We are now entering a critical phase of this electoral cycle: local elections, parliamentary elections, further local elections, the European elections and the Scottish referendum on independance The outcomes of these elections will set the agenda for the next General Election. In this cycle, the fortunes of UKiP will determine the outcome of the General Election So long as UKIP’s standing in national polls is in excess of 10 percent, and it now stands at 13 percent in some polls, the Tories cannot win a General Election and Labour will be handicapped in the drive for a majority at Westminster. It is an easy prediction to make that UKIP is likely to top the Euro polls and at some time during 2014 will be showing, in some national opinion polls, support in the 20’s before a decline as the General Election approaches.
I assume that Scottish voters stay in control of their good senses and will vote No in the Scottish referendum. If so one would expect electoral support for the SNP to decline and a recovery of the Labour vote at Westminster to take place in Scotland. If this occurs then Laboiur would be diffiult to defeat in Westminster elections.
While economic predictions are foolhardy the odds are on poor economic performance up to May 2015. The best the Tories can hope for is slow growth, stable employment and a deficit edging slowly downwards. There will be little prospect of electoral bribes. This being so it is safe to predict that the chance of a Tory majority at the next
General Election are near to zero.
What then are the prospects for the Lib Dems? I do not under-rate the resiliance of the Lib Dems. However, if in the public mind they remain linked to the Tories in Coalition a reasonable prediction is that their parliamntsary position would decline substantially with a loss of 30-40 MPs. It would follow from this that it would be
most unlikely that they could play any part in a national coalition with any other party.
In these circumstances I would expect UKIP to win some Westminster seats at the expense of the Coalition parites but not enought seats to achieve any tactical advantage.
If this analysis is broadly right we would haver had a further shake in the party system that could in some circumstance lead to paralysis. As the economic circumstasnces inherited by a new Labour Government would be difficult if not dire Britain might emerge from the experiment of Coalition in a virtually ungovernable
All this will become clearer to participants and pundits. Will those individuals at the heart of this disaster do nothing? I have never believed that they would behave as rabbits staring into car lights. The Coalitiion will break up and David Cameron could be confronted with a leadership election before May 2015.
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Everyone is an economist these days and many of these new pundits have never read an economics text book. Alan Johnson is not the first to admit it and rumour has it that James Callaghan was sent on a course at Nuffield College. Of course, some of their advisers have read something along the lines of economics . So it was a relief to me to tune in to a debate in the House of Lords on the proposed rise in tuition fees and hear economic terms being used.
An issue discussed was would an increase in tuition fees reduce the number of people applying for a university place particularly the ‘deserving poor’. The Coalition argues that when Labour did it applicants dropped for a short time and then the rise resumed. Well as any economist knows whether it rises or falls depends on the elasticity of demand for university courses and their supply in the past and in the future. It is possible to calulate the numbers for the earlier period and make some reasonable forecasts now when the determinants of demand have changed. Has any one done that? if so please speak up. Obviously when Labour did it the demand for university places was rising and their provision expanded to meet this demand. The total number of applicants were on that part of the demand curve that was rising quickly. The potential supply of students is not infinite and we would expect the rise in the percentage of the population going to a university to level off within its limits. Of course there is the issue of rising population and overseas students. No one said that forecasting was simple?
Then there is the issue of rents in London the elasticity of demand for the properties occupied by 17, 500 hapless Housing Benefit families. What we might wonder are the demand and supply curves for this accommodation in London. There is no doubt the population of London has been growing fast and the demand for rented accommodation has been rising. What is the percentage of these 17,500 homes to the total number of such properties in the whole of London by segment? Let’s guess. Pretty small I hear you say. And what is the demand for them? Well, you might say, getting into the swing, the curve must be rather steep. After all who can get a mortgage these days? Atta boy you are getting the idea. What we need to predict are the growth rated in family establishments and the need and aspirations of people to settle in London. Look, you can stop at this point. I think you get the drift of this. What I am saying is that when you are seeking to change Housing Benefit it is reasonable to predict the consequences and not make up fairy tales.
I am a prodigious borrower of books from my local library most of which comes from the British Library at £3.50 a book. My librarian tells me that the charge is to rise to £10 a book which is the real cost of the British Library lending it. I consult these books rather than read every word in them. At the British Library there is no limit to the number of books I can borrow in a day. Let us assume I work in the British Library on ten books free of charge which is quite usual for me. I can get there by train for £25. I resolve not to borrow these books through my local library. It is a matter of elasticity of demand you see. Anyone know what it is? At the end of the year some accounting Wally will argue that there is no local demand and the Council should withdraw the facility. And so on.
What is my gripe? The illiteracy of many people, and especailly, the politicians who debate these important public issues.
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