Tonight’s daily YouGov poll for the Sun has topline figures of CON 34%, LAB 37%, LDEM 9%, UKIP 12% – so a second YouGov poll with a somewhat lower Labour lead than of late. Again, could still be margin of error, or perhaps we are seeing the lead narrowing. Time will tell.


358 Responses to “YouGov/Sun – CON 34, LAB 37, LD 9, UKIP 12”

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  1. R. Huckle re Fed reducing QE to $65bn

    It may seem strange, but $65bn instead of $75bn in asset purchases is actually monetary tightening.

    The reason is that the QE asset purchase programmes (both in US and UK) are based on buying of short-dated bonds. Once the initial programmes were set up and gradually built to the agreed level, the Fed/BoE has to keep buying new bonds on a rolling basis, otherwise the maturing notes would reduce the monetary effect.

    For this reason, QE needs to be phased out gently and not abruptly switched off, otherwise it would have a serious impact on liquidity in the money markets, with potentially catastrophic effects on market confidence.

    A bit like slowing an oil tanker before trying to turn it.

    Watch out for BoE to follow suit in near future.

  2. Phil Haines,
    On a very frivolous note,Believe that you are confusing your eyelashes with
    Eyebrows .Andy Burnham has the lovely eyelashes,Alastair Darling has the
    Eyebrows that were singed in the fires of hell.

  3. @R&D

    Never mind that, what about my looks?

  4. Paul H J

    IF the revenue raising argument is valid – as advanced by those who refer to the Laffer curve – a 60% rate in the 1980s was even more stupid than a 50% rate today!
    In terms of political message , it would surely be helpful to Labour – in repelling Tory attacks on their proposals – to remind voters of what happened under Thatcher.

  5. @Graham

    Re Tory 60% rate in the 1980s

    It’s a total mystery to me why Labour are not using this reminder…….so obvious, perhaps they have not even thought about it!

  6. Daniel Craig bares his chest in a James Bond movie. Luciana Berger is a Shadow Minister. That’s the difference .

  7. Valerie

    Thankyou for some common sense.

    For me I think of it as slippery-slope-syndrome rather than political correctness gone mad.

  8. @Rosie and Daisie/ Valerie

    I agree. Commenting on the attractiveness of a female politician is an attempt to undermine her power/credibility. Obviously, there has to be an implicit backdrop of assumptions that women are not to be taken seriously. Hence, reminding the audience of the politician’s gender is intended to invoke a schema of prejudices. Its a ‘dog whistle’… which seems quite appropriate as an analogy.

  9. This is why I’m dreading the US Presidential Election in 2016. The Republicans have a strange knack for saying things that completely turn my stomach when it comes to women, and Hilary Clinton is going to come in for a hell of a lot of comments on her gender.

    Doesn’t help that I really don’t want her to win the nomination anyway, but she’ll easily walk it.

    (I triggered auto-mod. AW, you need to stick a space before and after the L-word in the filter)

  10. Neil A

    My wife’s looks are clearly irrelevant to her roles as a mother and a care home manager. Like you I shall refrain from complimenting her in the future. Wouldn’t do to be seen as sexist.

    I think we’re more discussing about voicing one’s opinion’s about other women’s looks when appearing in television. And I suspect you’ve already learnt not to do that in front of Mrs A. So I’d keep on with the compliments unless she actually appears on television. Because nothing you say in that situation will be right. Especially the bit about it putting 10lb on everyone.

    spearmint

    […]And as I recall David Steel got a few comments on his looks in his day.

    Still does, it seems. Decca Aitkenhead described him as “surprisingly foxy” in that Guardian interview the other week. Though on reflection that may have referred to him sinking his sharp little teeth into what was left of Nick Clegg’s reputation

  11. @Robbie

    The hole seems to be the more appealing existence, if the alternative is never being a human being. :))

  12. Changing the subject slightly from the alleged attractiveness of David Steele! I was having a look at the approval figures for the government and they have jumped about 7% since last week. I just wonder if the leap in the polls iso
    More to do with plan a working or being perceived to work depending on your political leaning rather than any policy announcement by the two Ronnie’s….. sorry eds

  13. This From the TELEGRAPH

    “For a tall, elegant and good-looking politician with an African father —-”

    The person commented on is Chuka Umunna

    Doesn’t only Happen toWomen

  14. Have we seen any substantive move yet? Labour back to 38 suggests this is still their MOE mid range as it has been for ages. Tories on 35 is the high end of their MOE range with a midpoint of 32 or 33, but unless they stick higher you can’t say its a move. We’ve had these periodic narrowings before

  15. An observation on Con improving VI…is it attributable to the ‘success’ in restricting social security benefits entitlements of new immigrants and thereby preventing an influx of Bulgarians and Romanians into the UK from 1 Jan?

