1) Labour’s lead continued to fall

For the main horse race – who is in the position to win the next general election – the key point is always the lead in the polls, and throughout 2014 Labour’s lead over the Conservatives continued to fade away. In 2013 it fell from around ten points to around six points. This year the trend continued, with Labour’s lead fading from six points to just under two points. Given the complexities of the Lib Dem collapse, the rise of UKIP, a large number of new incumbents and the separate race in Scotland it is dangerous to rely upon on uniform national swing, but include all those factors and I think we are now into hung Parliament territory.

2014roundup1

Labour’s lead has almost wholly been down to falling Labour support rather than increasing Tory support. The Conservative share of the vote started the year at around 32% and ended the year in roughly the same place, Labour supported started the year at around about 38% and finished the year at around 34%. While there is always some churn between different political parties and there will be some people who have moved from Labour to Conservative, it’s certainly not the main factor – rather what we’re seeing is an anti-government vote that had previously been going to the Labour party by default is now finding many homes and showing itself in rise of the Green party, the SNP and UKIP. The public’s lack of confidence in Ed Miliband and Labour isn’t manifesting itself in them running back to the Conservative party for safety… it’s manifesting itself in them going off to find more attractive oppositions to vote for.

This has in many ways been the pattern of the 2010-2015 Parliament. The Conservative party’s vote fell to around 32% early in the Parliament and has stayed there, seemingly immune to events, announcements, people or policies. Labour inherited a substantial lead early on thanks to the Liberal Democrat collapse and have watched it be nibbled away by rivals.

2) The Greens finally woke up

So to those rivals. The rise of UKIP has been covered by everyone, the most remarkable story of the Parliament. The increase in support for the Greens is a newer development. Earlier on this Parliament I was frankly surprised that the Greens were not doing better. They had elected their first MP, the government were implementing unpopular austerity policies and Labour were constrained in their opposition to cuts by a desire to establish their own economic credibility. Elsewhere in Europe radical left-wing parties were benefiting from an anti-austerity vote, yet here it wasn’t happening. The Greens were marooned on around 2%.

2014roundup2

This year it finally did, and looking at the charts it appears to be the European elections – with the coverage and campaigning that it implies – that sparked the Greens into life. The European elections pushed them up to 4% or so, and since them other polls have shown them building on that, in many cases getting their highest levels of support since their first breakthrough back in the late 80s. What impact that will have at the election beyond providing a home for some people who might otherwise have voted Labour or Liberal Democrat is a different question – in 2010 the Greens managed to breakthrough and win a seat despite having a derisory national share of the vote. There has been an Ashcroft poll in one of their most viable targets (Norwich South), but it showed Labour well ahead, so it is possible that the increase in Green support may not translate into any extra seats.

UKIP meanwhile have managed to keep the bandwagon rolling onwards through 2014. There was an expectation that their support would peak after the European elections and then go into decline, but things were thrown off course by the defections and by-elections of Douglas Carswell and Mark Reckless which kept the party at the forefront of politics through the autumn and allowed them to finish the year with higher support than in January. I would still expect their support to be squeezed as we get closer to the election, as the race focuses more upon the binary choice between a Conservative and Labour led government but events, such as further defections now a by-election is no longer unavoidable, could easily push that off course.

3) Economic confidence began to stall

We started 2014 with people being increasingly positive about the state of the economy, but still pessimistic about their own finances, and pondered whether the improving economy would filter through to people feeling more positive about their own finances. What actually happened in 2014 was that perceptions of the improvement in the economy peaked over the summer and have now started to falter – the economic statistics, GDP growth and unemployment, may have remained strong, but public perceptions have started to go back down again. In August YouGov found 50% of people thought the economy was showing signs of recovery or on it’s way to recovery, by December that had fallen to 40%.

2014roundup3

The impact of this is difficult to call as the economy is something of a two edged sword. Improving perceptions of the economy have gone hand in hand with a growing Conservative lead on the economy and that has remained steady… so far. If falling perceptions of the economy eat into the Conservatives lead on economic competence it will damage them. On the other hand, as the economy has improved it has fallen down the list of issues people consider important and become a less salient issue; if people worry more about the economy and it dominates their thinking more it may help the Conservatives…

4) Concern over immigration overtook the economy

Between 2007 and 2013 polls were consistent in showing that the public thought the economy was the number one problem facing the country. This year we saw it overtaken by immigration, and in the most recent few MORI polls it has been fighting with health for second place.

