Having predicted difficult years ahead for the Conservatives and Liberal Democrats, almost by default I’m going to have to predict good things for Labour. In terms of voting intention polls and electoral victories they should have a good year, what matters is what they choose to do with the opportunity, to use a well worn metaphor from the past year, will they fix the roof while the sun shines?

Since the election Labour have risen from 30% to around about 40% in the polls, the majority of this increase being at the expense of the collapsing Liberal Democrat vote (there is a small amount of churn between Labour and the Conservatives, but no great shift. The overwhelming majority of people who voted Tory in 2010 would vote Tory again tomorrow).

This means that Labour are narrowly ahead in all the polls just seven months after losing the election, and it will probably get even better next year. The cuts will start to come into play with all the consequential stories of this or that bad thing being attributed to them, further sapping government support. Barring an upset in Oldham, 2011 should be a year of electoral victories for Labour. The polls in Wales suggest a very strong Labour performance there, with the party on the edge of an overall majority. Scottish polling is less regular, but they too suggest a good result for Labour. They should also make good progress in the local elections. All of this suggests Labour should enjoy some healthy leads in national voting intention polls and the way the vote was distributed in the UK at the last election, that should translate into an easy Labour majority if repeated at an election….

But, there probably won’t be an election next year. Labour’s strategy can’t afford to be based upon the assumption that the government will fall early, that the economy will still be up the spout come 2015, nor that the spending cuts will automatically bring public services to the point of total breakdown rather than being adapted to over time (of course, things could end up in utter disaster, but in that case Labour will probably win anyway regardless of what they do).

Being ahead in the polls gives a lot of advantages. The party appears on the up, people take you seriously, and it gives the leader a certain authority to act and take the party with him. Labour need to utilise this time to tackle their underlying problems so they are ready for the next election.

At present Ed Miliband’s authority in the party is uncertain because the majority of Labour’s MPs and members voted for a different leader, who was also perceived as the better leader by the public. Miliband’s current ratings in the polls are lacklustre – he already has a negative approval rating, his brother is still seen as a better option and only 27% of the public think he’s up to the job.

The worst case scenario for Labour is that Ed Miliband is their IDS – little bit awkward looking, vocal mannerism that makes it hard to take him seriously, has the right ideas about reforming the party, but fatally underminded by the fact his MPs never actually wanted him in the first place and never felt any loyalty to him.

I’m inclined to withhold judgement on Miliband so far – he hasn’t made an impression with the public, but that also means he hasn’t made a negative impression yet. Think of the rapid negative perceptions Hague built up immediately, or Michael Howard brought with him to the job. There’s still time for people to warm to Miliband – more importantly, after May 2011 he should have some victories under his belt and that will give him the aura of success. People will think more positively of him as a victor, and it should win him some loyalty amongst his MPs.

I wrote earlier in the year about the problems that resulted in Labour’s defeat in May. Gordon Brown himself had atrocious ratings, their economic record was shot and they were seen as old and tired and out of touch. Gordon Brown is a problem Labour don’t need to worry about of course, but solving the other problems is less easy and in some cases contradictory.

Building an economic reputation in opposition is nigh on impossible. We saw in my post on the Conservatives that 47% of people now think the government are handling the economy badly compared to 40% who think they are doing well. However, ask people if they trust Labour or the Conservatives on the economy and the Tories still come out top.

On this front Labour also need to worry about the narrative the coalition government build around them. In 1997 Labour successfully painted the narrative of Conservative years of boom and bust and chronic underfunding of public services. The Conservatives will want to paint their own narrative of the last Labour government, of reckless spending pushing the country to the verge of bankrupcy, and have had some success in doing so: 60% think Labour haven’t faced up to the damage they did to the economy, 47% that if Labour returned to government they’d put the country into even more debt. Labour can argue with that, try to put forward their case for the last goverment’s economic record…but that conflicts with trying to distance themselves from Gordon Brown and the last Labour government.

How Labour respond to the cuts may be the trickiest. There will be pressure upon Miliband to simply oppose all the cuts and reap the rewards of public unhappiness. This may be superfluous anyway, as the only main opposition party, Labour are going to benefit from public unhappiness at cuts whatever, but it would bring with it its own risks – it can be portrayed as Labour not having their own plan, running away from hard decisions and, worst of all, raises the question of what happens if the cuts work… if the economy comes back on track, and public services don’t collapse?