  16. @ Paul Bristol

    Re Tory 60% rate in the 1980s

    It’s a total mystery to me why Labour are not using this reminder…….so obvious, perhaps they have not even thought about it!

    Maybe they’re concerned the Tories will remind voters of the 10p rate debacle!

  17. Adventures in croossbreaks, Thursday edition:

    In today’s poll Labour and the Lib Dems look completely normal, and the Tories have extremely high retention. Stuff is probably happening in the weighing that I’m not seeing, but on the face of it what we seem to have are three polls in which the lead is low for three completely different reasons (although the Tories are consistently doing better on retention than they were a month ago).

    A polling average is made up of a bunch of individual polls in which a party’s VI is good or bad for different reasons on different days, so I don’t want to downplay this too much- we’re seeing real movement. But I would be very hesitant to ascribe it to any specific cause until we can find a consistent internal source for it.

    Team Red should wait to panic/whinge/sack Ed Balls until next week, when we’ll have a better idea of whether or not Labour has taken a hit. (Anthony has also written sensibly about this here: http://yougov.co.uk/news/2014/01/29/why-hasnt-50p-helped-labour-polls/)

    @ Old Nat,

    Labour DKs were high on Tuesday but normal on Wednesday and Thursday. Tory and LD DKs were normal all three days. (When Labour are doing well they have a lower percentage of DKs than the Tories; when they’re not doing especially well their numbers are comparable. They’re comparable this week except for the Tuesday poll.)

  18. It is possible I suppose the Tories might have picked up a percent or Two of the less swivel eyed UKIP supporters following some pretty deranged and off the wall comments emerging from that source.

    AW any thoughts on that?

  19. The main shift seems to be London, where Lab have dropped by 4% over a week or so, while Con have gained 1%.

    Not sure how that accounts for a halving of the national lead though.

  20. Pleased to see Carney’s rather honest intervention in the independence debate yesterday. His view very much matches what a few of us on here have been saying for a considerable time, which it has to be said, is largely stating the obvious. The Euro crisis has not been a great inspiration for the independence movement, and they are now left with little choice but to change their policy and try to deal with an unresolvable issue. As ever, it appears it will be ‘negotiated’ away, but the reality is likely to be far more difficult for nationalists to explain away.

    I do anticipate one key electoral issue to flow from this. Should there be a yes vote, the currency issues will have to be sorted out. There are implications for stability and financial well being north and south of the border, and with the example of the Euro to guide us, rUK voters will be looking for clear signs that no unnecessary risks are imposed on our economy if the Scots decide to walk away.

    At present, there is a broad ambivalence to independence in rUK, but this is on the basis that issues and problems will be for the Scots to sort out. Any hint of risk to us, will I suspect, be met with a fierce backlash, and I can’t see a Westminster PM getting away with a deal that doesn’t tie Scotland into a firm framework. I suspect this will mean things like corporation and other tax rates set in London, Scotland’s budget agreed in London, and Scottish borrowing capped in London.

    Carney did say the Bank would make whatever system arose work, but this really isn’t anything for the Nats to hold on to. It’s the political pressure in rUK they need to worry about. After a Yes vote, and Westminster PM has no political imperative give the slightest regard to Scottish public opinion, and will only care about rUK voters.

  21. @ianbailey

    Granted the change is the Tory vi going up but the outliers in the last six polls have been lower Tory support as you can see below. Truth be told I agree we will have to wait a bit longer to see if it is just a short term bounce but if not it raises an interesting question if ukip has borrowed 5% of Tory support if a general election was held now the Tories could be on 40% if tube lib dems recover 5% of support then labour are on 33% that has to be close to Tory maj territory. Not that I am changing my prediction from lab majority of 20

    Last few polls Tory support 35,34,35,32,35,32
    Labour support 38,37,37,39,38,40

  22. The main shift seems to be London, where Lab have dropped by 4% over a week or so, while Con have gained 1%.
    Not sure how that accounts for a halving of the national lead though.

    -Greater London accounts for around 15% of the UK population and it has a higher percentage of people of working age than average so I suppose it could.

  23. @ R&D et al

    What about gay icon’s. Are we allowed to comment on those?

  24. PAUL HJ

    @”Watch out for BoE to follow suit in near future.”

    BoE’s portfolio is much more spread in term of gilt dates.

    To date only £6.6bn of QE purchased Gilts have matured.
    BoE re-invested the proceeds in March 2013 to maintain the total QE Assets held at £375 bn.

    I believe £20bn or so matures this year.

    If BoE continue current policy that too will be re-invested.

    If it isn’t then QE will start to be reversed.

  25. Apparently Vlad Putin is a gay icon.

    Bet that pleases him.

