Tuesday round up

There have been several interesting polls out today. First up Lord Ashcroft has released some polling of members of the Unite trade union. Many of the answers are what we’d expect, although not entirely comfortable for the Unite leadership – as you’d probably expect, Unite members don’t universally support the Labour party (amongst those who would vote, voting intention was Conservative 23%, Labour 49%, Lib Dem 7%, UKIP 12%). Shown a picture of Len McCluskey only 24% said they could recognise him (and only 16% actually got it right!). Again, rather awkward, but not wholly surprising – turnout in McCluskey’s election was only 15% and I suspect many members join up for protection of their rights in their local workplace, and have little concern for national trade union politics.

The core of the poll though is naturally about political funds, party affiliation and opting in. Asked if they contributed to the political fund, 37% of the Unite members polled said they did, 30% said they had opted-out, 33% didn’t know. This is interesting. The reality is that only about 5% of Unite’s membership have opted out of the political fund… so it could be that the sample is strangely skewed (though I can’t think of any obvious reason why it would be skewed towards opt-outers!), or that Unite’s rank and file members really do have little idea whether they are contributing to the political fund or not. Asked if they think the political fund should be opt-in or opt-out, 57% of members said they thought it should be opt-out, and asked what they would do if it was opt-in, only 30% said they would opt-in (comparing that to the 95% who currently contribute to the political fund I can’t imagine Unite going down that route!)

Ed Miliband’s proposals don’t affect Trade Union’s own political funds of course, rather he has suggested that Trade Union members should only be affiliated to the Labour party if they opt-in. Asked what people would do under these circumstances, 12% of Unite members said they’d opt-in to affiliating to the Labour party. Whether this is good or bad news for Labour is a matter of perception – yes, it’s only a small minority of Unite members, but it would be well over a hundred thousand new party members for Ed Miliband so I doubt it would upset him too much (in terms of finances for the Labour party, who knows, whose to say the affiliation fee wouldn’t be higher under the new regime to make up for lower numbers and, as others have pointed out, if the political funds themselves were still opt-out the money would still be there for Unions to donate if they wanted to).

Secondly, there is a new YouGov poll of Wales, carried out for Roger Scully’s new website Election in Wales. Voting intentions there are below (note the very sharp differences between how people say they’d cast their constituency and regional votes – the difference in Labour support in particular looks startling).

Westminster: CON 23%, LAB 48%, LDEM 8%, PLAID 9%, UKIP 8%
Welsh Assembly (constituency): CON 19%, LAB 46%, LDEM 8%, PLAID 17%, UKIP 6%
Welsh Assembly (regional): CON 12%, LAB 25%, LDEM 9%, PLAID 23%, UKIP 16%

Finally TNS BMRB have a voting intention poll out with topline figures of CON 28%(+1), LAB 38%(+2), LDEM 9%(+1), UKIP 16%(-3). There is clearly no obvious narrowing of the Labour lead here, though the drop in UKIP support is interesting. We’ve seen a decline in UKIP support amongst the telephone companies and YouGov who tend to show lower UKIP support anyway, but this is the first time the companies that tend to show higher UKIP support have shown them coming off the boil a tad.


284 Responses to “Tuesday round up”

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  1. AW nothing wrong with the last post did it have some words that got it moderated

  2. Nick p

    There is a further problem in that not all lending to business is to increase production and/or efficiency, some of it is used for sharebuybacks which make the shares worth more and iincreases the earnings per share but does very little for the economy

  3. NICKP

    @”But then it’s a race to get the election done before the bust…”

    You should have more faith in Laszlo-I seem to remember he thinks growth will only last until the autumn of this year.

  4. RiN

    Yep. This whole redistribution of wealth thing is more difficult than I thought.

    You’d have thought a public house building programme would be within the scope of a Government though. We managed it post war. I don’t really see how the guarantee of deposits of buyers will start ne house building…and I don’t believe the Government really thought that is what the effect would be.

  5. colin

    I am interested in your thoughts on this. The new growth we are promised does ssem to what was formerly sneered at…a bubble of spending on the back of confidence about rising house prices.

    Any growth is good growth, baby. But is the brave new world you imagined?

  6. RiN

    @”some of it is used for sharebuybacks ”

    Share buy-backs are done when a company has accumulated cash, and cannot find an investment with a rate of return greater than that from a buy-back reduction of dividend costs.

