Category Archives: Vince Cable

The Economy: Now We Know


The GDP figures for Qtr.1 2o11 tell us what we need to know on the vexed and central economic and political dilemma of how to cut the public deficit and grow our way to economic success. No economic growth for six months is bad news. I have commented in previous posts on the optimism of OBR forecasts and that they are consistently behind the curve – and wrong. They were wrong in their belief that the last quarter 2010 figures would be adjusted upwards and that this current quarter would come in at 0.8 percent growth, They are surely wrong in their forecast for 2011.

Does it matter? Yes, it does.  Lower growth means higher unemployment and public debt and  lowers confidence.  If the Coalition intention remains ‘fixed as the Northern star’ another round of expenditure cuts, higher taxes and a spiral downward to economic defeat and long term recession is on the cards.

To echo Lenin, what do we do now? Something revolutionary? To enter into the spirit of things, bring the Coalition to a halt. In eight days time throughout Britain the electorate have an opportunity to inflict  a mortal wound by voting against the Coalition parties, and then there is the time honoured tradition of a motion of no confidence in the Commons (Dream on the Constitution has been fixed. It’s not so simple as you might think). Alas the times may be revolutionary but we are not. ‘No Bolsheviks’ here is the sign outside the House of Commons. We are all Mensheviks now Well we might start by winning the argument. When Ed Balls advanced the proposition that even the Labour objective of halving the deficit in four years might not be achievable without economic depression he was widely derided. What we have seen is that the  squeeze on expenditure started by Labour and intensified by the Coalition has already had a dramatic effect on the British economy. The Coalition tax increases and cuts have only just started. It is asking a lot of business and consumers to reverse that trend when personal incomes are squeezed and small and medium companies denied loan capital.

It may not be in Labour’s power to  change things for the better BUT the much derided and humiliated Lib Dems could do it if they had the will. It is difficult to determine how long the tragedy needs to unroll before they pluck up the courage to say with one (or almost one) voice that enough is enough. I hate to write this but history does help. Look at what happened to the Mensheviks and subsequently to a whole country and a substantial chunk of the European map? If you think that I exagerate you may change your mind as events unfold. I will not write, I told you so.

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Filed under BBC, Budget 2011, Cabinet, Cameron, Coalition Government, Commons, Deficit, Economics, Ed Balls, George Osborne, IFS, Nick Clegg, OBR, Politics, Vince Cable

A Very English Revolution


In England we do not do Revolutions. They are for foreign countries denied freedom of expression and parliamentary government. Is that right? It seems so but the belief in social cohesion and solidarity of purpose is about to be tested. Our beliefs may turn out to be illusory. In 2011/2 real incomes are likely to fall at a faster pace than at any time since the 1920’s a decade followed by slow growth and high unemployment. At that time we took it all very meekly. Then, as now, some thirty percent of the population was doing very nicely. They were in employment and enjoying steady increases in real wages. Unemployment and poverty was concentrated in foreign places: Scotland, Wales and the frozen North. Of course, the unemployed protested, but in a orderly fashion: hunger marches, dole queues and long lines of working people not at all like us. Men, and families, to be pitied, consciences to be stirred,  but largely to be forgotten on golf courses and at bridge parties.

Over the last two years citizens, you know the ordinary folk who pay the wages of the political elites, have wondered whether ‘that lot’ at Westminster are really representing us at all. While hardly anyone wishes to resurrect class war, many people must wonder whether these Old Etonians with their posh accents and monied interests really ‘get us’ the people. Do we wish to pass back to a Victorian condition of poor public sevices and a Samuel Smiles concept of self help and charity to all (sorry some, the deserving poor). 

Well, what can we do about it? Those who object We could start by admitting to ourselves that we are responsible. We allowed this lot to gang up against us, cobble together an agreement that no one voted for, and are busy changing the rules so that it is extremely difficult to get rid of a government in the short term.

I can hear some of my readers objections at this point. Come on now, they say, this is a parody of the truth. Every citizen knows that the huge public deficit must be reduced and the sooner the better. Personally I agree: drastic problems require drastic remedies. But just suppose that the economic strategy being imposed upon us is wrong. It doesn’t work. What if we are destroying a valued social structure and welfare state for nothing? What then? Why, you say, in all reasonableness . if we are proceeding for the rocks we can change course Can we? Boy George and our Dave say. ‘Not on your Nellie’, or words to that effect, Like the Blessed Margaret before them these Old Etonians warming themselves in the last rays of an   August sunset across their playing fields are not for turning.

