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. @ Old Nat

    “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.”

    I agree. I don’t think that voting preferences for individual parties can be combined in that way.

    I think where the seat could be close and where it could be swung is if the Lib Dems hold up in their vote and the Tories, at the urging of David Cameron and others, vote tactically for the Lib Dem candidate, the Lib Dems could win. Or that the race will be a very close fought thing.

    This conversation reminds me of an online shouting match I got into once with a Democratic partisan from Nebraska who boasted of great success in the 2006 midterms by claiming that the Democrats had received more Congressional votes than the Republicans had despite the Republicans winning all three of the state’s Congressional seats (he was trying to bring in numbers from another race and mix them together and despite my very kind and polite explanation of why he was wrong……he lambasted me, lol).

  2. SoCalLiberal

    Democrats disagreeing? Heaven forfend! :-)

    From my limited knowledge of English political dynamics, your analysis of how the LDs might win seems perfectly feasible.

    In the absence of any definitive data, one could construct equally persuasive structures under which the Tories or Labour might win as well, though.

    However, since the result could have no conceivable importance to anyone (other than the voters of Old & Sad, who may need to rely on the assistance of the successful candidate’s staff to get them through the bureaucracy of Westminster) the rest of us can at least hope that someone interesting and funny is elected.

  3. @ Old Nat

    “I see on the news that your freeways closed due to snow.

    Did your media demand the resignation of your politician in charge of transport?”

    How ironic that you ask. I just returned this afternoon from a short trip out to the desert, very relaxing. The freeways were not closed in my neck of the woods (there was some drizzle driving out of the desert and into the mountains but it cleared up quickly). To answer your question, no.

    I don’t know though if we even have a politician in charge of transportation. I would imagine that the head of CalTrans would be responsible in California but I doubt he’d get blamed. Usually, whoever happens to be the elected executive of a jurisdiction (usually a mayor or a governor) gets blamed if snow cleanup efforts are a complete mess. Michael Bloomberg is getting heavily criticized for his response to the current massive snow storm in New York City. Last year during Snowmageddon in Washington, DC, then mayor Adrian Fenty was heavily damaged by his poor response to the snowstorm. I guess that’s the benefit of a parliamentary system, there’s always some government minister or cabinet secretary to blame. :) I don’t think anyone will get blamed here anyway, we just swore in our new governor today (Moonbeam). It feels good to have a real governor again. :)

  4. @ Old Nat

    “Democrats disagreeing? Heaven forfend!”

    You know, this was at Daily Kos (where my blogger name comes from) and there was a time when I would go there to read this great enlightened political analysis of U.S. politics and people would share stories and strategies about fighting against the GOP. And then we’d share some personal stuff intertwined in politics. But then the site got popular and very radical and now it’s kinda regressed further into a good mix of stupid/manic depressive. Many of the old bloggers there have actually left. In any case, this guy was trying to say that since the Democratic Senate candidate had won overwhelmingly (a conservative incumbent, he ran practically unopposed), he could mix the votes together. I explained that it was like mixing apples and oranges and didn’t paint an accurate picture. I touched a nerve. I’m more of a liberal than a Democrat. I would have registered “Decline to State” (which is Californian for “Independent”) if it wasn’t for the fact that at the time I first registered to vote, every pundit was writing the obituary or giving the last rights to the Democrats and people were claiming that California was about to go steeply to the right and that Democratic registration was dropping. So I registered to show support. But in any case, it is one thing to be a partisan and cheer on your team, but it’s quite another to claim victories you don’t have and to just make up stuff. I’m a liberal, not an idiot. I am all for being partisan, hopeful, and optimistic (even in the worst of circumstances) but I have a thing about staying reality based.

  5. Congratulations on getting Brown back. (I can say that in a Californian context : I might even have said that in a UK context :-) )

    CBS News perhaps only a vague geographical concept of what “Southern” California means. You’ll have to excuse those of us who get their news filtered through media who really should know better.

    I wondered about your media, only because I observed with interest (while I was in NC), BBC Scotland baying for the blood of the Scottish Transport Minister, and the interesting silence of their London compatriots with regard to the English one while Heathrow was shut down.

  6. SoCalLiberal

    I used to read the Daily Kos quite often – if only to find good quotes to throw at my NYT reading brother.

    Sad to hear that it has degenerated.

  7. @ Old Nat

    “From my limited knowledge of English political dynamics, your analysis of how the LDs might win seems perfectly feasible.

    In the absence of any definitive data, one could construct equally persuasive structures under which the Tories or Labour might win as well, though.”

