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On Being a “Real Conservative”

Tim Montgomerie, formerly doyen of Conservative home, now at the Times, has returned to his former bailiwick to explain why he’s not joining UKIP. Basically, they’re a bunch of clownish amateurs, however much he likes having his prejudices stroked by them. Despite not wanting to join them, he agrees with much of UKIP’s analysis.

I feel – as many Tories do – that there is a cuckoo in the nest at present and he will be gone on either the day after the next election or a year or two afterwards…

Cameron is, of course, a great deal more popular than his party. Or more accurately, in this current toxic anti-politics mood, less unpopular. Cameron isn’t the problem;  people like Montgomerie (and me…) are the problem. The parties, as they shrink are less the mass movements of ordinary people they once were, but clubs for political obsessives. The Tory fixation with Europe, or the endless Lib-Dem demands for PR as the answer to everything, or Labour’s wibble about predistribution could never happen in a genuinely mass party.

He blames Cameron for failing to win an election against Brown. The UKIPish nutters, obsessed by Europe are far more to blame than the Prime Minister for conservative failure to win an election. The sheer insane kamikaze disloyalty they have shown has crippled the party for nearly two decades.

David Cameron is not a terrible conservative. He’s a little bit conservative in every respect. A little bit of a fiscal conservative. A little bit of a Eurosceptic. A little bit of a reformer. A little bit of a hawk on foreign policy

Montgomerie appears to be complaining that the Prime Minister who has cut state spending faster than any administration since Atlee is not savagely partisan enough. Cameron doesn’t seem to enjoy being conservative enough. And that is the problem.  In the United states, the parties have become utterly polarised. Candidates must appear extreme to win nominations in primaries, then tack to the centre to win an election. Everyone ends up with something they didn’t vote for, which further feeds dissatisfaction with politics. American Politics is utterly toxic and totally dysfunctional as a result, yet too many Tories look at the GOP today, and think “Gosh, I wish we looked like that“.

As parties shrink, they become captured by vested interests: The Labour party is more in hock to the Unions than ever before, a wholly owned subsidiary of Unite. The Tories run the risk of being seen as being a subsidiary of their big-business donors. All this turns off the average voter, who feel, rightly at the moment that none of the parties speak for them. Hence the rise of UKIP, the SNP and the Greens who all have messages which are angry, clear, simplistic and wrong.

The activists, like Montgomerie have to realise it’s they (we…), not the much-derided “political class” who are the problem. Professional politicians have always existed, and the idea the country should be run by amateurs is laughable. Until activists can reach out in the spirit of compromise, seek to speak to people about what the people are interested in, not what the activists think the people ought to be interested in, politics will remain a minority pursuit. Most Tory councillors, who’ve experience of governing get this, but the activists, the enthusiasts, the door-knockers and bloggers who create the mood-music don’t. “How can he think like this? If only he’d be more extreme, then all would be well.

How’s Ed Miliband’s 35% strategy working out?

Montgomerie blames Cameron for the rise of UKIP, which he says

is partly the product of both lousy party management and strategy by the current Tory leadership.

I think a better analogy is UKIP as the Tories’ Militant Tendency. As Douglas Carswell and Mark Reckless have shown, the UKIPish backbenchers and activists are utterly unreconcilable – reaching out to them is utterly futile. They got the referendum they claimed to want, but it just encouraged them in to more tantrums of headbanging nuttiness A referendum in 2017? NO WE WANT ONE NEXT WEEK, WITH YOU CAMPAIGNING FOR ‘OUT’!. They have got into the habit of rebellion, and lack the discipline to want to run the country, preferring the masturbatory pleasures of opposition, even while sitting on the Government benches. Compromise isn’t unprincipled. Collective responsibility isn’t dishonest. It’s a recognition that there’s competing interests in the country, and no-one gets everything they want.

There are divisions across the Right in all parts of the world but the lack of internal democracy has forced Tory divisions into the open and many natural Tories out of the party… Robust systems of internal democracy might have meant certain policies that I, personally, support – including equal marriage and the 0.7% aid target – might have been blocked. I would have argued for them but party members and MPs deserve to be consulted more often than at a once-in-a-decade leadership election. Every MP in the next parliament should have a job (running the UK equivalents of Battleground Texas, for example (of which more on another occasion)). There should be an elected Tory board and Chairman with the responsibility to think about the long-term health of the Tory Party. The whole party apparatus should not be obsessed with helping the current leader survive beyond the annual electoral cycle. Fundamental change is needed in party organisation if it is to think long-term about rebuilding in the northern cities, changing the profile of party candidates and – the previous theme – remoralising the Tory brand.

There are some good ideas about decentralising the party, but the problem remains: Tory activists do not look like the country and remain unhealthily obsessed with Europe. The country is socially liberal, the party is (mostly) not. To give too much power to the current ageing activist base risks accelerating the party’s retreat from the electorate, and making it harder to govern – the one thing the electorate agrees on is it cannot stand a split party. The party must reach out first, try to make the activists look a little bit more like the country and learn to compromise again.

