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...a blog by Richard Flowers

Wednesday, July 01, 2015

Day 5295: Making a Drachma out of a Crisis

Wednesday:


Featured on Liberal Democrat Voice

The badly-wounded Greek economy lurches between survival and final total collapse.

When the Greek Syriza Government – elected on an unfulfillable promise to end austerity AND settle with their creditors – hit the brick wall of reality, they abdicated responsibility, punted it back to the people in a referendum where not even Nobel Prize-winning Economists understand the choice, and seemingly killed any chance of a last-minute rescue.

But now, as he's already over the brink, Prime Minister Tsipras appears to accept the demands of the people trying to save him.


Update: or would he rather his people voted no, and carried on into the abyss?


How can this rescue the Greek economy?


How much does a Greek... oh, you've heard it


This is what a taste of Economic Armageddon looks like: their banks are closed; their Euro lifeline is suspended; they've missed a payment to the IMF – though the IMF, obviously unwilling to pull the trigger, declares that they're "in arrears", rather than "default"; and they've managed to piss off most of their neighbours by apparently playing silly-beggars over this referendum…


There appear to be two – equally heartfelt – responses to the crisis unfolding in Athens and engulfing the Greeks.

The first is: Why should we (or at least Europe) continue to throw good money (raised from EU taxpayers) after bad when Greece has already been treated with incredible generosity – more than half of their debt was written off and the rest was effectively nationalised by the EU in the immediate aftermath of the global meltdown – while they have failed to do their part in reforming their pensions, government or tax collection?

The Greeks are seen – largely legitimately – as the authors of their own downfall:

  • their now notoriously-generous pensions (retire at 55, receive £1000 a month for 14 out of 12 months a year… it seemed too good to be true, and guess what… it WAS!); a welfare system that appear to involve generously paying grannies to make sure their kids are all right: Greece has a population of 11 million, 2.6 million (24%) of whom are receiving their pension. No wonder the system is still going bust!
  • their kleptocratic government (who fibbed their way into the Euro, and, with the help of Goldman Sachs, were hiding some rather substantial "off-balance-sheet" debts until they were uncovered as the whole sub-prime derivatives market unravelled in disarray);
  • their cripplingly-expensive loss-making 2004 Olympic vanity project that left Athens bedecked with new ruins of abandoned stadia;
  • and their basic unwillingness to pay taxes (with tax evasion estimated to run at 40%-50%!); their spending has gone up with their post-Euro-entry GDP, but they are still collecting roughly the same amount of tax as they were in 2001.


It's not that Greeks do not work harder than Germans – if anything, the reverse is true. It's not even that they all retire at 55 to sit on an Aegean beach. It's because Greece is a small country largely dependent on a service sector economy.

80% of the Greek economy is in service sector jobs. To be fair, so is Britain's! But unlike Britain, where high-value financial services are by far the biggest part of that sector (40% of service sector; 30% of the total economy – don't look smug; that's why our economy was nuked in 2008), in Greece those services are TOURISM and SHIPPING, both of which pretty obviously take a hit during a global recession (when fewer people can afford to take a holiday and fewer goods are being bought and sold and therefore moved about) and both of which are given a relatively low value (while huge banking hubs like London are RARE, there are PLENTY of OTHER places to go on holiday or OTHER boats to ship your goods in).

The pre-existing infrastructure for manufacturing in Germany (or for finance in London) put Greece at an inescapable disadvantage. Nor do they have the massive population of a China or an India or a Brazil and even if they did certainly not one willing to accept the low standard of living that lets those countries (currently) undercut on cost of labour. Hiking their minimum wage probably didn't help, but really they were never going to go low enough to be cheaper than places where people live on a dollar a day.

They wanted all the benefits (and some) of a Northern European economy. Without the Northern European economy to support it. So they elected Governments who gave them what they wanted but paid for it on tick.

And by electing Syriza, who were committed to spending even more money that they don't have (and have already made a start by re-hiring 15,000 civil servants), the Greek people have given a pretty obvious gesture to their creditors.


The other response is to see this as tyranny, even cruelty, an immoral "moral crusade" by faceless, foreign, unaccountable, "neoliberal" (see my button eyes roll), capitalist bankers overruling the sovereign wishes of a democracy. If it's NOT the Greeks fault – they are hardworking but geographically unlucky – then it must be someone else's, it must be the sinister cabal of capitalism!

This view says that the conditions imposed on Greece – in particular the demand that the Government slash spending to the point where they were able to run a surplus – were (indeed still are) not only utterly unachievable, but actually at the root of why Greece's recession has persisted for six years. Making poor people poorer doesn't magically make them richer.

Great Britain, they remind us – no matter how smug Gideon is about our superior growth rates – has moved out of recession while continuing to run elephant-sized deficits and thus stimulating not smothering our recovery (though that's largely thanks to Liberal Democrat amelioration of the more insane Tory austerity plans).

But Greece HASN'T been running a surplus either – they've just not run ASTRONOMICAL deficits the way Great Britain or Americaland have; with Greek debts already 175% of their GDP they've had no flexibility to do so.

There are a FINITE amount of lenders to go around, If EVERYONE is running deficits because of the recession, OUR deficit – looking like a safer bet – has probably sucked up international lending making it harder for Greece to attract another sugar daddy. In fact, their membership of the Euro may have actually SAVED them by forcing this role upon the otherwise-unwilling Germans.

Eurosceptics (and idiots) insist that membership of the Euro effectively locks Greece into an unsustainably high exchange rate that continues to draw money away from the Mediterranean countries and into Germany, and they should crash out and devalue to regain competitiveness.

These are usually the same people who celebrate Mr Frown's intransigence in keeping Great Britain out of the Euro, saying "look, look how badly Greece and Spain and Italy are doing!" even though – by their exact same argument – the huge financial centre of London would have sucked money into the UK making us huge winners from the deal.

There IS some truth in saying that single currency areas need to make revenue transfers back to their economic peripheries – in the UK (sterling single currency area) payments go from London and the South East to other parts of the country; in Americaland (US dollar single currency area) payments go from the coasts to the central States.

European debt-forgiveness has achieved something like this but in a half-hearted and haphazard manner.

However*, the REAL impact of Euro entry saw Greek GDP per capita go from $12,000 in 2001 (when they joined the single currency) to $32,000 in 2008 (when the market hit peak just before the crash) and has so far fallen back to $27,000. So anyone who says that the Euro has been a bad thing for the Greeks is totally talking out of their hat; and anyone who thinks that things there are as bad as they could get has wilfully blinded themselves to just how much further the Greek economy could fall.


The great fear of Germany (and everywhere else), apart from being stiffed with the bill for all this, is "moral hazard" or the "how many people can you pull into your lifeboat before it sinks and you ALL drown?" problem.