  26. “While Ed Balls and George Osborne have made rather similar sounding commitments to achieving a surplus in the next Parliament, their targets are actually very different.
    Ed Balls’s commitment to achieve a surplus on the Current Budget would allow significantly higher spending”

    Gemma Tatlow
    IFS

    IFS put the difference at £25 bn of spending/borrowing.

  27. I prefer your “alternative explanation” Anthony -and note you still haven’t committed to “a narrowing” !

    http://yougov.co.uk/news/2014/01/29/why-hasnt-50p-helped-labour-polls/

    The silent sense of bated breath here is palpable

    [I wrote that before I saw today’s results, three in a row is enough to convince me something is probably afoot – AW]

  28. Alec,

    This is Carney’s speech in full, a bit long for a post here but worth reading.
    Overall I think it is a good thoughtful piece well grounded in economics which makes a lot of good points.

    What it doesn’t do is justify the dire warnings for Scotland that newspaper headlines portray. In terms of clear reporting of the facts today’s front page stories are treated almost as badly as polls are.

    If you skip to the conclusion you will probably read the only bit the journalists did before handing it to editors to be spun to fit the papers political line!

    “Speech given by Mark Carney, Governor of the Bank of England, at a lunch hosted by the Scottish Council for Development & Industry, Edinburgh 29 January 2014.”

    “It is a pleasure to be in Scotland today and to have the opportunity to hear directly from businesses about the economy. The recovery that began in Scotland has now taken hold in the UK with the economy growing at its fastest rate since 2007.

    Although a few quarters of above-trend growth driven by household spending represent a good start, they aren’t sufficient. Even though employment is growing and unemployment has fallen – particularly so recently in Scotland – the recovery has some way to run before it would be appropriate to consider moving away from the emergency setting of monetary policy. The Monetary Policy Committee has noted that, when the time eventually comes to increase interest rates, any such move would be gradual. That should help to reassure businesses in Scotland and all around the UK that the path of interest rates will be consistent with achieving a sustained and balanced recovery in the face of the remaining headwinds stemming from the financial crisis.
    Scotland is a land rich in history and ideas, and one to which I owe a great debt. Scots built the very foundations of my native land, Canada, whose first Prime Minister Sir John A. Macdonald was born in Glasgow. Scots have shaped the modern world through their contributions to culture and science. The pioneering work of Scottish economists from Adam Smith to Sir James Mirrlees has had great influence on my profession. Among them is David Hume, born just a short walk from here and a great friend and collaborator of Smith. While better known as a philosopher, Hume’s essay “Of the balance of trade” set out the theory of how trade imbalances between nations sharing a currency (gold) would self-correct as inflows of money to surplus countries raised their prices and reduced their competitiveness.

    As an empiricist, Hume would doubtless admit that recent euro area experience of persistent current account deficits leading not to self-correction but instead to crisis requires a more elaborate explanation. Fortunately economists have over the years obliged with substantial work on the economics of currency unions.

    Given the recent focus here on the currency and the fundamental role of the Bank of England in maintaining monetary and financial stability across the United Kingdom, I want to draw on that body of economics today to review some of the most important issues with respect to monetary union.

    I will stick rigidly to what Thomas Carlyle described as the dismal science. Any arrangement to retain sterling in an independent Scotland would need to be negotiated between the Westminster and Scottish Parliaments. The Bank of England would implement whatever monetary arrangements were put in place.

    What follows is not an assessment of whether Scotland will be overall better or worse off under independence – that is a multi-faceted judgement for the Scottish people. It does not pass judgement on the relative merits of the different currency options for an independent Scotland, but instead draws attention to the key issues. This is a technocratic assessment of what makes an effective currency union between independent nations.

    The costs and benefits of currency areas

    Let me begin by outlining the basic rationale for sharing a currency.

    Economist Robert Mundell first wrote about what determined an ‘optimum currency area’. Spurred by the breakdown of the Bretton Woods system and the move to floating exchange rates as well as by the formation of the European Monetary Union, others have elaborated and extended his work. We now have a fairly comprehensive sense of the costs and benefits of sharing a currency.

    For Mundell, the main benefit was that it eliminates the transactions costs associated with using, and switching between, different currencies. The European Commission estimated the size of these direct benefits for Europe to be almost 0.5% of GDP every year.

    Sharing a currency can promote investment by reducing uncertainty about currency movements and giving businesses access to deeper, more liquid financial markets. It can also reduce borrowing costs for countries with a history of high inflation and currency devaluation. By tying themselves to the mast of the monetary policy of others they can import credibility. This is exactly what the UK and other European countries aimed to do in joining the Exchange Rate Mechanism.

    Sharing a currency also helps promote integration. It does so by eliminating one of the barriers between markets, improving transparency of pricing and increasing competition. Sharing a currency can also help to increase the mobility of labour and capital, raise trade in goods and services, and improve the flow of technology and ideas. In these ways, members of a currency union can exploit more fully comparative advantage and ensure greater dynamic efficiency.