2014roundup4

These top three issues are each strongly associated with a party – the public invariably trust Labour more on the issue of the NHS, over the course of last couple of years the Conservatives have built up a solid lead on managing the economy and UKIP generally lead the other parties on the issue of immigration. It is in the clear electoral interests of the Conservatives to have an election dominated by the economy, for Labour to have an election dominated by the NHS, for UKIP to have an election dominated by the issue of immigration. Over the last year things the issue agenda has clearly been moving in UKIP’s favour.

5) We found out where the Lib Dems were doing well and badly

In previous round ups like this I’ve always ended up saying how Lib Dem national support is in a dire state, but their MPs may or may not survive due to their personal votes and tactical voting. Through 2014 though we have got a lot more data on where the Lib Dems are doing well and badly and where they may be able to withstand the tide against them. At the last election the Liberal Democrats won 57 seats. Thirty-three of these are English and Welsh seats with the Conservatives in second place, and twenty-six of those we have Ashcroft polls for. Twelve are English and Welsh seats with Labour in second place, and we have Ashcroft polls for eleven of those (all but Bristol West). A further eleven are in Scotland, where the impact of surging SNP support remains to be seen and where we will hopefully have some Ashcroft polling later this year. Finally there is the unique Lib Dem vs Plaid seat of Ceredigion.

The average swing in the LD-v-Con seats is a modest 2.2 points from LD to Con, enough for the Conservatives to take seven seats. However, because the majorities and the swings aren’t evenly distributed there were actually ten seats where Ashcroft found the Conservatives ahead and three more (St Ives, North Cornwall and Torbay) where it’s too close to call). The line on the chart below is the swing needed for each Lib Dem seat to fall, the bars the swings recorded in the Ashcroft polling (when Ashcroft has done more than one poll in the same seat I’ve averaged them)

2014roundup5

In the LD-v-Lab seats it is a different story, the average swing is a towering 12 points from LD to Lab, enough to win all the seats at a trot. Again, there is some variation from seat to seat, but this is only enough to save two of these seats – the once unassailable Old Southwark and Bermondsey, and Birmingham Yardley where John Hemming seems to be bucking the trend.

2014roundup5b

While national polls are never going to tell us too much about Lib Dem seat numbers, based on the Ashcroft polling The Lib Dems look set to loose around twenty seats in England and Wales, plus however many in Scotland (and given their dire performance in Scottish polls and the 2011 Holyrood elections that’s unlikely to be pretty). I think a fair assessment is that the Lib Dems start 2015 looking set to loose about half their seats at the election.

6) The SNP lost the war, but are winning the peace

Which brings us to Scotland. The aftermath of the referendum has been stark in terms of Westminster voting intention, with all polls since mid-October showing substantial SNP leads, ranging between 16 and 29 points. Thanks to the electoral system, if anything even nearly approaching this happens at the general election it will have a huge effect on seat numbers.

2014roundup6

For the last thirty years the electoral system in Scotland has worked heavily in Labour’s favour – they have enjoyed around 40% of the vote in Scotland, the rest being split between the SNP, Lib Dems and Conservatives, who have all struggled to get more than a quarter of the vote. That has translated into a consistent block of forty-plus seats for Labour. If that flips round in other direction, with a large lead for the SNP, we can expect the electoral system to deliver a similar boon for the SNP. There are still many unknowns about the Scottish vote – the post-referendum SNP is a new development, we don’t know if it will last, nor do we really know how the vote will be distributed and how the SNP surge in support is distributed. The Ashcroft Scottish polling will at least tell us more on that front, at present we can only say that things looks very good for the SNP in Scotland, and very worrying for Labour.


279 Responses to “Six opinion poll findings from 2014”

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  1. …and where has it been done before and worked!

    US, UK, Japan, China etc. etc.

  2. @ Colin

    Assets Purchased by the Central Bank in UK were not bought direct from The State-but purchased in the market after issue by the Treasury.