Greece may (still) end up defaulting. And if they DO, they may "get away with it", that is, see their way through to an economic recovery.

Iceland did something similar a few years ago. Their banks went bust and their government simply refused to pay up and when they refused to pay their debts it meant that somewhere else a lot of people's money ceased to exist. Iceland "got away with it", and have seen an economic recovery. That recovery was largely paid for by YOU, the British Taxpayer, because a lot of that money that ceased to exist was ours. Lured by ridiculously generous interest rates that, as it turned out, like the Greek pensions, really were too good to be true, lots of people had put their saving into Icelandic banks. And several councils had put really silly amounts of money there too. And the Treasury forked out to cover those losses, paid for from your taxes.

Those losses were a lot easier for sixty million Britons to bear than three-hundred thousand Icelanders.

If Greece defaults, European governments – mainly the German one – will fork out and eighty million Germans will find it easier to bear than eleven million Greeks.

But where does it end?

Because if Greece can "get away with it" – goes the worry – what's to stop Ireland or Portugal or even Spain or Italy defaulting? At SOME POINT we will HAVE to draw a line. So draw it here and now, they say.


So how do we get these two views? And how do we resolve them?

Well, I think (and it may seem perverse) that the first view is the OPTIMISTIC people, who think that Greece's problems COULD be solved (if they'd just do something about some of them!).

The second view is from people who think Greece's problems are UNSOLVABLE, and therefore want to bung the problem to someone else (someone with enough money to cope with it – meaning Germany… but… moral hazard…).

In a way this is because there are really TWO problems: lack of LIQUIDITY (i.e. no cash in the banks) v lack of SOLVENCY (i.e. expenditure exceeds – all possible – income).

What we NEED to do is SEPARATE the unsolvable problem (the ever-expanding debt that is soaking up all the money) from the (possibly) solvable one (the imbalance in the Greek economy).

So step one: quarantine the existing debts at zero interest. Postpone any further repayments by Greece.

Step two: rather than the random method of letting them borrow willy-nilly and then cancelling some arbitrary chunks of the debt, agree revenue streams from the EU that will allow Greece to BALANCE THEIR BOOKS in return for them implementing reasonable controlling of their spending (and tax raising).

Step three: be aware that every other country in Europe is going to want in on this scheme and immediately begin the work to create accountable democratic control, otherwise Germany will secede from the EU even before Britain manages to vote in Mr Balloon's daft referendum.




*Bite me, Michael Gove (the goft that keeps on goving)

Friday, June 26, 2015

Day 5289: Fluffy footnote: what IS this DEFICIT thingie, again?

Thursday:


I cannot emphasise the following enough: The Deficit is NOT the National Debt. The deficit ADDS TO our National Debt.

I'm sure that Tim Lord Tim (@timfarron) and Mr Norman Conquest (@normanlamb) get this. But too many politicians clearly DON'T.

So: Economics for Elephants 101…

The Government raises about seven hundred billion quid in taxes.

But they spend nearer to EIGHT hundred billion pounds on health, pensions, benefits, schools, guided missiles and Boris' hairdo and the rest.

The difference, the amount extra needed for that spending, about a hundred billion pounds last year, is what is called the DEFICIT and we need to BORROW that from somewhere.

(Mostly, actually, it's borrowed from pension funds more that international banks, but the boys in the City still get a nice cut).

I'll say it again because I really cannot emphasise it enough: The Deficit is NOT the National Debt. The deficit ADDS TO our National Debt.

As of March 2015, the total National DEBT amounted to ONE THOUSAND, SIX HUNDRED BILLION pounds (£1,598.5 billion) or 86.6% of GDP*. That's SIXTEEN times (or SIXTEEN years of) the annual deficit.

And it's going UP.

The INTEREST that the country pays on the debt we owe already is forty-three billion pounds (£43 billion) or around 3% of GDP. Or about the same as we spend on the Department for Education or the Ministry of Defence.

Even if Master Gideon were to eliminate the deficit tomorrow – and the cuts to do THAT would be STAGGERING – we would STILL owe sixteen-hundred billion pounds, so we would STILL have to pay that forty-three billion pounds EVERY YEAR just to stand still.

(Like an interest-only mortgage, or just paying the minimum on your credit card – the debt NEVER GOES AWAY!)

And I'll say this YET again: running a deficit ADDS TO our total national debt.

Running a SURPLUS, on the other fluffy foot, (raising more than we spend; the OPPOSITE of a deficit) means reducing the total debt.

And it’s ONLY a surplus if you reduce debt

(*Or, in an extreme case, where you have NO national debt running a surplus would mean paying in to a sovereign wealth fund.)

– if you spend it on absolutely anything else then you are SPENDING, and NOT running a surplus.

Spending is still spending, even if it’s spending on things we’d rather wish away.

When people say "it’s BAAAAD to cut spending!" my Daddy often replies: "I want to cut the amount of spending that goes to international bankers. You want to give them more and more".

A surplus gives us a CHOICE. We can choose to run a LARGER surplus to build reserves – or rather, as our financial advisors usually advise us, to pay off debts first – OR we can to run a SMALLER surplus and spend a bit more (or even cut taxes a bit).

Though at some point – probably about 2018 – Master Gideon will say "…and now that we're running a surplus I can give you tax cuts…"

At which point, obviously, it STOPS being a surplus again.

IF we reduced the TOTAL debt, we could reduce those £43billion interest payments. And cutting down the amount that we have to pay in interest lets us spend more in future on other things, like schools, hospitals, soldiers, and hairdos.

Why do we not just run a surplus?

Well, as the man said when asked for directions to Tipperary, I wouldn't start from here.

There are a frustrating number of left-wing commenters who will say the likes of: "the Coalition borrowed umpty-billion more in 3 years than Labour borrowed in 13." Clearly without the slightest recognition that what they are saying is that they wanted the Coalition to not run a deficit, i.e the cuts to be a hundred billion pounds a year more savage. Often, and with no sense of irony, while saying that austerity is unnecessary.

The Government is committed to a great deal of spending – salaries for doctors, nurses, soldiers, teachers; building projects; aircraft carriers; £43 billion in interest… They cannot very simply just hit the "stop" button on paying those and many other things, any more than you could, say, cancel your rent or heating bill.

In 2008, tax incomes contracted very sharply. It was ALWAYS going to take TIME for spending to be brought down in line with the new fiscal (meaning how much money the government gets) reality.

i.e. in 2010, a deficit was INEVITABLE.

On top of that there is a question of POLICY. Overspending by the government when the economy is going down the tubes is supposed to HELP. At least that's what Liberal Economist JOHN MAYNARD KEYNES says, anyway.

The strength of the economy is (forgive the waving of fluffy feet) connected to the amount of money and goods moving about in it.

