by Martin Odoni

I do understand that Chancellors of the Exchequer feel the need to exude calm confidence. However the inevitable slump of the pound in the aftermath of the Brexit vote  has brought a response from the present incumbent at 11 Downing Street so relaxed you could almost pour him into his suit.

George ‘Gideon’ Osborne, for whom I have of course always had the deepest respect, except when I am asleep (oh yes – or when I am awake), said this morning, with no apparent trace of irony, that the UK is “in a position of strength”. While admitting the painfully obvious point that adjustments would need to be made to the British economy, post-withdrawal from the European Union, he then said, quite maddeningly, that it could wait until after David Cameron has been succeeded as Prime Minister. Osborne could hardly have sounded more like a British Muhammad Saeed al-Sahhaf as the allied tanks were rolling into Baghdad, if he had declared, “The infidels are committing suicide by the hundreds on the gates of the Treasury!”

Now, according to the 1922 Committee, the next leader may not be in place until as late as 2nd September, which means that Osborne is willing to do nothing at all for two months.

After another day of bad news on the stock exchange – including another very serious reduction to the UK’s credit rating – this seems comatose, not cool-headed. Now in fairness, he is not explicitly ruling out doing anything at all between now and then, merely not arranging the Austerity-heavy emergency budget that he was threatening people with, in his characteristically diplomatic fashion, before the referendum.

But even so, he also has had an air about him of doing nothing, not least given his prolonged absence from public post-referendum view until this morning. There is no doubt that the problems need some corrective action. I am not suggesting anything dramatic, nor am I suggesting that measures Osborne might use are guaranteed to put a stop to the slide in the value of sterling. Further, there is just a chance, though not a great one, that the problems are simply a rather prolonged blip and the markets will soon right themselves once the shock of the vote has worn off.

But it would be an awful lot better if we had a Chancellor who is not just going to count on that hope, instead of being proactive. So here are a couple of small boosters to the pound that Osborne could try, just to apply a bit of a ‘drag factor’ to its plummeting value.

  • First, Osborne could ask the Bank of England for a small cut in interest rates. This would make loans for sterling cheaper, and therefore more attractive to potential borrowers. With rates currently at just 0.5%, there is not much room for further reductions, but even a very small cut could help. If enough loans are taken out in response, demand for the pound will have gone up, and may just stabilise its value somewhat.
  • Secondly, Osborne could ask the Bank of England to do a sort of ‘negative-QE’ to siphon some electronic capital out of the system. This would make pounds scarcer, at least in electronic form, and there will therefore be less to go around. Therefore, theoretically, demand for pounds would be increased.
  • And thirdly, Osborne could order the Treasury to buy up some capital from the markets at a high bidding rate, which pushes the price up, while again reducing the amount of pounds in the system.

(In terms of practical application, options two and three are very similar.)

I do not expect Osborne to try any of these, because none of them really involve giving money to bankers or taking money from poor people.

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by Martin Odoni

One of the worst things a person can be accused of at the moment appears to be a ‘deficit-denier’, as apparently it is irresponsible to think it okay when a Government spends more than it takes in in taxes – even though in fact it is and holding that view is not the same as ‘denying’ that there is a deficit.

I am far more irritated by poverty-deniers. For one reason, they genuinely do deny that the problem of poverty exists when it plainly does. But for another, the specious reasons they come up with to support their view are so shallow that it should hardly be necessary to debunk them.

Now Lord Alan Sugar is the one having a go. He insists that there is no such thing as poverty in the UK, through his shrewd, scientific, in-depth analysis and canny powers of deductive reasoning. Which is to say, he thinks that everybody owns a mobile phone, therefore everybody must be quite well-off.

Now, it is hard for me to establish whether anyone has bothered to tell Lord Sugar yet, but I feel it my duty to point out that the year 1997 ended quite some time ago. Whether or not we really believe that everybody owns a mobile phone – of course it is not true anyway – Sugar’s reasoning is like assuming someone must be happy just because they are capable of smiling. A mobile phone probably was a bit of a status symbol for most of the 1980’s and 1990’s, but these days they really do not cost that much at all. Many handsets can be purchased for about ten pounds, and even paying for credit is not that big a deal, given most mobile networks offer lo-cost calls and texting packages.

Quite simply, possessing a mobile phone in the year 2015 is not really the evidence of luxury and opulence that many poverty-deniers seem to imagine it is.

In a sense, Sugar’s words can be seen as correct, but not in the way he seems to mean. By and large, absolute poverty of the type that is commonplace in parts of Africa, Asia and South America, clearly does not exist in Britain. Parts of the improvement in the average Briton’s condition over the last two hundred years come from simple advancements in technology, many of which result in goods that, by nature, are held collectively. For instance, when electric street-lighting was first introduced in the late nineteenth century, it was not possible for the rich to light the streets to keep themselves safe at night, while simultaneously leaving them dark for everybody else. Tarmacked roads, also, remain tarmacked no matter who is driving or walking on them, irrespective of their relative wealth.