Well Boys, then we must get rid of you by the means at our disposal. They know it, you can see it in their faces. and the panic measures they advance. Can we the people do it? Can we the people save ourselves? I don’t know. But I do pose the question

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Steady As She Sinks


Imagine the scene. Captain Osborn stands on the bridge of the Titanic as it hits the iceberg and shudders to a halt. ‘Panic, ye not’ , he cries, ‘this ship is unsinkable’. Stay right where you are. It is no use running to the lifeboats for there is not room for you all. It is a feature of the design. There are only two pathways: forward or down. For the moment we cannot go forward but who in their right mind wishes to go down. Have faith. We shall overcome.

Of course, it may not be an iceberg and, if it turns out to be one, perhaps only  small. This is a test of leadership. And communication – don’t forget that. Where is that chap Coulson? He is so good in a crisis.  But what if it is a large one? What if the ship is sinking and nothing can be done? Of course, we don’t know yet. One quarter’s provisional slump in GDP is not not the albatross we all might  fear. Wait a while. Courage mon brave. But it must be admitted that the economic prospects look bad.

Over the last few months, I have argued that the outcome of a crisis is usually somewhere between peoples hopes and fears, that we will not get a double dip recession but rather a long grind forward at the expense of much that we hold dear about the British way of life and a great deal of suffering by millions of people. To remain sane in an insane world requires us to think like this. You avoid the worst by confidently believing in something better. No one can say that David Cameron lacks optimism or courage. But far worse than abundance of self-confidence, perhaps they are plain wrong about the Coalition’s programme of deficit cutting, small government and a Victorian strategy of self help and charity.

I confess to an ideological bias of my own. I believe in an enabling society, universal social benefits and rights and a fair degree of central direction and management of the economy. Looking back over the last two hundred years I believe that social democratic ideals work out best. Of course this leads to some people obtaining benefits to which they are not entitled, to benefit cheats and loafing about. It is a price worth paying. That is just my opinion, of course. I would not have set sail in the Titanic or aquiesced in a design with too few life boats or believe in the invincibility of the Captain. Let us all admit it is too late to avoid the voyage we were jockeyed into last May. Each man to his own is the cry as the lemmings force their way to the upper deck and the life boats. Hold on, where’s Nick, Dave and George? Surely they will think it morally right to go down with the ship. Have they somehow slipped a way to fight another battle on another day.? Yet another iceberg, more confident assertions? After all, surely there is no alternative? Steady does it while we sink.

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Filed under Andy Coulson, BBC, Benefits, Big society, Cameron, Coalition Government, Deficit, Economics, George Osborne, IFS, Labour Party, Lib Dem blogs, Liberal Voice, Nick Clegg, OBR, Spending Review, Treasury, Vince Cable

Let’s Play Consequences


The electorate is a sceptical lot. So far that has worked in favour of the Coalition. After all it has to be accepted by reasonable people that the budget deficit must be lowered as rapidly as possible and if the OBR tells us that there will be more people in employment  by the end of 2011 then who will gainsay them. Opposition doomsayers predicting a 1930’s style depression  for some years can be safely shrugged aside. ‘They would say that wouldn’t they’ being  a common reaction. However, today’s increase in the  unemployment figures may make a difference to all that. Whichever way you look at it these are grim figures. So far the Coalition has benefited from the Labour fiscal stimulus and the first economic upturns in world trade. But as the blessed Gordon has told us there has been no follow through internationally to a viable global economic growth stategy. The moment has been lost and the monetarists have had their day. Goodness! Might Gordon (blessed be his name)  have been right all along? 

So far the Tories have been continued to ride high in the opinion polls at around 40 percent , marginally higher than in the General Election  while the Lib Dems have incurred the  public wrath with 60 percent of their vote disappearing. As the recession grips this will change , although given the nature of Tory  support among the affluent it is likely that support will  remain in the 30’s. The Tory position relies on  self-engendered high levels of confidence and David Cameron’s exuberant leadership. It can be expected that he will lash himself to the mast as the storms break upon the ship of state but not all the crew will remain. Some will cower below deck while others will wash overboard. The storm reaches an early climax in May with local and assembly elections and the AV referendum.

It is not all cheer for Ed Milliband. He has sought to play a long game and to plead unpreparedness for an early tilt at power. Might it not be desirable to build an acceptable platform much earlier than he has supposed? Come on Ed, get on with it. I have always believed that there should be good odds for an early General Election, say June 2011. I notice that the smart money has shifted  to it with the odds shortening  from 20/1 to 4/1. There is still time for you to put your money on. 

And a word to the besieged Lib Dems. Jump now while you have the opportunity to do so. Labour could do a deal not to oppose Lib Dem MPs linking  loosely with Labour at least in those seats in the south where the Libs may still have a chance. After all if the ship is sinking who could blame you for wishing to save yourselves.

You might think that I am in advance of my self and you would be right. But judgement is crucial in politics as in life itself. For God’s sake jump, your country needs you.

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In Whose Interest?