(You CAN get into an argument about there being too much money chasing too few goods driving up inflation, but go too far in that direction and you'll wander into controlling the economy by cutting the money supply through the hiking of interest rates and that way lies the failed madness of monetarism.)

Government raising taxes is taking money OUT of the economy.

(So is putting it in your piggy banks by the way, but that's not a lever the government controls.)

Government spending puts money back IN to the economy.

So running a DEFICIT is a BOOST to the economy because the Government ADDS more money (strictly, adds more than it takes away, or what we call adds "NET").

(And the FLIP side is that running a SURPLUS… or in fact ANY actions to cut a deficit – raising more from taxes or putting less back in spending – tends to SLOW DOWN the economy. As we saw in 2011, following the Coalition's first economic rescue remedies, raising VAT and cutting capital spends.)

So why not just run a deficit forever?


Some people actually suggest that we should! And they often point out that most governments for most of the time DO run deficits (and get away with it).

Let's just suppose we had a balanced budget. Don't laugh. If we knew the economy was growing, and we guessed that we would have, let's say, £20 billion more next year…

(As I said yesterday, the Bank of England expect growth to increase the economy this year and next, which will – everything else being equal – increase the Treasury's tax IN by about £20 billion.)

…then we could have two choices for next year's budget.

Number One: increase spending (or cut taxes) by £20 billion, keeping everything in balance. That would be the CLASSICAL economic approach.

Or, Number Two: we could say: "well, how much could we BORROW so that the INTEREST PAYMENT on that would be £20 billion…" and if interest rates are 2% then that's a TRILLION (a THOUSAND billion) pounds. Which would pay for a LOT of hairdos. So why not have that trillion pounds NOW.

(Though, you may observe, this is kind what we have actually already done!)

In theory, then, if the economy is growing, you COULD continue keep increasing the total borrowing, and with it increase the interest we have to pay, so long as the increase in interest keeps pace with the growth of tax revenues.

And indeed this is probably the thinking behind those people who say that thing about most governments running deficits most of the time.

But it doesn't work.

(If it did you'd have invented a perpetual motion machine, and that's impossible!)

It doesn't work because you are GAMBLING. Gambling in the biggest way. You are gambling that the economy will grow FOREVER. Not just that, that it will grow in every year forever, that it will NEVER, EVER NOT Grow.

Because in ANY year that the economy shrinks, then you cannot afford as much future payments of interest so you have to PAY BACK some of the TOTAL DEBT… and – as the man said in the note – all the money is gone, you've spent it. Go directly to the IMF, do not pass go.

And after 2008, do you REALLY REALLY REALLY believe in betting that the economy will grow forever? Can you with a straight face say you can "abolish boom and bust?"

(If you do, I have a perpetual motion machine I would like to sell you!)

Trickle-down economics, by MC Escher


So we shouldn't borrow at all?


Borrowing money that you spend on building your economy, that is borrowing for INVESTMENT, can WORK.

But a LOT of the time, it's borrowing just to SPEND, which is actually a PONZI SCHEME – a very famous kind of FRAUD.

It pays the REWARDS now (more spending) out of the money drawn in as investments (more borrowing) rather than as a return on those investments actually generating anything.

"Investment" is a word that has become very DEBASED since the time of New Labour, because they would SPIN things and used "investment" (because it sounded good) when they actually just meant "spending" (which sounded all "tax and spend" bad!).

It's the difference between borrowing money to buy a FARM, which then grows things so you can feed yourself and sell the extra which makes new economic growth, plus you've still got a farm; and borrowing money to buy FOOD, which you then eat and you're left with only the debts.

Things are slightly different for COUNTRIES than they are for PEOPLE. If people run out of money for food, they go to the food bank. If countries run out of money they go to the WORLD Bank…

What happens to countries in real life is that the more they borrow, the more EXPENSIVE it gets to borrow MORE.

Interest rates are (partly) to do with how much RISK a loan has.

(A "secured" bank loan like a mortgage has lower risk, because the bank can take your home back if you stop paying. That's why unsecured WONGA loans have much higher risk and so much higher interest rates than bank mortgages which are secured on your home. That and Wonga being EVIL.)

If you borrow a LOT, then the lenders start to think you are less likely to be able to pay them back. So the RISK is greater. So they charge you MORE in interest.

Eventually, you get to the GREECE-style position where more lending is SO risky that there's no way you can afford the interest payments let alone repay the original loans.

How are we supposed to bring balance to the force, then?

In the age of MR GLADSTONE, what we now call CLASSICAL economics taught that Governments shouldn't mess up the economy by interfering, so they should try to run a BALANCED budget (i.e. only take as much tax as they were going to spend; and only spend as much as they raised in tax).

But what Professor Keynes thought (remember him!), in the light of the GREAT DEPRESSION (aka Mr Frown) was that the economy would still go through cycles of BOOM and BUST.

So what the Government OUGHT to do was to try to act like a COUNTERWEIGHT: overspend during the recession years to add stimulus to the economy and speed up recovery; AND run a surplus during the boom years to try to reduce the overheating and make the next crash smaller when it came.

(Clue: Mr Frown OVERSPENT by OVERBORROWING during the BOOM years and we had the BIGGEST BUST IN HISTORY. This is NOT coincidental, whatever Hard Labour apologists may say!)

The REAL truth though, is just how POWERLESS people feel in the face of these enormous and sort of nebulous "economic forces". "Globalism" and "Austerity" have a huge impact on people's lives, often directly when it comes to Disability Living Allowance or Bedroom Tax, or pay freezes and redundancies, or immigration and off-shoring. But nobody really "gets" where all the money went, and so it feels as arbitrary and capricious as those old (ironically) Greek gods randomly smiting us mortals.

The old economy – the one where Labour and Conservatives are alike in only seeing one "good", which is to shackle yourself to one job – is entering a death spiral.

What we need to look at next, is how a Liberal economy would start to empower people against the "new economic gods", to share our resources better, freeing people both from poverty trap AND wage-slavery, and giving them back the power to change their local, national and ultimately global economies.




Fluffy footnote to the fluffy footnote: and GDP? What's that?


*"GDP" or "Gross Domestic Product" is a way of measuring the size of the economy; it is the total value of everything produced in the country, and is sort of like the country's "salary". It is a useful benchmark to compare against.

In 2014, the United Kingdom had a Gross Domestic Product of roughly one thousand, eight hundred billion pounds (that is about £1.846 trillion).

(This, incidentally, makes us the FIFTH largest economy on EARTH, overtaking France.)

The Government took about 37.5% of GDP in taxes, about seven hundred billion quid (£690 billion).

But the Government SPENT about 43.2% of GDP, or nearer to EIGHT hundred billion pounds (£795 billion).

The difference is the DEFICIT (about a hundred billion pounds in 2014).

Remember, in case I haven't mentioned it enough: The Deficit is NOT the National Debt. The deficit ADDS TO our National Debt!

