UK election: A battle for the left

With the rise of Cleggophilia, the potential has been raised as to whether this election will actually be a lot more than just a hung Parliament, but a seismic shift in the fortunes of the two major explicitly leftwing political parties.

Almost all polling in the last two weeks shows Labour coming third in opinion polls of voter preferences. Notwithstanding the vagaries of polls (and the possibility that respondents may be less likely to admit to voting for the encumbents under the current circumstances), if translated into votes it will be a devastating blow. Given the allocation of current support across constituencies, and the UK having a first past the post electoral system, it would still mean the Liberal Democrats would come third in terms of number of seats.

In 2005, Labour received 36.1% of the vote and 349 seats, the Conservatives 33.2% of the vote and 210 seats, the Liberal Democrats 22.6% of the vote and 62 seats, whilst a bunch of smaller parties received 8% of the vote and 29 seats, in a Parliament of 650.

The latest poll of polls puts the Conservatives on the SAME proportion of the vote as in 2005, with around 33%, the Liberal Democrats skyrocketing to 30% and Labour slipping to 28%.

However, what this means is, with the swing spread evenly among current constituencies Labour STILL has the plurality of seats with 276, the Conservatives only increase to 245, and the Liberal Democrats increase to 100 (others have 29).

Under that scenario, Labour would have the right to form a government BUT being third would mean its moral authority to do so would be highly questionable. The Liberal Democrats would almost certainly demand electoral reform in exchange for support to either major party, but LD leader Nick Clegg has said that if Labour came third in popular vote, it would not support Labour led by Gordon Brown for government, as it would be clear that the vast majority of voters would have rejected his government. So there may be the spectre of the Liberal Democrats backing the Conservatives as the party with the highest plurality of vote, whilst Labour with the highest number of seats is in Opposition. The price of Liberal Democrat support will be clear though - it would mean a change in the electoral system (although almost certainly not to MMP like New Zealand was led to do by the hard left).

If Labour gets less than 27.6% of the vote, it will its worst result since before the Great Depression, as it managed to grab 27.6% in 1983 when it promised a hardline socialist manifesto (and the Liberal/SDP Alliance, precursor to the Liberal Democrats grabbed 25.4% of the vote).

Yet, it could be far worse for Labour. The Conservatives have shifted targets to a range of what were previously seen as "safe" Labour seats, where the Conservatives are second, on the basis that if the Labour vote seriously collapses, it could mean a significant sea change. The Conservatives implicitly see Liberal Democrat seats are unlikely to be winnable. The Liberal Democrats are also targeting Labour seats, with leader Nick Clegg saying in the Times that he wants to be Prime Minister and that "Liberalism has replaced “Labour statism” as the driving argument of the Centre Left". Of course what he means is liberal with other people's money and socially liberal, not classically liberal.

What is most important is that the Liberal Democrat leader has admitted he leads a party of the left, and he is seeking to supplant Labour as the centre-left force in British politics. While it would be a brave person to predict this will happen at the election, it would be a crucial blow to Gordon Brown and the Labour Party to find large numbers of their supporters switching to the Liberal Democrats.

The last time such a shift occurred was in 1924, when the Liberals lost a third of their vote and over two thirds of their seats, cementing Labour as the Opposition party (even though the Conservatives won most of the seats).

Such a shift would thrill the Conservatives, as they are left without major competition on the side of those who want less government and taxation (as limp wristed as they are in being committed to this), as shifting support from Labour to the Liberal Democrats increases the seats the Conservatives pick up along the way.

Personally, I doubt it will quite happen like that, but it is highly likely the Liberal Democrats could beat Labour on share of the vote, and the Conservatives may get less seats than Labour.

Oh and before the shrill self-righteous head counters (not head examiners) of the electoral reform left start shouting, the simple truth is that this is NOT an issue in the UK for anyone, besides the Liberal Democrats and a small handful. Most voters accept that the seats in Parliament won't actually be proportionate, and work within that system.

After Greece?

