It’s The Economy Stupid

Every political commentator always rehashes the Clinton line that all elections are about one thing – ‘It’s the economy stupid’.

So in recent days the issues have drifted from the sublime to the ridiculous as we surely slipped ‘off grid’ for all the major parties. Today, with the publication of the IFS report was certainly always going to be about the economy and more specifically the deficit and austerity.

The IFS Report is here – http://www.ifs.org.uk/publications/7725

A helpful BBC guide to the main points is covered here on its election website – http://www.bbc.co.uk/news/election-2015-32424739

As you can see the parties have tried their best but haven’t been specific enough to help you sit down and work through their budgets for the next 5 years. Indeed I would argue that has never been the case and a manifesto isn’t a detailed plan for the decisions a PM or Chancellor – or indeed any SoS are going to make for the for 5-10 years. Surely a manifesto is a broad appeal to the type of government and its intentions for the next 5 years. So what the IFS report confirms to me is quite simple. The Tories are fixated on reducing borrowing and even talking about a very small surplus by 2020. This is their ideological position not just an economic one. The same was true of the last five years. The Tories criticised Labour for only wanting to half the deficit in this parliament – even though that is al they achieved and at great economic and social cost. By fixating on the deficit the Tories created the slowest economic recovery in history. You see the deficit isn’t ‘the economy’ it is one part of our economic story. If we take the Tories spending plans as face value there is a lot of pain to come. If we add in the fact that they have also ‘promised’ another £23bn of spending which they have not accounted for that will have tome come from somewhere – more cuts? Increased taxes or as Andrew Neil said – the magic money tree.

It looks as though with the other major parties the tax and spend plans look similar. Yes there will be reductions in spending but not at the rates proposed by the Tories and the deficit would be reduced much more slowly.

I know most of the readers of this blog/guide are interested in finding their way through the spin and enjoying finding out what is really going on behind the headlines. well today the IFS have thankfully done my job for me.

The economic and public finances are examined and explained. So if it is all about the economy it would be easy from here wouldn’t it? You decide which model of the economy you prefer and you back it? Well of course not. What money is spent on and if your priorities and values are reflected by the Party of your choice that counts just as much. 

The economy is important as the basis for government but it’s not the size of the economy that matters – it’s what you do with it!

Tory Success if we are still talking about the SNP today instead of NHS

The Tories will be pretty pleased with themselves if the news coverage today is still talking about Scotland and the SNP. Instead of the normal daily coverage of the topics the parties want to talk about in their ‘Grid’ – education, NHS, Transport or the economy we have had the last week dominated by the issue the Tories love to use to reduce the number of Labour held seats (by assuring Scots that if they vote SNP they really do get a Labour government) Whilst in England playing the ‘SNP are really dangerous intolerant people who don’t have a legitimate place in Westminster. As I have posted before this is a dangerous short term game – playing with fire. However, if you are sitting in CCHQ and none of the other themes of the Campaign seem to be working the way Australian Guru Lynton Crosby told them it would all of this risk obviously seems worthwhile. I guess the fact that in my reflection today I am even talking about the SNP and not about the NHS Launch from Labour in Manchester shows it is working. So I promise this will be generally SNP free blog from now on. We will wait until May 8th to see what happens and then work out what sort of government is formed.

I did find it amusing today though. Dragging up John Major to lecture us on unstable government really did take the biscuit. If ever there was somebody who missed the irony surely it must have been him in his speech today. Major presided over chaos and a government held to ransom by his UKIP tendency in the Party – those who he described as ‘Bast$%^s’. It is also probably galling for Cameron to see this weakest of PMs actually won an election in 1992 – something Cameron is likely never going to achieve.

But back at the campaign. It looks as though Labour are trying to go back to the NHS this week with a big launch in Manchester today. It will be interesting to see if this gets any cut through given the headlines are elsewhere and people already give Labour big lead on handling the NHS. At least it is good ground for them to reinforce their message.

More later when the full implications of the days campaign have become obvious after a day in London and on a train!

Link

This article is why I am feeling like I would just like to fast forward the rest of the General Election Campaign and get to the exciting part – who gets to form a government! I enjoyed the film Click where the star of the film is given a TV remote control that can fast forward and pause life! That’s just what I would like to see happen now so we can see the interactions in play.

As it the article says it looks Like the cards are stacked slightly in the favour of Ed Miliband to lead some form of government. The Tories failed to win the election in 2010 and have failed since 1992 when they had a slim majority of 21. Everything has always stacked up against them winning in 2015 so I have never quite understood their confidence (some of it actually genuine) that they might win this time.