On one hand, Labour are in opposition and by the time of the next general election the deficit will probably have been addressed. It’s not the opposition’s job to govern, and there’s no point Miliband tying himself into an inevitably tricky policy on a problem that someone else has the unenviable task of solving. On the other hand, if they don’t put forward some sort of coherent stance they will firstly be mocked for it, but more importantly, the government will invent a stance for them. If Labour don’t define themselves, then come the next election the Conservatives will paint the choice as being “the party that took the hard but necessary decisions while Labour suggested nothing” or “the party that took the steps needed to bring the economy back to health, opposed at every step by Labour”. It would fall on fertile ground: if you look again at the YouGov trackers on party image, the Tories have an overwhelming lead (58% to 10%) on the perception that their “leaders are prepared to take tough and unpopular decisions.”

Then there is the fairness agenda, this is the Conservatives’ great weakness. As I wrote in the first of these pieces, polls show people increasingly think the cuts are unfair and many still see the Tories as a party that puts the rich and affluent first. That’s an open door that Labour can push at. However, in order to win Labour need to appeal to middle class and aspirational voters. YouGov polling in August found Labour was seen as being closest to trade unions, to benefit claimants and to immigrants, with comparatively few people seeing them as close to the middle classes or people in the South. In opposing the cuts Labour mustn’t allow themselves to become too closely associated with the benefit recipients losing out from cuts, or the trade unions striking against them (hence, of course, Ed Miliband’s focus on the “squeezed middle”)

Finally Labour have to make themselves seem renewed and relevant again. It will be easy for Labour to say what they are against, trickier to say what they are for.

The short term position for Labour is good, and will get even better next year. It may be that the economy sours and they have an easy ride back to power. If not though, they have an awful lot of hard work to do – Ed Miliband needs to ensure that the relative ease with which the party has re-established a lead in the poll doesn’t lead them to think that it’s in the bag. The good news for Labour is they have the luxury of being able to do all the work from the position of an opinion poll lead.


413 Responses to “End of year round up – Labour”

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  1. @ Neil A

    I don’t really remember any promises Cameron made either (apart from the usually vague “make britain a safer place…blah… secure the economy…blah… whiter snow at christmas” – okay points to him for the last one ;))

    Intriguingly, though, he did say, back in 2005, that he was opposed to tuition fees and would get rid of them.

  2. Colin
    Your 10.41am post is very good analysis, IMO.

    Billy Bob
    “Cecil Parkinson, a week or two back was highlighting … that no one seems to know how to wind-down or dismantle the coalition.”

    Some readers may recall that within two weeks of the formation of the coalition I was questioning how the LDs could extricate themselves from it before the next GE. IMO, this issue should have been uppermost in the minds of NC and the LDs and guided their action/decision.

    Howard
    Ah, makes sense now.
    I’d imbibed a little too much port yesterday and later in the evening realised I needed to review, revisit and revise my postings.
    …………………………………………….
    General observation..
    I am now convinced the LDs will fracture.. A part will be swallowed or subsumed into the Cons. and the rest will align with Lab. When is the question…IMO, this year if the LD result in Old and Sad is poor, the local council elections in May are bad, the AV referendum is lost. There will be people in the LDs who will then decide enough is enough and they will want to save what remains of their party. But perhaps they don’t care or like rabbits are immobilised by fear by car headlights…

  3. @Colin – “Despite all the noises off, I can’t see any real sign of schism in the Con side. They are the majority party in the coalition after all.”

    That’s interesting, as the Telegraph (I know – take this with caution) reported over the weekend that Tory rebels are working with Labour and look set to deliver a government defeat in the upcoming vote on the EU. It seems that the bill to guarantee a referendum on any future treaties has been badly drafted and the Tory right are up in arms and looking to give their leader a slap. Labour are reporting that they are very close to the rebels position and an agreement on an embarrasing amendment is very close. If DC is defeated it will be a real cause for alarm – he’ll have to start to distance himself a little from Lib Dem discontents, bringing in turn further problems there.

    I think the problems for the coalition are deep and fundamental – between and within both sides. The new Tory intake is not pro Cameron and not moderate, as some here predicted pre election. His policy of selecting A listers has also backfired, in the sense that as these people are not the usual journeymen backbench MPs of old (‘lobby fodder’ springs to mind) but have other lives and careers to go back to, they are much less controllable as they can stick two fingers up to their party and go back to earning better money elsewhere if they wish.