Portugal? Not yet but the Wall Street Journal reports "Its overall public debt is close to 80% of GDP, while's Greece's surpassed 110% of GDP last year.

The Portuguese government is slated to borrow around €20 billion to €22 billion from bond markets this year, less than half of Greece's borrowing needs". However, give it a few months and a lack of fiscal discipline.

Spain? Now that's a far bigger economy, but it has public debt at lower rates compared to GDP than the UK and France. Its problem is going to be prolonged stagnation, and unemployment at a destabilising 20%. However I wouldn't see it falling before any of the others.

Italy? As the third biggest economy in the Eurozone, this would precipitate a crisis that makes Greece look like a sideshow. Italy has serious problems, as the billionaire halfwit running the place continues to be willfully ignorant of the need to upset people by cutting spending. Italy has public debt proportionately similar to Greece, at well over 100% of GDP. Its most recent sovereign debt issue was only barely adequately covered by subscribers, meaning the next one will have to be at a higher interest rate. It has one saving grace, in that private debt levels are low as Italians have a savings culture stronger than other Eurozone countries. It is this, and the fact Japanese continue to "invest" in their government's sovereign debt, that has saved Japan from collapse (but meant the economy has been zombie like.

Ireland? It has bitten the hard pill of budget cuts, so should be safe but it still has the largest budget deficit of them all, because it decided to nationalise banks. Its recapitalisation of Anglo-Irish Bank has been classified as debt, when before the Irish government wanted to treat it as equity.

What's the verdict overall? Socialism doesn't work. It especially doesn't work if governments promise voters who expect something for nothing, and it shows the enormous damage and the costs imposed by constitutionally unrestrained governments. Governments who can overspend, and effectively issue promissory notes for debt that they issue, but have no means to repay. Governments that ever grow, that constantly offer more and more "freebies" to citizens, that grow the welfare state, that grow the bureaucracy of the unproductive, yet employed.

It is a path to absolute ruin, and it is a path that has been popular in much of Europe for some years, and a path that the UK, the US and New Zealand have also been following. Albeit all of them have had the option of devaluing their currency, effectively stealing from the holders of their currencies (in debt and savings) to enable this sovereign debt cycle to be perpetuated.

Who is accountable? No one. Politicians get 3-5 year bites at power, they get paid (and get opportunities to get paid far more afterwards), they promise to spend other people's money to get power, and the masses like children vote for it, and then wonder like imbeciles when governments eventually tell them the "good times" are over.

When government has unrestrained power to borrow on your behalf, demand you pay for its spending on its behalf, imprison you if you fail to do so, and the only restraint you have is to vote along with millions of others to change the teams, who by and large do the same with different flavours, this is what happens.

Reality evasion on a grand scale.

UK election: Evading unpleasant truths

Besides me not actually being in the UK for around a week, I've not blogged about the UK election lately because it has been an exercise in comprehensive banality largely focused by an unusual degree of hyperactive psephology.

Given that was fun just to write on its own, it is timely that the Institute of Fiscal Studies (an economics think tank that was formed in the 1960s) announced today that the three main political parties are misleading British voters of the scale of the budget deficit problem.

According to the Daily Telegraph, the IFS said ""Over the four years starting next year, Labour and the Liberal Democrats would need to deliver the deepest sustained cuts to spending on public services since the late 1970s,"

"While, starting this year, the Conservatives would need to deliver cuts to spending on public services that have not been delivered over any five-year period since the Second World War."

You see, the fundamental enormous lie they are all spreading is that the budget deficit is the highest it has ever been, by any measure, and public debt is the highest it has been, by any measure, for over a century.

This debt is, in part, because Gordon Brown decided to nationalise banks rather than let them fail, but is also because he has consistently run budget deficits over the last nine years. Borrowing, spending and hoping, so Labour could be re-elected by the people receiving the largesse stolen in advance from future taxpayers.