Thursday, June 25, 2015

Day 5288: Only Fools and Tories

Wednesday:


"No Income Tax, No VAT;
"No Deficit, No Guarantee."


Master Gideon would appear to have taken Steve Bell's gimp-suit-wearing cartoon of himself as a role model, judging by his justifiably-mocked announcements that he will be trussing himself up in legislation to stop himself doing things that he shouldn't ought to do anyway.

First, during the election, he promised to pass a law to stop himself raising taxes; then, in his Mansion House speech, he said he'd make another law that he would run budget surpluses in "normal times".

The fact that these two laws pull in opposite directions only adds to the madness.


Fiscal Rectitude, Steve Bell style (c) Grauniad

Swearing off ANY rise in taxes – particularly for a whole five-year term, when you've NO IDEA what's coming even in the next few WEEKS with the Greek bailout/crash out saga – is just silly. In fact dangerously silly.

When the books don't balance, you've got THREE* ways to address yourself to the problem: ONE, cut spending; TWO, raise taxes; THREE, a mix of the two.

Master Gideon's first pledge robs him of TWO of the THREE ways out of this mess.

(Full disclosure of wiggle-room here: he could raise taxes other than the "big three" of Income Tax, VAT or National Insurance. But no other taxes raise anywhere NEAR the kind of money those three do, not even Corporation Tax and he's very keen to keep lowering THAT one as well. So this law will stop any SERIOUS closing of the deficit through tax.)

So he's making it very much harder to run a surplus… at the same time as saying it's the law to run a surplus.

Minister, is this entirely wise?

Running a budget surplus is, in and of itself, not a bad idea. In fact, it's one that good old Keynesian Economics says we SHOULD do when times are GOOD (which they're sort of not quite at the moment, but they might still be the best they are going to get in this cycle).

But the way to run a budget surplus… is to run a budget surplus.

The way to not raise taxes… is to not raise taxes.

Who is going to enforce these laws? What are the penalties if Master Gideon breaks them?

In the last parliament Master Gideon promised to eliminate the deficit. For various reasons – some of them his own fault, but mostly things that are entirely out of his control (or possibly ANYBODY'S control!) like the Eurozone or the cost of energy shooting up and then crashing down when the Saudis forced the price of oil to drop – this he totally failed to do. Well, HALF-failed to do, anyway.

Mr Frown repeatedly broke HIS own "golden" rules too. Nobody came to slap HIM on the wrist either. Unless you count the SPANKING handed out by the global economic meltdown.

It's bad enough the Home Office pumping out SECURITY THEATRE without the Treasury starting to perform ECONOMIC THEATRE!


But, what is worse, they are a DIRECT ATTACK on a hundred years of democratic accountability and constitutional settlement.

Oh yes.

Because they're not really FOR holding Master Gideon to account. These laws are REALLY a BOOBY TRAP for Hard Labour.

If a future government, say a Hard Labour Government, wants to run a budget deficit – which they might have entirely good reasons for doing – they first need to repeal these "financial responsibility" laws.

One of the written bits of our unwritten constitution is the Parliament Act that says the House of Lords will not vote down a Government's Finance Bill, so that if a Party (or Coalition!) in the Commons can pass a Budget, then the Lords won't block it. But these "responsibility" laws are NOT Finance Acts.

(There's also the – unwritten – Salisbury Convention that the Lords will not block things that are in a winning Party's manifesto, but can you see "We Will Repeal the Financial Responsibility Act" making to ANY manifesto of a Party that expects to come out alive?)

So you can expect to see Conservatory Lords shamelessly delaying and derailing a future Government's budget, ignoring the Parliament Act on Finance bills under the pretext that the Government is "breaking the 'responsibility' law"; you can look forward to Conservatory millionaires getting their highly-paid lawyers to demand judicial-review of the repeal to drag things out further.

You can see that these "responsibility" laws are ACTUALLY an excuse to play fast and loose with BANKRUPTING the COUNTRY!

In other words, these are laws for the most appalling Financial IRRESPONSIBILITY!




PS

*OK, there IS actually ANOTHER way of cutting the deficit. But it's the one over which the government has very little control beyond crossing its fingers and WISHING.

If the economy is GROWING, then you will get more tax IN just because the economy is bigger. So long as the increase in tax is more than the increase in costs (i.e. so long as economic growth is more than inflation) then with no other changes next year the deficit will be smaller.

This is where Mr Ball's mantra of "the deficit falling as a share of national income" comes from; it's the "Hope that SOMEONE ELSE fixes the problem" approach from the Party of "Let's Spend Someone Else's Money" solutions.

To illustrate: the Bank of England currently estimates growth this year will be 2.5% and next year will be 2.6%.

Assuming that this translates straight into the tax take, that's worth about an extra £20 billion a year this year and next. ALSO inflation is currently next to nothing. (Good if you're shopping; not so good if you were hoping for a pay rise.) So tax coming in goes up and spending does not. Which means the deficit will be £20 billion LESS without Gideon having to do anything.

The Conservatories ACTUALLY want to cut the deficit about £30 billion each year – so £100bn last year goes down to £70bn this year, then £40bn, then £10bn and then into surpluses by the end of the Parliament. Honest, they really mean it this time! – which is why they need MASSIVE CUTS on top of the rest of the country providing growth.

It's more complicated than that because they are pledged (or even triple locked) into increasing money for pensions and the health service, so the cuts to other areas have to be EVEN bigger.

And it's even more complicated because cutting government spending (at least in some of the things government spends on) can slow down the needed growth, which cancels out your savings.

To an extent this is what happened at the start of the Coalition, when Gideon slapped up VAT and followed Alistair "Captain" Darling's plan and cancelled a load of capital investment.

This made it harder for the least well-off to buy "stuff" and at the same time took away a lot of jobs from people who might buy "stuff", and if "stuff" isn't being bought and sold – i.e. if there is less economic activity – then your GDP and hence tax receipts go down.

Slashing away at people's benefits – which is the Conservatories' preferred method of cutting spending – may well have a similar effect.

Which just makes it even more stupid to swear off raising tax!



(And tomorrow, we can talk a bit more about Mr Balloon and the Magic Money-go-Round!)

Monday, June 22, 2015

Day 5286: Game of Drones

Monday:

I've been talking about the leadership contest between Tim Lord Tim and Mr Norman Conquest.

But the Liberal Democrats aren't the only Party to find themselves in need of a new leader. And it makes me realise just how VERY lucky we are – even after the disaster of May – still to have two candidates with two brains between them!

We watched the hour-long Newsnight hustings with the four candidates for leader of Hard Labour and I swear beyond the nebulous and vaguely-xenophobic call for "controls on immigration" there wasn't a single mention of policy from any one of them.

And is THAT mug, really the thing they want to take away from the 2015 manifesto?!