    What were they purchased with, Colin?

  3. @ KeithP

    “Looking at that decline in the Labour lead graph (no 1 above) I’ve been trying to decide whether it could be best modelled by a straight line or negative exponential curve.”

    A partial answer could be obtained by seeing whether there is any curvilinear (quadratic) component in the trend over time. In a decay curve, the negativity of the second differential reduces over time whereas for a linear fit the slope is obviously constant. I did that (and posted) for another party within the last few weeks. (Can’t remember which…)

    Recent analyses show that Labour is currently bettering long-standing linear predictions. This suggests there might be a bit of levelling off. On the other hand, Anthony’s post covered all of 2013 as well, and the recent change might not show up in the full dataset.

  4. QE is printing money to buy toxic assets off the banks and dumping them on the public so when the interest rates finally go up and those toxic assets become worthless the public take the loss and not the banks.

    “Just exactly where;
    Does the money come from,
    why doesn’t everybody do it as a miracle cure to unemployment
    and where has it been done before and worked!”

    Where does the money the government borrows come from? The banks conjure it up out of thin air and then charge interest on it.

    There’s no reason the govt. couldn’t conjure it up out of thin air themselves and save themselves the interest payments.

  5. A number of contributors have recently commented on the fact that the Conservative VI seems to be clamped on 31-32% and have argued that the outcome of the election may be determined by the actions of voters who currently say they will support one of the smaller parties.

    With this in mind, I have decided to play around and look at the effect of a range of hypothetical scenarios. To do this, I am using the modified version of the Electionforecast predictor (as described in my post yesterday at 3.54 pm). In all cases the starting point is my ‘Continuing Trends from 2014’ assumption (dubbed CT-2014 or just CT, for brevity. (I do this because I currently see no advantage in making reference to polling data from prior elections). I plan to make some comments at the end about the effects of using different sets of prediction assumptions.

    First, by popular request (albeit only from @CMJ) … The Greens

    In my CT-2014 run yesterday, I noted that the current projection is that the Greens will hold Brighton Pavilion and *gain* Bristol West.

    Some brief comments on the former. Brighton P. is 19th on the UKPR Labour target list and in some ways looks like a seat they should be going for. Labour and Green VIs have increased by the same amount since 2010 and so the small Green majority looks fragile. However, most of the external evidence seems to point to a Green HOLD. The December Ashcroft marginal poll placed the Greens 10% ahead using the Constituency VI measure (albeit with a 5% *deficit* using the standard VI measure). But the main point is that Caroline Lucas is a national figure who enjoys a good deal of national TV exposure. She seems to be regarded as a good constituency MP, and she should benefit from any first-time incumbency effect there might be.

    Bristol west: I have no idea how plausible this might be.

    The next thing I tried was to see what happens if you make generous assumptions about the continuation of the recent swell of support for the Greens.

    Here an extra 2% swing from Labour to the Greens would bag Norwich South for them. To me this outcome seems somewhat implausible given that an Ashcroft June marginal poll put Labour 13% ahead of the Greens. But they have only recently started prompting for the Green Party so…perhaps a long shot.

    From what I can see, this must be the limit of the Greens own ambitions. (Others my disagree..)

    The next issue I looked at was the effect on *other* parties of a further boost (or minor slump) in Green fortunes.

    This produced some interesting results as about a dozen seats changed hands over the range 1% above and below my central assumptions for Green vote-shares in the election.

    Of these, two were battleground seats for Labour and the LibDem, and nine others were in contention between Tories and Labour.

    The two LD seats were Bermondsey and Old Southwark and Leeds North West. The model says that these both pass to Labour if the Greens fade a bit, but stay with the LDs if they retain current levels of support or improve a bit. Personally I doubt whether Simon Hughes is genuinely at risk of losing the former. (The spreadsheet doesn’t know about sitting MPs).

    The Labour/Tory switching list included Blackpool North and Cleveleys, Bristol North West, Brigg and Goole, Calder Valley, Halesowen and Rowley Regis, Hove, Nuneaton, Stevenage and Worcester. Each is chalked up as a Labour gain if the Greens drop back a little but a Tory hold if the Greens improve a little (and vote for their own party in the GE).