Purging the UKIPpers, who’ve been making Tories unelectable since 1992 is a good start.

On Charlie Elphicke’s plan to ban the Trolls.

I write as a pseudanonymous blogger. My nom-de-plume is an old nickname from growing up. It’s useful mainly because It means I can keep my political writing and activism separate from my professional life. But if you really, really want to find out who ‘Jackart’ is, it should take you about 2 clicks. This filtered permeability is deliberate. A Google search will either throw up my professional life, OR the blog, but not usually both.

A am not in any meaningful way, anonymous. But I understand why people might be. The Military ‘Service test’, company social media policies and so forth usually expressly forbid the expression of political opinion online. The exception seems to be the public sector hard-left who revel in their employers’ support for their hard-left activism and desire to ‘expose’ those who ‘have vile views’ (ie disagree). Letters to employers can often follow some pretty mild expression of what is  often basically ‘Economics 101’.

The real bullies are all too often those defending the status quo from those who think differently, and ‘Troll’ has come to mean ‘anyone disagreeing with a lefty on the internet’. Real Trolls are just people whose hobby is winding up the self-important and humourless. The endless tweets of “your a dick” (the grammatical error is part of the gag) to Richard Dawkins is an example. The aim is to get a rise. And to this end, the perma-outraged Caroline Criado-Perez, the womyn behind the campaign to get a woman womyn on the £10 note, is great value. She will always bite. So she’s targeted by Trolls. Some of whom are hilarious, some of whom aren’t.

Trolling is not the same as ‘flaming’. Flaming is the straight exchange of insults. This too can be cathartic and when indulged in between people who aren’t offended, can be enjoyable. A good insult can be poetry. Use of robust Anglo-Saxon shouldn’t be illegal.

We’re also moving into the territory where giving offence is becoming illegal, encouraging a competitive victimhood race to get your identity/religion/political beliefs  legally protected. This is profoundly undemocratic, with a chilling effect on free expression. If you don’t like something, block, ignore and move on (on which more later). Free speech must come with the freedom to offend, or it isn’t worth anything, and political debate becomes a circle-jerk around the status quo. To the extent that it already is, partially explains the rise of anti-establishment parties. Offensive comment isn’t “trolling”, and shouldn’t be illegal, however angry you may be about your shibboleth being held up for challenge or ridicule.

Nor is the stalking, harassment and abuse meted out to some people “trolling”. I’d quite happily wind up Miss Criado-Perez, because I think she’s an insufferable, po-faced, hypocritical misandrist who’s more or less wrong on everything. But just as you’re allowed to ask “name me something a woman has invented” to a feminist in a pub in order to piss her off, you’re not allowed to say “I’m going to rape you, you fucking bitch” in a pub, on Twitter or indeed anywhere else. There’s a line. That line is threats, harassment and incitement. The line exists in law, and no further law is needed. You can say what you like up to that line. But if the target of your abuse leaves the pub (blocks you on Twitter), and you follow them home (set up multiple sock-puppet accounts), you’re moving from legal free speech, into harassment. Prolonged harassment is already illegal, online or in meatspace.

Which brings me to this excrescence from the Tory MP, Charlie Elphicke.

Hate-tweeting trolls make people’s lives hell. They’ve got out of hand on social media and we need to crack down on it

Great, enforce the laws that already exist.

we cannot just be tough on hate-tweeting, we must be tough on the causes of hate-tweeting, too. We should target the anonymity hate-tweeters use to harass people online. At the moment it’s just too easy to set up a bogus account and viciously stab at people from behind the curtain.

Does he mean “people” or “politicians”? So much good is done by people who tweet, blog and write anonymously, maybe because their views are controversial, or because “procedures” forbid those who know, from telling the truth. Remember night jack?

I would fisk the whole thing, but as it doesn’t address the issue that sprang instantly to mind with his first sentence, there’s no point. Elphicke is talking out of his arse.

Anonymity is a vital component of free speech, because it allows uncomfortable truths be told to those, like Elphicke, who exercise power. And if you really need to find who someone making actionable threats is, it’s easy enough to find out. Even the careful Old Holborn was ‘exposed’ eventually, after trolling the whole of Liverpool. But as he’d said nothing illegal, he’s able to wear his title of ‘Britain’s vilest troll‘ with pride.

Peter Nunn, on the other had crossed the line. Threatening to rape someone, the MP, Stella Creasy on twitter is not ‘Trolling’ and is (rightly) already illegal. He was gaoled for 18 weeks under current legislation. Perhaps Ms Creasy is right. Perhaps we do need to take such threats more seriously. But it’s clear from this case we don’t need another law to do so.