    Re VAT – the £400 pw spending figure to get a £7.50 a week hit seems high at first, until you think that this equates to an annual spend of £20,000. Although apparently high, once you think about buying a car or a £4,000 rail season ticket, a family holiday, some furniture, petrol, etc it gets to be more reasonable, if still a little high.

    I can’t help feeling using VAT for deficit reduction now is a mistake. It feeds immediately into higher inflation at a really difficult time as well as surpressing spending just when we need to boost confidence.

    My long held view is that while raising VAT may have a place in the overall deficit reduction plan at some stage, it should have been delayed until the economy is less shaky. Right now we need to be looking for measures that raise revenue without having such an immediate impact on the broader economy.

    Temporary measures to restrict things like pension tax relief and/or increases in inheritance tax and taxes on certain assets could have yeilded some short term income without so much impact on spending, to be replaced by increased VAT in two or three years time when spending could cope with the rise and inflation is less of a threat.

  4. Mike N

    What actual evidence from within the LDs do you have of any fracture? Most of us in the Lib Dems painfully aware of what would happen under a breakup scenario to the pursuit of our party’s objectives – namely a fairer and freer society led by democratic forces rather than one enslaved to either big business (the Tory agenda), the trade unions and public sector interests (Labour) or any other corporate body.

    Given the dreadful economic legacy of Labour, with public finances in meltdown, and the paltry 8% of MPs we got for 23% share of the vote, none of us underestimates the challenges we face. They are huge. But to say that we are going to abandon our role in government after decades of electoral exile enforced by our corrupt and downright undemocratic electoral system is complete madness. Why would we want to do anything of the sort? We are already hugely unpopular, so we might as well stick with it to make sure the things we did get written into the coalition agreement are put in place. I think most other Lib Dems would agree.

  5. @ ROBERTC

    “We are already hugely unpopular, so we might as well stick with it to make sure the things we did get written into the coalition agreement are put in place. I think most other Lib Dems would agree.”

    I think so too Robert.

    I sincerely hope that “most other LibDEms agree” too.

    But LibDEm supporters have expressed their opinion in large numbers-and it amounts to “goodbye”

    LibDem MPs, including Ministers, have made it clear that they are unhappy working with Tories.

    I took those revelations as a sign that LDs were unreliable as a partner in government. I mean that in a practical sense-from DC’s point of view -not a critical sense-LDs are entitled to their own viewpoint.
    But after the lengthy parade of all that LD party democratic process, those episodes shook my faith in their real conviction in a coalition which I believe in.

    I hope you are right.
    I think LD MPs should take your advice.

    But I now have severe doubts that they will ( the SocDems anyway) -& in fairness to them the pressures being exerted by the OPs must be severe.

  6. Robert C
    Interesting comments…

    There is currently no fracture in or of the LDs. But there appears to be a schism growing.

    I may be wrong with my reading of your comments but I interpret them to be “who cares what happens to the LD party, we’re in gov for the first time in many years, we’re getting some things we want done, so let’s not worry about tomorrow and what it will hold for the LD party”.

    A while back LDs claimed that being in coalition served to limit the right-wing tendency of the Cons; that the people wanted a coaltion gove; that it was in the national interest and that strong stable gov was needed.

    I suggest LDs will soon run out of arguments to justify their support of being in coalition.

  7. Alec

    THanks.

    THere will be disagreement, adjustments, U turns even.
    But I don’t think Cons will schism.

    I think EM’s VAT effect number is nonsense-which is why he would only defend it by pinning it on NC-the whole thing is a wind up.

    You don’t by furniture & new TVs every year. Even the things that EM quoted in his ridiculous speech included stuff you don’t need t buy-like CDs.

    Many people have been living above their means Alec for a long time-its time to retrench a little. Foreign Holidays, PLasma TVs, New Furniture & the like are a matter of choice-not neccessity.

    In the three months to the end of September 2010 homeowners reduced their mortgage debt by a further £6.1 billion, and this reflected the tenth quarter in a row where mortgage repayments were greater than the level of new borrowing. The figure for the third quarter of 2010 was also the highest seen since the start of 2009,

    People-sensible people anyway-are pulling their horns in-reducing their debts.

    I think some retail sectors will be absorbing this VAT increase-reducing prices even, as they feel the effect of consumer retrenchment .