Most of that borrowing has not even been for the sort of infrastructure projects some economists argue produces a net positive outcome for the economy either. It has been to pay for the ever growing expansion of the welfare state in all of its forms.

Gordon Brown has tried to campaign on "business as usual". Labour, you see, "invests" its borrow stolen loot - "investing" means paying for wealthy pensioners to get free bus passes and subsidised gas and electricity. "Investing" means propping up homeowners who foolishly borrowed too much and have mortgages worth more than their properties. "Investing" means paying for new bureaucracies to run neo-Stalinist big brother checks on people who may spend time with children, vetting those without convictions or even charges. "Investing" means pouring money down the ever poorly performing ponzi style health and state pension plans. YOU can't invest of course, or rather, your children can't (since it will be them forced to pay for it). Don't be so selfish.

After all Gordon Brown saved the world, he's the genius who sold billions of pounds of Britain's gold reserves when the price of gold had been at a historic low, he abolished boom and bust. How dare mere taxpayers question him?

How can any person seriously trust this man with a piggy bank, let alone the finances of the world's sixth largest economy? Particularly when his own Treasury Secretary let it slip that the necessary cuts in state spending will be greater than that implemented under Thatcher's government in the 1980s (which frankly were modest), at the same time as Labour promises to introduce a socialised care service for the elderly.

Labour is lying and it knows it, because all it has ever offered the UK electorate, fundamentally, is to spend more of its money and to grow the role of the state. It will be cutting spending, and increasing taxes if it gets elected, because if it does not address the deficit convincingly, it will hurt the pound, the sharemarket and Britain's credit rating. However, Labour is partly expecting to lose, and is hoping to stem losses by promising to the masses to continue giving them more unearned proceeds from future taxpayers.

What about the Conservatives? Well, the only thing going for them is that they haven't wrecked the country's finances. The Conservatives say they'll be more ruthless on improving the efficiency of the state, but they too are fundamentally dishonest. They continue to promise real increases in spending on the centrally planned and "free at point of use" (so unlimited demand) state health system, and in aid to the wealthy in poor countries. They continue to promise toys like a state subsidised high speed rail line for business travellers. The Conservatives simply stopped talking about cutting spending because the lumpen-proletariat didn't like the truth, especially since Labour and the Liberal Democrats kept promising money borrowed from future taxpayers.

Taxpayers (and let's be honest, many millions who are net tax recipients), you see, appear to like being promised goodies, paid for by someone else, no doubt because past governments have treated them like children. So the Conservatives have chosen just to keep quiet.

The Liberal Democrats are having it both ways, because they claim to support deep cuts, although they also seek to increase some taxes and abolish income tax on the low paid. The net effect is not that different from Labour.

However, their cuts range, like abolishing ID cards (not much money), not replacing Britain's nuclear deterrent (not a lot year on year, but a fundamental change to foreign policy), to abolishing government subsidised Child Trust Funds. Slightly more honest? Well they would be if they were worth much, but most of what they say is the same "efficiency savings" "reduce bureaucracy" Sir Humphrey speak that is code for keeping the state as big as it is. The Liberal Democrats are largely an offshoot of the Labour Party. Given the recent celebrity style boost of the polls, the Liberal Democrats are also keeping quiet on spending cuts, as they see an opportunity to plunder Labour voters used to being promised something for nothing.

So what SHOULD be the biggest issue at this election simply isn't - it is whether the next government can avoid the UK making the same sort of failure to deal with public spending that has seen the Irish and Estonian government engage in major cuts in spending on a grand scale, and saw Greece face default.

Are the politicians just liars or is the public too stupid to understand?

UK election - Liberal Democrats, the naive protest vote

For a very brief period I thought about voting for the Liberal Democrats. Why? Because I want Labour out, and the Lib Dems came second in my constituency last time. Removing a seat from Labour is rational, but a moment of scrutiny shows the Liberal Democrats for what they are, a mediocre muddle of conflicting, contradictions, which at best is naively optimistic and at worst is peddling envy and big government.