The tone of debate on twitter is not the same as that in the house of commons. It’s more like how a rowdy pub would be were it to hold a political debate. People are engaged through the medium of twitter. It’s potentially a superb means for politicians to reach out to the people and bridge the divide. Some, like Michael Fabricant or indeed Stella Creasy get it. Others like Elphicke clearly don’t. But trying to turn Twitter into the Oxford Union isn’t going to work. All it will do is encourage another online network, which isn’t regulated by the nanny state, to be set up where people can flame each other at will. Most of us enjoy the rough and tumble of debate, and sometimes minds are changed.

Perhaps someone should point out that calling Charlie Elphicke a stupid, ignorant know-nothing with a face like a baby’s arse and brains consisting of what comes out of one, isn’t “trolling”. It’s fair comment. I’m a card-carrying Tory, so nor it this a partisan attack. Indeed I’m ashamed to share a party with someone so wildly illiberal and ignorant of what he speaks. How DARE he write something so ill-informed and stupid?

This fear of “trolling” is nothing more than a particularly egregious moral panic. A good insult can be poetry. There is no right to live unoffended. We don’t want to ban anonymous comment because we’re a democracy. We have already banned abuse, threats and incitement because we’re civilised. 

Cameron’s European Immigration Gamble.

When Jean Claude Juncker was “elected” EU Commission president, he indicated he’d be happy to work with Cameron to renegotiate some powers. The one ‘Red Line’ he would not give is the free movement of people, enshrined in the Treaty of Rome.

There’s an unpleasant xenophobia in British politics at the moment, where immigration is seen as a terrible thing, the worst thing, rather than an answer to the question “who’s going to pay for your pension?”. Most people, the left hand tail of the bell curve, who are considering voting UKIP are horrified by stories in the papers of schools where 75% of children speak a different language. Not knowing what the “availability heuristic” is, UKIPpers then go on to consider this near-universal. Over half of children in inner london schools are by some measure children of immigrants. Is that because that’s the level of immigration, or because British people tend not to try to bring up infants in central London?

There is no doubt the foreign born population of the UK has expanded rapidly to around 12%. By far the biggest inflow is a half a million Poles who arrived between 2001 and 2011. Immigration from the Indian subcontinent continues at a steady trickle, tens of thousands a year. There’s remarkably little evidence that wages have been driven down by this movement of people, though the claim is often made, evidence has come from individual industries, but certainly doesn’t represent a widespread picture. If you believed the rhetoric, the 147,000 who came from Pakistan represented the majority. But the numbers are dwarfed by the Poles, whom no-one can accuse of scrounging, and who’re often spoken of in a positive light, before a tirade against “the muslims”.

Low skilled work is losing its value, and so low skilled workers are facing stagnating wages world wide, not just in the UK. It’s just comforting to those who are suffering the effects of globalisation and automation to blame the polish blokes on the building site, rather than impersonal economic forces and the relentless march of technology. Throwing up barriers to the Poles coming here won’t help Poland get richer, or improve the standard of living of British-born workers. It’s an act of spite, that demeans this country, and should be resisted.

Cameron for his part has staked a “solution” to European migration as part of his negotiating strategy. I cannot see how this could possibly benefit him, except in the narrow, tactical sense in so far as it gives some answer which the army of Conservative activists can give to on the doorstep, while to the voters of Rochester and Strood consider whether or not to vote for Mark Reckless. The free movement of people is so fundamental to the EU project that it cannot be offered as a bribe to keep the UK in. So Cameron is going to face a humiliating climbdown at some point. Being cynical, He probably expects to do this some time in 2015, after the election. Will it be enough?

UKIP cannot be appeased. They are a protest. They are angry, and giving them the policies they “want” won’t win them over. They will simply find something else to be angry about. Though it’s not said openly, anti-muslim sentiment is being mixed with anti-immigration rhetoric, to overcome the relatively positive image of the largest new immigrant communities, the poles have in the minds of much of the electorate. The people who’re considering voting UKIP don’t by and large, hate the poles. But they are becoming much more open in their dislike of Muslims. And UKIP is not afraid to allow the misconceptions, the disinformation and the outright lies to continue. Sometimes they get caught saying something outright racist. Most of the time UKIP keep the right side of outright bigotry, and let the xenophobic mood music do the work. This is “dog-whistle” politics.

It’s not policies UKIPpers want, it’s leadership they’re craving from Politicians. And on immigration at least, Cameron has failed the test. Having already made one promise, to reduce net migration to the tens of thousands, which he couldn’t deliver, is now doubling down. The political class, insofar as such a thing exists, has failed the test by failing to lay out why free movement of people, within the EU and from elsewhere will benefit everybody. The logic behind free trade – division of labour, comparative advantage and so forth is as true for where people live as it is for what we buy. In failing to point out where the electorate is wrong, as they are on immigration, politicians are failing in a duty to the people in a representative democracy.