Some parts of the world however have still not had an industrial revolution even to bring their people’s condition up to the level of a Briton in the slums of Whitechapel in the 1880’s. Countries with threadbare infrastructure, perhaps torn apart by warfare, constant food shortages, and the like. The sort of poverty these parts of the world are familiar with is plainly in a different world from the sorts of poverty we have in Britain, and we should not overlook that.

But this does not really tally with Sugar’s arguments at all. He is simply saying that because someone owns something nice, anything at all, they cannot be poor, and therefore they deserve no sympathy or support. This is like saying that when a soldier owns any weapon at all, even if it is just a bow-and-arrow, he must stand and fight, even when he is facing a convoy of armoured tanks. (And is it not strange in this light how we never heard him protesting earlier this year when MPs were complaining about how hard it is for them to get by on sixty-thousand pound salaries? Sixty thousand pounds is hardship, but a mobile phone is opulence?)

We do have poverty. As a member of the House Of Lords, Sugar should be aware of the Government figures from June this year that 2.3 million children in the UK are living in relative poverty. Even with the Government’s attempts to massage the stats by altering the definition of poverty, the numbers are bewilderingly high.

Just because we do not have absolute poverty, that is no reason to assume that the UK therefore has no poverty, or that the comparatively mild poverty of the UK is acceptable and no attempt should be made to tackle it. As one of the richest countries in the world over the last three hundred years, the UK has long-since run out of excuses for insisting that it does not have enough to go around. And just because a particular problem is not the worst problem in the world, that is not a very good reason to leave it unsolved.

Lord Sugar might be able to point to his ability to emerge from boyhood poverty to say anyone can make it if they try, but that very same ‘we-do-not-have-enough-to-go-around’ mentality is precisely what gets in the way of other people duplicating his rise. When the system is set so that wealth is concentrated in few hands, and that there is not enough for everyone else to be well-off, Sugar’s individual rise will mean that the door was closed on dozens of others. It is the nature of any pyramidal social structure that some people will not make it, no matter how hard they try, because they structure does not have space for them higher up. Owning a mobile phone in the days of their ubiquity will not be much of a consolation prize, and having to see Alan Sugar go on television and tell them that they are not poor while he gets hundreds of pounds every day just for turning up at the House Of Lords, will probably make them slightly nauseous.

It is true what they say, people. Too much Sugar makes you sick.

by Martin Odoni

I should know better than to watch BBC Question Time. I have largely stopped watching it, especially over the last two years, as I have become fed up of its thinly-veiled bias – its tendency to give incredibly disproportionate exposure to members of the UK Independence Party in particular – and its considerable dumbing-down since the late-1990’s. Habitually inviting pop-culture celebrities, where once it might have included scientists or public workers, often lends the programme an air of triviality.

But today I decided to give last night’s episode a viewing on iPlayer , and yes, it was a mistake, as I was soon listening to one of the most obtuse audience-members Question Time has ever had.

He said, as follows; –

Economics is really simple. I’ve got ten pounds in my pocket. If I go out and buy three pints of beer in Cambridge, I’m probably borrowing money. If I carry on doing that, then I’m gonna run out of money, and I’m gonna go bust. It’s not difficult, guys.

So to sum up, his very basic argument was that spending cuts, greater than any done so far since the start of the period we call ‘Austerity’, are necessary, because if spending costs more than the amount of money the Government has, that would mean borrowing is necessary, and the more we borrow, the longer it will take us to pay off the National Debt.

Wow. Shrewd calculation.

(There is a clip of him that has been shared on YouTube.)

So yet again, Joe Public thinks the words ‘economics’ and ‘budgeting’ are freely interchangeable. I was mentally screaming at my PC screen as he spoke, something I do a lot when watching Question Time, which is one of the reasons I tend to avoid it these days. But this was particularly maddening, as it reminded me that way too many people still think that they can use their private incomes as an analogy for a national economy.

The guy in the audience did not help himself in that he chose to make the comparison while arguing with Yanis Varoufakis, one of the better-informed economists in all of modern Europe, and sure enough Varoufakis slapped him down with relaxed ease. But we should still make no bones about this; the guy in the audience is completely illiterate economically. Not just slightly, completely. And so is anyone who agrees with him. For not only does a national economy work differently from a household budget, it in fact works the opposite way in several critical respects, as any activity put in has feedback effects that do not happen to the money people spend when they ‘go out for a few drinks’.

Let us compare; –

A household budget is linear; the household receives money at the beginning of the line, what we call the ‘income’, saves it for a while, then spends it at the end of the line, what we call ‘outgoings’. Before and after this line, the money is not part of the household budget.

An economy is a circle. The Government issues money via the Central Bank to pay for services, the money goes round and round the population, and then eventually it arrives back at the Government in the form of tax, whereupon more money is issued to pay for more services, and round it goes again, ad infinitum. The money does not leave the economy at any point in this circle (except when used for foreign trade, but even then it will probably soon be back).

The amount of tax a Government receives is directly proportional to the amount of activity there is in the economy. In which case, provided it is targeted sensibly, more spending will mean more activity in the economy and more money coming back in than was paid out.