The tones of the campaigns have started to reflect this. The perceptions of the parties on their strengths and weaknesses has hardly changed but the Tories reliance on Ed Miliband being so poor is not bourne out so far in this campaign, so they are left floundering a little. Their attempts at personal attacks and now the risk of throwing away their economic competence attributes on unfunded and frankly unbelievable spending commitments does show a sign that Plan A wasn’t working.

If today is anything to go by there tactics have shifted over the election again. Today 5 out of the 6 press releases they have put out have been about the SNP and Labour. They have a daily ritual of asking Labour to once again rule out any deals with the SNP at the same time as refusing to answer about their deals with UKIP. As we saw from the Marr show with Cameron this morning their press release campaign just doesn’t stack up as soon as their is even the minimal of push back from a half decent interviewer. But this is their calculation – in Scotland Cameron reminding Scots that the SNP will lead to Labour government answering to the SNP works against the campaign being run by Jim Murphy that the only way to get a Labour government is to vote for one. For every seat the SNP take it reduces the Labour seat tally which just might have got to the magic 326 with the 45 Scottish seats. And in England it throws up fear amongst ‘Don’t Knows’ who may just be tempted back to the Tory camp at the fear of the Nationalists dictating terms. I don’t fear it myself but have heard it played back often enough to me to see this is real.

So whilst I don’t think a great deal will change over the last 3 weeks I assume the Tories are just hoping the longer it goes on something will turn up. They hope the continued barrage of attacks from the Tory supporting press will finally wear Labour down, but as I have blogged recently this does not take into account Labour also winning the Ground war at the moment.

Plenty of twists and turns to come. I can’t wait to get to the en for the fun part.

Election 2015: Polls suggest Ed Miliband is likely to become Prime Minister | May2015: 2015 General Election Guide

Tax & Spend

So far during this election campaign it has all been a little predictable. We generally know the strengths and weaknesses of the parties, their poll ratings and the arguments they have been making for months. The slogans are clear and the priorities set accordingly.

Clearly this ongoing blog during the campaign comes from me as an ex-Labour & co-operative MP so obviously has a fair deal of bias, but I have tried to help out readers with a fair deal of objectivity about what I have seen happening in front of me as an ‘elder statesman’- as somebody described me recently.

Yesterday the unfunded £8bn ‘promise’ for the NHS from the Tories threw me (and apparently everybody else) as it defies almost all of the discipline they have all shown for the last year. They entered the election on a Tory competence ticket v Labour Chaos. They would pounce on every minor potential spending commitment with glee and tried to conflate this into a £3000 tax bill from Labour! But as nothing seemed to be working in their favour they seem to have thrown this agenda away with less than 4 weeks to go.

Their other problem as all pols show is they are seen as the ‘Party of the rich’ still, despite early attempts by Cameron to modernise the party at the start of his leadership. So you can see the £8bn promise might be seen to help soften their image – at the cost of their economic competence lead in the polls. As George Eaton in his NS column argued, perhaps they felt their led was so strong on the economy they could afford to lose a few % points.

But then the latest pitch is on an inheritance tax break for the top 6%

The way the papers write up Inheritance Tax, and the way the Tory poster has you believe it’s ordinary families that pay the tax.. but as this excellent article from the Independent IFS states this will be another tax break for the wealthy – thereby only reinforcing the notion that the Tories are for the ‘Rich’. Where the Tories gamble may be right here though is that in fact most people assume they will be caught by IHT, and therefore people think they might future proof themselves. So this is a bit about aspiration and hopefully most people not being fully aware of the thresholds. I regard myself as pretty well off but unless something dramatic happens I don’t expect I will get caught by the current thresholds!

http://t.co/VwzFoMAhnU – IFS article!

So I have been able to offer hopefully some useful insight into the campaigns and through my links on my twitter and facebook accounts hopefully lots of useful impartial checks on the claims being made by the main parties as well as up to date polling figures to give you a sense of who will ‘win’ this election. But I hate to admit that I am still slightly at a loss to explain properly the switch in the Tory campaign. I know many are seeing it as a panic reaction and I would love to see it this way – but with over 3 weeks to go there is surely many more chances to turn things around for them. I keep thinking there is some Master Plan and creative strategy I am missing here. I keep thinking House of Cards and a great trap? But I still can’t see what it is!