Cameron’s gamble may pay off. But he either knows it cannot be delivered, in which case he’s lying, or thinks it can, in which case he’s putting political advantage ahead of the good of the country. Neither paints the Prime minister in a good light.

Douglas Carswell, Direct Democracy and the Clacton By-Election.

When Quentin Davis defected to Gordon Brown’s Labour party in 2007, Matthew Parris remarked “when a Tory crosses the floor to Labour, the Average IQ of both parties goes up…” which is one of the most deliciously bitchy political insults of all time. Few called for a by-election. You had an opposition struggling for unity, facing a dying administration. The defectors, back-stabbing, politicking and so forth, like in the dying days of Major’s administration, is part of the theatre of politics. And vital to its function.

Defecting to another party not in a governing coalition or vice versa is called ‘crossing the floor’ and is also an important way by which the legislature (parliament and especially the commons) can hold the executive (the Government and its payroll vote) to account. If the executive cannot command a majority for at least ‘confidence and supply’ in the commons, you MUST call a general election. By leaving the Government over issues like the corn laws, or Europe, or civil liberties, you can prevent the Government enacting its program. You’re sending the strongest possible signal to your party’s leadership. And if it’s well timed, or comes in a large group, you can bring down a Government.

Or in Quentin Davis’ case, you can leap aboard a burning ship right at the moment a torpedo slams into the magazine, to the sound of Guffaws of “good riddance, you silly prat” from one’s former colleagues.

Which brings me to Carswell. If he had decided to stay in the commons, he would be able to support the Government in bringing the law calling for a 2017 EU referendum through parliament. He could have continued to support the government in rolling back some of the civil liberties that were taken by the Labour party in its 13 years of goose-stepping nanny-statism. He would have been able to do this as a UKIP member with a confidence and supply agreement with the coalition from the opposition benches. Much like the Ulster Unionists in 1995-7.

Instead he’s decided to take the Manor of Northstead (MPs can’t actually resign, they have to be sacked and the means by which this happens is to take a paid office of the crown incompatible with a sitting MP), and so trigger a by-election. This seems likely to set a precedent, and everyone’s applauding him for it. But if this becomes a convention that crossing the floor triggers a by-election, the executive will be significantly strengthened at the expense of the legislature, and this is not what Carswell claims to want at all.

“But it’s Democratic” people will say. “They elected a Tory, and a Tory they should have”. But we live in a representative democracy. Carswell is strongly in favour of direct democracy, so be clear, I am not accusing him of hypocrisy, just counter productive stupidity. For when an MP crosses the floor in a safe seat in future, the Governing party will be able to parachute a loyal apparatchik into the seat, and use the party machine to ensure victory. If a a sitting MP in a marginal constituency goes, electoral considerations, rather than the role of holding the Government to account come to the fore when deciding what to do on policy and law-making.

Carswell is strongly in favour of the right of recall too, which suggests a very different conception of the role of an MP to mine. Indeed, it is this issue that caused him to jump ship, not “Europe”, as much of the media will have you believe. I think we elect people of character to scrutinise legislation, and if necessary, kick up a stink, while trusting the electorate to judge him in the whole, every 4-5 years or so. Carswell thinks an MPs job is to reflect the brute and unexamined opinions of his electorate, and pander to their prejudices, which is why he voted against gay marriage (Which is also why I suspect this has been long-planned to occur up at a time to cause maximum damage to Cameron and conservative electoral chances). The state shouldn’t control our lives, but to the extent it does, it should be more than mob rule, which is why I am only half in favour of more direct democracy. Unfortunately, UKIP is all about mob rule, a bunch of pitchfork-wielding ignoramuses who neither know nor care what makes the world turn, or why.

The Tories will throw the kitchen sink at Clacton, and will probably be able to win (update: I no longer think the Tories will win, thanks to Lord Ashcrofts polling – when the facts change….), as local Tories are highly pissed off, and electorates don’t reward turncoats. The Tories will be able to mobilise an Anti-UKIP vote from Liberal and even Labour supporters as they did in Newark. I suspect he’ll look at the morons, bigots and buffoons ranting away with the certainty that only the truly mediocre mind can generate, and realise that he’s thrown away a seat at the top table and the chance to influence policy and drag the centre ground his way, for what? The leadership of a party which will never amount to anything, and which is the principle obstacle in the way of its own stated main aim. Carswell may just regret yesterday for the rest of his life.

But given UKIP is far more comfortable with the idiot certainties of opposition than in having a genuine platform for government, he may just fit right in.