Labour Leadership - spot the difference

Instead, what was striking was how all of them (ok the three of them who are "serious" candidates) were snaffling freaking great chunks of… the Liberal Democrat 2015 campaign!

Yvette "the Snooper" Cooper was the first out of the traps to claim she wanted a "stronger economy and a fairer country" (nearly right, there, Yve) but very soon Liz "Tony Blair in a Wig" Kendall was all over our positions like a particularly Blairite rash. And even Andy "Crash and" Burnham wanted a country where "everyone can get on".

This seems very odd for two particular reasons.

First: our campaign "Look Left, Look Right, Then Get Mown Down By Oncoming Traffic (Mr Balloon's Bentley and Nicola the Insturgent in a yellow three-wheeler)" did even less well than Labour's "Oh Go On: Vote for Us, he's harmless".

Second: it's not entirely clear if there actually ARE any voters to target in the mushy centre; liberal voters seem to have stayed with the Liberal Democrats; the ones that Labour gained and then lost in their deservedly-doomed 35% strategy seem to have been the "protest" voters who supported the Lib Dems as anti-establishment outsiders in 2010, but moved to UKIP or Greens in England, or nationalists in Wales and by a long way Scotland. The people Labour seem to be after now – voters who were frightened into voting Conservatory by the thought of the SNP – would surely be the very people who given the choice between Conservatory and Conservatory-lite will chose the genuine brand because they know the real Conservatories know how to do it.

How it looked on the tellybox:

Andy and Yvette were sat at either end like particularly smug bookends.

Yvette, campaigning as the compromise candidate between a vacancy and a waste of space, was trying to be as "mumsy" as possible – as mumsy as you can be with a Mother of Dragons reputation for wanting Home Office policy to start at roasting immigrants alive, before going on to do lots of nasty things to British people too – snooping, banning, locking up without charge, feeding them to the flying lizards if their still hungry…

Andy gabbled on at great length given the slightest opportunity. Or even sometimes when he wasn't and had to be put on the naughty step by Liz.

Liz, in between, kept talking slowly and deliberately, as though she was a supply teacher trying to manage unruly five-year-olds. (She knows her audience, then.)

And Jeremy… well…

Jeremy Corbyn was a BIG disappointment. We had been promised that he had been hoisted into the ballot by people wanting to "hear the debate". It would have been helpful if he'd actually had some debate to contribute. Where were the fireworks? Where were the calls for big ticket renationalisations, nuclear disarmament, abolition of academy schools or introduction of 94% squeeze-the-rich tax bands? Maybe he wasn't on his game. Maybe he was just looking forward to getting back among real friends at the anti-austerity rally at the weekend. But in a contest to decide Labour's future – or even if it HAS a future – he seemed quite content to sit quietly in a comfort zone in the past.

Early on he mentioned Iraq. And it's true that Labour has never really confronted what they – collectively – did over Iraq. But just condemning your own side for that disaster does not amount to much more than trying to have your cake and eat it. "Hard Labour were awful; I believe in the Hard Labour Party as the only Party of goodness." And presumably – to quote that other lefty Jeremy, incumbent misery of the News Quiz Mr Hardy – he sees no contradiction in that. There's a genuinely hard question here for Corbyn and others, like Diane Abbott, who were anti-war but remain in the Labour Party – namely: "how do you even justify that? What possible good does supporting Labour do that outweighs all those deaths?". But to Labour's shame it seems that raising Iraq is greeted with rolling of eyes and groans of "not that again, grandad". They know he's not serious about it because he never resigned the whip, so why treat him or the issue seriously in return?

If anything, Corbyn felt like a flashback even further – to the Eighties. And not even the good Eighties; the wet-flannel years of Neil Kinnock when the red flag was lowered in favour of the red rose, and Labour were content to be a protest movement.

But we know – and he knows – that he's not in there to "contribute" but instead so that Labour can say they've "heard the debate" and the left wing ideas (if they ever get voiced) have been "democratically" voted down and can we get on with trying to outflank the Conservatories from the right now, please.

They all remained in total denial about the deficit, trotting out the same old flim-flam: "Labour's overspending didn't cause the crash" – so fluffing what? The austerity was a direct economic consequence of losing 20% of the government's income; if Labour had been spending less, the cuts would not have been so severe and we'd have had more room to manoeuvre on borrowing. That's not monetarist (nobody's a monetarist anymore, whatever Mr "Eighties" Corbyn thinks or says); that's simple Keynesian economics, which Labour supposedly believe in. Labour would not have done anything differently, they know it, they know they were in no position to, and it hamstrung their every attack during the Coalition and yet at the same time prevented them arriving at any alternative thought either.

They ought to have SOMETHING to say on the economy.

I do not subscribe to the "blame Ed" excuse that Mr Milipede did Labour a disservice or behaved dishonourably by resigning once his defeat became clear instead of sticking around to be an unloved piƱata while the rest of them got their act together. It is NOT unfair to expect candidates at this level to have SOME idea of how they would steer Labour's policy.

It is EXTREMELY clear that BOTH candidates for the Liberal Democrat leadership HAVE invested thought into policy and strategy and are coming out with excellent ideas. That's why OUR leadership campaign is inspiring people and Labour's is an hour of the dullest television in history.

Those Labour leadership contenders in full:

Yvette Cooper


Liz Kendall


Andy Burnham


and Jeremy Corbyn

Sunday, June 21, 2015

Day 5283: Elephant v Home Office

Friday:


The story so far…

At the Leadership hustings on Wednesday, Mr Tim the Tim Lord challenged us not to let the Party of Grimond, Penhaligon and Kennedy die on our watch*.

And Mr Norman "Conquest" Lamb impressed me with his radical proposals on prison and drugs policies.

And I described the Home Office as our "natural enemies".

In reply to a comment, I said I would defend this idea. The Home Office want increased security. It's their job. But mostly they do this by reducing liberty. Defending liberty is OUR job. This very naturally puts us on opposite sides.

(Though, as I also said, as with most things I say, it WAS supposed to be amusing/satirical rather than extremely literal, too.)

This is ALREADY a big issue, what with the Conservatory Government dropping their manifesto pledge to abolish the Human Rights Act even before Mrs the Queen had sat down for her first speech.

Lord Chancellor Michael "Gollum" Gove Sheepishly Presents the Speech to Her Majesty, sans British Bill of Rights

But the Speech did contain

…an "Investigatory Powers Bill" aka Return of the Snooper's Charter, to collect your every random browse on the Internet;

…and a "Psychoactive Substances Bill" that plans to ban anything that might legally give you pleasure;

…and an "Extremism Bill" to ban "extremist groups", "extremist mosques" and "extremist broadcasts"… presumably to be followed by "extremist thought crimes";

…and an Immigration Bill to make "illegal working" a criminal offence and extend the principle of "deport first, worry about whether they've survived to appeal later" to all immigration cases;

…and a "Police and Criminal Justice Bill" because, what the heck, it's an annual tradition nowadays and we can sweep up anything left we've forgotten to criminalise into that.