This is little different from profit margins for a private company; a factory is useless for making money, unless money is invested to begin with on machinery, staff, raw materials and the like, and continued payments are needed for more raw materials, maintenance, ongoing wages and so forth. Without that investment, all you have is an empty building. A national economy without an outlay is also an empty building.

So when our esteemed audience-member with his checked shirt says, “It’s not difficult, guys!” he is wrong. Cutting spending in your private life is likely to result in you having more money, certainly. But for the nation’s Exchequer, cutting public spending usually means also reducing the income heading the other way, so it may not result in having more money. In fact, it can be a very delicate calculation, sometimes even dependent on luck, establishing what to target spending on, how much to spend in order to get the right feedback, and predicting precisely how much the feedback will be.

What is this calculation? Well, the term whose meaning we can be sure the guy in the checked shirt is unaware of is ‘fiscal multiplier’, which is roughly the public sector equivalent of a ‘profit margin’ in the private sector. A fiscal multiplier is the calculation of how much Gross Domestic Product activity is ‘fed back’ from an investment by the state. A multiplier of 0.5 means that the GDP activity generated is only fifty per cent of the amount invested. A multiplier of 1.0 means that the GDP activity generated is equal to the amount invested. A multiplier of 1.5 means that the GDP activity generated is fifty per cent greater than the amount invested. A multiplier of 3.0 means that the GDP activity generated is three times the amount invested. And so on.

Now, the International Monetary Fund revealed in 2012 that the average fiscal multiplier during the years of the Labour Government was 1.3, meaning a ‘profit’ of thirty per cent on average. And our current Chancellor of the Exchequer, the ever-beloved George Osborne, has spent the last five years hacking away at the services that generated these margins. The result has meant a net loss of wealth for the country. The growth in GDP that began two years ago only became possible after he slowed down the pace of cuts. (Even then, he was still lucky that the banks decided to start lending again.)

In fairness to Mr Checked-Shirted-Expert-On-Cambridge-Beer-Prices, he was not the only one in the audience who seems just to assume that spending cuts automatically mean less of a deficit. A few minutes earlier, a guy with glasses and what appeared to be a black eye was arguing that Austerity should carry on, and perhaps be spread to pensions. Pensions are funds that the retired have spent their lives paying into under a strict guarantee of regular payments in their old age, and therefore there are no moral or legal grounds for cutting them. But also, our bespectacled audience-member seems not to have considered what would happen to the economy if millions of pensioners suddenly lost money and had to reduce their spending accordingly. That would be an awful lot of businesses suddenly selling less to them, getting less revenue from them, and therefore forwarding less Value Added Tax to the Government. And lower tax-receipts for the Government by definition mean the deficit is going up, offsetting much or all of the downward pressure the initial cuts have applied.

See how it works?

Indeed, the latest figures released this week show that the deficit is going up again, even though spending is not. The reason for the increase is quite explicitly because tax receipts are going down, which was always going to happen sooner or later with Osborne’s occasional cutting frenzies. When you reduce spending that has a healthy fiscal multiplier, you make it more difficult to close the deficit. (That is, if you truly believe that closing the deficit down completely is a necessary thing to do, but I have discussed the drawbacks of that idea abundantly elsewhere. As has Professor Simon Wren-Lewis, who has a greater mind on this subject than mine will ever be).

The fact that fiscal feedbacks still need to be explained is depressing. Until a far wider expanse of the population grasps how economic cycles and state-spending really work, audience-panel shows like Question Time, at least when discussing economic issues, are never going to be worth the bother of watching.

by Martin Odoni

I would just like to express my admiration and heartfelt condolences to Mike Sivier over on the Vox Political blog. After a very long, arduous and hair-tearing battle against the delaying tactics of the Department of Work & Pensions, to get the real numbers of deaths of people claiming incapacity benefits, today he won, as the figures were revealed to the world. It genuinely is a great achievement, managing to force one of the most stubborn, secretive and underhand departments in all of the British Government to give way. But has there ever been a more heartbreaking boon at the end of such a long and gruelling journey?

What the statistics today revealed is that, near-enough, ninety-two thousand people claiming Incapacity Benefits died in the space of a little over two years leading up to February 2014. Across the three years from January 2011 to February 2014, the overall death-rate was about ninety-nine per day. But it was just thirty-two per day in the first year. Overall, the acceleration in the two subsequent years means an increased death-rate of two hundred per cent. That is only people claiming Incapacity Benefits, please note, not people who had been on benefits of any other description; we are yet to learn how many of them have died of impoverishment by other means. Even more alarming is that over four thousand have died within just six weeks of being classified as ‘fit-to-work’, making a very bleak joke of the Work-Capability Assessments. (Four thousand, please note, is roughly the number of Britons who died at the Battle Of Marston Moor, and as that battle is always presented as one of the most important chapters in our nation’s history, it seems reasonable to suggest that today’s discoveries should be treated with similar gravity.)