    So-you don’t borrow for buy-backs-you already have the cash & can’t invest it more profitably.

  7. NICKP

    Lets wait & see what ONS say about the elements of growth through this year. ( if indeed there is growth)

    The “Services” sector includes all sorts of industrial & commercial activity-as well as domestic consumption.

    Let’s see what is happening to Construction & Manufacturing……….and exports.

    RE House buying stimuli-
    THe first one which came in this April was for New Build & has stimulated House Building. I don’t see that as a problem. The next one ( January I think) is a mortgage guarantee scheme for New & Old houses. That is certainly more controversial-but there have been advocates as well as critics.
    THere is time yet for that proposal to be amended if it starts a price bubble.

    REmember also that the panoply of new regulators at BoE includes one with a remit on asset bubbles. I can’t see CArney keeping stum if it becomes a problem-he is explaining to VC today ( I think) , why his “Taliban” crack is off beam-ie you can’t have safer & more prudent bank reserve ratios AND demand more credit at the same time-unless banks raise more capital.

  8. @ Colin

    Thanks- I still think I’m right (as I can see nothing new – either way). But I didn’t say bust only that growth will choke (no growth, small negative output.

    UK publicly quoted companies have been borrowing for both buyback and dividends this year. The cash is abroad (you can decipher it from their financial statements.

  9. LASZLO

    OK-so to be clear you are forecasting GDP growth in 2013 Q2-then GDP decline in Q3 & Q4 ?

  10. @Colin

    Thanks for this explanation about buy backs. On the face of it, ‘buying back’ is a use of money, but it is one in which, for the moment, nothing changes ‘in the real world’. (For example, the company does not put more money into buying machinery). Am i right about this? I ask because one of my sons is a scientist and on the board of the start up company in which he works and of which he was a co-founder. One of the things that frustrates him is the degree to which the board’s attention is focussed not on developing the idea around which the company was founded but rather on the possibility of selling the company or alternatively using the money they have raised to buy other unrelated companies. It seems like a kind of trading for trading’s sake and nothing to do with the core business of getting a brilliant idea off the ground.

  11. LASZLO

    I find that surprising-frankly I doubt companies are incurring the cost of borrowing in order to save the cost of dividends.

    Buy Backs are all about cash assets with no current profitable home .

    http://www.uhy-uk.com/resources/news/uk-listed-companies-keep-shrinking-as-share-buy-backs-outweigh-capital-raising-by-two-to-one/

  12. CHARLES

    Balance of risk is the consideration-always.

    And just recently, for obvious reasons, the risks of new investment, given market conditions have been too great for many.

    If you have a cash pile in those conditions-with savings rates so low-better to give it back to shareholders & save the dividend cost.

  13. @NickP – “You’d have thought a public house building programme would be within the scope of a Government though.”

    As a beardy weirdy, I’m all for more pubs.

    On the GDP figures, I’m a little surprised that the consensus seems to be +0.6% – given the Markit CIPs data I would have thought it could have been higher, but then again, ONS data from earlier in the period was notably more subdued.

    There was positive news on exports yesterday, although again this was a BCC stat, whose record isn’t great when put against ONS data, but let’s be optimistic. On the down side, June mortgage data suggests the housing up turn isn’t particularly robust, so there isn’t yet a clear sign of the sunlit uplands ahead.

    What is striking is that you would be hard pressed to find any serious economist or commentator suggest that the current growth path is sustainable or particularly desirable, other than being slightly better than recession. We really need to see evidence of a productive increase, rather than debt driven reflation, and with earning still falling behind prices, that looks some way off.

  14. +0.6%

  15. @Colin
    thank you

  16. Charles – your sons situation may be a microcosm of the wider issue with corporations sitting on large reserves and/or buying back shares.

    Nothing wrong with buying back shares as a principle but it can be indicative of a lack of confidence to invest.

    Laszlo, even increased cheap borrowings to buy back shares is a sensible way of using ‘cheap long term money’ for those businesses, after all many of us feel the Government should be doing the same but to invest more. Same point though is that it would be better if they were investing.

  17. Service sector more or less to pre recession levels ,construction still down by 16% and manufacturing by 10%., real incomes for 95% of the population down 8%

    How is this consistent with a Manufacturing and export led recovery (anaemic though it is any way), seems basically service, property price inflating, and personal debt driven to me.