    I think EM’s figure is complete baloney-but it wasn’t meant to be serious-it was just another dig at NC.

  8. Colin
    You make sensible points, but to your comment that “…it was just another dig at NC..) I would add that it is also timely and will remind voters in Old & Sad.

  9. MIKEN

    Thanks

    I understand the point of the remark-totally political.

    I was trying to get Alec-who appears to think the £500 pa effect actually stacks up-to understand that.

  10. @ Colin

    I fully agree with EM’s intentions with these figures and I also agree that people will adjust their spending, but the figure is not outlandish.

    In the 2009 (that’s in the recession) consumer basket those items that carry VAT the following were around 85% of spending. The mean average of family spending was £450 and that’s down by £40 from 2008. Those households where the reference person was aged 30 to 49 spent the most on average at £558.80 a week.

    Transport was £58.40 a week of this was only £19.50 on purchase of vehicles,

    Recreation and culture was at £57.90 a week (the cutback here was £4 from 2008). This includes TVs, computers, newspapers, books, leisure activities and package holidays (only £12.30). In my view in 2011 in the UK or any developed countries these are entitlements – or we need more libraries, etc.

    Food and non-alcoholic drink purchases contributed £52.20 (VAT free, but not all of it)

    Even if we consider further reduction in some non-essential purchases, EM’s figure makes sense or rather NC’s figure makes sense.

    Or are you suggesting that people would accept more than 20% reduction in their standards of living next year? Because this is what you are claiming…

  11. Correction:

    I fully agree with you Colin on EM’s intention…

  12. @ Laszlo

    “This includes TVs, computers, newspapers, books, leisure activities and package holidays . In my view in 2011 in the UK or any developed countries these are entitlements ”

    Then you & I have very different ideas about what is an “entitlement” Laszlo.

  13. @ Colin

    Could be the case…

  14. Laszlo

    I think “priorities” is a good word too.

    Perhaps a more helpful word than “entitlement” in considering hosehold expenditure.

  15. @ Colin

    “I think “priorities” is a good word too.”

    Sure. Whose priority?

  16. OK Laszlo-you made me do the research-thanks.

    I see where NC/EM get the £7pw from now-but the detail is so revealing:-

    Same source as you-ONS-£455pw household average.

    Analysis :-
    455-Total
    – 19-minus new vehicles-not a regular purchase.
    -52-minus Food-VAT Zero rated by & large
    -57-minus House Fuel & Power -still 5% VAT I think.
    ____
    327-Balance-VATable
    ____

    Made up of :-
    39 Transport ( excl new cars)
    20 Clothing
    13 Communications
    28 Household goods & services
    9 Education
    5 Health
    35 Misc
    58 Recreation & Culture *
    38 Restaurants & Hotels*
    12 Alchohol & tobacco*
    70-not specified
    ___
    327
    __

    So-VAT increase is 2.5/117.5=2.13% = £7 pw

    ( Well done NC & EM :-) )

    Now-add the asterisked items-not exactly essentials are they-not in extremis Laszlo ?

    They come to £108 pw

    So to avoid that £7 pw -this household could reduce those three expenditures by 6.5%…….that shouldn’t be too hard should it?.

    And if we include the “not specified ” item as non-essential too-the reduction needed is 4% !!

    Like I said Laszlo-Priorities.

    Now then-does this look to you like a poor family?-a struggling family-with those sort of spend options?

    EM ( nor NC before him !) didn’t mention what sort family spending pattern & options produced that £7pw.did they ?

    Substitute a bigger food & clothing bill-and ditch that eating out & leisure spend-and maybe you get a bit nearer to a family with children ….but then that £7 VAT bill falls.

    LIke I said Laszlo-it’s just political- its an EM con trick -to try & win a Byelection.

  17. @ Colin – “its time to retrench a little.”

    It’s certainly what I intend to do.

    However, if we all pull our horns in, say reduce our spending on non- essentials by 2.5%, then it cancels out any deficit reducing benefit of the VAT rise and the government is no better off, in fact back we’re back where we started.

    Happy New Year all :-)

  18. Woodsman

    The people who really pay VAT will not bat an eyelid.

    You will still see them in Comet, buying those £800 TV systems……another £16 on top?-not a problem if that TV is your priority.

    The people who replace their car every year.

    The people for whom food comes from restaurants.

    The people who can afford a foreign holiday -or three.