    The national polls would indicate that this race would be a cakewalk for Labour. Afterall, Labour held this seat in the worst possible circumstances in May 2010. With the Tories stagnant, the Lib Dems collapsing, and Labour surging, it would seem that if the national polling is replicated, Labour will win and perhaps comfortably.

    But if Tory voters are willing to cross over and if the Lib Dems hold steady with their supporters, the Lib Dems could hold the seat. That presumes a couple of things:

    1. Tories are willing to vote tactically. This is problematic because (1) Tories typically don’t tend to tactically vote, (2) apparently a lot of Tories have an even greater visceral dislike for Liberals than they do for Labour, and (3) this is a three way marginal seat, not a Lib-Lab marginal. If I’m a proud Tory, why would I want to vote for a Lib Dem in a seat where the Tories were only a few percentage points behind. And if I am a proud Tory who doesn’t agree with Labour but have a real hatred of the Lib Dems, why would I vote for someone I hate to keep out someone who I don’t agree with but don’t neccessarily hate? Because David Cameron says so? I’m not sure that will work.

    2. Lib Dems will stick with their candidate. Even if Lib Dems don’t swing over to Labour, might they stay home and not vote?

    3. Labour won’t improve on their 2010 result. There aren’t some people who typically vote Labour who voted Tory or Lib Dem in 2010 to give Labour a time out.

  8. @ Old Nat

    “Congratulations on getting Brown back. (I can say that in a Californian context : I might even have said that in a UK context )

    CBS News perhaps only a vague geographical concept of what “Southern” California means. You’ll have to excuse those of us who get their news filtered through media who really should know better.

    I wondered about your media, only because I observed with interest (while I was in NC), BBC Scotland baying for the blood of the Scottish Transport Minister, and the interesting silence of their London compatriots with regard to the English one while Heathrow was shut down.”

    Lol, I’m not really thrilled about this. I’d rather of Gordon than Moonbeam. I did vote for him though (if only because the last thing we need is a know-it-all megabucks businessperson attempt to run the state and fail miserably and because of his decision not to appeal the federal decision on Prop 8). So I hope he does well. I’m more excited about Kamala Harris.

    Southern Californians don’t always agree on the geographical boundaries of Southern California. I, for example, argue that Santa Barbara County and San luis Obispo County are in Southern California. Some Santa Barbarans have told me they’re not in Southern California but instead are on the Central Coast. I know a highway that leads up to Big Bear was shut down last week because rainstorms completely washed it out (literally, the roadway fell off a cliff) and that may be considered Southern California and I would not be surprised if any freeways leading up there were shut due to snow.

  9. SoCalLiberal

    “The national polls would indicate that this race would be a cakewalk for Labour.”

    Every election is about the narrative that is constructed in the minds of the electors.

    Is the narrative for any elector going to be “this election matters?”

    What percentage of the electors there are going to care about giving a “message” to politicians at this stage of a new Parliament?

    How many of them were offended by Woolas’s offence? How many of them were offended that a “good Labour man” should lose his seat for racism/lying/whatever?
    How many voters that Woolas attracted will go back to their natural home among the extreme racist right?

    “National” (ie GB – ie English) polls don’t mean very much in an individual constituency unless the electorate is roughly similar to the English norm – that doesn’t seem to be the case in Old and Sad.

  10. @ Old Nat

    “I used to read the Daily Kos quite often – if only to find good quotes to throw at my NYT reading brother.

    Sad to hear that it has degenerated.”

    I still pop in to read stuff and occassionally post. It’s good for getting the latest polling and big news. I write a diary about once a year. I am sad to see it degenerate too.

    Of course, any discussion of UK politics is tempered with a blanket statement about how all Dems would vote Tory if they lived in the UK. I don’t think this is true actually. Besides, anyone who studies U.S. history will notices that the Prime Ministers and political leaders who fought hard against the Revolution and the early U.S. were either Tories or Lib Dems (then known as Whigs). There were no Labour MPs (or SNP MPs for that matter) advocating for crushing the Revolution or bringing the colonies back into the British Empire. So in that way, all Americans are aligned with Labour (as well as the SNP and Plaid Cymru). J/k. :)-

  11. SoCalLiberal

    “Southern Californians don’t always agree on the geographical boundaries of Southern California.”

    Don’t knock the capitalist opportunities of that. My son made a significant profit in Glasgow by buying a property labelled “Central”, when it was obvious that it was soon going to be relabelled “West End”.

    The limits of his financial acumen, however, were demonstrated when he moved to the US and blew the real estate profit on a car built in Detroit!

  12. @ Old Nat

    “Every election is about the narrative that is constructed in the minds of the electors.”

    I agree. I actually have to run out now (meeting my brother for dinner). But I will continue this discussion with you later.

