes to the levels at which child benefit will be withdrawn have taken the worst of the sting from an awkward but necessary curtailment of a universal benefit which many do not need but others survive on.

The reduction in the rate of corporation tax must be good news for the economy as a whole as the more businesses arrive, start up, invest and expand, the more they employ. So what has gone wrong?

First of all the leaking of all the good bits in the budget in the previous days, which fifty years ago would have been regarded as a high crime little short of treason, whilst at the same time glossing over the freeze in the tax allowance for the old and the lowering of the threshold for higher rate tax, neither of which had been trailed, in the actual budget speech, was a very grave error of judgement which has seriously undermined public trust. It meant that the interpretation of the figures and the exposure of their impact was left to excited commentators, hysterical newspapers and a rampant and re-energised opposition. All of this is disaster enough, but Osborne and the Treasury managed to turn it into a calamity.

In reality the increases in tax or potential tax about which the Chancellor chose to be coy were required to pay for the increase in the personal allowance. Sadly that is not what is perceived. No. The message was that it was  required to reduce the 50% rate to 45% on the highest paid in the land. Robbing the poor to help the rich or squeezing the already squeezed middle to enhance the quality of life for those already in luxury. It is not possible to get worse than this.

Of course it is right that fiscally the 50p rate should never have been introduced and is counter productive, producing little if any gain in net revenue. But it was not introduced as a fiscal measure. It was introduced as a political necessity. If the cohesion of the country was to be held together in the longest and most draconian period of austerity since WWII and which may turn out to be the longest ever, there had to be a clear signal that those with the most money were being squeezed too. Ultra high stamp duty on mega properties is no substitute. After all if you are not moving you do not pay. Even up to the eve of the budget 65% of voters supported the 50p top rate. This should have sounded a very loud political warning.

Add to all this the fact that half the cabinet is found to be better off and you have a political blunder, from which there is no certainty that the Conservative Party can recover this side of the general election. At the very least trust in the Chancellor is shattered entirely. He now has the aura of a snake oil salesman of the dodgiest  kind. This is a pity because he is a sound, but progressive, monetarist. But unless this is allied to political understanding of the emotions which drive voters, the harm done will outweigh the good.

Euro Pause

Saturday, March 10th, 2012

With the finalising of the Greek bailout, the signing of the fiscal pact, the acceptance of massive losses by investors in Greek bonds and the triggering of the credit default swaps, Euroland survives to fight another day. This is, of course, not the end of the story. It is a kind of Dunkirk moment. Catastrophe averted, but the underlying problems of massive sovereign debt, excessive regulation, lack of growth and the absence of democratic control over economic policy are all still there.

Yet the Euro can now survive, not because it has collectively solved its problems, but because Germany has taken control. There is now governance of the currency and the currency has a government. It is not in Brussels or Strasbourg or even Frankfurt. It is in Berlin. It is a democratic government, but only Germans can vote.

This is an extraordinary outcome to a predictable problem. Germany alone in the eurozone profits significantly from the single currency because only Germany has the industrial efficiency to exploit the low value of the euro compared with the much harder deutschmark of before. This gives Germany the profit to help it fund the faltering spendthrift economies of the south as well as the power to enforce its will.

For how long the eurozone continues under German control depends on the German people. If they get tired of paying the bills and lose sight of the benefits to their own economy of the undervalued (for them) currency, the euro will bust apart. At least the mystery is over. In future we all know who will decide.

The rest of Europe will just have to knuckle down. This is the price they pay for failing to resolve issues at the start. The failure to organise an effective democratic structure to unify economic policy in the euro area produced a vacuum.  Germany has marched in, to fill it. We seem to have been here before.

Gay Marriage

Sunday, March 4th, 2012

This blog has in the past found itself in agreement with the views of Cardinal O’Brien, the leader of Catholics in Scotland, especially over the release of the Lockerbie bomber. On the matter of gay marriage, we have profoundly to disagree.

Marriage is a human right, custom and tradition pre-dating Christianity. It is not the property of any religion or faith. It has no exclusivity. Of course it is well within the authority of any faith to lay down the terms of marriage within its own theology and these terms can and do vary in prescriptiveness and style between one religion and another. The Cardinal can define marriage for Catholics, as can Archbishop Sentamu who holds similar views, for Anglicans, but neither can define it for everybody.