    Don’t worry-GO will collect -some of it anyway :-)

  19. All of this doesn’t even mention the obvious point, which is that Labour would almost certainly have raised VAT themselves in the event of winning the election.

    Of course, the Reds here will deny this absolutely, along with any other policy they’re now criticising the coalition for. But that sort of fantasy politics, whilst the prerogative of opposition parties, shouldn’t really form the basis for discussions in such an elevated forum.

  20. Neil A

    I agree with your first para.

    I disagree with your last sentence-I thought it most interesting & revealing.

  21. @Colin,

    Well, yes, I take your point. We can discuss the stunts people pull, in the context of the likely impact if any on the polls.

  22. @ Colin

    Ed M is simply making the point that the Dems had a big poster campaign about not increasing VAT.

    I am dearly hoping that the Dem & Tory candidates follow your advice & exhort people to spend less, change their priorities etc.

    People really dislike being told by government to change their priorities – to do without a bottle of table wine & a foreign holiday. Especially when the chancellor is reportedly quaffing champagne at Klosters. ;-)

  23. “Especially when the chancellor is reportedly quaffing champagne at Klosters. ”

    Ah yes, the man who said we’re all in this together I believe?

  24. Sorry to take so long to reply re: my comment that the economy is in trouble. The counter claim that UK GDP has grown by 2.7% over the last year must be set against inflation of 3% or more over the same period. In real terms the UK economy has therefore shrunk by 0.3% – most of this since the Coalition policies started to have an effect.

    Interesting to see the Daily Express lining up behind Ed Milliband & Alan Johnson – all calling for the VAT rise to be abandoned or delayed.

    So we can look forward to 2011 having a very poor start – the CBI figure of 0.1 to 0.2% growth is probably correct, which again means a real terms contraction of output, which will be coupled with lower High Street spending, and thus lower output. A weak £ will help exports (my company had a nice manufacturing export order early last year for Thailand ), but the Eurozone looks as though it is weakening as well.

    This is not the time to be implementing deflationary policies, or implementing tax rises that reduce consumer spending

  25. @ Neil A

    See what I did, I discussed the likely effect of Colin’s strategy on the polls before I even read your comment.
    :-)

    And – I would’ve used Furthermore but And is shorter & usually better in a speech; furthermore can sound pompous, when spoken aloud, Howard – of course you are correct about Labour & taxes. Had it not been a Vat increase, it would have had to be some other tax(es). Labour have always said they’d raise more from taxes & cut spending less.

    Labour would say that the taxes would have been much fairer, burdened those more able to afford it etc. but there definitely would be tax increases.
    8-)

  26. @ Eric Goodyear

    In real terms the UK economy has therefore shrunk by 0.3% (Eric’s point).
    —————————————————————
    Are you certain that GDP % is not inflation adjusted? I am asking because I can’t remember off the top of my head. If you aren’t certain about this, I’ll do some reading to remind myself!
    8-)

  27. Also Amber as per Alec Labour would have raised taxes later so we are back to the discussion about pace and strategy for deficit reduction. (Supermac 1981 Budget and all that)
    I also think the ‘fairness’ argument is playing here which will be a constant opposition theme til the next GE. VAT increases regressive I think or at least not as progressive as alternatives, others with more knowledge may be able to assist?

  28. John B Dick

    I remember your “gift” of a list of New Labour defects in Local Government. And*, I remember thinking that Labour in Ayrshire and other bits of West Central Scotland are neither Old nor New, Socialist nor Capitalist, Nationalist nor Unionist. Many are simply Machinists – they joined a machine, to allow the machine to project them into positions of power/influence, hence they advocate the continuation of the machine.

    I have known many honourable exceptions to that rule. Alas, they tend to be my age or older.

    * “And” at the beginning of a sentence was beautifully described by Ernest Gowers in his 1965 revision of Fowler (and after I had ceased the barren practice of parsing)

    “That it is a solecism to begin a sentence with and is a faintly lingering superstition. The OED gives examples ranging from the 10th to the 19th c.; the Bible is full of them.”

    I love the term “faintly lingering superstition” – it seems so appropriate to use it on a site devoted to evidence, as a basis for declaration! :-)

  29. @ OldNat

    Yeah – but the Bible is poorly written sh*t ;)

  30. Billy

    Those with little confidence in their own judgment still cling to “faintly lingering superstitions”.

