Saturday, February 20, 2010
Friday, February 19, 2010
Economist Bagehot: Into the triangle of hope
Who and where are the voters who will decide the outcome of the general election?
HE OR she must be out there somewhere. That is, according to some marketing men and pollsters. Every election throws up an identikit swing voter—“Mondeo man” and “Worcester woman” in campaigns of yore—whose demographic group is said to hold the key to the outcome. The latest alliterative super-voters include the “Swindon swinger” and “Motorway man”; the latter connotes a rootless, consumerist 20-something who lives on a new housing estate and near a motorway junction. This week Bagehot headed north to try to find these mythical voters, and to discover whether they really hold such sway.
He began in Bury North, in Lancashire. The textile mills that once sustained Bury are derelict; the steam railway that runs through it now carries tourists rather than cloth. But proximity to Manchester has helped it to weather the collapse of the old industries. The constituency also includes moorland and some prosperous villages. It is a classic marginal, falling to Margaret Thatcher in 1983 and to Labour in the 1997 landslide. To win in 2010, David Cameron’s Tories need to reclaim it.
On the fringes of Bury, the Victorian terraces give way to the sort of new estate in which, Bagehot speculated, “Motorway man” might lurk. But things are evidently more complicated than such categories imply. David Nuttall, the congenial Tory candidate, points to several key sets of voters: couples with young families; first-time voters; and, in a seat where the state is the largest employer (the biggest private one is a call centre), disgruntled public-sector workers: the sort of people to whom the recent Tory talk of mutualism in the public services was pitched. The planned closure of a local maternity ward is a hot topic.
The biggest struggle, however, may be to overcome the resentment caused by the parliamentary-expenses scandal. It has touched Bury North particularly because its Labour MP, David Chaytor, is among the handful now facing criminal charges. But Labour may not be the only party to suffer: it has a new candidate, and the backlash seems to be indiscriminate. At a pensioners’ lunch at a Bury pub (which advertises “recession specials”) the anger is general: “they’re all as bad as each other”; “they all promise the moon”. Here the most important type of elector may not be swing voters but those too furious to vote at all.
That may also be true in North West Leicestershire. Even the Liberal Democrat candidate—not fancied to triumph—reports vitriolic abuse on some doorsteps. On the high street in Ashby-de-la-Zouch, a tidy market town, Bagehot momentarily thought he had found the archetypal swing voter: a youngish mother who lives on the edge of town and whose husband works for Rolls-Royce—just the sort of characteristics that political strategists get excited about. But she turned out to be a vitriolic Tory-hater (“I remember what the Tories did in the ’80s…”). There seems still to be a surprising amount of that sentiment around.
Like Bury North, North West Leicestershire lies in what some senior Tories describe as the “triangle of hope”: the swathe of seats from the Midlands to the north-west that their party must conquer to secure a parliamentary majority. Politically as well as geographically, the constituency is in the middle of England. Like Bury North it was taken by Labour in 1997, and combines comfortable bits with grittier areas such as the town of Coalville. (There are a monument and a museum to Coalville’s mines, but the things themselves are closed.)
Labour has a new candidate here as well, but for different reasons: David Taylor, the popular incumbent, died in December. Party workers refer to the wavering voters whom he managed to retain as “Taylor Tories”. They are a potentially vital group. But another are those former Labour voters, mostly in Coalville, who in council elections have switched to the British National Party: immigration is a big concern here, despite (or perhaps because of) the fact that there isn’t much of it. Another prime target for the candidates are the activist professionals in Castle Donington and other twee villages outside Ashby. They have organised protests against assorted unwanted developments and the closure of local facilities; all the parties court their favour assiduously. “Motorway man” and his ilk seem a relatively low priority.
Thatcher’s children
“Worcester woman”, “Mondeo man” and the rest are mostly variations on the same general theme: they describe the lower middle classes and skilled manual workers—C1s and C2s in marketing speak—who are thought to be more politically volatile than other voters, and thus to decide the fate of marginal seats and so elections overall. In truth, politics has always been more complicated than that; among other things, as an old political adage and Bagehot’s travels suggest, voting has always been influenced by local characters and concerns. And in 2010 the business of winning elections has become more complex than ever.