Arguments could be made – indeed have been made – that the deaths cannot be reliably confirmed as caused by the DWP’s policies, as the cause-of-death in each case has not been recorded. But the astonishing rate-of-acceleration among the deaths since 2011 leaves little room for doubt; DWP policies, as they have kicked in, have clearly had a very substantial impact, and one for the worse. If the acceleration were caused by something else, for instance the recession, why did the death-rate not start accelerating a couple of years earlier, and why has it not slowed down again over the two years since the so-called ‘economic recovery‘ began?

The figures, in the end, are only numbers and so I suspect many people will take a while to grasp their full significance. Trying to imagine ninety-two thousand faces, and trying to assign a name to each one, is perhaps the only way of turning a number into humanity. But for over ninety thousand people? That would take a very long time. That is the point.

So often in recent times, when challenged on the heartless cruelty of his Sanctions Regime, the Work & Pensions Secretary, Iain Duncan-Smith, has offered only pseudo-religious platitudes of, “I am doing what I believe to be right” or some variation. How can this possibly be ‘right’? How can he possibly carry on insisting that he is doing people good when thousands of them are literally dying as a direct result of his malevolence?

Duncan-Smith’s conduct towards the unemployed and the disabled while he has been in office has often been described as ‘bullying‘, but is that really an adequate word? He is not just reducing people to tears, he is not just imposing his will on them in an unfair and intimidating way, he is not just making them feel small. He is killing them, he knows that is the consequence of his deeds, and he carries on doing them, usually looking for more and more people to victimise by cutting away more and more lifelines. That is not bullying, it is not even persecution, it is a blood-vendetta.

It says a lot about Duncan-Smith’s priorities, and those of many in the wider public, that the rapidly-increasing rate of deaths among Britain’s most vulnerable people is likely to be seen in many quarters as a ‘price-worth-paying’, in the fight against ‘sponging’. Even if benefit fraud were really as prevalent as many imagine – in reality it is less than one per cent of the bill and has been around that level for a very long time – is culling people really ‘better’ than wasting money? Never mind that it is a false economy anyway as no net money is being saved as a result of all this, but how sick must our culture be when it has come to believe equations like that?

What Iain Duncan-Smith has done is preside over a completely pointless and utterly avoidable humanitarian disaster in one of the richest countries in the world, and then imagined he could keep such a disaster neatly brushed under the carpet. So while I congratulate Mike on lifting that carpet enough to reveal what we had all feared lay beneath it, I commiserate him on what it has taught us. If ever there were a victory to despair at, it is this one. However necessary it is to reveal ugly truths, that does not mean we have to enjoy them. Instead, they should be seen with the disgust that motivates us to correct them.

_____

EDIT 28-8-2015: Correction – the number of people who died after being categorised as ‘fit-to-work’ is two thousand six hundred-and-fifty. The four thousand figure is taken from several media sources who counted a number of the claimants twice due to a misunderstanding of two groups of statistics. The real figure is substantially fewer, thankfully, but still terrifyingly high, and while it does not rival the death-toll at Marston Moor after all, it is still high enough for the Battle Of Bosworth Field nearly three times over.

by Martin Odoni

You know, since at least the 1970’s it has been unfashionable to say this, but I sometimes feel sorry for Civil Servants, even the ones in Whitehall. They get a very bad rap, thanks primarily to anti-statist propaganda, which often attempts to portray them as officious, pedantic, obstructionist, long-winded and over-privileged. Not entirely untrue of course, but it is more of a generalised stereotype than a fair assessment. Sir Humphrey Appleby has a lot to answer for.

But I feel a further pang of sympathy for the Civil Service in the way that this reputation has turned them into the plausible scapegoat-of-first-choice when a politician has made an undiluted horlicks of a policy plan.

News broke last week that the Department Of Work & Pensions has been publishing fictitious stories and made-up quotations about ex-benefits claimants, who do not even exist, going on to do really well after being sanctioned. So the Work & Pensions Secretary, Iain Duncan-Smith, AKA CVFNNL (“CV From Never-Never Land“), is in trouble for the umpteenth time for telling flagrant lies to defend the sanctions culture he has created. I for one am struggling to think of a single occasion over the last five years when an attempt by Duncan-Smith to justify his work has not proven to be a lie, or at least a desperate denial of plain reality.

Finally, Duncan-Smith has come forward today to comment on the fake stories, making a rigorous attempt to distance himself from them. He has insisted that he knew nothing about them, and that they were nothing to do with him. He said that the fake stories are under investigation, but appeared to be meant as “an example of the kind of advice we give and ended up going out as a quote which was quite peculiar and quite wrong.”

Oh, so it seems that the Civil Servants are the ones who got it wrong, and the guy giving the instructions is completely innocent again.

Now, it is quite doubtful enough, if all this were the case, that Duncan-Smith would wait almost a week to put his denials-of-involvement into the media, and still further that he would publicise this rather tall explanation for what happened while it is still being investigated. But even if every word is, for about the first time in his career, the truth, it is not really much of a defence. The rules of Ministerial Responsibility are quite clear on this. As the Minister of the Department, IDS is its public face. He takes the credit for everybody else’s work when things go well at the DWP – abstract concept though such an eventuality may be – and he must equally take the blame when things go wrong.