    The way I have come to understand a parliamentary election in how an individual candidate helps is to look at local Democratic or Republican clubs holding meetings for endorsements of candidates in political races (primaries I should say). Usually, the candidates themselves don’t appear at these things and they send surrogates. A surrogate can be the best speaker at one of these events and completely outshine every other surrogate but that won’t win an endorsement because the members voting to endorse are voting for the candidate, not the surrogate. I think of parliamentary candidates being surrogates by and large for their party leaders. A small English child once explained to me how he understood the system to work back in 2001. His family lived in Hampstead and Highgate and he said “Glenda Jackson is our MP, she goes in for Tony Blair.”

  13. SoCalLiberal

    “There were no Labour MPs (or SNP MPs for that matter) advocating for crushing the Revolution or bringing the colonies back into the British Empire.”

    That’s because so many Scots had gone to the US and were busy writing the Declaration of Independence, or one of your Constitutions.

    They might have stayed here, and set us free, if they had known that your roads would fall into the Pacific Ocean! :-0

  14. SoCalLiberal

    Off to bed, so will catch up with you later.

    Your story about Glenda Jackson, however, raises a question about the system.

    What good does it do anybody for a superb actress to desert her profession in order to become lobby fodder as good as (and no better than) the most corrupt and useful ex-councillor from Scotland to have crawled, greased and manipulated his way to a Westminster seat?

  15. @Colin – “I was trying to get Alec-who appears to think the £500 pa effect actually stacks up-to understand that.”

    I discussed the £7 pw VAT figure by gut feeling and without detailed research to facts and figures. To me, if you take the average VATable consumer spend in the UK and divide by the number of families, the £20K annual spend felt about right. (Remembering that averages get heavily distorted by less numerous high figures, so that one woman’s £200,000 Masserati accounts for 10 individual families entire spending etc.)

    You obviously thought that I was talking nonsense, but I’m feeling a little more smug after reading your post of 4.34pm 3rd Jan – where you agree entirely with Ed’s figures, but still claim it’s a political trick of some kind.

    On the wider VAT issues, I remember when Brown announced the VAT cut most posters on here (it was very Conservative dominated at the time) said it was a pointless waste of money and would be of no benefit. I disagreed and argued that it would have a substantial impact in holding up consumer spending and helping maintain producer margins. History tends to prove the latter arguement right and the doubters wrong (although there is always the debate about whether the price in terms of higher debt was worth it).

    In the same vein, I now think the VAT rise will have a bigger than expected hit on the wider economy and this is the wrong time to make this move. The impact will be doubly painful because of the effect on inflation. At present we are already importing substantial inflation – nothing we can do about that. While some retailers will absorb the rise, this will only cut their margins when their costs are already rising, and the combined effect of higher inflation and supressed spending are really badly timed.

  16. Osborne has just given nearly the worst political interview I have ever seen, to the BBC, completely failing to defend the choice to raise VAT rather than NI or income taxes. Instead trying to attack Labour for proposing NI and income tax rises which he claims would cause unemployment.

    They really should keep Osborne out of the spotlight, he does not have the ability to sell his plans to the media.

  17. @ Old Nat

    “Don’t knock the capitalist opportunities of that. My son made a significant profit in Glasgow by buying a property labelled “Central”, when it was obvious that it was soon going to be relabelled “West End”.

    The limits of his financial acumen, however, were demonstrated when he moved to the US and blew the real estate profit on a car built in Detroit!”

    Eeesh. Your son should stick to real estate and not automotive investments!

    What I find is that the borders of certain well known neighborhoods often seem to get dramatically expanded by real estate brokers. There’s a neighborhood in LA known as “Beverly Hills Post Office.” Why is the neighborhood named this? Because the city and state of the addresses read “Beverly Hills, CA” even though technically speaking, their homes are in LA. This was done to increase property values (and confusion).

  18. @Jay Blanc – Evan Davis gave him an easier ride on Radio 4 (Today). Osborne gave little away, except perhaps that other taxes may come down before VAT, and that he is committed to creating “low income jobs”.

  19. @ Old Nat

    “That’s because so many Scots had gone to the US and were busy writing the Declaration of Independence, or one of your Constitutions.

    They might have stayed here, and set us free, if they had known that your roads would fall into the Pacific Ocean! :-0”

    I’m not sure they would have been able to set us free without the help of the French.

    And it didn’t fall into the Pacific Ocean, the road fell into a canyon, it was up in the mountains near Big Bear.

    Here’s a pic:

    h ttp://www.ktla.com/news/landing/ktla-big-bear-hole%2C0%2C4179402.story

  20. Aleksander
    I was thinking of you when I posted and agree with your comment

  21. @ Old Nat

    “Your story about Glenda Jackson, however, raises a question about the system.