Some Labour and Tory figures talk optimistically of reviving the coalitions of voters that Tony Blair assembled in 1997 or that Mrs Thatcher corralled to her side in the 1980s. But in the past 13 years, to say nothing of the past 30, the structure of the economy and the shape of the electorate have changed dramatically. Even before the expenses palaver, fewer people were voting, and more of those who did were voting for smaller parties. Class allegiances have become less predictive of voting patterns; the main parties’ bases have fragmented. There are more opportunities for politicians to grab votes from their opponents, but a greater risk of losing some they once relied on. They need more sophisticated campaigning and more local nous than ever to succeed.
Bagehot didn’t find the legendary super-voter on his little tour. That may be because he didn’t look in the right places. But it may be because the super-voter isn’t out there after all.
Wednesday, February 17, 2010
David Cameron: Join us help bring the change Britain needs
There are just a few months to go until the General Election. All across the country, many thousands of people are still making up their minds about how they will vote.
Many like Julie and Ian and Danielle have never voted Conservative before.
They know that Labour has let them down. They know they don’t want another five years of Gordon Brown.And in the modern Conservative Party they see values, ideas and policies that they believe would help get this country back on its feet.
Click here to read more: Join us help bring the change Britain needsMonday, February 15, 2010
Don't vote for Labour's new death tax
The Conservative Party today launched a new billboard campaign highlighting Gordon Brown’s plan to impose a £20,000 death tax in order to pay for his new National Care Service.
Sunday, February 14, 2010
Labour's Two Nations
The Conservatives have launched "Labour’s Two Nations", a comprehensive assessment of the level of inequality under this Labour government.
Labour’s great claim is that they are 'for the many, not the few', but that rings hollow today.
This report exposes the truth: after thirteen years in government, the party that prides itself on fairness has delivered the very opposite.
And in the foreword, David Cameron outlines Conservative plans to create "the big society" - our positive alternative to Labour’s failed big government - through which responsibility and opportunity can develop.
read the full report here
Liam Fox: Strong alliances, and strong on our own
It’s been a busy couple of weeks in defence. I’ve been looking closely at the Government’s announcements, as well as setting out more of the thinking behind our defence policy.
The Blue Blog: Strong alliances, and strong on our own
The Blue Blog: Strong alliances, and strong on our own
Saturday, February 13, 2010
David Cameron Woos Davos Business Class
David Cameron determinedly wooed his audience as he addressed the British Business Leaders’ Lunch today. This was the sixth year of the event but the first at which a member of the Opposition had spoken, a clear indication that the organisers do not expect him to be leading the Opposition after May 6.
“I’d be proud to take on the role of flag waver for British business,” said Cameron. His enthusiasm for British business was repeated regularly throughout his speech but, given an audience which represented a large slice of that, including the chairmen of Barclays, HSBC, BT, Lloyds of London, it was an easy strategy.
http://blogs.wsj.com/davos/2010/01/29/david-cameron-woos-davos-business-class/tab/article/Monday, February 1, 2010
Nationwide superfast broadband by 2017
As part of our plans to Get Britain Growing, the Conservatives have unveiled plans to help make the UK the first major European country that has superfast broadband in the majority of homes by 2017.
Read more on conservatives.com: Nationwide superfast broadband by 2017
Read more on conservatives.com: Nationwide superfast broadband by 2017
Inequality is at its highest level since the Second World War
Last week’s report from the National Equality Panel contained numerous damning statistics, but perhaps the most shocking was this: under Labour inequality has risen to its highest level since the Second World War.
Read more on The Blue Blog: Inequality is at its highest level since the Second World War
Read more on The Blue Blog: Inequality is at its highest level since the Second World War
Davos 2010: David Cameron Speech
“It’s great to be back in Davos. Because Davos is about dialogue. For years people have come together here to debate the great challenges of the day - from climate change, to protectionism, to poverty in Africa. And for years we have come at these things from different perspectives, with some very different opinions.
But underpinning it all was a fundamental agreement about the kind of global economy we need. You could call it the old economic orthodoxy. The consensus that controlling inflation is the main purpose of monetary policy. The understanding that in fiscal policy, it is responsibility that matters most – that large budget deficits are always a bad thing. And the shared belief that the capitalist system of open markets and free enterprise is an unalloyed good.