 

Britain in the EU after Juncker

Obviously David Cameron’s defeat over the Commission presidency is a disaster for him, right? Daniel Hannan wrote

The game is up. No one will now believe that the United Kingdom can deliver a substantively different deal in Europe. The FCO’s ploy of doing a Harold Wilson – that is, making some piffling changes and presenting them as a significant new deal – has been discredited almost before it began. If David Cameron couldn’t prevent the appointment of Jean-Claude Juncker as President of the European Commission, no one will believe that he can deliver a more flexible EU, with more freedom of action for its member nations

And he may have a point. But the problem is, I’ve seen no-one who isn’t already a Eurosceptic make the same point. Hannan thinks we should leave the EU. Nothing’s changed, and he’s found it easy to hammer recent events into his narrative. Obviously UKIPpers are cock-a-hoop. They’ve always said Cameron was “weak” and re-negotiation is a pipe-dream (comments saying this will be deleted as utterly uninteresting…). Fine. Certainly the election of the Luxembourgeois arch-federalist doesn’t directly contradict this narrative.

But I suspect reality may be more complicated.

The EU was never going to give Cameron much when there is a realistic prospect of a Miliband administration in 2015, to whom nothing would need to be given and from whom much could be taken.

But assuming Cameron is still Prime Minister in June next year, having thrown him under the bus, Merkel would be forced to give way on other matters in any re-negotiation she’s already admitted as such. Juncker’s red-lines are likewise reasonable. He says free movement of people isn’t up for negotiation, and nor will Britain have any veto over further integration in the Eurozone, but otherwise he’ll listen and is open to negotiation.

The “Spitzenkandidaten” system by which the commission presidency goes to the pre-chosen head of the largest “party” in the European parliament is a power-grab by the parliament against the heads of Government. Supposedly a response to the charge that the EU is undemocratic, but actually allows the Bureaucracy power over the process, it’s a form of cargo-cult democracy, aping its forms, but without any of the substance of democracy. This is why Merkel initially sided with Cameron in opposing Juncker. She too, along with most of the executive heads of Government in the EU oppose the Spitzenkandidaten system. She was effectively forced to back down by her own domestic party. If anyone’s “weak” it’s Merkel. Cameron stuck to his guns, not, I suspect because there’s anything wrong with Mr Juncker; no other candidate is any less federalist, but because failure to do so would mean the implosion of the Tory party.

If the EU bureaucracy sought to wound Cameron by publicly humiliating him, it is they who miscalculated.

As it transpires, near Isolation in EU summits is a very comfortable place for a Tory PM to be. He returned, defeated 26-2 in a vote, to cheers of support from the entire Tory party, including the awkward squad like Peter Bone. Far from having his tail between his legs, Cameron, by raising the prospect of the UK leaving the EU, seems to have taken the wind out of UKIP’s sails. It’s certainly not obvious the “defeat” has hurt the PM in the polls and may have even given him a boost. A UK PM sticking two fingers up to the Eurocrats is rarely unpopular.

Whatever Cameron gets by way of re-negotiation will be painted by Daniel Hannan as “insufficient”, making Britain’s exit inevitable. I think he, and UKIPpers can be ignored on the subject. Again, don’t bother commenting about what you think will happen in negotiation, if you think there’s no chance of success, I’m not interested.

For my part, the EU needs to be reasonable. It needs to acknowledge the UK’s history of independence and act accordingly. Unless there is a significant return of powers including some movement on the primacy of EU law, and the EU negotiating with respect with our elected head of Government, I will vote “out”. Cameron has relied on the conditional – “if there is significant movement, then I will say ‘in'” and this was taken as a clear and outrageous threat by the Eurocrats.

The UK is going to leave, unless the EU gives way, a lot, which it still might.

On the Right of Recall

I’m not a fundamentalist on this issue. We have a right of recall, it’s just we might have to wait a few years to exercise it. Neil Hamilton was booted out by the electorate in Tatton in 1997 and now pathetically plods along, embarrassing UKIP rather than the Tories. Tatton was the fourth safest Tory seat.

The problem is how to deal with politically-motivated, opportunistic attempts at recall. It’s easy to see a situation where an MP in a marginal constituency could face a recall petition simply at the behest of a (and it probably would be Labour) party in order to discomfit the Government and take advantage of mid-term unpopularity.

So while I like, in principle, a right of recall, In practice, I’m comfortable with a committee of MPs as a filter for vexatious recall petitions.

I expect lots of “How can you call yourself ‘Libertarian’?” rants from the perma-outraaged in the comments. Democracy doesn’t mean giving the people what they want, all the time. Nor does ‘freedom and the rule of law’ mean pandering to every whim of the mob. Indeed quite the opposite. We have a responsive democracy in the UK. It ain’t broken, so doesn’t need much fixing.

The Rise of UKIP Heralds a Return to Two Party Politics.