The whole manifesto is here, but you'll fall asleep reading it. So I've compiled the highlights, it shows a party that is pulled in three different directions, socialism, environmentalism and liberalism. The result looks like a left wing more liberal version of the Labour Party.

On tax it starts looking good. The first £10,000 would be tax free for everyone. I can't oppose that, except that it isn't about cutting taxes overall. No. Capital gains tax would be increased, as would taxes on aviation (why tax aviation? Part of the environmentalist religious mantra, and helps to price the poor out of overseas holidays), and a new tax on owning a big home. The tax policy essentially benefits the middle class voters it wants to attract, while penalising the wealthier and the poorer (as the tax on aviation hurts the poorest who want to fly).

It then claims to look sensible on deficit reduction, but when you look at the detail it isn't much different from the weasel words of the other two, about more efficient procurement, reforming state sector pensions. The exception is the Liberal Democrat view on defence, which is for the UK to withdraw from the world somewhat. Scrapping Trident means phasing out Britain's nuclear deterrent over time.

However, the real danger is in the policy on banking. A new Banking Levy on all banks, would penalise the prudent as well as those bailed out, and it is a precursor to splitting up the banks. It also wants to drastically cut bank bonuses, effectively chasing the most talented in finance to Geneva, New York and Hong Kong. In other words a wholesale attack on one of Britain's leading industries, presumably to pander to middle class anger and envy about it. How can this be taken seriously? Why the hell aren't the Conservatives warning of how devastating this would be, except the fact that George Osborne hasn't a clue about the banking sector either?

Meanwhile, it might say it wants to cut the deficit, but then it seeks to made the Ponzi style state pension MORE generous. Surely not another vote bribe of the elderly paid for by more borrowing? It also extends the absurd Winter Fuel Benefit to the disabled and would give money to homeowners with homes that aren't used so they can be used for public housing. It also wants to eliminate child poverty by 2020, presumably by not leaving it to parents to look after their own kids. Increasing the welfare state at a time when it says the economy is in tatters?

It wants to expand corporate welfare by the state paying shipyards to make wind turbines? What sort of nonsense is that to put out of business existing manufacturers? It is illegal under EU competition law for the state to do that, you'd have thought since the LibDems love the EU, they might have known that.

It would set up an Infrastructure Bank to waste taxpayers' money. It sees it like a sovereign fund, except you don't establish those until you have low or no net public debt. Silliness again.

Then there is part privatisation of the Royal Mail, a sudden rush of blood to the head of common sense, rare as it may be.

Liberal? My arse. What liberal party would make it compulsory for job application forms to have NO NAMES, so people are not discriminated against for their sex or ethnic background? How the hell are you meant to interview Applicant X, or approach referees? How does that combat the suspected discrimination?

Education is largely tinkering, except for promising to abolish university tuition fees over six years. Again, the cutting the deficit idea is shown up to be bullshit.

Health is tinkering as well, although it is curious the LibDems are the only major party to not promote continued above inflation spending rises on the NHS. Although the quackery of the policy can be seen when included in health policy is opposing the 3rd runway at Heathrow Airport because it will reduce pollution and health costs. Yes, seriously.

Free speech? Well not really, not when you want to ban airbrushed images in advertising, for example. Requiring Facebook to have an online reporting function for perverts and bullies. See the trails of Nanny Statism all over the manifesto. You see it in setting maximum interest rates for credit cards, forcing rail fares to be reduced (even on overcrowded lines) and in wanting to set up a PostBank! Border exit checks add to this.

It wants to regulate supermarkets, so that they are forced to pay higher prices to farmers for food (as will everyone). Liberal? Just mercantilist protectionism.

It is in cuckoo land on energy policy to make 40% of energy renewable by 2020, which would mean a huge increase in energy bills. It would scrap nuclear power as well, and have an Australian style nationwide home insulation programme. Why? Because the LibDems are vehement about cutting CO2 emissions. It wants to spend more money on UN agencies, and to support wiping third world debt - seems bonehead Bono has got to them too. It is quiet on the EU, because it knows so many loathe the waste there, but it would strengthen European defence co-operation.