Well that was last year. This year we face a totally different economic landscape. If I had told you twelve months ago that we’d be talking about nationalising major banks, about some countries’ borrowing approaching ten per cent of their GDP – and even printing money – you’d have thought I was mad. But as the full scale of this crisis has emerged, some of our long-held economic assumptions have simply fallen away. So now we are forced to re-consider the old economic orthodoxy. To question its assumptions about monetary policy; its rules on fiscal policy, and its faith in the virtue of free-market capitalism. And the key question we should be
asking is this. Which of the old rules should we keep, and which – in these extraordinary times – should we discard?
The stakes are high. The fate of our global economy for the next few decades rests on the decisions of this generation. Those countries that cling to the old rules, the old way of doing things – they will fail. Those countries that rush to change, to discard the wisdom and experience of centuries – they too will fail. Success will go to those that navigate a sound path – between the bold action we need to pull us out of this slump, and the prudent sense to stick with what works. And tonight I want to tell you where I stand – where I think we should depart from the old economic orthodoxy, where we should strengthen it, and how we should update it.
MONETARY ACTIVISM
Let’s start with monetary policy. In one sense, this crisis is all about monetary policy. Because at the core of the crisis is, as we all know, a credit crunch. We’re seeing the most severe contraction of credit for decades. Britain’s boom, for example, was part-financed by more than £700 billion of foreign money. Now, in the bust, that money has disappeared. Billions have been sucked out of the British economy and the cogs of commerce are grinding to a halt.
The impact on the real economy is devastating. Whether it’s the most efficient car plant in Europe or the store at the end of the street, they’re all suffering the same thing: they’re all starved of credit. The policy priority is clear – we’ve got to get credit moving again. So when it comes to monetary policy, yes I do believe the old rules should be torn up. Radical monetary activism is what the economy needs. We’ve got to take all the necessary steps to restore confidence in our banking system and get credit flowing again. That’s why my party supported a recapitalisation of British banks.
It’s why we proposed a National Loan Guarantee Scheme to underwrite bank lending to business. It’s why we support the principle of insuring banks’ losses for a fee - though the devil is in the details. And it’s why, as a last resort, we might have to consider quantitative easing too. Because our exceptional monetary problems demand exceptional monetary solutions.
FISCAL RESPONSIBILITY
So if it’s right to discard the old orthodoxy on monetary policy, should we also abandon the old orthodoxy on fiscal policy? Should we give up the idea of fiscal responsibility, and suspend all the old rules about borrowing and deficits? Some have argued that to fight the recession we should spend like there’s no tomorrow, junk fiscal responsibility and let the long-term look after itself.
Now, I’ve got nothing against the idea of a fiscal stimulus. I think it’s a good idea – if your country can afford it. But as the OECD, the IMF, and the ECB have all said, if your country can’t afford it, a fiscal stimulus is a very bad idea. Not just in the long-term, as future generations are burdened with a mountain of debt. But in the short term too, because if people know that in just a couple of years they’ll be hit with higher taxes to pay for the stimulus they’re not going to invest, and spend and do the things that will pull us through this slump. So an unaffordable, irresponsible fiscal stimulus will actually damage confidence and delay the recovery.
So no, I do not believe we should just abandon fiscal responsibility. Instead, each country should use fiscal policy to do whatever it responsibly can to stimulate its economy. Sadly, thanks to a decade of fiscal irresponsibility, the current British government can’t afford to do very much.
BROKEN CAPITALISM
So in this crisis we have seen challenges to the old orthodoxy on monetary policy, challenges which I believe are right. And we have seen challenges to the old orthodoxy on fiscal policy challenges which I believe are profoundly wrong. But perhaps the biggest challenge we have seen is to the capitalist system itself.
All of us here are agreed on something. Open markets and free enterprise are the best way to increase human wealth, health and happiness. We’re not blind to the system’s flaws but we know that at its best, capitalism extends ownership, spreads opportunity, and works arm in arm with political freedom.