As long as he is Work & Pensions Secretary, Duncan-Smith is responsible for what the Civil Servants in his department do, and part of his job is to make sure that they do not embark on any ‘policy-initiatives’ without his approval. What he is describing is not just an error-of-implementation of one of his policies, it is a Public Relations initiative that the Civil Servants dreamt up themselves and put into action without him even being informed about it.

NOTE: I am not saying I believe any of this, I am only going along with it for the sake of argument.

If Civil Servants are really behaving in such a brazen fashion in the DWP, and I am not convinced for one moment that they are, it means Iain Duncan-Smith has lost control over the Department, not just at an administrative level, but even at a policy level. Controlling the Department at a policy level is the bare minimum of his job description, and so this proves once and for all that he really is not up to the task; especially given this does not appear to be the first time it has happened, without him apparently cottoning onto it.

In short, whether Iain Duncan-Smith was behind the campaign of lies – and let us not forget that he has a mighty long history in that particular field – or he really was completely innocent of it, he has to go. He is either deceitful to a degree that is unworthy of the title ‘Right Honourable’, or he is not sufficiently competent a leader to head up a department. One way or the other, he is unfit for his purpose.

So, folks, if you have not already done so, please sign this.

ETA: It’s been recommended to me that I should share this link to the official Government website as well, as it is a petition that MPs will not be allowed to ignore if it gets over one hundred thousand signatures. Nod of acknowledgement to Andrew Bunting.

by Martin Odoni

The old sitcom Yes, (Prime) Minister can be dangerous when taken completely seriously, but it has a habit of hitting nails squarely on heads more often than not. One sequence in the first season of its incarnation at 10 Downing Street offered a very fair and necessary warning about the dangers of accepting the results of opinion polls completely at face value. It is not necessarily that the pollsters will alter the answers. The far greater danger is their tendency to massage the questions, framing them in such a way as to push the person being asked into a particular mindset.

Take these two questions which are both attempting to assess whether the Welfare State is a good or bad institution; –

Is it good that vulnerable, sick or poorly-educated people receive financial support from those in society with a significant share of the wealth, or born to greater privilege?

Is it acceptable that feckless, idle layabouts are constantly subsidised in their workless lifestyles by hardworking, aspirational people who make a genuine attempt to get on in life?

The first question is clearly framed in such a way as to draw a sympathetic response. It emphasises the vulnerability of those who depend on welfare, and the possibility that many of their problems are not of their own making, while also highlighting the possibility that many who are well-off may be where they are by accident-of-birth, and therefore have done little or nothing to merit their wealth. Whereas the second question is clearly designed to draw a lot of dismissive answers, by presuming that a predominance of work-shyness and indolence are the main causes of poverty, and that industriousness and aspiration are the main causes of wealth and success.

We need to keep this in mind when reading the average poll in the Daily Mail or the Sun, as they are among the worst newspapers in the country for having a very ‘anti-pauper’ outlook, and so would prefer an ‘anti-pauper’ answer. As a result, they are liable to ask something akin to the second question while taking soundings in the street, but when publishing the results, to print something more in keeping with the first.

And yes, it is entirely likely that the Mirror and even the Guardian will resort to transposed versions of the same trick when polling the public on the same issue.

Polling when done by newspapers, in short, is often just a dirty trick. (More on this subject is discussed in episode 2 of To Play The King, approx 14 minutes in – paid subscription.)

However, what this assessment does not allow for, which I think may happen quite often, is inadvertent massage-of-questions. This suggestion of mine could cause the odd doubtful look, but I do think ordinary, bungling human nature is as capable of making a mistake when wording an opinion poll as it is when wording anyhting else. (TYPO DELIBERATE – just to make the point in reverse.) Opinion poll questions are vulnerable to lack of nuance, after all, and so are human minds.

This possibility came to my thoughts today when studying the results of an opinion poll conducted independently, Jon Cruddas tells us, of the Labour Party’s higher echelons, in a bid to find out why Labour lost the General Election in May. The findings are interesting, and the first conclusion drawn is that the defeat was not a result of the party being perceived as ‘Tory-lite‘. Instead, it was perceived as being ‘Anti-Austerity’, and this was seen by many in the public as irresponsible.

Now, this conclusion may indeed be an accurate reflection of public perceptions, and I do not wish to take up time here assessing whether the perception itself is true (it is not), or whether being pro-Austerity is the same as being ‘financially responsible’ (it most definitely is not). Instead I want a closer look at the question asked in the poll that led to this conclusion. It reads; –

Agree or Disagree: We must live within our means so cutting the deficit is the top priority.’

Now, the question itself is somewhat leading, and presents two slightly separate concepts as one. But also, the interpretation of the answer by the Labour researchers leaps to an assumption.

Firstly, the very term live within our means is an economically-meaningless platitude, much loved by Conservative Party ‘toom-tabards‘ when trying to justify cutting spending that is perceived as not benefiting the well-off. In reality, our ‘means’ are limited by the amount of real resources that are available, not by the amount of money the Government owes, and also in reality, there is no danger of insolvency. But as most people-in-the-street appear to have no grasp of these details, we can forgive the term being used in the question.