    Set against these benefits are the potentially large costs of giving up an independent monetary policy tailored to the needs of the region and a flexible exchange rate that can help absorb shocks.

    A flexible exchange rate acts as a valuable shock absorber when domestic wages and prices are sticky. For example, suppose demand for a country’s exports falls. All else equal, its output will fall, unemployment increase and current account deteriorate. With an independent currency, exchange rate depreciation can dampen these effects by improving competitiveness, and monetary policy can become more accommodative, supporting demand and employment. However, if the country were part of a currency area with its foreign market, its exchange rate would by definition not change, putting the full weight of adjustment on wages and unemployment – a significantly more protracted and painful process. In addition, the responsiveness of monetary policy to weak demand in that country would be diluted by the needs of the broader membership.

    Being in a currency union can amplify fiscal stress, and increase both the risks and consequences of financial instability. In the situation just described, fiscal policy would ideally help smooth adjustment to the external shock. But its ability to do so could be limited by the budgetary impact of the falls in output, prices and wages. To maintain credibility, fiscal policy may even become pro-cyclical, with the resulting austerity exacerbating the initial fall in demand. In the extreme, adverse fiscal dynamics could call into question a country’s membership of the union, creating the possibility of self-fulfilling ‘runs’ on bank and sovereign debt absent central bank support. Such adverse feedback loops turned recessions into depressions in several European countries in recent years.

    What makes a successful currency union?

    The success of a currency area hinges on whether its features mitigate the costs of losing the flexibility that comes from an independent monetary policy. These features generally promote the alignment of economic cycles, and the maintenance of price and financial stability within the union.

    The most obvious feature is the degree of similarity amongst members. Similar economies won’t suffer from a ‘one size fits all’ monetary policy. Surprisingly, a review of major currency areas suggests that similarity is neither necessary nor sufficient for success. For example, the industrial structures of the core and periphery of the euro area are more similar than those of the constituents of Canada or the US. Yet few would argue that the euro area is the most effective currency union of the three. Conversely, the Canadian monetary union works well despite having substantially larger industrial variation than even the US.

    The similarity of the industrial structure of Scotland and the rest of the UK depends on how offshore oil is allocated. With oil split on a per capita basis Scotland and the rest of the UK look about as similar as the core and periphery of the euro area; but with oil split on a geographic basis they look about as diverse as the United States. Despite any differences, the close integration of the Scottish and rest of UK economies has helped ensure that their economic performance has been very similar over a long period – output growth is highly correlated.

    So theory notwithstanding, being similar doesn’t necessarily help and being different doesn’t necessarily hinder. This suggests we should look elsewhere for the ingredients of a successful union: to the mobility of labour, capital and goods; to institutional structures promoting financial stability; and to institutions that mutualise risks and pool fiscal resources.

    An economic union with free movement of labour, capital and goods

    The ‘five tests’ formulated by the UK Government to analyse the merits of joining the euro in 2003 were crafted in large part around the degree of integration of the UK and the euro area. That is because greater openness and integration within a currency union not only enhances the benefits of a shared currency but can also mitigate the cost of losing exchange rate flexibility.

    Mundell originally argued that currency areas should coincide with regions which had high internal factor mobility. The idea was that by moving from areas where demand has fallen to those where it has risen, workers help moderate changes in wages and unemployment.

    There are clear practical impediments to labour mobility within the euro area including language and culture. As a consequence, it has the lowest cross-border mobility of the five currency unions in table 2**. This has contributed to the need for painful internal devaluation for some countries in the euro area to restore competitiveness.

    Given that more than 700,000 Scots live in the rest of the United Kingdom and over 500,000 from the rest of the UK live in Scotland, one would be tempted to assume that labour mobility between the two is high. In fact gross migration flows between Scotland and the rest of the UK are lower than in the constituent parts of some other currency areas.

    That probably in part reflects the fact that economic conditions in Scotland and the rest of the UK have been very similar, such that the incentive for migration is relatively limited. It is reasonable to think that the similarities between Scotland and the rest of the UK mean that there is the potential for higher labour mobility should that become necessary. Given differences in industrial structure, this would put a premium on ensuring barriers to mobility are not allowed to develop if monetary arrangements were to change.

    It is not just an integrated labour market that helps adjustment within a currency union. Openness to trade and free movement of goods also assists in diluting the effect of shocks by spreading them across the union. If one part of the union imports a large share of what it consumes from other parts, changes in demand will be quickly transmitted. This helps to align economic cycles and makes a common monetary policy more appropriate.