    According to taste, these might be –

    The Bible
    Political parties
    Syntactic Analysis
    Ghosts
    BBC impartiality
    etc

  31. There is a general assumption on this site that Labour will easily win the Oldham East by-election. However, even assuming that there is a significant anti-government swing, the reason for the by-election (illegal campaign tactics by the previous Labour candidate), and the existence of a substantial 3rd party vote at the recent GE, makes this outcome much less certain, particularly if there is tactical voting. These were the votes cast at the last GE:

    Phil Woolas – Labour 14,186 (31.9%)
    Elwyn Watkins – Liberal Democrat 14,083 (31.6%)
    Kashif Ali – Conservative 11,773 (26.4%)
    Alwyn Stott – British National Party 2,546 (5.7%)
    David Bentley – UK Independence Party 1,720 (3.9%)
    Gulzar Nazir – Christian Party 212 (0.5%)

    The parties forming the current government thus had a 58% share of the vote.

  32. @ OldNat

    Safe to say I don’t have any of those ‘faintly lingering superstitions’ – I would have added ‘optimism’ to the list as well, as well as ‘referees aren’t biased’ :)

  33. @ DAODAO

    I’m claiming exemption from “the general assumption”.

    I already said that the Dems are at the front of the grid in O&S, regardless of the bookies’ odds.

    Obviously, I’d be very happy were Labour to win but objectively, it is more likely to be the Dems. A Labour win would very much depend on a large contingent of anti-coalition Conservatives in O&S declining to vote tactically for a Dem.
    8-)

  34. DAODAO

    “The parties forming the current government thus had a 58% share of the vote.”

    I have no knowledge of the dynamics of political support in Old & Sad, and I suspect your post has not lessened my ignorance.

    Since none of the voters there knew that a coalition between Con & LD would emerge to run UK and English politics, the voting patterns then seem fairly meaningless. I would be surprised if the percentage of voters who are loyal to a party label in that constituency is higher than elsewhere.

    In the absence of evidence that they are, any such belief is probably best described as the kind of “faintly lingering superstition”, commonly used by political partisans.

  35. @ Old Nat

    And I still believe in my crystal ball. ;-)

  36. Amber

    And I still believe that partisan supporters of particular groups of politicians try to spin expectations before elections.

    While that may require crystals, it does not require balls. :-)

  37. @Eric Goodyer/ Amber

    ‘Are you certain that GDP % is not inflation adjusted?’

    I’m with Amber on this as I think that the figures quoted are the inflation adjusted Real GDP numbers rather than the Nominal ones. The adjustor used is the GDP deflator rather than the more domestic CPI.

  38. @ Colin

    I fully agreed with you on EM’s intention and probably Labour would have increased VAT too – indirect taxation is a way to get around taxation problems, though it should have been an anathema for all LibDems – they fought many, many years against it.

    I do think that recreation and culture is essential, but it is a question of priorities. To my mind in a civilised societies these are essential, to you they are not and there is no compromise here, but two different view of the world, society whatever. And I don’t think it is extremism to say that excluding people from the knowledge and comfort accumulated over generations is withdrawal of acquired rights.

    Oddly, I use to have a handbook on how income support was calculated. It did not include books, but it included things like wireless. It also calculated how many bar of soaps the poor should consume (hopefully it did not drop in the bathwater and melted away quickly). There were special allowances for emptying cesspits (in rural areas only, mind you) and special vegetable allowances for people with peptic ulcers. So there you have priorities too.

    I also think that it would be a shame on the UK if the family holiday would be a trip to Hoylake beach with a thermal bottle of tea and bread and butter (as it was a commonplace for Liverpool working class in the 1960s). This is not too far from your recommendation. My mother-in-law would not have agreed with you (as she actually experienced it), but it’s just different opinion.

    In reality household budgets are so stretched, that there is no real savings opportunity without giving up things that appears to be acquired rights to them and because of the peer presssure, unlikely that people could give much up anyway. Just look at the figures you put up from the family survey.

    In economic terms, if what you said should happen there would be an economic catastrophe or a popular uprising. Take your choice.

    Yet, I agree with the core of your argument – not on people’s behaviour, because I honestly think you are wrong – but on the economic meaning of the current situation: we will see significant and enduring reduction in people’s living standards and increasing psychological disturbances in large sways of the population. It is ONE way of getting out of the nightmare where we are.