Marriage is universal. It comes in many forms. A form should be legally available to gay couples in a loving relationship willing and wishing to publicly commit to each other. David Cameron is right to promote this. As for the Catholic church, nobody is asking them to include it in their liturgy. It is, in fact, none of their business.

Syria: Can It Get Worse?

Saturday, March 3rd, 2012

Sadly, yes it can. The Syrian people are now caught in a nightmare of suffering and violence. The insurrection has taken too deep a hold to be crushed by internal military means. Even if The Assad government razes whole districts and slaughters the residents, protests will erupt elsewhere. Yet the protesters lack the power to challenge the authority of the regime nationally, with force enough to overthrow it.

The West and most of the Arab world has lined up with the rebels, yet nobody knows who they are exactly and what forces operate within them. Reliable reports of Islamic fundamentalists and Al Qaeda are widespread. In demanding regime change the West is taking a leap into the unknown. Is this wise?

The Assad government, built on the fascist model of the Ba’ath Party, is a monolith where Party and State are the same thing. If you destroy the party, the fabric of the state disintegrates; this does not mean just the disappearance of security police, it means power, health, fuel water and all vestiges of civilised living. Moreover the question is then, who has the keys to the chemical weapons store, the missiles and other military hardware of one of the region’s major military powers?

The Russian position, backed by China, is not to include regime change on the list of demands and to try and negotiate an end to violence. This, they believe will produce an adequate compromise and an outcome less traumatic, not only for the Syrian people but for the region as a whole. This blog has always seen merit in this approach, but so far it has not worked. The backing of Russia and China, was used by Assad to embark on a blitz of rebel areas of unprecedented brutality. The outcome appears to be something of a hardening of the Russian position towards Damascus and hints that backing for Assad personally is not guaranteed.

This may, just may, do more to force the Syrian government to stop its military repression than the the West’s embargoes and protests. At the same time the rebels need to come to reasonable terms. The whole cake is of no value if none are left alive to eat it. The continuance of the rule of the Ba’ath Party, but on the more liberal lines of the new Constitution, with Assad himself replaced by another and some enforceable guarantees of basic human rights, may be the best that can be achieved at this point. It would be a beginning rather than en ending, but if it ended the slaughter and the torture it would be a beginning of better times.

Euro Pact

Friday, March 2nd, 2012

Clearly there is a feeling in the Eurozone that the worst has passed and by signing up to the latest pact, governance of the euro becomes viable. Greece looks as if it will get its bail-out and the ECB has been busy pouring cheap money into European banks, many of which are technically bust.

It is not quite as simple as that. There is not a commentator to be found who does not expect more trouble from Greece. Spain is a real mess. Since it joined the Euro, the Italian economy has been flat-lining. But all of this is detail. At the heart of the Eurozone is a profound truth, few are willing to face.

It is the issue of democracy. The EU has become an area, not of vibrant and collective democracy, but one of uniform and intrusive regulation, where governance is in the hands of officials enforcing rules, rather than ministers enacting policy. This is not by accident, it is by choice and for the most part the population of the EU is quite happy with that. The Fiscal pact just signed is not a democratic instrument nor one designed to expand the working of democracy. It is believed that with a combination of bureaucracy, regulation and treaty, it will be possible to manage the challenges faced by a single currency across diverse economies.

This new arrangement is better than the vacuum before and there are signs that euro ministers have found the courage to make decisions. However, at the end of the day money is, or will be, needed to prop up this or that country and that money, or most of it, comes from Germany. This means that the German electorate and the German electorate alone, has the power to determine outcomes. It means the EU is under the financial domination of Germany, whose voters can turn the cash flow on and off. It means voters in other countries can have little to no impact on events.

It is democracy, but of empire, not union. This blog wonders if this is the place for which people thought they were headed. Taken in this context, whether anybody listens to Cameron’s ideas, is neither here nor there. Without Germany’s backing, they are dead in the water anyway.

Back Again

Friday, March 2nd, 2012

Sorry for the lack of posts recently. A virus slipped under the flu jab radar. Quite bad, but now better.