  18. Modest growth across all sectors, which is encouraging. Construction particularly strong, but that is from a very low base.

    Perhaps more encouraging are the numbers from Europe. There were predictions yesterday that the EZ may be leaving recession later this year, and the Spanish unemployment rate seems to have fallen this morning, so possibly a sign of better times.

  19. Fair to say labour market folk are a bit concerned that we see 0.6% GDP growth but a fall in private sector employment (and a smaller fall in public sector employment), with a large rise in economic inactivity, quarter on quarter. Unemployment went up sharply as well.

    (Data’s here: https://www.gov.uk/government/publications/private-sector-employment-indicator-february-to-april-2013, for anyone wishing to check).

  20. Colin

    With interest rates as low as they are it makes sense to borrow money for share buybacks especially if your pay is related to share price, but even without that added inducement it still makes sense to borrow money here and leave excess cash abroad untaxed

  21. RICHARD

    “Cash” isn’t taxed.

    Profits are taxed.

  22. @Charles

    Interesting post but your comment about the LDs is questionable.

    Some LD members may very well have been miffed at joining in a coalition with the Cons but else could they do?

    The Cons were the largest party in both votes cast and seats won and Labour were really nowhere to be seen.
    The Cons had every right to be the party of government but realised they couldn’t manage alone – So, it was either a coalition government (not ideal situation as we have seen) or another election in the Autumn of 2010.

    Just my observation of the situation. – At the time they did the right thing AND REMEMBER a coalition means compromise on both sides which is basically what we have had.
    Would the LDs members now whinging had prefered a majority Tory government or helped reign them in a bit?

  23. “Reign” is what the Queen does.

    “Rein” is what we use to stop horses (or economies?) bolting.

  24. @ Sine

    Some of what you say re Lib Dems has some truth in it, although this is obviously not the place to discuss it. I agree that the vote in 2010 meant the Lib Dems would really have been out on a limb if they had put in for a rainbow alliance. Equally the counter argument is how they went about putting the Tories in (a coalition) and where they used their brownie points (nearly all were used up on voting reform).

    But in terms of voting it doesn’t matter what the logic is- the reality is that a third of their voters did not think they would be voting for them just to end up with a Tory government. I heard shrieks up in Wigan from some of my wife’s family who, for whatever reason, voted Lib Dem despite natural Labour leanings. I am sure the same shrieks would have been heard down South had the opposite been true and they had somehow put Labour in.

    I think the problem for the Lib Dems has been being in the coalition and the Rose garden felt like a 100% endorsement of the idea and the policies. Had they presented an attitude of ‘don’t have any choice’ the polling might have worked out a bit better for them- might not have been better for stable government but that is the nature of things.

  25. @ Colin

    Cash made of profits (orange juice and orange) “made” abroad is not taxed until the cash is brought home – it’s done but I have no intention of describing how it’s done (you know it, I’m sure). Lots of cash (some comes back as FDI… How foreign!).

    I expect 0-0.3% in Q3 and -0.1-0.2 in Q4.

  26. LASZLO

    @”I expect 0-0.3% in Q3 and -0.1-0.2 in Q4.”

    Brave man.

    Are those on first estimate-or final numbers. First estimate ( as today) is on 40% of the data.

  27. This set of economic figures do show the first real signs of turning the corner since the crash 5yrs ago, with growth in all sectors, together with falling unemployment begins to feed into that feel good factor. Plus the governments recent figures on crime and immigration which show downward trends and the welfare policy which has proved popular with the public.

    Together these things have placed the Tories in a better position in the polls, the challenge for Labour is to show there economic plan would have brought better economic figures which is always going to be a difficult thing because it can’t prove your plan until your in power .

    It will be very interesting to see if pressure builds on EM from his own party if those VI continue to close for the rest of the year but it’s still a long way to go to the GE and if the EU goes bust those economic figures could look very different.

  28. One thing wikileaks did reveal were Mervyn King’s remarks to the US ambassador… on the subject of Cameron and Osborne’s economic credentials in the run up to the GE.

    He also seems to have intervened with Nick Clegg during the coalition negotiations.

    Most voters would have been at least dimly aware that LD (in other words Vince Cable’s) economic policy was much closer to Darling than Osborne.

    The attempt to avert a situation where would be confusion about UK economic policy helps to explain why the LDs capitulated completely to the Tory agenda… and why many LD voters felt betrayed.