So it's not like the Home Office ISN'T BUSY driving a tank across everything the Liberal Democrats were protecting during the Coalition.

Not to mention Mr Balloon's frankly TERRIFYING speech stating that:

"For too long, we have been a passively tolerant society, saying to our citizens 'as long as you obey the law, we will leave you alone'.".

So, even if you obey the law they're STILL going to come and get you.

What happened to Habeus Corpus? Did Magna Carta die in vain?

And now the Prime Monster is saying British Muslims are (quoting the BBC's headline): "…'quietly condoning' IS ideology"; perhaps it's time someone told him to stop LOUDLY ADVERTISING for the terrorists!

(and things are getting pretty DIRE if I'm agreeing with the Grauniad's numpty Owen Jones .

Next thing, I'll be saying Pollyanna Toytown is right about wind farms!)

In a time of AUSTERITY, people feel afraid, afraid for their jobs and the security of a roof over their families' heads. And it's all too easy for politicians to tell them that (to quote Tim again) the blame lies with the foreigners for taking their houses rather than the politicians for not building the houses in the first place or the voters for not voting for politicians who’ll build and reduce their house prices.

The treatment of migrants and asylum seekers and the people daily being people-trafficked across the Med (or drowning in the attempt) is urgently topical.

Government ministers' talk about "pull factors" and "encouraging more" is, quite simply, OBSCENE when people are dying. These are human people and they have left their homes, fled across continents, because of PUSH factors – War, Famine, religious genocidal maniacs – which massively outweigh any trifling "pull" considerations.

It seems there are really only three possible solutions:


  1. Let them drown!
  2. Annex dirty great chunks of the Middle East and North Africa to establish new, secure safe zones where they can build cities and jobs for themselves protected by our military, i.e. a new IMPERIUM, exactly what we're accusing Russia of doing (and bearing in mind that we would need to spend an awful lot of money and possibly lives to do this properly)!
  3. Actually do our bit and let them come here.


Call me old fashioned, I favour option THREE.

Iraq, and to a lesser extent the bombing in Libya, has demonstrated the limits of our ability to control foreign interventions given the amounts of money and lives that we are willing to expend (i.e. not very much of either).

Instead it seems that we are going to leave them either in the water, in terrible danger in their own countries, or in effectively concentration camps in Italy and Greece (Greece! As if the Greeks weren't in enough trouble!).

Immigration is GOOD for the country – any country! It drives growth in GDP. It could be good for OUR country.

But to feel that benefit we need to ensure that we build the houses, services and infrastructure to support the people here. But building those things CREATES jobs, including the fabled "British jobs for British workers" (and also British jobs for anyone else willing to do them!).

We should be LEADING the call – as Paddy Ashdown did when saying we should give British passports to citizens of Hong Kong in the lead up to the hand back to China – for not a few hundred or a few thousand but for a few HUNDRED THOUSAND rescued migrants to come here to start a new life. Britain will DO OUR DUTY and stop blaming it all on poor, impoverished Greece and the EU.

Meanwhile, a lot of anti-EU rhetoric is being driven by the spurious claim that we are unable to deport foreign criminals.

We should be telling people loudly that this is a sign of PATHETIC WEAKNESS in a Home Secretary!

If people are criminals then we should be prosecuting and punishing people HERE. If you are so WEAK that you need to chuck them out of the country and make it someone else's problem, then probably you are not FIT to be Home Secretary let alone Prime Monster.

And IF we are so PROUD of British Justice, then why would we NOT be willing to hold it up to international scrutiny? Our record is INCREDIBLY GOOD, and we win VERY NEARLY ALMOST ALL of the cases that go before the Court in Europe.

(And let's be clear: it's a Court of UNIVERSAL Human Rights IN Europe, not Rights OF Europeans or OF Europe – we'd have a GLOBAL International Criminal Court one excep, China and America refuse to live up to their protestations of upholding Human Rights! Even Russia is technically a signatory!)

Once again, we should say that if you think we need to withdraw from scrutiny then you clearly don't think British Human rights are UP TO MUCH.

Well, I rather think they ARE, and that the Conservatories are a bit PATHETIC for not trusting that we DO uphold Human Rights.

But nobody is perfect, and having an outside body that can look from time to time and say where we might – might – have to consider that we could be wrong… only a SOCIOPATH thinks they're never wrong.

As I went on to say in that comment: I think saying the Home office wants to increase security is being NICE to them. I'd suggest that very often the Home Office does things that reduce liberty and do NOT increase security:- counter-productive measures like stop-and-search or "go home poster vans" which generate resentment and breed threats to security; and ludicrous security theatre - like ID cards or the snoopers charter - which is in the business of looking like it's doing something but actually wastes resources, money, time, manpower, on activity that achieves NOTHING.

We have had more than three decades of the Home Office making more and more grabs for power – and over the same time saying that they can do less and less to protect us; three decades of Home Secretaries and Shadow Home Secretaries trying to outbid each other on toughness, outflank each other to the crackdowns, racing to the bottom of the Civil Liberties barrel. Michael "of the night" Howard sending pregnant women to give birth in chains; Tony "Lord" Blairimort, brutally profiteering from the horrible death of Jamie Bulger; Jack "the sinister minister" Straw; David "detention without trial" Blunkett, and the declassified reclassified cannabis; Charles Clarke, the safety elephant; "nice" Dr John Reid and the I.D.iot cards; Jacquie Spliff, the Second Home Secretary… the list goes on, each more authoritarian than the last; most recently we've had Teresa "nuts in" May and Yvette "the Snooper" Cooper vying to be worst yet.

And yet for all their "strong on crime" posturing, for all their "not giving in to terror", every last one of them CAPITULATES instantly, the moment someone (from security or the police) comes along and SCARES them with talk of "the bad people".

"Oh, we need more money, or more powers to arrest people, or to intercept their Instagrams, or to look inside their fluffy brains. Only then will you be safe, only then can we protect you from the paedo-terror-drug-militants… at least until the next time we ask."

It is, quite literally, a PROTECTION RACKET.

And if Her Majesty's far too loyal Opposition will not OPPOSE the madness, then by all that's fluffy WE fluffing well should!

Friday, June 19, 2015

Day 5282: An Elephant's Queen's Speech

Thursday:


Bit of a flashback/catch-up today, but it does follow on from what I was saying yesterday about what the next Leader of the Liberal Democrats will need to do.

Back on the day of the first Tory Queen Speech in almost two decades, Auntie Caron asked Liberal Democrat Voice's readers to suggest their own bills for a Liberal Queen's Speech.