    The result of this is that without changing any figures for the Tories, LDs, SNP, Ukip or smaller parties, the projection can change from a small Labour lead to a small Tory lead. My own assessment is that there are not more than about a dozen seats that are subject to Green influences of this kind. But it could be enough to change the political dynamics of coalition formation.

    Note that all of these details are premised upon Continuing Trends assumptions. If you believe in Swingback or regression-to-mean, then the overall tallies will be different and a different set of seats will move centre stage. But is suspect that, on these analyses, roughly the same number of seats will be subject to being swayed by Green votes.

    Focus on other parties coming in due course…

  6. Good Evening All.

    UNICORN: Thank you for your analysis.

    Cons look set, at this stage, to be slightly ahead in four months time.
    Their alliance with the DUP may help them into Government, which would have happened in Feb 1974, had Ted Heath not alienated the majority community in the North of Ireland, by closing down the Stormont Parliament.

  7. Unicorn,

    Nice work again.

    Re Greens in con/lab marginals there have been suggestions that the Greens may not field candidates in some of all such seats.

    Anyone know more aboit this?

    Agree re Hughes by the way – a hold and Labour activists in SE London better deployed elsewhere imo but then Iam not on thhe ground there.

  8. Colin – “The Monetary Base in US-as in UK -increased dramatically following Quantitive Easing in both countries. In both cases the excercise was one of increasing market liquidity to boost economic growth & keep interest rates low.-not to finance government spending.”

    Actually it was done to prevent deflation. Nothing to do with growth, and in a deflationary world interest rates would have been low regardless of QE.

    The velocity of money collapsed. See the following graph from the Fed:

    http://research.stlouisfed.org/fredgraph.png?width=630&height=378&range=Max&id=M2V

    It was lower than it had been for over 50 years. In that situation the only way to prevent deflation was to increase the monetary base. (Inflation/deflation is a function of the monetary base and the velocity of money). Incidentally the collapse in velocity is the reason that inflation did not arise from the money printing as some people predicted.

    The eurozone is edging towards deflation precisely because the ECB’s hands have been tied regarding QE.

  9. @unicorn. You seem to me to be interested in understanding a) the factors that determine VI in individual seats and b) the way in which current voting intentions are likely to change between now and the General Election,

    With the Constituencies, you have the Ashcroft Polls for the current or recent VI but obviously not for the future situation. For the future you have trends, past histories, ideas about swingback or whatever, and the ability to test out the effect of different assumptions but all this at the national rather than constituency level,

    It is, of course, possible that the way VI changes will vary in different constituencies but this seems pretty unpredictable other than on the sort of reasoning you employed for Simon Hughes. Otherwise it seems best to assume that trends are national (e.g. as in your example) that the Greens gain or lose 1 per cent of VI.

    Would it be possible for you to produce a Constituency model based on the Ashcroft polls (perhaps slightly more elaborate than the one you have with some allowance for incumbency, date of poll and party identify of challenger and incumbent), run this on all constituencies and then apply changes across the board based on various assumptions, (The point of making a slightly more elaborate model would be to try and improve you prediction of Ashcroft’s second VI question) It seems to me that this would give us a future national picture informed by the variation between constituencies and with a clearer picture of the uncertainties involved,

    I make these suggestions on the assumption that you have the mathematical expertise (surely true), enough data to produce a more elaborate model (not sure) and the time to produce a full model and apply the different assumptions (no idea if true). I possess none of these requirements. So hopefully you will pardon the suggestion.

  10. COUPER2802

    I can assure you that it is a lot more than Labour activists who dislike the SNP.
    This dislike is a fairly recent development, and it stems from their never ending efforts to get Scotland togo for Independence.
    The SNP still don’t understand that the majority of getting sick tired of their blinkered views of Scotland and the United Kingdom.

  11. Reading a book about the rise of the US Mafia, and came across a gem of a quote. The subject is about how saloon owners were generally well placed to be involved in politics (illegal casinos, brothels) and generally greasing the palms of police and politicians alike.