  29. @sine nomine

    I agree that the LDs had no choice. What I was talking about was based on my emotional reaction. I realise that this was unfair and not rational. But I felt it nevertheless, I guess that others may feel the same, and the persistently low LD share of the vote suggests that so far I may be right. Just to add to the unfairness the conservatives have got the unfortunate Danny Alexander to front a number of their more unpopular measures and I very much doubt will get any benefit from their ability to take tough choices.

  30. Laszlo

    Are you basing your estimates of forward GDP on your theory of a 3 month lag to the US economy and the recent drastic downward revisions of expected US GDP?

  31. @Turk

    As the post I made earlier shows, unemployment isn’t falling. It rose again last quarter. It might be a blip, but it’s an unnerving blip, especially as it seems to have gone up particularly in the West Midlands, East Anglia and South West, all nicely marginal-heavy.

    The new GDP figures are not yet regionalised, but if I were a Tory I would be praying it doesn’t turn out that the economy is growing rapidly in London and the SE and not anywhere else, because that’s not just no bloody use to the Tories, it’s actively harmful – not least because Ed Balls said that’s what’s happening a few days ago.

    I am afraid the employment figures suggest that exactly this might be what is happening, but we won’t know for a while.

    It would be sensible for the Tories to be a little circumspect just now and wait and see what the detailed figures come back with.

  32. @ Colin

    It was brave indeed… But I had to… All my measures are proxy and all relate to the cycle rather than some economics of growth. We will see. If I’m wrong I will admit it and revisit my measures.

  33. CHRIS RILEY

    @”unemployment isn’t falling. It rose again last quarter.”

    eh??

    http://www.ons.gov.uk/ons/dcp171778_315111.pdf

  34. LASZLO

    ………so you forecasts are vs ONS FINAL numbers -ie 100% of the Data ( & NOT first estimate)-which will take a while to come through .

  35. Well a little growth is probably better than none.

    Turk

    The problem with Growth in the UK as it currently appears to be happening is that it is based on a property bubble and the growth of domestic credit debt which of course is entirely inconsistent with the concept of a rebalanced export driven economy and leaves the UK open to the same banker greed driven recession factors as caused the 2007/8 crisis.

    The other factor is the type of recovery. Growth in GDP and relatively high inflation are normally accompanied by real term income growth, this has the benefit for the incumbent government of reducing any national debt by the twin factors of reducing it as a percentage of GDP and increased taxation revenue.
    This isn’t happening in the UK
    What we are seeing is by design a fall in the living standards of all public sector workers on a long term basis accompanied, because of the fact that growth in the private sector has only resulted in growth in incomes at the very top of companies while others have seen their real incomes fall, reductions in family based benefits and benefits to the poorest have also contributed to the longest sustained falls in real incomes for 95% of the population seen in the UK since records were kept with it’s obvious impact on taxation revenue.

    The average disposable income in the UK will have fallen 10% between 2010 and 2015

    As you say it is difficult for an opposition party to show the credibility of it’s policies but given that for the vast majority of the population and most of England and Wales outside of London and the South East this will be a a period of historic real income reduction and low growth it will be incumbent on Labour to show some idea of how real incomes and living standards are going to rise.

    On the living standards and effectively real income front a policy based on substantial social sector housing construction has some real attractions,it is a stimulus to the economy far more so than Osborne’s mortgage guarantee which even according to the Chair of the Institute of Directors is “madness” and puts downward pressure on private rents as more social alternatives become available (incidentally this also helps makes the Benefits cap more practical)

  36. @Colin

    Private/public sector employment indicators came out last night.

    https://www.gov.uk/government/publications/private-sector-employment-indicator-february-to-april-2013

  37. CHRIS

    THe ONS numbers are March to May.

  38. @Colin

    Even with last week’s regional figures you show, economic activity and employment both went down. Economic inactivity went up. To be fair there was a modest reduction in unemployment, although it was not spread around the country. The West Midlands looks to be having a difficult time.

  39. @Colin & @Chris Riley – those employment figures are interesting, and I think you are both correct, if I understand what you are saying.

    Unemployment has fallen, as Colin points out. However, the PSEI figures that Chris quotes are somewhat confusing, as you have to wade through the paper to find the quarter on quarter data as everything is presented in terms of annualised data. What this appears to suggest is that for Q1 2013, private sector employment fell, compared to Q4 2012, although note that the months making up the quarters in these two data sets are one month different, with the ONS employment stats being a month further on.