    Scotland and the rest of the UK are highly integrated. 70% of Scottish exports are destined for, and 74% of imports into Scotland come from, the rest of the UK. A word of caution applies here. There is a body of evidence that national borders can influence trade flows, even between otherwise highly integrated economies. The high degree of integration between Scotland and the rest of the UK may in part depend on their being part of the same sovereign nation.

    Mobility of capital can also promote necessary adjustment to shocks. Moreover, if capital in one part of a union is owned by those in other parts, the effect of a given shock is diluted across the union. Simply put, risks and rewards are shared. Similarly, the ability to borrow from other parts of the currency union in deep and liquid cross-union credit markets or integrated banking systems allows one part of a union to smooth out temporary falls in incomes.

    However, free movement of capital can be a mixed blessing. If the funds provided by one part of a union to another can be withdrawn easily, these outflows can – if the right structures are not in place – undermine financial and economic stability of all members.

    This brings me to the second feature of a successful currency union – banking union.

    Banking union

    Effective currency unions need a wide range of institutions to support an integrated and efficient financial sector. These are often referred to as a “banking union” and include:

    • Common supervisory standards,

    • Access to central bank liquidity and lender of last resort facilities,

    • Common resolution mechanisms, and

    • A credible deposit guarantee scheme.

    Without a banking union, cross-border capital flows can be restricted, the effectiveness of monetary policy impaired and, in the extreme, the viability of the union itself undermined.

    It is as difficult to separate the institutions that support banking union from national fiscal arrangements as it is to separate the creditworthiness of banks and sovereigns. Let me explain.

    In recent years, doubts about the resilience of major financial institutions have created expectations of sovereign support. The scale of these potential liabilities can in turn generate doubts about public finances undermining the resilience of both banks and sovereigns.

    When such concerns emerge, the consequences can be dramatic. The banking systems of peripheral European countries experienced outflows of between 10% and 85% of total deposits from elsewhere in the euro area in the three years following June 2010. Bank funding spreads in those countries ballooned by 5 percentage points from the beginning of 2010 to the middle of 2012. Bank lending to the real economy collapsed and credit conditions tightened massively. Clearly something must be done.

    It is in the interests of all countries to sever the link between banks and sovereigns by ending too big to fail. Governments must put in place regimes that impose losses on bank management, shareholders and creditors rather than taxpayers. That is exactly what is established by the UK’s recent Banking Reform Act, and the recently agreed European Bank Resolution and Recovery Directive. The Bank of England is at the forefront of efforts to establish the common global requirement that is needed to finish the job.

    While ending too big to fail should mean that taxpayers no longer have to bail out banks, it will not fully break the bank-sovereign loop, for three reasons.

    First, banks hold substantial amounts of their national government’s debt in order to manage liquidity, meet collateral obligations and hedge exposures – European banks hold more than €1trn of home country sovereign debt amounting to 5% of total assets.

    Second, confidence in deposit guarantee schemes relies on a national backstop. The European process illustrates the difficulty of building the institutional arrangements for a common insurance scheme across sovereign states. This is unsurprising since mutualised deposit guarantee schemes imply a pooling of risk and loss of sovereignty. All member states must be persuaded that they won’t simply be left with the bill for the mistakes of others.

    Third, a currency union requires a common fiscal backstop for its central bank. Central banks must be able to act as Lender of Last Resort, both to financial institutions that are solvent but experiencing an unwarranted loss of confidence and to provide bridging finance to institutions that are being recapitalised using new resolution regimes. Under the current governance arrangements in the UK, these operations require an indemnity from, and the approval of, the Chancellor, because they would put substantial public funds at risk.

    The existing banking union between Scotland and the rest of the United Kingdom has proved durable and efficient. Its foundations include a single prudential supervisor maintaining consistent standards of resilience, a single deposit guarantee scheme backed by the central government, and a common central bank, able to act as Lender of Last Resort across the union, and also backed by the central government. These arrangements help ensure that Scotland can sustain a banking system whose collective balance sheet is substantially larger than its GDP.

    The euro area has shown the dangers of not having such arrangements, as well as the difficulties of the necessary pooling of sovereignty to build them. An independent Scotland would need to consider carefully how to develop arrangements with the continuing United Kingdom that are both consistent with its sovereignty and sufficient to maintain financial stability.

    Fiscal arrangements

    While banking union requires common fiscal backing, there are two broader justifications for shared fiscal arrangements within a currency area.

    The first is that deeper fiscal integration between members can play an important role in smoothing shocks that affect only part of the currency area.

    It is no coincidence that effective currency unions tend to have centralised fiscal authorities whose spending is a sizeable share of GDP – averaging over a quarter of GDP for advanced countries outside the euro area. That offers scope for a significant degree of stabilisation, much of it happening automatically as slowing growth in one part of the union causes tax revenues there to fall and welfare spending to increase. Those automatic fiscal stabilisers are important within the UK – it is estimated that for every £1 that output falls the reduction in taxes and increases in transfers are together worth about 50 pence.