More than twenty years ago I travelled through the Soviet Union and the Eastern Bloc. I’ll never forget the greyness of life under Communism, the lack of choice, the lack of freedom, the lack of expression. When the Berlin Wall came down, a wave of colour and life broke over Eastern Europe. Democracy delivered people from half a century of despair, and capitalism – its economic agent – offered hope for a better future. People could rise up, grab opportunities with both hands and make a better life for themselves. It was one of those high points of popular capitalism, like the age of plenty in post-war America, or the ownership revolution led by Margaret Thatcher. These were times when people believed in the best of the capitalist system. They felt they could play a part in its success.
But today that widespread belief – that optimism – has faded away. A lot of people are angry with capitalism. Instead of representing hope for a better future, they think capitalism threatens it. This matters because in the future, social, economic and environmental progress will only come from the drive, energy and enterprise of individuals. So if we want capitalism to be a success again, we need to make capitalism popular again.
POPULAR CAPITALISM
That means updating the old free market orthodoxy, and understanding the reasons why capitalism has become so unpopular. Reasons like the apparent absence of a moral framework because people might not follow the minutiae of over-leveraging or short-selling, but they know that the roots of our current crisis lie in recklessness and greed.
Reasons like the disconnection between capitalism and people’s lives because someone working in the local branch of a global corporation can feel like little more than flotsam in some vast international sea of business their destiny decided by someone else, somewhere else as globalisation can turn into monopolisation, sweeping aside the small, personal, local competition in our neighbourhoods.
And that links to a third – and even more important - reason why capitalism has become unpopular: the incredible inequality of the modern world. Too often, the winners have taken it all. Today, the poorest half of the world’s population own less than one per cent of the world’s wealth. We’ve got a lot of capital but not many capitalists, and people rightly think that isn’t fair.
So this is what too many people see when they look at capitalism today. Markets without morality. Globalisation without competition. And wealth without fairness. It all adds up to capitalism without a conscience and we’ve got to put it right.
CAPITALISM WITH A CONSCIENCE
So I think it’s time to update the free market orthodoxy that has dominated the past few decades. It’s time to assert a fundamental truth: that markets are a means to an end, not an end in themselves. Markets are there to serve our society, not to suck the joy out of it or trample over its values. So we must shape capitalism to suit the needs of society; not shape society to suit the needs of capitalism.
That is what I mean by responsible business. Business helping to create a society that is greener, safer, fairer - and where opportunity is more equal. Business helping to create a society that is more family-friendly, where responsibility and power are decentralised, and where we value and build up the institutions of the public realm and civic society.
So if markets, and capitalism, and the activities of individual businesses conflict with our vision of the good society and a better life if damage is being done to our environment, or if family life is being undermined we must not sit there and take it, going along with the old orthodoxy that nothing should be allowed to impede the pursuit of profit. We must speak out.
Yes, as I’ve said many times, we must stand up for business, because it’s businesses, not governments or politicians, that create jobs, wealth and opportunity, it’s businesses that drive innovation, and choice, and help families achieve a higher standard of living for a lower cost. But we must also stand up to business when the things that people value are at risk. So it’s time to place the market within a moral framework – even if that means standing up to companies
who make life harder for parents and families.
It’s time to help create vibrant, local economies – even if that means standing in the way of the global corporate juggernauts. And it’s time to decentralise economic power, to spread opportunity and wealth and ownership more equally through society and that will mean, as some have put it, recapitalising the poor rather than just the banks.
The best chapters in our economic history are those that embrace the many, not the few. In America in the 1950s there was a sense that everyone could have a slice of the pie. In the 1980s Margaret Thatcher led an ownership revolution that gave millions a new stake in our economy. That was truly popular capitalism, and we’ve never needed it more than we do today.
All of us – politicians, campaigners, economists, business leaders – need to help lead the change. Our financial system boasts people so bright they’ve created financial instruments beyond even their own understanding. Now they need to use those talents to help the poorest build assets. To go into our most deprived communities, giving them the tools to make the most of the market, to help them with banking and saving and owning.
CONCLUSION
So here is the outline of a new, updated economic orthodoxy. A new monetary activism. Traditional fiscal responsibility. And a new, more popular capitalist system – capitalism with a conscience. That is the way to meet the great challenges of this moment. And that is the way that this generation can build a legacy for our children we can all be proud of
But underpinning it all was a fundamental agreement about the kind of global economy we need. You could call it the old economic orthodoxy. The consensus that controlling inflation is the main purpose of monetary policy. The understanding that in fiscal policy, it is responsibility that matters most – that large budget deficits are always a bad thing. And the shared belief that the capitalist system of open markets and free enterprise is an unalloyed good.