So, I came up with half a dozen ideas, pretty much off the top of my fluffy head. Auntie Caron was kind enough to include one of them (and several others were already covered by other cleverer fluffy toys)!

In coming up with these Bills in particular, I wanted to address ideas that would be clearly LIBERAL (and not ones that either Hard Labour or Conservatory Parties were likely to come up with) AND that would make genuine and TARGETED differences to people in need.

(And of course I've included one on voting reform because, not only is it now more vitally necessary than ever to have a Parliament that reflects the genuine spread of people's opinions – whether it's us, the Greens, even moderate socialists… even the Kippers(!); and to stop Conservatories and Hard Labour from all parasitizing votes off all of us – but if there's just ONE thing people remember about us – one thing that isn't the godawful mess we made of tuition fees, that is – then it's PR.)

There is a case to be made for a Government committing to what Sir Humphrey once described as "masterly inactivity": the Coalition made many changes, particularly to the NHS and to education, and doing nothing would allow those changes to "bed in" while giving nurses and teachers some respite from change for change's sake, and give Government the opportunity to observe and gather evidence for review.

And if we were still IN government, I'd certainly warm to that idea. Hard Labour's accusation of last year being a "zombie parliament" just because the Coalition was not intent on keeping up a blizzard of legislation never appealed.

However, having just fought the general election campaign on a platform of "no change, everything's fine" – and remind me, how exactly did that work out for us? – we are now NOT in government.

And a Queen's Speech is a political event, and that means making political statements: we have to jump up and say we would make things DIFFERENT.

Here then is my list in full:

UNITED KINGDOM PARLIAMENTS ACT
The Parliament installed as a result of the 2015 General Election so manifestly fails to represent the votes cast by the electorate that it is now of vital urgency that we replace our Nineteenth Century constitution with one fit for the Twenty-First Century. To this end, a Liberal Democrat government would empower a people’s constitutional convention – after the model that successfully developed the Scottish Parliament – to decide on a fair way of deciding who governs Britain.

HUMAN RIGHTS ACT
A Liberal Democrat government would celebrate the 800th anniversary of Magna Carta by reaffirming Great Britain’s commitment to the Human Rights and the European Court that were created under the guidance of Winston Churchill and the other leaders after the defeat of Nazism.

Measures will be introduced to increase Freedom of Information and to increase citizens' protection from abuse by government, including the abolition of the Regulation of Investigatory Powers Act, and a Digital Freedoms Bill to protect citizens from hacking and snooping.

CONTROLLED SUBSTANCES (DRUGS DECRIMINALISATION) ACT
A Liberal Democrat government will adopt a sensible, scientific evidence-based approach to control, monitoring, and treatment of drug use and misuse, based on the positive outcomes resulting from the changed approach in Portugal.

Funds currently wasted on the futile “war on drugs” can be transferred to more productive policing. The government will review legalizing the medical (and possibly recreational) use of cannabis.

UK PRISONS (ABOLITION OF SHORT SENTENCES) ACT
British prisons are extremely overcrowded in spite of falling crime and evidence shows that short sentences do nothing for rehabilitation and only introduce prisoners to hard drugs and more serious criminals. A Liberal Democrat government would therefore, with immediate effect, abolish all prison sentences of under one year in length to be replaced by programmes of reparative justice that have been shown to be more effective.


EMERGENCY AFFORDABLE HOUSING AND RENTS ACT
There is a critical shortage of housing in the United Kingdom which is damaging our economy by sucking capital into houses rather than investment and shutting people out of buying or renting homes near to where they want to work or where their families live.

A Liberal Democrat government would: immediately begin building more housing concentrating on new garden cities and renovating disused sites in cities, raising government borrowing but only where future rents can cover the interest; reverse Tory policies of Buy to Rent which have seen further reduction in the public housing stock and prevent further sales of public assets until the housing stock has been restored to sustainable levels; examine ways to outlaw the practices of holding large “land banks” rather than developing new housing, and keeping homes empty as “investments”; and bring in rent councils with the powers to reverse unfair rent rises or evictions.

CLEAN AIR / CAR ELECTRIFICATION ACT
The state of the air in our cities is among the worst in Europe and the only long-term solution is to replace the internal combustion engine with new, clean, green technologies.

A Liberal Democrat government would therefore begin research into the necessary changes in infrastructure to make this possible – e.g. greater generation of electricity; provision of charging points in homes and on street in addition to regular charging stations; changes to taxation.

Initial reporting to take place within one year with a view to – if evidence shows practical – trials before the end of the Parliament in two English cities (not London) and negotiating with the Scottish Government and other devolved authorities for similar joint programmes.

EDUCATION AND SOCIAL MOBILITY ACT
Under the Coalition, Liberal Democrats invested heavily of both our political capital and the little actual spending that we were able to wring out of the Tory Chancellor in targeting Education: both the pupil premium and the delivery of free school meals to early years pupils were targeted at redressing the balance and giving the best possible start in life to people who would otherwise be – by the age of six, even – left behind by their better-off peers.

To continue that investment, we would raise funds from better-off schools by removing the charitable status of fee-paying schools and spend that money to increase the number of years that free school meals are provided, and substantially to increase maintenance grants for university undergraduates, to allow them to use their time to study, rather than having to work part-time to feed themselves.

We would continue to maintain government spending on sciences. Additionally, as part of the BBC Charter renewal, we would seek to agree an increase in the licence fee in exchange for the BBC establishing apprenticeships in the arts and creative/productive industries.


I would also add a couple more to the list.

First, Mr Norman "Conquest" Lamb's
ASSISTED DYING BILL
Broadly speaking I do not, in fact, want people killing themselves, and I am deeply troubled that the largest cause of death among young men in the UK is now suicide, not to mention the way that this disproportionately strikes at the LGB and particularly T community. But as a Liberal it is not my place to deny choice to other people. It would be my hope that through a more mature consideration of the end of life, and openness about it – and a much greater openness to using medical cannabis and opium-based pain relief; and much greater care and much less stigma put into mental illnesses – we would see fewer people suffering but also actually fewer people choosing to end their lives.
and second,
ABOLITION OF VICTIMLESS CRIMES BILL
(an idea of Daddy Alex's, and a very good one, that would cover the decriminalizing of sex-working that Jade O’Neil in Auntie Caron's list proposes).

We put too much legislative effort into banning things we think are bad and then even more effort into criminalising people for doing things we have banned. We need to let go of this overwhelming desire to control others before ourselves. Among the first principles of Liberalism is the "Harm Principle" from "On Liberty" by John Stuart Mill and Harriet Taylor, and it is worth quoting here: "the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others."
I'd also like to incorporate Duncan Stott, Kelly-Marie Blundell, Maria Pretzler and Jon Ball's suggestions to Lib Dem Voice into my Emergency Housing Bill.