    What good does it do anybody for a superb actress to desert her profession in order to become lobby fodder as good as (and no better than) the most corrupt and useful ex-councillor from Scotland to have crawled, greased and manipulated his way to a Westminster seat?”

    A lot I think. It adds diversity to the legislature, helps bring fresh perspectives and new opinions, helps represent a constitutency (actors and actresses) that might otherwise be only represented by lobbying organizations. Both can learn from each other, both can teach each other, both can make each other that much more responsive to groups that they might not have considered. I think it’s also important that there be more than one route into politics. One doesn’t have to be an ex-councillor who greased their way in. Or one could be. But it’s not the only route.

  22. @ Jay Blanc

    “Osborne has just given nearly the worst political interview I have ever seen, to the BBC, completely failing to defend the choice to raise VAT rather than NI or income taxes. Instead trying to attack Labour for proposing NI and income tax rises which he claims would cause unemployment.

    They really should keep Osborne out of the spotlight, he does not have the ability to sell his plans to the media.”

    I fail to understand the argument that income tax rises increase unemployment. They might curtail economic growth and they might curtail spending but how do they lead to unemployment?

  23. @Socialliberal

    Well, the answer is that they really don’t. But the Conservatives campaigned on the idea that Labour’s proposed tax rises were “a tax on employment”.

    Someone at the BBC apparently realises what they have in that interview, and they’re running it over and over on BBC News. I don’t think anyone has ever coached him on how to not look awful on TV either. He looks like he’s been awake all night, and was just pushed onto camera.

  24. @ Jay Blanc

    “Well, the answer is that they really don’t. But the Conservatives campaigned on the idea that Labour’s proposed tax rises were “a tax on employment”.

    Someone at the BBC apparently realises what they have in that interview, and they’re running it over and over on BBC News. I don’t think anyone has ever coached him on how to not look awful on TV either. He looks like he’s been awake all night, and was just pushed onto camera.”

    What I fear is that what I term “Jesusnomics” is spreading across the pond like a virus and infecting everyone in its path. I’ve heard some other interesting things come from the Tories. For example, I read a quote from one Tory defending a plan to throw people out of government housing because increasing the number of people looking for private housing would probably lower rents. I read that and went “huh?”

    As for how he looks on BBC, some people are like that, perpetually disheveled.

  25. I know this is petty but:

    @Billy – “Yeah – but the Bible is poorly written sh*t”

    So we’ll assume that Donne, Milton and Shelley took Hello! magazine as their inspiration.

    @Neil A – “… you are the first person here I’ve seen point out that the LDs withdrawing from the Coalition wouldn’t actually force the Tories out of office.”

    Perhaps you have been making an assumption about all previous discussion of a possible coalition break-up.

  26. Alec

    My initial puzzlement at the £7pw was that it equates to £350 pw of VATable spend-ie excluding Mortgage/Food/Childrens clothing etc.

    This didn’t seem like a hardpressed family to me.

    Laszlo’s persistence enabled me to see that he was indeed refering to a family with after tax disposable income of £24k pa excluding mortgage payment…and with a pretty small food bill at that.

    Such a family has leaway in its non-essential spend to mitigate that £7pw…..EM didn’t mention that of course.
    He just made it seem like every family in the land will have to pay£7pw extra , and be able to nothing about it.

    Still-he has a by-election to win……and turning NC’s own figure back on him was neat, I do concede.

    Did you see the Deloitte’s study on the VAT rise?

    They say it will hit middle-class & higher income groups “significantly” more than poorer groups.

    An “average well to do family” with income of £70k will have to pay -wait for it Alec-£10.80 pw extra.

    This group represents 2.6million households-the wealthiest 10%.

    Deloittes say that the “mean average” household will pay an extra £2.88 pw.

    So there we are-The top 10% will no doubt be pleased that ED took a little time out in Old & Sad to come on national TV & speak up for their plight.

  27. @Colin

    It appears that the evidence of who will be affected most by the VAT rise, depends entirely on which foundation you ask. Some are saying it’ll impact the poorest the most, some say it’ll impact the middle class the most. Most do say that the wealthy will pay most, but that it will be a much smaller amount of their income and have next to no impact on the wealthy’s standard of living.

    What everyone seems to agree on however, is that it will come with a consumer confidence shock, and it will increase inflation by a substantial amount.

  28. @OldNat

    The ethnic data is that from the 2003 official census. In that respect the difference will be defined by the individual’s own perception of their ethnicity. ie tick this box.