But secondly and more importantly, cutting the public deficit and favouring Austerity appear, by the way the answer has been interpreted, to be treated as one and the same. Of course they are not the same, and so the opinion poll has been worded as a false dilemma – in effect, it accepts that if the deficit is too high, we must either cut spending or face the consequences of excessive debt.

Whether we think the present deficit really is too high or otherwise, it simply does not follow that an excessive deficit can be brought down by spending cuts, and spending cuts alone. In fact, spending increases that are targeted intelligently can cause the deficit to shrink more reliably, by fiscal multiplication feedbacks e.g. hiring more public sector workers can lead to more productivity, as well as higher income tax receipts and Value Added Tax through the workers’ subsequent personal activity. There is no indication whatever in Cruddas’ assessment that this point-of-view has even been considered in the poll, let alone been asked of those questioned. For instance, the poll could have asked a supplementary question to the one above, something akin to this; –

‘If you agree with the above, do you think that reducing the deficit is best achieved through a) spending cuts, or b) targeted investment?’

But no, there is no indication that such a question has been asked, and the way the majority answer is assessed by Cruddas seems to assume that this is already part of the previous question.

That is maddening, not only because it might lead to Labour getting the wrong idea about why they lost the Election, but also because it might have been a useful way of testing just how economically-literate people around the country really are. My suspicion is that this is a genuine mistake, and not just Blairite confirmation bias against the rise of Jeremy Corbyn, at least not consciously, for the simple reason that a great many people in the Labour Party appear to be no more economically-literate than the general public, an impression that is scary enough in itself.

One thing I can say about the poll result is that it both confirms and denies my recent suggestions at the same time. It clearly underlines, as I have pointed out before, that Labour’s only hope of getting back into power any time soon is to destroy the myths of what caused the Credit Crunch seven years ago, if they are to win back public trust on running the Economy. It also seems to indicate that a move to the left, as I have called for, is not going to be received well by the public, although that depends on there being a public prejudice that leftism-and-anti-Austerity-equal-bad-economics, something that the poll does not really check.

Whatever the case, I would suggest they needed to word the poll more carefully and comprehensively if they wanted a reliable answer.

by Martin Odoni

It is June 2012. The Chancellor Of The Exchequer, George Osborne, has flip-flopped on a policy to increase fuel duties. BBC Newsnight, never slow to offer a Conservative politician the opportunity to speak to the public, invites Osborne to appear on an edition of the show and explain the thinking behind the policy-reversal, and how it is to be funded. Osborne sends a junior Treasury secretary, Chloe Smith, to absorb the heat of Jeremy Paxman’s verbal flame-throwing on his behalf. She struggles and stumbles, and fails to explain anything adequately, and is largely sneered at and laughed at in the media the next day. There is just a note of sympathy for her in many quarters though, with sentiments along the lines of, “Why was this inexperienced junior minister sent to speak on behalf of the Chancellor? It was Osborne’s decision, where was he when it needed defending?” Where was he indeed? Even some of his party colleagues thought he was being cowardly.

Now that tells a story of a man who is really scared. Easily scared.

It is December 2013. Iain Duncan-Smith, Work & Pensions Secretary, attends a hearing in front of the Parliamentary Work and Pension’s Committee. He is surrounded by armed police officers, and even has a personal bodyguard protecting him. They are there to keep him safe from ‘frenzied attacks’ he is apparently expecting from a small group of disability activists. Three of the activists, let it be noted, are in wheelchairs.

Now that tells a story of a man who is really scared. Easily scared.

Later that same month, Duncan-Smith and his current lieutenant, Esther McVey, she of the blonde hair and bland intellect, speak at a debate in the House Of Commons about the rising use of food-banks among the British poor. Or more precisely, McVey talks about it in rather vague and dismissive terms, while Duncan-Smith refuses to speak at all in the face of a constant barrage of questions from Opposition benches He promptly runs out of the chamber in a hurry about one-third of the way through the debate.

Now that tells a story of a man who is really scared. Easily scared.

It is March 2015. David Cameron, Prime Minister of the United Kingdom of Great Britain & Northern Ireland (heaven help them) receives a challenge. His first – somehow not only – term as Prime Minister is scheduled to end in the next couple of months, and with a General Election therefore imminent, the matter of campaigning in the media is now prominent in people’s thoughts. Five years ago, the Prime Minister, as then-Leader of the Opposition, had taunted his predecessor at 10 Downing Street, Gordon Brown, as being “frightened” to debate him live on TV. Now, with the boot on the other foot, the current Labour leader, Ed Miliband, is the man to throw down the gauntlet, demanding that Cameron debate him in a head-to-head on live television. Cameron refuses. He refuses various other suggested arrangements, including debates with a broad cross-section of leaders of various other parties. Eventually, after lengthy and frustrating negotiations with the parties and the TV stations, Cameron agrees only to a debate with a very crowded stage of party leaders from across the spectrum, and to a leader-audience Q&A session. He avoids a head-to-head, and he avoids being the definitive focal point of opposing leaders’ pressure, and thus leads many to think he is exactly what he once accused Gordon Brown of being.