However, one policy on defence says it all about naivete. The LibDems rule out military action against Iran. It may not be a wise or a desirable move, but to completely rule it out tells Iran that Britain, at least, would not stand in its way of being a nuclear power. Why this policy even needs to be here (how many Iranians are voting?) is beyond me.

Transport isn't too important, but again it shows a childlike foolishness. It would seriously cut road spending (which isn't big anyway) to reopen closed railway lines, which would mean no road improvements and possibly more potholes and other serious deterioration of already underfunded roads. Along with banning new airport runways, and it is the typical Green "rail good, road baaad, planes baaad" religion.

Anything liberal? Well scrapping the ID card scheme is about all i can get enthused about, but the Tories say the same thing. There is an implied policy of not being so draconian on drugs, with policy based on harm, but that is barely scratching the surface. Libel laws would be reformed, innocent people's DNA removed from state databases and stop storing people's email and phone records without good cause. This is it on freedom, at the same time as regulating business and individual behaviour more, and changing taxes, but not reducing the size of the state.

Finally, it would reform the electoral system to introduce STV, and give the young and naive the vote at 16 (both would benefit the Lib Dems enormously). It would also empower local government to introduce local income tax, yes small government isn't to be found here.

It's atrocious. It is a mix of old fashioned socialist envy about banking and property ownership, lots of anti-capitalist environmentalism and hatred of certain technologies (aviation and nuclear power are notable), and a lot of tinkering, with a smidgeon of reducing state surveillance in some areas.

It could be the Labour Party without it's embracing of state surveillance, and its commitment to the defence status quo. However, it reforms very little, and in fact would cause immense damage to British business and industry, whilst gaining nothing for social services, and reducing Britain's influence in the world.

There is nothing here to excite, and quite a bit to fear. However, all the public are thinking is that Nick Clegg is a vote against both Brown and Cameron. Yet, he has enough seats and could win enough to hold a significant influence after the election.

What's next?

Well there is another debate next Thursday between the three leaders, so things may go a little different.

More importantly, Monday morning is only hours away from having the markets open and react to the high chance of a Liberal Democrat determined hung Parliament. I suspect that will tell a lot about what business thinks of the public's flirtation with the Socialist Democratic barely Liberals.

UK elections - Liberal but Democrats, so what are they this time?

I had the great fortune of missing the debate between the two men who will be Prime Minister and Nick Clegg on British TV - largely because I was on one of the last planes out of Heathrow before the volcanic ash cloud plummeted the country into environmentalist heaven.

The Liberal Democrats are deserving of attention for three reasons.

Firstly, the original "Liberal Party" once governed the UK and once proudly embraced free market capitalism and social liberalism. When it waivered from this, it moved to the centre, embraced Keynesianism and the Labour Party supplanted it as a major party, from which it has never recovered. Until the merger with the Social Democrats (a breakaway from Labour when it was avowedly Marxist).

Secondly, as the third biggest party, with 66 seats, it has the potential to be a kingmaker if neither major party wins an outright majority. This has happened last time in 1974, on that occasion the Conservatives came second, but Ted Heath tried to remain in power through support from Ulster Unionists. They had demands Heath was unwilling to agree to, so Harold Wilson from Labour formed a government with support from the Liberals, but the majority was so slim he called another election that same year. Labour won an small majority, which itself disappeared over the next few years as Labour lost by-elections and formed a pact with the Liberals. The possibility is real that this situation could be replicated.

Thirdly, with Nick Clegg allegedly the "winner" from the first leader debate, the poll ratings of the Liberal Democrats have soared. With both the Conservatives and Labour losing support to the Lib Dems, making it more of a three way race.

So should lovers of freedom embrace the presence of the Liberal Democrats, given their consistent support for civil liberties and suspicion of state interference in the rights of citizens? Or is it simply a wolf in sheep's clothing?