    They had very similar but separate histories. After both gained independence from Ottoman rule in 1878 their relationship was a major issue.The Montenegrin reigning party supported greater ties with Serbia while the opposition supported the Montenegrin King Nikola. Though all fought on the same side in the WW1 these differences led to the Christmas Uprising of 1918 when the ruling party decided to unite with Serbia. Eventually both kingdoms became part of the new Yugoslavia and the issue became less important. However federation followed under Tito and the local politicians had their own power bases again.

    There are also different external influences due to their geographic position especially as Serbia is land-locked while Montenegro looks out to the Adriatic and Italy. The very mountainous parts of Montenegro have contributed to segregation.

    @Barney

    Thanks for pointing out the Glenny book as I haven’t read it. My own experience suggests that Montenegro could be renamed The Moscow Mob by the Adriatic.

  29. @Jay Blanc

    The Vat rise will obviously increase prices but the effect on measured inflation like CPI or RPI is masked by the timing and size of the rise. It exactly matches the rise from 15% to 17.5% last year so will have no effect on statistical inflation. If there had been no change then there would have been a fall of around 0.7% in measured inflation as the previous rise fell out of the year on year calculation.

  30. Jay’s point is right it is the proportion of disposable income that will be lost to the VAT rise that matters from a fairness debate standpoint.
    Re NI rises creating unemployment.
    Any tax rise reduces net demand in the Economy (the oppositie of what Alec referred to with the VAT cut).
    Putting aside the debate about when to raise taxes/reduce the deficit, the are are 2 important questions. Which approach is fairest in terms of the pain spread and it seems at the moment you can select which analysis suits your position. The second question is which deflationary measure has the most benign impact on micro behaviour i.e Job creation. Cutting margins via a VAT rise with a arguably large negaitive multiplier affect on demand affecting jobs further; or an employers NI increase with GO claiming a 1% NI increase will deter employers from taking people on which will be true at the fringes of recruitment.
    My instinct is that the VAT increase is both less fair and less benign than an employers 1% NI increase would have been but have no confidence that a conclusive analysis can be produced to settle the debate.

  31. Osborne seems to have been called on his blunder during the BBC interview, when he tried to label VAT as “progressive”. As we all known, VAT is a flat tax and not “progressive” by any measure, and is arguably regressive in it’s standard-of-living effect.

    EM has now directly asked for an apology from the Chancellor for making misleading official statements to the public.

  32. @JimJam

    “Any tax rise reduces net demand in the Economy ”

    Actually, tax rises targeted at the most wealthy have a negligible effect on net demand. Instead they reduce the excess income that would otherwise be put into savings.

    @Colin

    “Such a family has leaway [sic] in its non-essential spend to mitigate that £7pw”

    We can argue about exactly who the VAT hits hardest (and that rather depends on what you mean by ‘hard’ – £7 pw is nothing to someone on £100k, but is a great deal to someone on 10k), but it is quite clear that this is going to represent a substantial reduction in demand. That is precisely the effect of offsetting the VAT increase by reducing non-essential spend.

  33. Regardless of the merits of the issue Osborne really is a vote drainer for the Tories.
    IMO with Hammond as Shadow Chancellor they would have scraped an OM.
    Maybe DC wanted a coalition to keep his right wing at bay and it was not just giving his mate a top job.

  34. oldnat @ John B Dick

    “There is a difference between an MP/Party which regularly wins an election in a particular constituency because they aren’t “them”, and one which regularly wins because they are one of “us”.”

    You are right about David Steel but neither the Liberal party not the ABT’s would have responded as they did had it not been for the exceptonally clear mesage they got from the bye-election result.

    Reginald Sorensen and Denis Canavan were initially elected on the party label and over a lengthy period of time became so well known and respected locally that they were ultimately elected for their personal qualities with huge majorities.

    The list vote makes it possible to identify which MSPs are significantly more/less popular than their party in the constituency.

    I’d expect the LibDems to lose Ross, Skye and Inverness West and it will be interesting to see how the lost LibDem votes break. My guess is 2:1 in your favour.

    Greens should get maybe 3 of the list seats you cheated them of last time, but you can comfort yourself that although gaining this constituency seat won’t make any difference to the balance between SNP & Lab and will probably result in Lib -1, Grn +1.

    What should worry the SNP is whether another 1, 2 or 3 Green gains are more at the expense of SNP or LAB.

    If it’s one each, (and nothing else happens) then you’re in. If you think you could lose one more than Labour then someone had better go and see Margo and her doctor and give her anything that it takes to induce her to stay.

    What would be in the best interest of Cons, SNP and Scotland, would be for the Cons to Bavarianise,re-brand as Christian Democrats and while remaining anti-independence, be pro-referendum and campaign for a no vote. Then there could be a SNP-Con coalition otten supported by the Greens.