Well that was last year. This year we face a totally different economic landscape. If I had told you twelve months ago that we’d be talking about nationalising major banks, about some countries’ borrowing approaching ten per cent of their GDP – and even printing money – you’d have thought I was mad. But as the full scale of this crisis has emerged, some of our long-held economic assumptions have simply fallen away. So now we are forced to re-consider the old economic orthodoxy. To question its assumptions about monetary policy; its rules on fiscal policy, and its faith in the virtue of free-market capitalism. And the key question we should be
asking is this. Which of the old rules should we keep, and which – in these extraordinary times – should we discard?
The stakes are high. The fate of our global economy for the next few decades rests on the decisions of this generation. Those countries that cling to the old rules, the old way of doing things – they will fail. Those countries that rush to change, to discard the wisdom and experience of centuries – they too will fail. Success will go to those that navigate a sound path – between the bold action we need to pull us out of this slump, and the prudent sense to stick with what works. And tonight I want to tell you where I stand – where I think we should depart from the old economic orthodoxy, where we should strengthen it, and how we should update it.
MONETARY ACTIVISM
Let’s start with monetary policy. In one sense, this crisis is all about monetary policy. Because at the core of the crisis is, as we all know, a credit crunch. We’re seeing the most severe contraction of credit for decades. Britain’s boom, for example, was part-financed by more than £700 billion of foreign money. Now, in the bust, that money has disappeared. Billions have been sucked out of the British economy and the cogs of commerce are grinding to a halt.
The impact on the real economy is devastating. Whether it’s the most efficient car plant in Europe or the store at the end of the street, they’re all suffering the same thing: they’re all starved of credit. The policy priority is clear – we’ve got to get credit moving again. So when it comes to monetary policy, yes I do believe the old rules should be torn up. Radical monetary activism is what the economy needs. We’ve got to take all the necessary steps to restore confidence in our banking system and get credit flowing again. That’s why my party supported a recapitalisation of British banks.
It’s why we proposed a National Loan Guarantee Scheme to underwrite bank lending to business. It’s why we support the principle of insuring banks’ losses for a fee - though the devil is in the details. And it’s why, as a last resort, we might have to consider quantitative easing too. Because our exceptional monetary problems demand exceptional monetary solutions.
FISCAL RESPONSIBILITY
So if it’s right to discard the old orthodoxy on monetary policy, should we also abandon the old orthodoxy on fiscal policy? Should we give up the idea of fiscal responsibility, and suspend all the old rules about borrowing and deficits? Some have argued that to fight the recession we should spend like there’s no tomorrow, junk fiscal responsibility and let the long-term look after itself.
Now, I’ve got nothing against the idea of a fiscal stimulus. I think it’s a good idea – if your country can afford it. But as the OECD, the IMF, and the ECB have all said, if your country can’t afford it, a fiscal stimulus is a very bad idea. Not just in the long-term, as future generations are burdened with a mountain of debt. But in the short term too, because if people know that in just a couple of years they’ll be hit with higher taxes to pay for the stimulus they’re not going to invest, and spend and do the things that will pull us through this slump. So an unaffordable, irresponsible fiscal stimulus will actually damage confidence and delay the recovery.
So no, I do not believe we should just abandon fiscal responsibility. Instead, each country should use fiscal policy to do whatever it responsibly can to stimulate its economy. Sadly, thanks to a decade of fiscal irresponsibility, the current British government can’t afford to do very much.
BROKEN CAPITALISM
So in this crisis we have seen challenges to the old orthodoxy on monetary policy, challenges which I believe are right. And we have seen challenges to the old orthodoxy on fiscal policy challenges which I believe are profoundly wrong. But perhaps the biggest challenge we have seen is to the capitalist system itself.
All of us here are agreed on something. Open markets and free enterprise are the best way to increase human wealth, health and happiness. We’re not blind to the system’s flaws but we know that at its best, capitalism extends ownership, spreads opportunity, and works arm in arm with political freedom.