The members of the CBI meeting on Monday were somewhat insistent and David Cameron somerwhat compliant: a dynamic and prosperous private sector would save us from economic depression and the Coalition would do all in its power to help firms large and small thoughout the country through lower taxes, fewer regualtions flexible manpower practices and targetted Government incentives. Long live free enterprise! Had I heard this before?

Well, good luck to them is my response but not at the expense of my job, my family, my way of life. After all, is it not true that modern democratic and parliamentary Government is about the representation of interest, of all our interests. Consider the leaders of the top fifty leading British  companies who wrote recently to the press in support of the Coalition’s austerity measures. They are international companies who can locate anywhere. They have no intrinsic compulsion to invest in British industry and jobs, Some, perhaps all,  will invest elsewhere if it suits their  balance sheets. Might it be that  these companies actually benefit from unemployment: the availability of more  workers, the lower the wages that might be payable to new recruits. No one pays more than they need. Higher dividends mean richer shareholders. Of course, our pension funds benefit too, I accept, but a host of owners of capital rub their hands at the same time. Our families may suffer but surely not the Captains of industry! If the weight of public consideration is given to the owners of capital, our interests, the interests of the motley, take second best. Is that what we can expect? Is that what we shall get?

The Coalition leaders are often portrayed as non-ideological managers of our interests. Let us place our ideologies in the waste paper basket of history and solve our problems one by one. They can do this apparently. However, it is not clear to everyone that this is what they are about. In the 1980’s Mrs Thatche earned her re-elections on the backs of the unemployed. Around 1982 the economic recovery began but with it came rising unemployment for a further four years to 1986. Is this what we are going to experience now? I don’t know. Boy George doesn’t know either. It does seem to me that the world is a dangerous place. Perhaps we shall avoid a double dip depression but I do not think it is likely that we shall avoid a long period of modest growth (lower than it need be). Who can judge the outcome of foreign currency wars, of a slowing in buoyant BRIC economies, or  the multitude of wrecked family lives. No one will pay us for the long years of personal suffering. They will be years lost. I do not envy fat cats but I do not feel that they should sleep easy in their beds while some of us kip in doorways. How about you? Long live Parliamentary democracy. Two cheers for our interests!

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Filed under BBC, Cabinet, Cameron, CBI, Coalition Government, Conservative Home, Deficit, Housing Benefit, IFS, Labour Blogs, Lib Dem blogs, Liberal Voice, New Stateman, OBR, Parliament, Politics, Spending Review, Thatcher, Treasury, Unemployment, Vince Cable

The Universal Pink


This is not a an indulgent fantasy of a lost musical past. My subject is universality that magic solution that binds us one to another in a decent society: not a Big Society nor a Little Britain  but one which believes in the solidarity of its citizens, brother to brother, neighbour to neighbour. A decent universal state pension fairly earned by those who have worked and those of us who have stayed at home to care for children is just such a universal benefit so too in a National Health Service and Care for the Elderly. Speaking personally I have always believed that a free at the point of use education system came into the same category. I benefitted from such a free education system. No one in my family had enjoyed the benefits of a university education until my sister broke the mould and became one of the first women to be accepted by Barts for a medical degree. On her application form she had to list the occupation of her father: she wrote ‘Labourer’ Imagine this same wonderful individual  today. She comes home from her clerical work and anounces to her astonished parent that she intends to become a doctor. ‘Oh, that’s good dear and how much will it cost.’ ‘Well if you help me with day to day expenses and we are talking of the medical fees alone,  I shall run up a debt of over £100,000 pounds but I will not have to repay it at once. I can take a very long time to pay it off – maybe 20 years by which time it may well be twice the original debt perhaps £200,000.’ A long silence. ‘Look dear, my heart is with you, really it is. I would like to help you with this. I shall think very carefully about it because, of course, I have the duty to do so. But I can’t encourage you. All my life I have avoided debt. It is a dreadful thing I can assure you. (Ask David Cameron if you don’t believe me!) I think the answer will be no. What you might do is to approach charitable organisations. I’m sure there  are some who would wish to help you. But darling think on it how could you do such a thing?’

 What is a human life worth to us? Everything or nothing? Why stop at university education? There is more money to be made for loans to get children through school. Why should this be free? Why should we citizens pay for courses on needlework, cooking and carpentry to name but a few unnecessary courses. And why five days a week? Why not a shift system which would enable children to limit school to three days a week? Why not distance learning using standardised subject modules? After all most children spend more time at their computers playing silly games than they spend in a classroom. Just imagine the savings in public expenditure?

‘Don’t be silly’, I hear you saying, ‘there must be some service that are universally provided. ‘But not many AND not provided at my expense.’  ‘Well dear, you do not have children. This issue of education does not concern you, does it? Why should you pay for the education of those do-nothing children from the Council estate?’ Why indeed?

‘You should pay madam because you gain from the universal pink. We are one of you and, like it or not, we are one of you.’

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