(Since I wrote these, and since the Queen's speech, Mr Norman has also made some substantive proposals on reducing prison numbers, while Conservatory Mayoral hopeful Mr Zac Goldfinger has called for an electric car revolution in London. So I'm clearly surfing the zeitgeist here!)


I think that between six and eight bills is enough to get the point across without becoming too much of a shopping list. But reviewing my suggestions I think that they are not very well BALANCED between the areas where I believe we should be targeting.


As a reminder: these are the FOUR areas where I said yesterday I think we need to be campaigning:

1. Personal freedoms and Civil liberties
2. Health, Social Care and Wellbeing
3. Opportunity and Education
4. The Economy

Three of my proposed bills, and both of my "extras", fall under "1"; whereas housing and clean air are both "Wellbeing" without substantially talking about either Health OR Social Care.

So there's clearly some work to be done.

Therefore (if I can keep this new spurt of writing going!), next time I'd like to talk some more about taking the fight to those people I named as our natural enemies, the Home Office; and then share some thoughts about a Liberal Economy and the longer term direction for the Party and the country.


PS:
Today is the memorial in Glasgow for Mr Charles, our much loved former leader.



Thoughts go with his family and friends.

Thursday, June 18, 2015

Day 5281: Tim Farron or Norman Lamb? We Need BOTH!

Wednesday:

Featured on Liberal Democrat Voice

I was lucky enough to attend the Liberal Democrat leadership hustings in London, and to meet both candidates.

Going in I was leaning more for Farron, and the Tim Lord did indeed play a blinder: full of that old-time Liberal religion. And his last word – "it's my job to get Norman back into Government" – was the best line of the night. But Norman was consistently impressive throughout as the one who put thought into his answers. He made it very much harder to choose. And that's got to be some kind of victory for the Norman Conquest.



Illustrative was the question: "What would you vote against the Party Line on?" (one of Alex's favourites). They both didn't answer the question but in different ways.

Tim's answer was to point to his rebellious record in the last Parliament, voting against the whip on Tuition Fees and Secret Courts. Those are his radical credentials, right there, do what's right not what's on the ticket. That's not really voting against the Party line, though. Norman, answering that question second, chose that opportunity to defend his own record as being the "good boy" and voting for those things on the grounds that practical Liberalism means doing more good by staying in and winning the fights you can win, rather than letting "best" be the enemy of "good".

So in some ways – from a certain point of view – Tim was being the more careful candidate here, embracing the Party, touching us in our warm happy place, while Norman was willing to be a bit more dangerous.

If we were still a credible force in the House of Commons, whether in Coalition or at least in contention to be in Coalition, there would be a strong case for a candidate who has shown just the sort of "winning the best deal" by "tough decisions" talent that Norman has. But we've been massacred. To his credit, Norman clearly recognises this, and that continuity – being the "establishment" candidate – are a weakness in this context, and he's been highly active in generating radical policy ideas to demonstrate that there is so much more to him than that.

When questioned on policies, both candidates were – unsurprisingly – saying the same things: we need to make tackling the housing crisis our priority; we should be first in line to defend the Human Rights Act; we should celebrate immigration not condemn immigrants; renewables not fracking. But although Tim was saying we should be the Party saying the difficult, "spiky" things, Norman was the one coming out with the "out there" ideas, in particular taking the fight to the Home Office (our natural enemies!), on drugs and on cutting the numbers in our (vastly overcrowded) prisons.

If I might paraphrase "Yes, Prime Minister" episode "The Ministerial Broadcast", it's pretty clear that Tim would be the one sat in the oak-panelled room with the leather-bound books on the shelves and the calming tones of Brahms playing to reassure you; while Norman would be all modernist furniture and Stravinsky to distract from the Continuity Clegg label.


With only eight MPs… and one of those the ex-leader, the Reverend Nick, who the public no doubt expect to step into quiet semi-retirement (or to put it another way, they would say they've seen the back of him)… and another, Alistair, the Laird Carmichael, shall we say, hors de combat… with only six MPs… I'll come in again…

At least one candidate (it was Tim) has made it clear that we will have to pick our campaigns.

I would suggest we have to cover the following:

1. Personal freedoms and Civil liberties
2. Health, Social Care and the dreaded "Wellbeing" (so including housing)
3. Opportunity and Education
4. The Economy

In the short term, it almost doesn't matter who wins.

Norman has already made himself a champion of personal rights with support for an Assisted Dying Bill, and his excellent policy announcements, in particular on the failed war on drugs and on our prisons. And (for all those "Yes, Prime Minister" reasons) the fact that he looks the more establishment character makes him just the man to be taken seriously when attacking the Home Office from the ANTI-authoritarian flank (something Labour hasn't done for twenty years).

Tim clearly knows his Beverage (and I don't mean TEA), and he's got the background (voting against Tuition fees gives him the opening to be listened to on the subject, possibly the only Lib Dem who can do that), and the talent of a natural preacher to condemn the Tories as "immoral" (which he did several times on the night): clearly he's the man to lead on housing and education.

(Obviously we should be defending our NHS too, but there's no way to make that an issue identified with us and not Hard Labour – however unjustified, they've just spent too much political capital in buying that as "their" turf. What we could and should do, in fact, is address ourselves to the "wall of bureaucracy" that often means the NHS works for itself rather than patients – of which Mid Staffs was only the most extreme example.)

We cannot NOT talk about the economy (stupid), and I'd ask Tom Brake to be our Shadow Chancellor.

Additionally, I'd ask Nick to be spokesperson for foreign policy. It means we can use his considerable talents, but at the same time allow him to step aside from the field of everyday politics, and be a (very young) elder statesman figure.

But the leadership is for more than just the short term. It is about who – as a Party – will be speaking for us for the next five years. Because the media will no doubt shut us out now, and at best we will get our leader to appear on TV's Questionable Time or the occasional talking head comment on the news.

(I did wonder briefly, Tim might be "interesting" enough to get the occasional appearance even if he were not leader, which – in Bizarro world – might be a reason to pick Norman for a "two bites of the cherry" approach. But it won't fly. If we want our best – surviving – communicator to be able to communicate, then we'd better decide which of them it is and make him leader.)

So this is the question: are we content as a Party to drift back into quasi-think tank status? Or do we want to say loud and strong that May 7th will not stand.

This Party, this liberal phoenix needs fire. Tim certainly has fire. And it may be that that's what wins it. But if it does I very much hope that his first act will be to put Norman in charge of choosing our campaigns, picking the fights we're going to pick.

I shook them both by the hand and wished each of them good luck. Whoever wins, they'll need it. But more importantly, whoever wins, they'll need the other one too.

PS: 

courtesy of Count Packula: the opening speeches of both candidates.

First to speak was Norman…



…and then Tim.