More than twenty years ago I travelled through the Soviet Union and the Eastern Bloc. I’ll never forget the greyness of life under Communism, the lack of choice, the lack of freedom, the lack of expression. When the Berlin Wall came down, a wave of colour and life broke over Eastern Europe. Democracy delivered people from half a century of despair, and capitalism – its economic agent – offered hope for a better future. People could rise up, grab opportunities with both hands and make a better life for themselves. It was one of those high points of popular capitalism, like the age of plenty in post-war America, or the ownership revolution led by Margaret Thatcher. These were times when people believed in the best of the capitalist system. They felt they could play a part in its success.
But today that widespread belief – that optimism – has faded away. A lot of people are angry with capitalism. Instead of representing hope for a better future, they think capitalism threatens it. This matters because in the future, social, economic and environmental progress will only come from the drive, energy and enterprise of individuals. So if we want capitalism to be a success again, we need to make capitalism popular again.
POPULAR CAPITALISM
That means updating the old free market orthodoxy, and understanding the reasons why capitalism has become so unpopular. Reasons like the apparent absence of a moral framework because people might not follow the minutiae of over-leveraging or short-selling, but they know that the roots of our current crisis lie in recklessness and greed.
Reasons like the disconnection between capitalism and people’s lives because someone working in the local branch of a global corporation can feel like little more than flotsam in some vast international sea of business their destiny decided by someone else, somewhere else as globalisation can turn into monopolisation, sweeping aside the small, personal, local competition in our neighbourhoods.
And that links to a third – and even more important - reason why capitalism has become unpopular: the incredible inequality of the modern world. Too often, the winners have taken it all. Today, the poorest half of the world’s population own less than one per cent of the world’s wealth. We’ve got a lot of capital but not many capitalists, and people rightly think that isn’t fair.
So this is what too many people see when they look at capitalism today. Markets without morality. Globalisation without competition. And wealth without fairness. It all adds up to capitalism without a conscience and we’ve got to put it right.
CAPITALISM WITH A CONSCIENCE
So I think it’s time to update the free market orthodoxy that has dominated the past few decades. It’s time to assert a fundamental truth: that markets are a means to an end, not an end in themselves. Markets are there to serve our society, not to suck the joy out of it or trample over its values. So we must shape capitalism to suit the needs of society; not shape society to suit the needs of capitalism.
That is what I mean by responsible business. Business helping to create a society that is greener, safer, fairer - and where opportunity is more equal. Business helping to create a society that is more family-friendly, where responsibility and power are decentralised, and where we value and build up the institutions of the public realm and civic society.
So if markets, and capitalism, and the activities of individual businesses conflict with our vision of the good society and a better life if damage is being done to our environment, or if family life is being undermined we must not sit there and take it, going along with the old orthodoxy that nothing should be allowed to impede the pursuit of profit. We must speak out.
Yes, as I’ve said many times, we must stand up for business, because it’s businesses, not governments or politicians, that create jobs, wealth and opportunity, it’s businesses that drive innovation, and choice, and help families achieve a higher standard of living for a lower cost. But we must also stand up to business when the things that people value are at risk. So it’s time to place the market within a moral framework – even if that means standing up to companies
who make life harder for parents and families.
It’s time to help create vibrant, local economies – even if that means standing in the way of the global corporate juggernauts. And it’s time to decentralise economic power, to spread opportunity and wealth and ownership more equally through society and that will mean, as some have put it, recapitalising the poor rather than just the banks.
The best chapters in our economic history are those that embrace the many, not the few. In America in the 1950s there was a sense that everyone could have a slice of the pie. In the 1980s Margaret Thatcher led an ownership revolution that gave millions a new stake in our economy. That was truly popular capitalism, and we’ve never needed it more than we do today.
All of us – politicians, campaigners, economists, business leaders – need to help lead the change. Our financial system boasts people so bright they’ve created financial instruments beyond even their own understanding. Now they need to use those talents to help the poorest build assets. To go into our most deprived communities, giving them the tools to make the most of the market, to help them with banking and saving and owning.
CONCLUSION
So here is the outline of a new, updated economic orthodoxy. A new monetary activism. Traditional fiscal responsibility. And a new, more popular capitalist system – capitalism with a conscience. That is the way to meet the great challenges of this moment. And that is the way that this generation can build a legacy for our children we can all be proud of
Subscribe to:
Posts (Atom)