    What matters for individuals is the extent to which this risk sharing insulates their disposable income from shocks. In the UK there is evidence that around a fifth of variation in regional personal income relative to the national average is stabilised by central government transfers. That is probably an important factor in accounting for the close harmonisation of economic performance within the UK. The degree of stabilisation in France and the US is similar, with a slightly lower figure for Canada.

    Fiscal stabilisation is particularly important in a currency union because it helps mitigate the loss of exchange rate flexibility. But being in a currency union can amplify fiscal stress for individual nations, limiting their ability to perform this valuable role just when it is most needed. So it makes sense to share fiscal risks across the whole currency area. A localised shock is less likely to stretch the fiscal position in a larger more diversified currency area, especially if it shifts demand between different parts of the area. That makes a given shock to Nova Scotia less severe than the equivalent to Portugal.

    The second justification for shared fiscal arrangements is that problems in one country are very likely to spill over to others. For example, the threat of default by one country may trigger a generalised crisis, particularly if the liabilities of the crisis country are held by the banking system of the broader currency area. It will be in the interests of other countries in the union to bail out a country in crisis, and that reduces the incentives for countries to run their finances prudently in the first place. At a minimum, this ‘moral hazard’ problem suggests the need for tight fiscal rules, to enforce prudent behaviour for all in the union, although credible sanctions for breaking those rules are hard to develop.

    There is an obvious tension between using robust fiscal rules to solve this problem, and allowing national fiscal policy to act as a shock absorber. This reinforces the need for fiscal risk sharing between nations.

    As the Presidents of the European Council, European Commission, Eurogroup and European Central Bank argued in their report, European monetary union, which has so far relied on fiscal rules, will not be complete until it builds mechanisms to share fiscal sovereignty. Possible options range from a transfer union to a pooled employment insurance mechanism. Whatever is ultimately chosen, the degree of fiscal risk sharing will likely have to be significant.

    Similarly, in a monetary union between an independent Scotland and the rest of the UK the two Parliaments would have to agree on whether fiscal rules were sufficient or whether similar risk-sharing mechanisms were necessary.

    Conclusion

    The Scottish government has stated that in the event of independence it would seek to retain sterling as part of a formal currency union. All aspects of any such arrangement would be a matter for the Scottish and UK Parliaments. If such deliberations ever were to happen, they would need to consider carefully what the economics of currency unions suggest are the necessary foundations for a durable union, particularly given the clear risks if these foundations are not in place.

    Those risks have been demonstrated clearly in the euro area over recent years, with sovereign debt crises, financial fragmentation and large divergences in economic performance. The euro area is now beginning to rectify its institutional shortcomings, but further, very significant steps must be taken to expand the sharing of risks and pooling of fiscal resources. In short, a durable, successful currency union requires some ceding of national sovereignty.

    It is likely that similar institutional arrangements would be necessary to support a monetary union between an independent Scotland and the rest of the UK.

    I suspect you have reached your limits of endurance of the dismal science, so you’ll be relieved to know that economics can take us no further. Decisions that cede sovereignty and limit autonomy are rightly choices for elected governments and involve considerations beyond mere economics. For those considerations, others are better placed to comment.”

    Peter.

  29. Colin – is that £25Bn over the parliament or per year?

    Also – 3 in a row satisfied and as you hypothesised accounted for in part by some 2010 Tory identifiers moving back from WV/DK.

    This is part of the group always likely to drift back and which makes up some of the ephemera that has given a Lab lead while imo the underlying picture was perhaps a small Lab need and now maybe neck and neck.
    Although, we need a decent run of polls to be confident some of the movement is short term for reasons various explanations have been offered on this site.

    My hunch FWIW is that the steadily improving approval rating has been from disenchanted ex Tories who have come back to the fold and most are here for the GE.
    The fall in Lab which is actually modest (perhaps 1-1.5% max if polls accurate is more difficult to predict if it will move back or drift elsewhere – possibly a mixture.

  30. Comment in mod – must be a trigger word as nothing naughtie if I know which I will avoid in future?

  31. With regard to the Scottish pound issue I seem to have missed something – to me nationalism is a sense of pride in your country, a language, history and culture of your own. Scotland has all this-so should be independent once again.

    Name one person in the UK who sees themselves as a UK citizen first. We all see ourselves as Scottish / English/ Welsh / NI . We are only a vaguely ‘united kingdom’ – time to let go…

    Nationalism is not a rational thing or half the countries of the world would not exist. I note that Eire began as a bankrupt country due to debts imposed on it by the UK and many, many countries of the world are in debt – but they are still free countries.