  39. @ Old Nat

    LOL :-)

  40. @ Amber

    “Ed M is simply making the point that the Dems had a big poster campaign about not increasing VAT”

    Yep. I watched his speech on TV.

    He said people should vote for his candidate because she would keep her promises.

    He didn’t say what they were though-hope the folks in Old & Sad do ;-)

  41. Interesting rumour on Facebook. Imminent poll results for Oldham indicating Lib Dems a clear 1st, Labour 2nd and Tories a close 3rd.

    Ed M expected to be under a lot of pressure if Labour loses the seat.

  42. @ Eric Goodyer/ Amber/Aleksandar

    The 3Q of 2010 figures are down by almost 4% from 1Q of 2008 in constant prices (and that uses GDP deflator).

  43. Laszlo

    “I do think that recreation and culture is essential, but it is a question of priorities. To my mind in a civilised societies these are essential, to you they are not ”

    Wrong-I didn’t say that-or mean it.

    We were discussing the disposition of disposable income.
    Clearly ones spending is limited by it -or perhaps we might say “should be” !
    Therefore everyone makes choices-but they can be about degree of participation.

    I can’t afford Mr Osbornes holiday in Klosters-so I choose something I can afford.
    I can’t afford to go to Covent Garden-but I can afford a DVD of it -or a trip to my local theatre.
    Museums & Libraries are available to me too.
    Books are reasonably cheap, as is the cinema.

    I can’t afford a day at Wimbledon, but I can watch it on TV-and go to the local beach, and walk on the Weald.

    You seem to deal in abslutes Laszlo.

    Of course recreation & culture is essential. It is available to all & it doesn’t have to cost a given sum.

    I agree with you that we will see a reduction in living standards.
    And the reduction won’t be evenly distributed-and you will think that unfair-& I might agree with you.
    Some might say that those living standards-supported as they were by record personal debt levels-were at worst illusory, at best unsustainable. In which case we should not be surprised that they will fall.

    Ed Miliband said that the “average” family would see a VAT increase of £7 pw. He failed to explain that the model weekly spend on which that is based is for a family who have ample leeway to mitigate it from a slight reduction in their discretionary spend.

    I would have had much more respect for him ( & NC before him) if he had spoken for families who will see a VAT increase of £2 or£3 pw, for whom there is no means of mitigation, because their major costs are on Food & Energy, which are subject to very large price rises.

  44. Mike

    Imminent from whom?-do you know?

    That sounds very interesting.

  45. @ Colin

    A poll from Surveyance is expected, Anthony mentioned it. I’m wondering if this is the source of the rumour.
    8-)

  46. COLIN

    I don’t know but Mike Smithson on Political Betting has previously advised “Survation” expected to publish a poll early this week.

  47. @Alec

    ‘Temporary measures to restrict things like pension tax relief and/or increases in inheritance tax and taxes on certain assets’

    I am in total agreement with you about restricting pension tax relief as it largely benefits those whom least need tax relief. Why only temporary?

    Inheritance tax is a political issue rather than a practical one. The tax take last year was £2.4bn so even raising the rate to 100% would only raise another £3.6bn unless you plan to increase the mortality rate until your VAT rise comes in. A more realistic rate of 50% would only yield an extra £600m. This compares with around £12bn from the VAT rise.

    The sums due last year for various taxes are in £bn:

    Income tax -140, NI – 96, VAT-70, Council tax and business rates -49, Fuel duty-26, Sin taxes -18, corporation tax -36, Stamp duties -8.
    CGT-2.2, Inheritance-2.4. Insurance premium tax-2.4.

    The heavy lifting for central govt is done by the taxes on income and on sales. The rest are just govts moving the deckchairs around.

  48. According to the website of TRading Economics.com-quoting UK ONS a a source , these are the “UK GDP GRowth rates, for Annual GDP growth Adjusted by inflation” :-

    % change
    2008
    Q1 +0.5
    Q2 -0.3
    Q3 -0.9
    Q4 -2.0
    2009
    Q1 -2.4
    Q2 -0.7
    Q3 –0.2
    Q4 + 0.4
    2010
    Q1 +0.3
    Q2 +1.1

    ( Amber-thanks)

  49. Mike

    Thanks

  50. Aleksandar

    Thanks for those tax take figures. To save me looking them up, do all of them apply to the total tax take for every part of the UK – or only those which go directly to the Exchequer in London?

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