    “Ideally the saloon owner became a politician himself. If he was so inclined he could then direct an entire city’s serious crime, from white slavery (coercive prostitution) to extortion, loansharking and the elimination of rival criminals. With a corrupt police force and the county sheriff in his pocket the saloon-owing politician could wipe out all the opposition. If any employee or racket of his were brought to court he could get the charges thrown out by the judge, whose election he had secured or whom he had appointed in the time-honoured spoils system of American politics. If the worst happened and reformers won an election on an anti-corruption platform, the saloon syndicate usually had enough guile to outlast the reformers. After a few years the crooks would get re-elected, outwardly chastened perhaps but cannier than ever. As Richard Croker, the turn-of-the-century boss of New York’s corrupt Democratic organisation said after his candidate for mayor had been defeated, ‘The people could not stand the rotten police corruption. We’ll be back after the next election. They can’t stand reform either.’

    Not so out of tune with modern times. Different methods and faces, but not too different. Beware a politician with a pub! :))

  12. Anthony…comment in moderation…any chance?

  13. AMBER

    They were purchased with electronically created Credit Balances at the BoE ; in the name of the insitution selling Gilts to BoE , on which the seller could draw.

  14. @ Colin

    They were purchased with electronically created Credit Balances at the BoE

    AKA “Money”! And from where did the BoE get the money?

  15. @ Amber

    I’ll leave this discussion with Colin in your eminently competent hands :)

  16. @Peter Cairns – “Just exactly where;
    Does the money come from,
    why doesn’t everybody do it as a miracle cure to unemployment
    and where has it been done before and worked!”

    In the context of Greece, the argument is that the money should really come from the interest payments and capital repayments for some of the debts racked up.

    This is economically very sensible in one sense. Inappropriate lending is an example of a badly functioning business, and in economic terms, poor performers should not be allowed to thrive. In the US, sub prime mortgage lenders do not have the right to chase after mortgagees if they have handed the property back. Default occurs, which the bank has to absorb. It isn’t painless for the borrower – they become homeless and get a bad credit rating, but at least they no longer owe the money.

    European laws are geared much more towards the capital owners, so the lender gets protection against default and debts are pursued, even after evictions. The net result of this is that the US generally recovers far quicker from recession than Europe and the UK, as the debt problem is worked through far quicker. This is the general situation now, where debt ratios in the EZ are rising.

    In Greece’s case, a sensible solution would be for a managed partial default, releasing the debt and debt service costs for economic investment and growth measures. The downside is that Greece would have a poor credit rating, thus increasing future borrowing costs, but many countries have successfully worked through this, although it is by no means painless. The key question is which version of pain leads to a faster stabilization point.

    The complicating factor for Greece is that if you are going to have a single currency, debts really do need to be shared – something the SNP couldn’t grasp I’m afraid. In Greece’s case, this would mean Germany shouldering some of the burden for poor lending decisions, which it is not prepared to do, thereby prolonging the crisis.

    Ultimately, if lenders appreciate that they will suffer the consequences of poor lending decisions, logic suggests that they will be more careful. Obviously this didn’t happen in the US sub prime sector, but then we get back to the ‘too big to fail’ issue.

    Indeed, some right wing think tanks are opposed to our own state deposit guarantees of up to £85,000 per bank. They argue this breeds ill discipline in the markets, where savers only look for the best rate, and ignore security of the bank, with the overall impact of increasing risk. I have some sympathy with this view.

  17. @ Syzygy

    :-) Happy New Year :-)

  18. Does anybody think that this Prince Andrew story might have an effect on VI?

    :-)

  19. CB, why would it? He’s not an MP and I’ve always understood the Royals can’t vote.

  20. So has swing back started yet? Doesn’t seem so. It’ll be either a small Lab majority or hung parliament territory with a mad scramble to get the right numbers. Really can’t see the Tories getting a majority as there running out of time.

  21. Pete

    Royals may not exercise the franchise personally, but they are frequently used to influence votes.

    Freedom to do what the hell they like without public scrutiny is doubtless their just reward.

    http://www.independent.co.uk/news/uk/home-news/royal-family-granted-new-right-of-secrecy-2179148.html

  22. CB11
    “a senior detective in the West Midlands Crime Squad, got into a bit of trouble for using that acronym in a speech he made when leaving his former job for another. One of his colleagues recorded his speech and released the relevant excerpt to the press, I believe. He got demoted.”