The Liberal Democrats have based their political offer on a number of things. First a certain honesty about policy. Remember “1p on income tax to fund education” for example, and a general willingness to “think the unthinkable”. Clegg coming out as an Atheist or, senior people openly thinking about the legalisation of Drugs. They hope with a child-like naivety, that being right will somehow get them elected. It didn’t, at least in the Euros. Their councillors think that being the best at getting potholes filled in and dealing with dog-shit, will somehow go noticed by their electorate. That too is naive. They lost hundreds of councillors in the Local elections. The tragedy of the Liberal Democrats is they’re an honest party with dishonest voters.

Liberal Democrat voters wanted to be able to say smugly “don’t blame me, I voted Liberal Democrat” when the talk turned political at dinner parties. The hard-working, realistic, decent centrists of the Liberal Democrat parliamentary party took to Government rather well. It’s the voters who couldn’t handle the compromises of Government. Not being in a position to deliver all your promises is not the same as “lying”.

And it seems Clegg, by obtaining power will destroy his party.

Which brings us to UKIP. UKIP’s proposition isn’t couched in policy terms. They have one confirmed policy: to get out of the EU. How exactly that would be achieved, is open to doubt. Some of the more intelligent ‘KIPpers (a low bar, admittedly) might say “repeal the European Communities act 1972” and hang the consequences. Of course this isn’t simple. We’d then have to negotiate trade terms with the EU from outside, and I doubt this would be as favourable as negotiated withdrawal. But these niceties are not important the offer from UKIP is deliberately vague. This enables their supporters to think the UKIP policy is the same as whatever they think, which on immigration might range from “send them all back” to “open door to the commonwealth“. Elected ‘KIPpers have said both over the last few weeks.

Why do politicians lie? Well they don’t. They’re reacting to changing circumstances and they’re not always in the position to deliver. Why do politicians not answer the question? Well they’re absolutely terrified of making a promise they can’t keep, and so need to dissemble because the media is unable and unwilling to distinguish between “what I think” and “this is policy”.

So they’re all the same, right? Well no. The Public seems unwilling to understand just how unresponsive the economy is to the levers a politician might pull. While I think the Coalition is doing a good job, I certainly don’t credit them with the recovery, thought the fall in the deficit is welcome. “Nothing ever changes” the electorate say. Well not quickly no. But over 13 years, Labour massively increased the size cost and reach of the state. In four years since, the Coalition has shrunk the state headcount back again and undone about half of the damage done by Labour to the public finances. So things DO change. But most people are still in the same job they were in 2009, living in the same house, going to the same super-market, where things may or may not have risen in price faster than wages. That change is not noticeable day to day.

Politics matters. But it requires an electorate prepared to listen to arguments. Perhaps it’s not the politicians who’ve become dishonest, it’s the electorate? But this great yawp of dissatisfaction will pass. In many ways, the electorate have been reasonable. The Euro elections are pointless elections to a pointless chamber without power or influence. Sending a bunch of ignorant, clock-punching neanderthals to Strasbourg is a sensible response to a body formed as a democratic fig-leaf to cover “ever closer union” driven by the EU commission.

Perhaps the Eurocrats will finally get the message. ENOUGH! and David Cameron may find his renegotiation a little easier as a result of the parade of fascists, loons, time-wasters and bigots the European electorate have sent as representatives. It’s probable therefore that UKIP will be surprised by the General election when their “surge” falters. Do they really think UKIP are a party with actual governing ambitions, rather than just some suits sent to wave two fingers at Herman Van Rumpuy?

Turnout in the 2014 EU elections was 34.19%.  In the 2010 General election. which is the one that matters, it was 65%. I suspect 2015 will be higher still. Even if everyone who voted for UKIP did so in the General election, it’s still only about 14% of the vote. But they won’t. Many people return to their normal parties for an election that matters and this is probably around half of UKIP’s vote. Despite securing 16.5% of the vote in 2009 European elections, they got 2.5% in the 2010 General election. UKIP have indeed surged, but I think it unlikely they’ll get more than 8%, a level at which they will win no seats.

The Liberal Democrats will, of course be decimated. This isn’t the beginning of four party politics, it’s a return to Two party politics. And if you think Miliband’s going to improve his polling from here, I’ve a bridge to sell you. Many UKIPpers will drift back to their habitual parties, but which is going to have the stronger pull? The evidence suggests UKIP’s  initial surge, coinciding with the Gay Marriage debate, came mainly from the Tories. But the most recent surge in the run up to the Euro Elections came mainly from Labour. And I’ve a sneaking (possibly wishful) suspicion, the ex-Labour vote may stick around for the General Election, but more of the Ex Tory vote will head back to the blues, lest Miliband gets in.

It’s difficult to think of a better election strategy for Cameron than saying “we delivered a recovery, they’re led by Ed Miliband”. Apparently no leader has shown worse in focus groups, not even Gordon Brown. The more enthusiastic UKIP voters don’t want the grubby compromises of Government to dilute the simple appeal of the message. In this, they’re very similar to Liberal Democrat voters. Most of the rest know, deep down, however much they like having their prejudices stroked by Nigel Farage, UKIP are not a potential party of Government. It’s either Miliband or Cameron for about half of the 4.5 million people who voted UKIP, and I suspect the majority of those will choose the latter.