  35. The cynic in me assumed from the start that Osborne was a political appointment to Chancellor, to prevent outright revolt of the right-wing back-benches. Now I wonder if he is being set up to take the focus of hate on spending cuts and tax rises, as ablative shielding to be jettisoned before the next election.

    But right now Osborne isn’t going to start dragging Conservative polling down as he becomes the face of Government.

  36. Robin – I agree the impact on demand is inversely proportional to the progressiveness (is that a word) of the tax rise.
    The lower the income the higher the MPC so not only are more progressive tax rates policies fairer (up to disincentive levels of course) they susttain demand better when we need it to hold up.
    Been the same with low interest rates re Lord Young ‘ never had so good’
    Higher the mortgage the higher the extra disposable income (much used to pay down the capital).
    At the bottom end rents in the private sector have not gone down in general so whilst the tennant, who would have spent a high proportion, has seen no benefit their better off land-lords have.

  37. @ Robin

    “£7 pw is nothing to someone on £100k, but is a great deal to someone on 10k”

    It is indeed a great deal.

    It is in fact impossible for a person on £10k to incur a £7pw increase from a 2.5% VAT increase, since £7pw from such an increase means VATable weekly expenditure of £329, or £17108 pa ( added to which such a person will need to spend on VATfree items such as rent/mortgage/food/utilities)

    You illustrate the essence of Ed Milibands dissembling very nicely.

  38. @ JIMJAM

    “Regardless of the merits of the issue Osborne really is a vote drainer for the Tories.”

    mmmm-you might want to have a look at the piece on his performance in the FT today, and the views of economists.

    …..or you might not :-)

  39. @Alec

    You said “…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…”

    A little high? It’s huge! Who the heck buys a new car each year, plus holidays, plus furniture, plus a £4,000 season ticket? Who throws furniture out after a year? If you’ll excuse the Zoolanderism, this must be the Charity on Behalf of DINKYS Who Don’t Spend Too Good.

    To get a £7.5pw hit, you would have to be spending about £323 on VAT goods PER WEEK now, which would go up to about £330 now (see below for workings). That’s about £16,800pa on VAT goods per year. That’s very approximately forty-two plasma tellies per year (at £400each, see Argos website), or a brand-new sofa per week (at £323each), or a good-condition second-hand 90’s model BMW 3 series PER MONTH (at about £1,200, see Autotrader website). That’s a weird way of me putting it (Colin interrogated the figures more sensibly), but you get the point: £7.50pw is way, way too implausible.

    Ed Miliband said that the “average” family would see a VAT increase of £7 pw. I swear to God, Ed either has no understanding of the word “average” (That’s not the squeezed middle, it’s the spoilt upper. Average for Beverly Hills, perhaps). or he just can’t add up.

    @Colin

    Thanks for your calculations: glad to see somebody’s interrogating figures. But even so, you had house costs at 57pw. That’s £246pcm. Did you leave mortgage costs out here? £57pw is plausible if renting a single room, but it’s way low otherwise.

    @Robin

    You said “…We can argue about exactly who the VAT hits hardest (and that rather depends on what you mean by ‘hard’ – £7 pw is nothing to someone on £100k, but is a great deal to someone on 10k…”

    Somebody on £10K is not, repeat not, spending approx £323 per week on VAT goods. Which is what they’d have to be doing to be hit by £7.5pw.

    @Jay Blanc

    You said “…EM has now directly asked for an apology from the Chancellor for making misleading official statements to the public…”

    Presumably, he’ll get it right after the numpty who said the “average” family would see a VAT increase of £7 pw. Which isn’t misleading, it’s just dribbly stupid.

    Regards, Martyn

    WORKINGS
    A good costing approx £275 before VAT will cost approx £322 after VAT at 17.5% (275*1.175) and approx £329 after VAT at 20% (275*1.20)

  40. Colin – just tried on line but am not a subscriber will try to get out later to read.
    Regardless, though, of his performance as chancellor and he will divide opinion (I bet Blanchflower will not be so complimentary) it is his demeaner and political appeal I am mainly refering to.
    He is rightly or wrongly perceived as a toff with no idea how people live (as per LD minister) with a sneering experssion (which he can’t do much about).
    He epitomises for many the worse of the conservatives and was judged by many (icluding conservative Peter Oborne) to have come across as delighted to be cutting peoples benefits and spending etc at the budget.
    Please do not accuse me of class hatred I am just reporting how Osborne plays to many.

  41. @Colin

    “It is in fact impossible for a person on £10k to incur a £7pw increase from a 2.5% VAT increase,”

    I was illustrating the relative significance of a particular sum to a family, not attempting to make finely detailed calculations. Many families on low income are going to be hit by far more than this in other ways (e.g. housing benefit).