  32. As Spearmint said, after the disaster of Tuesday’s tables[1], these ones (and yesterday’s) look more normal. Even the anomalies, such as too many Tories in the under-25s and in Scotland, look like regular anomalies for known reasons, and may be compensated for elsewhere in the sample.

    As she and Colin have pointed out though, the problem remains that there is nothing that particularly explains the narrowing of the lead – there is nothing consistently changing. One suggestion I have are that we may be seeing the fairly regular phenomenon of the top 2-3 points of UKIP VI (from say 13-14 down to 11-12) going back to the Conservatives, triggered by poor UKIP coverage and good economic news.

    The other possibility may be to do with a question on the economy asked this week:

    http://d25d2506sfb94s.cloudfront.net/cumulus_uploads/document/2tu1lb9rj6/YG-Archive-140128-Sun-Economy.pdf

    Who would you trust more to run the economy where “David Cameron and George Osborne” got 39% and “Ed Miliband and Ed Balls” got 24% – a drop since 9-10 January[2] of 5 points for them. C&O lose a point too (the big gainer is “Not sure”) but it may reflect a feeling in particular that Balls is not putting Labour’s case well – he tend to come across as combative without being effective.

    Neither of these seem particularly strong without further evidence, but they may suggests areas to look for confirmation if the drop in lead persists.

    [1] Combined with the comparatively small sample size, I can’t help wondering if something went seriously wrong with YouGov’s procedures for picking potential respondents. Though if you were one of the nine male under-25s, who individually could have represented 1% of VI each, it may have been fun.

    [2] Irritatingly I can’t find the detailed table for this question for 9-10 Jan as it appears to be missing from the ST poll that those dates indicate, which means you can’t see where the movement came from.

  33. Anthony
    I have written what I believe to be a balanced response to R&D which has gone straight into auto mod. I’m not sure which word has triggered it but could it be cleared?
    If it’s a subject you don’t want discussed further, then I apologise and in which case just delete it.

  34. @Neil A

    “My wife’s looks are clearly irrelevant to her roles as a mother and a care home manager. Like you I shall refrain from complimenting her in the future. ”

    Come on, you’re better than that.

  35. Commentary about female politicians looks by people other than their partners feeds off and contributes to a culture where their attractiveness or otherwise is the primary benchmark of their success as human beings and trumps whatever else they may do in their careers. When women (or gay men) form the majority of politicians and political commentators then the same might be true of men, but today is not that day.

  36. @PETERCAIRNS

    Thanks for the Carney speech. I agree it is thoughtful and clear.

    Just one passage jarred on me:

    “It is in the interests of all countries to sever the link between banks and sovereigns by ending too big to fail. Governments must put in place regimes that impose losses on bank management, shareholders and creditors rather than taxpayers. That is exactly what is established by the UK’s recent Banking Reform Act, and the recently agreed European Bank Resolution and Recovery Directive.”

    Does he (or anybody else) really believe that ‘too big to fail’ has been resolved?

  37. @JACK

    “Name one person in the UK who sees themselves as a UK citizen first. ”

    OK.

    Guymonde

  38. ROGER

    I was looking again at the two Polls I refered to upthread.

    I know the base goes back beyond a putative drop from the recent 6 to 8 leads -all the way to a 10 lead. But this approach does at least provide the potential for larger & more significant numbers to be apparent.

    As I said before, the drop in Lab VI between those two polls is due in large part to both 2010 Lab identifiers AND non 2010 Lab supporters , shifting to WNV/DK/

    Lab 2010 group’s WNV/DK shot up from 10% to 15% of that total; group sample between my two polls. That effect alone meant 1.8% off Lab VI ( in yougovs format of “excluding WNV/DK” terms )

    This morning I was looking at LD 2010 identifiers. Lab defections actually fell from 29% ( in format of including WNV/DK) of the total group to 26%. …………but LD retention % ALSO fell -from 28% to 25% !!!

    And here again-as for Labour 2010 identifiers-WNV/DK rose between the two polls-from 21% of the LD total 2010 id group, to 23%.

    So-poor old LDs , having retrieved 3%pts of defections to Labour, lost the lot -and some- to WNV/DK ( and also UKIP & Greens a bit)

    Both Lab & LD seem to have suffered from loss of support caused by uncertainty who to vote for-what Howard descriobed as “waiverers”.

    Conversely , between those two polls, Con’s 2010 identifiers who said WNV?DK remained unchanged at 15% of the group-Cons suffered no loss in that direction, gaining from former UKIP defections-though on the downside, gained nothing from the Lab & LD waiverers explained above.

  39. @JACK

    Yeah, count me in. I get quite annoyed when people insist on putting ‘English’ for their nationality. It isn’t. Their nation is the United Kingdom of Great Britain and Northern Ireland (at least for now).