Every single pollster over-estimated Labour and underestimated the Tories in the run-up to the Euro poll, which means far from being neck and neck, I suspect the real GE 2015 polling position now is a small Tory lead. Governments enjoy swing back in the final year of Government, especially when there’s an economic recovery. And the UK is the fastest-growing major economy in the world at the moment. Napoleon once asked of a General, “I don’t care how good he is, IS HE LUCKY?“. Cameron appears to be.

Cameron, Farage and the Referendum

In 2007, when Cameron made his “Cast-Iron” guarantee about a referendum on the Lisbon treaty, it was made in the context of an election which was anticipated in 2008. This was probably his greatest political mistake. In not making this abundantly clear that there would be no post-ratification referendum, he opened the door for hysterical Euro obsessives to rant about it ever since.

The fact is the Lib Dems campaigned on an in/out referendum in the election and have blocked one in this parliament. Labour promised a referendum on Lisbon, and then scuttled away, and signed it anyway while he thought no-one was looking. The Tories did everything in their power to stop Lisbon, but once ratified accepted a done deal. None of the parties have a great record on offering a referendum, but only one has not actually gone back on a direct promise. The Tories.

When he finally became Prime Minister in 2010, I think given the state of the country, he can be forgiven for having other priorities than what would be a divisive, time consuming and problematic campaign – ones on which In think the Government has done a good job. The deficit has been cut, the coalition has got out of the way of job creation, and shrunk the state headcount faster than any Government not actively demobilising an army. Discretionary spending has fallen faster than under any Government in peace-time. Basically the coalition is cutting state spending faster than Thatcher did. Free schools are upsetting the teaching unions (a reliable indicator of good policy), private sector involvement in the NHS is a roaring success. This is a very effective government which has performed remarkably well despite a toxic legacy, as usual from an outgoing Labour government.
In doing so, the bubbling Tory discontent on Europe was kept from boiling over. Part of this is due to the fact that, at some considerable political cost, a referendum has been promised should Cameron be PM, and has been legislated for in this parliament. Cameron has said this would be a red-line for Tory involvement in a coalition. There is simply no way Cameron could stay leader of the party and renege on this promise. Even if you think Cameron a dishonest Europhile (and if you think the most Eurosceptic PM this country has ever had is a Europhile, you’re a nincompoop) you must see the weight of opinion in the Tory party will ensure a he sticks to his promise.
The Labour party and Liberal Democrats are NOT offering a referendum. Ultimately, if you want out of the EU, there is only one referendum you will be offered, and that’s by voting Tory in 2015.
Of course ‘KIPpers will say “I don’t believe Cameron’s promise”. If you think this, frankly I don’t care. Your nihilistic stupidity is utterly beyond reach. The real reason for (effectively) opposing a referendum in 2017, is that ‘KIPpers have been pretty effective at polarising opinion on the EU. While there are a lot of people who HATE the EU and want out, yesterday if possible and by next-Thursday at the latest, they’re already voting UKIP. The polls are clear. If the Prime Minister repatriates some powers, and Merkel has indicated she’s happy to go along with some limited renegotiation, the British public will overwhelmingly, if grumpily vote to stay ‘in’. 
Incidentally, the other politician to renege on a promise is Nigel Farage, who promised that he would work with any party to offer an unambiguous referendum promise, probably because he’s rather enjoying riding the Brussels gravy train. UKIP is a major obstacle to its own stated goals, having become much more about race, sex and a general Kulturkapmf by people who feel left behind by the world. UKIP is the party, not for those who really want a referendum: the Tories are for them; UKIP is for people who hanker after 1959, and who REALLY don’t like what the poofters get up to in bed.
So prediction: UKIP will come first tomorrow in the Euros with around mid to high-20’s vote share, Labour second and Tories third. Enjoy crowing. In 2009, UKIP got 16.5% beat Labour into third place, and got less than 3% a year later. Peak UKIP is nigh. The Tories have long expected and planned for this final mid-term kicking and will be delighted it’s not coming from Labour.

Prediction: a Year Out

The Tories are going to win the General Election next year, there’s an outside chance of the Lib-Dems securing enough to be worth hanging onto as coalition partners.