    @Martyn

    “A little high? It’s huge! Who the heck buys a new car each year, plus holidays, plus furniture, plus a £4,000 season ticket?”

    The car industry is sustained on people replacing their cars on a 3 year cycle, with the old cars then being bought by people further down the income chain etc etc. Even after subtracting the trade-in value, that’s several £k per year. Add in maintenance costs for those buying second hand.

    Annual holiday spend for a family is several £k

    Furniture spend spread over its lifetime is also appreciable, probably approaching £1k pa. Sofas, chairs, beds, carpets all have a limited lifetime.

    Zone 1-6 TfL season ticket is now over £2k. Taking a random commute as an example, St Albans to zones 1-6 is now £3540.

    Those for whom this expenditure is unfeasible are those who are already very hard pressed.

  42. Surely the reason VAT is considered to be progressive is that it principly a voluntary tax. Food, books & children’s clothes are 0 or exempt. You don’t have to smoke or drink or buy a new TV or car. That is entirely voluntary. OK we have to travel to work but look how the number of unnecessary journeys fell during the fuel strike a few years ago. And frankly an extra £8 on a tv will not stop someone who needs one, buying one.
    However I think an opportunity was missed to have differing rates. Eg 5% on tradesmen (as in France) & 25 or 30% on luxury goods such as TV’s & cars. That would have the benefit of reducing imports as well.

  43. Several posters have referred to rail tickets as being subject to VAT.

    My understanding is that rail travel is zero rated. Am I wrong in this or have I misunderstood some of the comments?

  44. @Robin

    You said “…The car industry is sustained on people replacing their cars on a 3 year cycle, with the old cars then being bought by people further down the income chain etc etc. Even after subtracting the trade-in value, that’s several £k per year. Add in maintenance costs for those buying second hand….”

    That’s not answering the question I asked. The question I asked was “Who the heck buys a new car each year, plus holidays, plus furniture, plus a £4,000 season ticket?”

    You said “…Furniture spend spread over its lifetime is also appreciable, probably approaching £1k pa. Sofas, chairs, beds, carpets all have a limited lifetime…”

    I’m sorry, are you seriously contending that average furniture cost per year is >£1K, or even ~£1K? I know things wear out but even so, I’d be surprised if furniture cost per year averaged out approaches even £500. How many chairs have you got? When was the last time you replaced a bed or mattress? Seriously, working on your own experience, do you budget for >£1K furniture expenditure pa?

    You said “…Annual holiday spend for a family is several £k…”

    (Facepalm). One of my sisters has five kids and no husband. She manages for way less than that. Other real-life examples by acquaintances include a) two people taking two children to Disneyland Paris, and b) two people, no kids, on an all-in week’s holiday to Tenerife, and c) two people, two kids, on holiday in France. In all cases, spend was less than £1K (although not much less). Thomas Cook do some great deals if you catch them at the right time, and Lastminute dot com is good.

    You said “…Zone 1-6 TfL season ticket is now over £2k. Taking a random commute as an example, St Albans to zones 1-6 is now £3540…”

    Fair point, and thank you for using facts. But you get my point. Somebody spending that much commuting per year AND buying a new car each year AND spending >2K on holidays per year AND spending >£1K on furniture is not “an average family”. Somebody spending that much is “a well-off family” and for Ed to contend that this is an average family spend is frankly silly.

    Regards, Martyn

    PS I must confess to a sense of despair here. It seems people on this board replace their cars once every three years AND spend several thousand pounds per year on holidays AND replace their furniture annually. Is this actually your real-life experience?

  45. @ Martyn

    ” But even so, you had house costs at 57pw. That’s £246pcm. Did you leave mortgage costs out here?”

    THose numbers were from ONS-average family spend pw.
    THey do not include Mortgage payments-which emphasises the point you & are trying to make.
    The £57 pw was utility costs-which I deducted because-so far as I am aware-they remain at the low VAT rate.

    @ JIMJAM

    Understand your point of view.

    If GO achieves his objectives on Unemployment reduction, Economic Growth, and Deficit reduction ( in that order) he will be a pulling in the votes come 2015 :-)

    @ ROBIN

    “I was illustrating the relative significance of a particular sum to a family”

    But we were discussing the impact of the VAT change Robin.

    I appreciate there are other factors which would impact your £10kpa example like food cost inflation & fuel prices-much more significant here than VAT.

    Conversly-such an individual will see his/her Personal Tax Free Income Allowance rise this year by £1000.

    So his/her Income Tax bill falls by £200-or £3.85pw-which is of some help.

  46. RIF – like the reduced rate for tradespeople policy.
    Tips the repair/buy new decision positively.

  47. @Martyn – “That’s a weird way of me putting it (Colin interrogated the figures more sensibly), but you get the point: £7.50pw is way, way too implausible.)”