  40. @ROGER M

    I’m wondering… throughout this parliament the Eds have been saying that it’s all wrong, deficit reduction too harsh, over-strong medicine has delayed the recovery of the patient.

    Whether you agree with it or not, that’s a consistent and arguable narrative, with backing from some Nobel prize winning economists.

    ‘All of a sudden’ Ed B is following GO, promising to eliminate the deficit/go into surplus (yes I know some are saying his words are slippery – not my point) which could be taken to imply that GO was right all along. For those who never agreed with him, further proof that he doesn’t know what he’s doing. For those who thought he was right, damn new Lab with its Tory light culture back in the ascendancy.

  41. Jack

    Ewen Lightfoot

    I’ve always considered myself British, having Welsh , Irish and English antecedents.
    Judging from what Guymonde has written this could become an “I am Spartacus issue!

  42. Also Mr N

  43. Currently I think Labour’s VI is like my weight, it’s very gradually reducing. Up one day, down the next but a definite pattern emerging.

  44. Guymonde,

    I don’t think that anyone would regard that as a u-turn without it being advertised as such. Those paying attention would know that it was always Labour policy that the deficit would get reduced EVENTUALLY.

  45. Guymonde

    Balls has has a difficult line to sell. There is a perfectly sound inter tail argument to be made on Keynesian lines, and he has made it consistently. The line is that the slump is not the time for Govt tightening, and that current deficits tend to a great extent to take care of themselves once revenue increases and welfare costs decrease in the boom.

    Balls made the first part of that case consistently from 10-13. If we are now, finally, after an unnecessary 3 year hiatus, moving into steady growth, moving on to the second part of the case. There is nothing whatsoever that is intellectually inconsistent about any of that.

    But it’s a hell of a job to sell to the public. It is almost entirely counterintuitive, and folksy tales about Govt having to do its share of cutting are much easier to peddle, despite their having no economically sound foundation.

    The public image of Balls is a fascinating case. An acquaintance of mine was a senior Civil Servant and leading economist in one ministry. He has dealt with Balls regularly and tells me that his (Balls’s) intellectual understanding of economics is way beyond that of any other current leading politician. And this guy is absolutely no Labour supporter.

    Yet, just last week I was chatting with another friend. Educated to doctoral level. He said that whilst he appreciated that every party needed bruisers like Balls, it was symptomatic of Labour’s problems that they had such an intellectual lightweight as Shadow Chancellor. A man who had called every decision since 2010 incorrectly.

  46. Err. Inter tail = intellectual

    Apple clearly doesn’t recognise the term…

  47. To me, any current Tory gains are the sort they would have gained in the run up to the election anyway. Softer ukippers etc.

    They will ebb and flow with the tide, depending on Ukip prominence etc., and with the don’t knows, the economy and whether Labour are landing any further blows on cost of living etc.

    There was always a chance for it to happen at some point, because we had a similar situation in the run up to the conferences.

    The real question, is how much more of it can Tories garner, as it will get progressively harder…

    As for the tax thing, I think most would have already factored in that Tories like to cut the top rate, and Labour had already put it up last time around, so it’s not really news…

  48. ‘Name one person in the UK who sees themselves as a UK citizen first. We all see ourselves as Scottish / English/ Welsh / NI . We are only a vaguely ‘united kingdom’ – time to let go’

    Jack,

    I always see myself as British – and consider England, Wales & Scotland to be regions of Great Britain in the same way tht Bavaria, Saxony & Westphalia are regions of Germany. I would argue that the German regions have a greater claim to be viewed as separate countries on the basis that they existed as separate states in their own right until the time of Bismarck in the late 19th century.

  49. Roger

    Just a further thought on my numbers.

    In the shift from 2010 id VI , to WNV/DK:-

    Lab & LD saw both elements increase between my two polls.

    For Cons WNV increased , but DK fell

    So -Con 2010 id-ers have become more certain of their 2010 vote..

    Lab & LD id-ers have become less certain of theirs.

    If ALL the current 2010 id-ers now giving a UKIP VI could be persuaded to revert to a Con VI-based on these recent YG Polls, Cons would be on 39%.

    THis would still leave the non 2010 id-ers giving a UKIP VI -who currently represent 3% of Headline Vote ( in YG format excluding WNV/DK) ………..the same as they got in 2010 GE.

    Cons should definitely concentrate on their 2010 defectors to UKIP -they are making little or no progress with Lab/LD waiverers.
    They should also continue to try and undermine the resolve of 2010 Lab voters by making Labour seem not to be what those voters want.

    ……..perhaps GO should stop criticising EB on his policies & start congratulating him on coming round to Osbornes !

  50. “What about gay icon’s………..”

    You haven’t finished your sentence: leather trousers? ear studs? Que????

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