I guess at least for the Tories it has gained the attention away from Labour. I can’t really remember hearing much about their plans for the last few days – something about police numbers, midwives and careers. All a little worthy but dull. Perhaps that was the agenda – but surely a very high risk strategy is being played out.

The Black Hole

During the campaign you will hear a lot of claims about black holes. These are not for the space fanatics amongst you but the claims and counter claims about each sides promises and budgeting not quite adding up.

At this election with the spectre of the deficit and mounting national debt the Tories keep reminding us abuot the need to ‘balance the books’, have a costed programme of austerity have been why politics has fragmented somewhat over the last year from the main 3 parties. All seem signed up to some formula of austerity. A bit like pizza you can have deep or paced austerity. However, the end game has been the same – the elimination of the defecit as some holy grail. Personally I can see the need for Labour to be seen as financially prudent but austerity is a political as well as economic choice. It is not a given. There area many good economists (I retweet a good few) who will show it’s a false choice.

However, we have been confined to this state of affairs over this Parliament and onece gain Labour have been afraid to do anyhting too bold in terms of spending the cahs for fear of being labelled as profligate again. This was the agenda for the last year and looked as though it would continue throught the election. Tory Long Term economic plan ve Labour Chaos was the theme.

But over the last 3 days it didn’t seem to be working for the Tories as a strategy. So we have had a massive shift ahead of the Manifesto launches next week. The Tories started off with a £1.5bn promise to ‘freeze’ rail fares. In fact not quite a freeze but an ‘at inflation’ rise year on year. No idea where this £1.5bn was tom come from but small enough to almost ignore in the press. Then came a promise to give everybody 3 days volunteering leave. A ‘nice idea’ but a terribly poorly thought through policy. More of policy making later but I guess this one will never see the light of day in government.

Then in the last 24 hours has come the big one that has thrown this election debate about the deficit wide open. On top of the £7.6bn of tax cuts promised which the Tories can’t say how they will pay for them, we now have an £8bn (or even more) promise to fund the NHS – to be paid for by growth in the economy! Wow if it was that easy we can promise all sorts of new spending by claiming growth will take care of it. The problem is that it doesn’t – and certainly hasn’t over the last few years where growth has not delivered the tax reciepts needed to cut the deficit.

I will find some better IFS figures, logs and counter arguments to post here.

All too often my non-political friends get annoyed at all these figures flying around and what they mean. All too often politicians use the ‘£ billion’ figures too readily and nobody gets a frim grip on what this means for the economy.

More updates later once I have caught up with the days sport!

Sports Meetings to Inspire – GE rolls on

Back to normal work today. A series of meetings to talk about making our sports sector fit for purpose and preparing it for the world ahead – instead of looking back to the glory days!

However, I’ve been keen to catch up on the train home on the latest election news. But it doesn’t seem to have moved much today. It seems the Business Letter to the Telegrapgh is still running.

The key points from the coverage. This is a letter organised by the Tories so why is it news? We assume a letter from 100 teachers will get the same coverage.

of course the rebuttal units have kicked in and we now discover the bunch of business people (very few women btw) have donated £9m to the Tories. (Nice to have that much money to waste) and that between them Cameron has bestowed 18 OBE, MBEs and CBEs to them in his 5 years. Suddenly looks more like a bunch of Tory cronies writing a letter organised by the Tories. So why should it be news.

A good article by George Eaton at the New Statesman on this. As he also points out, and in line with my earlier comments, I wonder if this is a double edged sword. On the day Labour launches its pledges on zero hour jobs it makes the Tories look like the Party of the rich business interests focus groups tell us they are. So it cements their ‘economic competency’ message but costs them – but only if you are a rich Tory businessman (and a few women). On balance I think this probably is a 2-1 win for the Tories but it was strange to play this trump card so early in the election and at the cost outlined above.

I have also been led into discussing on twitter the contents of the David Cameron Easter message to Christianity Magazine. You will see the link on my twitter to a brilliant piece written by Danny Webster from the Evangelical Alliance on why this is crass nonsense. I am assuming it was a piece written for him by his press team – and by somebody who has no knowledge of the Christian faith and the meaning of Easter. I will leave you to read the piece by Danny who cuts this to pieces much better than I could ever hope to. I just wonder why people this these messages help when all they do is make it obvious the writer doesn’t get the issue at all!

http://brokencameras.com/2015/04/01/easter-i-dont-think-that-word-means-what-david-cameron-thinks-it-does/