    Except that Colin’s interrogation of the figures from the ONS show that far from being implausible, it is actually the correct figure IF you take it as an average spend per family.

    As I did try to point out, spending on big yachts and £32,000 watches etc by the mega wealthy will skew the average figures considerably, but as a whole population average it seems perfectly correct.

    @Colin – “He [EdM] just made it seem like every family in the land will have to pay£7pw extra , and be able to nothing about it.”

    All he said was that ‘the average family..’ in which you have conceded he was absolutely correct, at least in statistical terms.

    “Such a family has leaway in its non-essential spend to mitigate that £7pw…..EM didn’t mention that of course.”

    And interestingly, neither has George O, as you are basically arguing that the VAT rise will stifle spending and therefore shrink the economy at a time when it is very fragile, which is the broader and much more significant point I was making.

    Either ‘the average’ family pays £7 pw in extra VAT or the economy takes a big hit. Either please, but not both.

    To both you and Martyn – one simple way to settle the argument is to use George’s own numbers. He says the VAT change will bring in £13b per year. We officially have around 17m households, so that means £765 per household per year, or £14.70 per week.

    Of course, this isn’t all directly levied on families, but as VAT is reclaimable on exports it means that eventually pretty much all of this will fall on the shoulders of UK consumers, either through direct VAT costs or higher prices, so Eds £7 per week figure looks a little mild to me – I would worry much more about George’s figures.

    Still – not to worry too much about VAT – by the time we get to our next New Year VAT will be a sideshow as the NHS will be the governments real disaster story – as even Tory MPs are now realising. I’ll post something on this a little later.

  48. Alec

    Thanks

    Just for your information, ONS say UK has 25million households.

    I don’t know whether the VAT rise will “stifle” spending or not-did ADs do so?

    All I’m saying is that the people who will experience Ed’s £7pw will have options in their discretionary spend to avoid/mitigate it.

    In the end the UK economy will speak for itself.

    THe December CIPS figures-particularly for Manufacturing -look pretty encouraging again.

    Inflation is certainly going to be a problem though.

  49. VAT is not payable on second hand goods. Surely someone on £10k pa would be well advised to source their “big ticket items” second hand? Perhaps the government should provide every household with a computer, internet access and an eBay account and start paying their tax credits directly into “PayPal”….

    Surely the point is that an “average family” (ie actually quite well off) would lose out under any tax rise, whether it is VAT, income tax or National Insurance. Ed M is deliberately pitching his language at the “hard pressed middle classes” when it’s really swings and roundabouts for them (well, us, I guess most of us are in there somewhere). Osborne seems to be attempting to counter on the same territory but from people’s descriptions of his interview not doing a particularly good job of it.

    Of course, Labour aren’t about to announce exactly how much they’d increase NI or IT by to compensate for the higher spending and lower VAT, so we can’t actually do comparitive figures.

  50. @Alec

    You said “…To both you and Martyn – one simple way to settle the argument is to use George’s own numbers. He says the VAT change will bring in £13b per year[1]. We officially have around 17m households, so that means £765 per household per year, or £14.70 per week…”

    Bless you for simplicity: I’m very much in favour of back-of-the-envelope calculations to provide a plausibility check.

    Unfortunately, we don’t have around 17m households, officially or otherwise: from memory, it’s 22.5million in England and Wales, and I forget the numbers in Scotland and Northern Ireland.

    So let’s take a handwavium ballpark figure: say 25million households in UK. Close enough for government work… :-)

    OK. £13bpa divided by 25mill = £520pa, or – yay, round figure! – £10pw per household. So fair point.

    Let’s look at it further. Very approx 63mill people in UK, so hit per person is 13bpa/63mill = approx £206pa, or approx £4 per person per week. OK, fine and dandy.

    So on the face of it, you are right: the household hit is £10pw for households on average, and £4pw per person on average.

    But – and apologies if you know this already – the “household hit on average” is not the same as the “hit on the average household”. Similarly, the “person hit on average” is not the same as the “hit on the average person”. As you correctly point out, the figures will be skewed by a small number of people earning a hell of a lot. So these figures will provide an upper bound, not an estimate. So we can say “the household hit on average will not exceed £10pw”. Ed is still wrong, and obviously so.

    The obviousness comes fron the fact that to incur a hit of £7pw extra, you have to be spending about £323 on VAT goods PER WEEK. Which average families don’t, even when you lump in everything. The cast of “S** and the City” would have to form a quadratic civil partnership to be pulling that off.

    Regards, Martyn

    [1]: I assume you mean “£13bpa EXTRA”, otherwise it doesn’t make sense

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