Everything is in place for a Tory victory in 2015. Don’t believe me?
  1. Even Gordon Brown secured “swingback” in the last year of his Government: in his case at least 8 points. The Coalition, Tories especially will enjoy the same effect. Given the Tories are 4% behind (polls currently running 6%-1% labour leads), this alone will give them a small lead at the poll.
  2. The trend is already in the Tories’ favour, though this alone will not extend Cameron’s lease on Number 10. 
  3. UKIP, currently polling 13-20%, are most likely to be disaffected Tories. (50% of their current polling are ex-Tories). It’s obvious a fair number of these are ‘lent’ votes for the Euros. UKIP are not going to poll 18% in General election. You can give at least a third of the UKIP vote to the Tories for the GE. And there you have it. Enough for a Tory government. But that’s not all.
  4. Labour is led by Miliband for whom voters will not turn out. Cameron at least isn’t repellent.
  5. New incumbent effect generally helps Tories.
  6. The return of the shy Tory?
  7. Lib-dems are harder to shift than herpes. (This hurts Tories at least as much as Labour)
  8. The UK is the fastest-growing major developed economy in the world. The cost of living crisis is over, and the public may well be feeling a bit more optimistic come May 2015.
  9. The Tory election narrative will be a combination of “look, things are going well, don’t let Labour ruin it” combined with “look at Ed Miliband, what a wally”. This is powerful.
So, if you think it’s inconceivable that the Tories will win a GE out right, the chances are you’re talking your own book.

The Post Office IPO

Most of the objections raised in the media concerning the sale of the Royal Mail are spurious. Most IPOs get away at a discount. Investors are taking on significant risk in buying a share for which there is no established market, and therefore price. Get it wrong, and your investors lose a great deal of money. No further money can be raised by the business in future except at high costs of capital.

A lot is being made of the advice as to the price range:

At the time of the flotation, and more specifically the book-building process, there were significant threats of industrial action. This faded as the floatation day approached. At 330p, the top end of the range, the shares yielded 6% or so, which appears about right for a floatation of a regulated utility the sale of which was driving the trades union movement nuts. SSE at the time yielded significantly more than that and 5% or so is about normal. 290p was cheap but 330 looked about right to me at the time.

Setting the price too high would ensure much less demand. And there are big magnifying effects at work.

There are known problems with the book-build process. The main one is that it is inflexible should demand prove higher than expected. And it was massively over-subscribed. Politicians running round telling everyone it’s undervalued might have something to do with this. There was an immediate buzz, as everyone tried to get as much as they can. This flattered the figures for demand. Once it is clear the demand is greater than supply, this creates more demand and so on in a virtuous circle. It became clear, as I endured my busiest week ever that everyone would get substantially less than they put in for. This in turn encouraged retail customers to bid for £20,000 in the hope of getting £3000 worth, further flattering demand.

So was the demand really 24 times over-subscribed by institutions as reported by the National Audit Office? No.

If the issue was priced at £5, just over 10% below the trading range it established following the flotation, it’s unlikely, at a yield of around 4% that I’d have been recommending it to clients. There would have been no politicians running round telling everyone how under-valued it was, and in the absence of the excitement, there wouldn’t have been people putting in for significantly more than they actually wanted. The issue may have been a flop, and been pulled. The Government would have been left with egg on its face, and the price it could achieve in future may well be worse than the 330p it actually achieved for the 60% of the company it sold, if it could get it away at all. This is of course the real objection from Labour and the Unions, who simply object to any and all privatisations.

Could the Government have got more than 330p? Yes, but not much more, and at significant risk to a successful flotation.

People are objecting that institutions which took part in the flotation have sold some or all of their holding. Well why shouldn’t they if they think as I do that at 560p, at a yield of 3.7%, Royal Mail is over-priced? I simply don’t understand this fetish for long-term holders. Royal Mail is a successful flotation with a deep and liquid market in its stock and so as a result, can if needs-be raise money at a low cost of capital. Those institutions which put in for the flotation early did so at some risk. They have been paid for this risk handsomely and early, as have the 600,000 or so retail investors, many of whose holdings of 227 for which they paid £750 are worth well over £1200. I don’t regard this as a bad thing. If you think the shares were sold off cheap, you could have bought some (unless, of course you were overseas, or an MP).

Should more have been made available to retail investors? Yes. But at the cost of securing the IPO, when it was not at all clear what demand for the shares was out there. Could a different flotation mechanism be used in future – an auction perhaps? Yes but these are a great deal harder for retail clients to understand and access. And if there are to be privatisations in future, we want to allow retail clients – individual British people to take part.

These quibbles aside, the IPO was a great success, and most of the objections to it are mere left-wing cant. The risk of owning Royal Mail to the tax-payer has been reduced. You can still post a first class letter from the Scilly isles to Shetland. Private money now underpins the business, and thanks to a hugely successful flotation, the Government can, at a time of its choosing, sell some of the remaining stake for which it will get a better price. The National Audit Office made an estimate of the value to the taxpayer of keeping the company in public ownership of £1. Labour is not making much of this figure. It has been sold to people who value it significantly higher. This is why capitalist, free-market economies are richer than the kind of economy Labour MPs want: everyone is better off now the Royal Mail is privatised and no-one is worse off.

Isn’t capitalism marvellous?