    Interestingly however, there are some nuggets in the ONS data that potentially backs up Chris’s point, in that while unemployment was down, so was the employment rate (not the employment gross number though). The inactivity rate also climbs by the same % that the unemployment rate fell, so while there were 57,000 fewer unemployed people compared to the previous quarter, there were 87,000 more economically inactive 16 – 65 year olds.

    So on balance, I suspect you are both correct, or at least you both have valid points to make.

  40. The Archbishop of Canterbury has warned the online lender Wonga that the Church of England plans to force it out of business – by competing against it.

    Something positive out of the Church for once .

  41. Is there any polling on what the public think about businessmen joining the govt, I’m pretty sure that if union leaders were being invited into govt there would be a public outcry led by our dear Colin but CEO’s leaving business for a govt post doesn’t raise eyebrows. How very strange

  42. STEVE,
    Have a look at the food banks run by various denominations and the schools which do so well for young people that politicians from centre and left break their own party policies and send their children there.

  43. I was thinking before this YG one that a second high Con would prove a trend, were it not for the normally consistently higher LD figure in other than this one at 10 -11 instead of this 8.

    Without being too rude, I hope, i think our Bournemouth correspondent CL 1945 ought to go and see someone about what he writes here about the LD poll (every day for months, a cracked record, or perhaps just cracked).

    So a few more of the same and we could conclude a lift for Con is a given trend.

    Looking at the tables the Yoof are 44% Con. That looks a bit fishy as a sample. It would be interesting to combine 3 days results this week and see if anomalies could be ironed out in that way. (I don’t know if that is a kosher polling method.).

  44. @RiN

    Personally I have no problem with businesspeople entering public service as long as there is no conflict of interests.

  45. @Charles – very fair assessment Charles – and I presume you are a LD at heart and so know where you are coming from.
    As a life long Conservative obviously I wanted a Majority Conservative Government (doesn’t mean for one minute I agree with everything they say or do of course) however I was the best choice at the time and may very well have to be the same choice at 2015 for all we know.
    BUT – absolutely anything could happen in reality – Labour slipping down point by point – Cons creeping up to the point they were at 2010 – the really big question in 2015 i think will be UKIP & LD figures – those figures will determine the outcome of the GE.

  46. @Howard

    It strikes me that a perfectly good reason why The Kids might be so Tory is because they grew up under a Labour Government that delivered unto them an economic crash. The Kids are, naturally, therefore reacting against The Man.

    For those of us of more advanced years, it might seem odd that The Man is Labour and not the Tories, but it could be logical for them and they could well see the Tories as liberty-lovers trying to free them from the burden of Labour taxing and spending.

  47. Steve/Chris

    The point is it’s all about perception it doesn’t really matter what part of the country the recovery is taking place, although the increased tax dividend will be spread around the country, so nothing is in isolation.
    The underlining message in the media is things are improving, not just in the economy but in other matters such as crime ,immigration and welfare budgets.

    The problem for Labour is there message has been that austerity wouldn’t work, if you make cuts in the police crime will rise, you can never cut the welfare budget and immigration is’nt being tackled.

    The jury is still out on the NHS but even there Labour have marginally lost some credibility.

    It’s up to EM to rally his troops and show how Labour would have done things differently and better than the Coalition and maintain he’s parties position in the polls and look to increase there share of VI.
    To date he has relied far to much on people using Labour as a party of protest, and keeping quite about policy, he now needs to put forward idea’s to show Labour really are capable of forming the next government or that closing of the polls will continue.

  48. @NICKP – well spotted – fair enough!

    @Shevii – Uhmmm – so what in your opinion should have happened – Minority Conservative Government with a possible election in the Autumn of 2010 or something else?

  49. @Turk

    The other side of the argument is that if the Govt is saying GDP is improving, but voters, themselves, are seeing their jobs going or their real wages shrinking, then they won’t be experiencing the prosperity that they’re being told is happening and will get cross about it.

    The underlying message from economic analysts (not the people who predict things; the people who work out what is going on) is that we have to be very careful about what’s happening here.

  50. @ Colin

    http://www.guardian.co.uk/politics/2013/jul/25/falkirk-ballot-insufficient-grounds-inquiry-police

    There’s a nice pic of Len with this article, so I wouldn’t want you to miss it. ;-)

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