Now that tells a story of a man who is really scared. Easily scared.

Still in March 2015, and the leader of the House Of Commons, William Hague, has decided to end the term of Parliament with an underhand coup against the Speaker of the House, John Bercow. Despite being a Tory himself, Bercow has been an occasional obstacle for the Conservative Party during the five years of the Coalition Government, and they would like to replace him with a Speaker who is likely to be kinder to Conservative ‘Honourable Members’. Hague has hit on the idea of a motion of no-confidence in the Speaker to be voted on in a Secret Ballot. The thinking appears to be that Tories are more likely to vote against Bercow if their choice is kept secret from him, as, in the event of his survival, he will supposedly be less likely to overlook them when they wish to speak in future. The vote goes against Hague, and there is a general mood of contempt from all corners of the House for the last-gasp nature of the motion he has introduced, giving almost no time over to discussion of its content. It is as though Hague is scared of what such discussion might have led to.

Now that tells a story of a man who is really scared. Easily scared.

It is July 2015. Scottish Secretary, David Mundell, the only Conservative to hold a Westminster seat north of the border, is visiting Dumfries, where he is, somewhat improbably, the guest-of-honour at the opening of a new food-bank by the Trussell Trust. Mundell has a rather dicey history relating to food-banks, having been one of a number in his party to rationalise the increase in food-bank use across the country as having ‘nothing to do with’ the sharp increase in poverty since the start of Austerity in 2010. While he attends the new food-bank, he makes a brief, cursory statement, but refuses to answer questions from the press. He makes a few rather pompous remarks about the importance of having an open, honest debate, and of politicians being willing to speak to people they do not agree with, and then promptly he scarpers through the back door to where his car is waiting. As he climbs into the passenger seat, he is surrounded by a furious crowd of about two hundred anti-Austerity protesters, who hammer on the car windows and make it difficult for him to be driven away. Mundell just sits there, staring ahead, refusing to acknowledge even that anything is happening, let alone to speak to people about their concerns. He cannot escape quickly enough. He cannot get away from these ordinary people quickly enough. The police soon intervene, forcing a pathway through the crowd, and only then can Mundell complete his escape.

Now that tells a story of a man who is really scared. Easily scared.

It would not be greatly difficult to quadruple this list, and still have plenty of examples to spare of British Conservatives who are very afraid. Now, the 1980’s generation who served in Margaret Thatcher’s Cabinet was not exactly the epitome of political talent, but the Labour Party of the time would have seen today’s successors to Norman Tebbitt, Nigel Lawson, Geoffrey Howe et al as dream opponents by contrast. Yes, the modern Tory Party is as mediocre as it has ever been, not only intellectually, but also in terms of moral fibre. With the odd exception here and there, today’s Tories are neither intelligent, nor ethical, nor courageous. Defeating them therefore, for anyone with a half-decent brain, really should just be a matter of holding one’s nerve.

For what it is worth, I do think there are some half-decent minds in the higher echelons of the current Labour Party. I would probably not accuse the likes of Harriet Harman, their fill-in leader, or Andrew Burnham, their present ‘pin-up boy’, of being dim-witted. But I do seriously question their nerve. We need only examine their public behaviour during the run-up to the forthcoming leadership contest to see their shortcomings.

Firstly, we must assess the matter of Jeremy Corbyn’s re-emergence as a prominent party figure, and the panic-riddled response of the party’s neoliberal wing. Labour ‘big-wigs’ of past and present, but almost all from the time since Tony Blair took command in 1994, have insisted on having a very indiscreet say on Corbyn’s candidacy, and its evident popularity both within the party and around the wider population. Much of what has been said, especially by Blair himself, has quite frankly been thoroughly bitchy. Liz Kendall, Yvette Cooper and Chuka Umunna have even gone as far as to rule out very publicly ever trying to work with Corbyn in Government.

The words they use are clearly a symptom of a powerful terror of their own. They seem genuinely convinced that a move to the ‘real’ left would be very dangerous to the party’s future, even though remaining staunchly lodged in the centre-right throughout thirteen years in Government lost them around five million votes between 1997 and 2010. But I am not looking to discuss the merits or otherwise of that outlook here; I have done it in some detail elsewhere. My concern is what the Labour Party seems willing to condemn very loudly and publicly, and what they will only criticise very cautiously.

So secondly, we must look back to Monday last week, when the Government’s latest draft of ‘We-hate-poor-people’ legislation, the Welfare Reform and Work Bill was unveiled in the House Of Commons. There was disapproval of the Bill from the Labour membership, but this disapproval was most marked by its reluctance. Forty-eight of the party’s MPs rebelled and formally opposed the Bill, we must not forget, but the great majority chose to toe the party line laid down by temporary leader Harriet Harman, and abstained. This was rationalised by pointing out that there were several policies in the Bill they agreed with – action on work apprenticeships and a support program for troubled families. However the Bill also included a new and crippling lowering of the benefits cap, cuts to Employment Support Allowance, and most disturbingly, the outright abolition of child poverty targets. Somehow, Harman has apparently concluded that these draconian measures are ‘offset’ by a couple of redeeming moves on apprenticeships and troubled families.

Now initially, Labour did put forward amendment proposals, stating a form the Bill could take that the parliamentary party would support. But once the amendments were rejected, the party should have opposed the Bill in its present form. Not just made the odd disapproving noise, and then stood back. A number of Labour MPs, most notably Andrew Burnham – a man for whom I used to have high hopes but who has disappointed unswervingly since declaring his candidacy – dared to make firmly disgruntled noises beforehand, but when the vote arrived, they did not go as far as to oppose it. (The Bill still has further readings ahead before it can be passed, but any opposition to it Labour offers from this point on will look hollow indeed.)

That is quite bad enough in itself. But what really bothers me is comparing the way the ‘Blue Labour’ faction, from which most of the leadership candidates have emerged, reacts to something that is genuinely disastrous for millions of people, with the way it has reacted to the emergence of a leadership candidate who just happens to be some way to their left *. As mentioned, there have been loud, bitter, angry, spiteful objections from the Blairites to Corbyn’s candidacy, some of which have sounded almost childish and petulant (typical of right-wingers of a different hue), and, above all, with hardly a note of restraint. Even though the evidence suggests that it is absolutely correct that Corbyn is standing, as he is giving an outlet to the views and frustrations of a very large and otherwise-voiceless majority in the party, he does not embody what the Blue Labour-ites want, and so they throw tantrums, possibly to an anti-democratic extent.

But when the Tories are putting forward proposals to throw potentially millions of people on the scrapheap, the objections that the Blairites present are cautious, half-hearted, and never supported by action at the moment that it really counts.

So that is how things now stand; it is when fighting the Conservatives, one of the primary purposes for which the Labour Party was founded in the first place, that Labour’s ‘big-wigs’ seem to lose their nerve. It is when fighting members of their own party that they seem to lose their inhibitions.

Surely, it should be the other way around?

For one thing, Corbyn has shown plenty of signs that he is not easily bullied, and so spiteful and juvenile remarks hurled his way are unlikely to have much effect on him.

But for another, the Tories, as mentioned above, seem to show such astonishing lack of resolve when faced with firm opposition that Labour seem to be missing a wide open goal every time they spurn an opportunity to attack Government policy.

We can recognise the fundamental problem the Labour Party has; the preponderance of right-wing power over the mainstream media is such that any perceived action in a leftwards direction is likely to be met with the usual screeching and scaremongering about “British Kommisars” and “Trade Unions holding the country to ransom”. Such things have never really happened of course, and in any event are hardly as appalling a prospect as the potential for millions of people to go hungry in one of the richest nations on Earth. But even if the media noises are preaching a fantasy, it is a fantasy that Labour are worried people will believe. Thus, they become more scared of the deeds of the Left than they are of the deeds of the Right. It is the media that Labour fear, taking away their power of resistance, whereas it is resistance by anything other than themselves that the Conservatives fear.

The first step to reuniting the Labour Party is thus not to realign on Blair’s part of the spectrum, or indeed on any particular part of the spectrum. That is a decision for the leader to make once he or she has been elected. Instead, the first step is for the party to get over its own sense of fear of the media, which is what is causing it to turn in on itself. The party has to stop being afraid of standing for what it really is, and it has to be prepared to roll with the inevitable media punches thrown in its direction, and even then, remain almost obstinately true to its real self.

Once that is done, the Labour Party can play on the even greater fear that permeates the Conservative Party, the terror its membership feels for almost anyone or anything not of itself. Divorced as they are from the people they govern, the top of the Conservative hierarchy can never truly understand them, relate to them, except through coercion, or co-exist with them. The ordinary people are as foreign to the Tories as a fleet of invaders from another planet would be, and therefore are just as frightening.

That fear will always be this Government’s greatest weakness, greater even than their vacuousness, their ignorance, or their incompetence. Indeed, these other weaknesses arguably stem from that very sense of fear. It is the Tory weakness that Labour must attack.

But the fact that Labour shows an almost-identical fear underlines how the party has become too similar to the Conservatives, and is therefore just one more reason among many why a move to the Left, be it through Jeremy Corbyn or through another candidate, is clearly the healthiest option available.

_____

* Not, it should be mentioned, from the radical left, as most in the media are insisting on labelling Jeremy Corbyn. I would say he is more of a social democrat than a Marxist – he does not endorse the outright nationalisation of all businesses and markets for instance – and certainly by the standards of the 1980’s, when he originally emerged, his policies and views are not all that far to the left. It is only the artificial narrowing-of-political-thought of the last twenty-five years, now so heavily focused on the right of the spectrum, that makes Corbyn look extreme. I would say that I am probably more left-wing than Corbyn, and I do not even class myself as a Marxist.)

Anything left of total free market economics is considered radical left these days.

A fine sum-up of the ridiculous narrowing of political discourse in modern Western society.