    Doesn’t it strike you, not only in this instance, but for example in its response to child abuse, that the police have a need for a more civilised, professional and educated participation in the urban culture for which they provide an important area of governance?

    COUPER2802
    ““common ownership of the means of production, distribution and exchange” is the definition of Socialism.”

    No it isn’t, if what you mean is a political philosophy which defines a socialist party which seeks or exercises government in the social market and free movement of goods, labour and production systems in conditions of regulated international trade – which is what we’ve got.
    In those conditions socialism is defined rather by the willingness of the government itself to govern aspect of wealth creation and distribution which will maintain equity regulate the market when necessary, and to establish and monitor the democratic mechanisms needed for that purpose.

  23. ALEC
    Germany was willing to accept the cost of ostpolitik, absorbing the results of “poor lending” by the soviet banking system in E.Germany, but not of sudpolitik in the entry and intended subsidisation of the Greek, Spanish and other southern European states into the EU, to which it contributed substantially.
    Time to suck it up, and to recognise the differences of culture which lie, in a country where the main export industries are tourism and shipping, and social security and employment are at base those of a peasant agricultural society.

  24. Is there a yougov on sunday or is it monday ?

  25. AMBER

    It didn’t “come” from anywhere.
    BoE created it in order to increase liquidity in the banking system.

  26. @ Funtypippin

    “A few pages back someone brought up Bristol West as a Green gain – I’ve said it before and I’ll say it again: I would be very very very surprised indeed if this happened. THis idea seems to have come from a Green press release and a puff piece in the newspaper-that-must-not-be-named…”

    I think this came from one of my projections using 2014-based trends. The verdict was based simply on a numerical extension of 2014 trends from now until Election Day.

    The reason that Bristol West came up as a gain was that the Electionforecast Nowcast currently have the Greens and Labour neck and neck here. I am pretty sure they don’t adjust their figures on the basis of press releases or newspaper articles. So they must have entered some polling data that put their figures where they are now.

  27. Any country can create extra money if it has its own currency. That money can then be used as a means of trading within that country. Whether the rest of the world accepts that currency or puts any value on its is up to them. The country issuing the currency can try to fix exchange rates in order to trade with the rest of the world but this only has a chance of working if the country has something to sell. If the country in question wants to borrow money in order to trade, then the rate it will have to pay will be determined by the currency it wishes to borrow, the internationally accepted exchange rate and the risk of default. The amount of its own currency it has floating around May be irrelevant in this transaction.

  28. Alec,

    “but many countries have successfully worked through this, although it is by no means painless.”

    Again, which ones.

    Show me the list of countries that have used default as a way out and which have gone on to prosper and why they did.

    I know it’s been done in the third world but I am at a loss to remember and advanced economy with the kind of social provision that Greece has and Greeks expect actually getting it to work.

    Peter.

  29. @Charles, referring to Unicorn and Bristol W:

    “…….. it seems best to assume that trends are national (e.g. as in your example) that the Greens gain or lose 1 per cent of VI. Would it be possible for you to produce a Constituency model based on the Ashcroft polls…….”

    In fact, these are already taken into account. Unicorn’s model is adapted from the constituency detail at Election Forecasting, which use both national trends AND local constituency polls (Ashcroft and other, where available).

  30. @Safer – Thanks. As far as I am concerned, ‘Unicorn rules’. But I wish he would slightly adapt his model so that it was better able to take account of people’s deliberations over how to vote in a particular constituency, as against which party they want to see in power.

  31. @John Pilgrim,

    I’ve reread the first part of your 6.10 am contribution a couple of times, and I’m still not quite sure what you mean.

    With regard to the BMW comment by the West Mids officer, I can see exactly why it was unacceptable and why he would be punished for it. Although it is a reasonably empirical observation that BMW cars are a common choice amongst urban black males (and therefore the comment may not in itself be discriminatory), it seems to me pretty irrelevant to anything and unworthy of comment, and therefore the “BMW” expression feels unprofessional. But is this the result of the police being out of touch with the public? Would you never hear the “BMW” phrase from non-police Britons, or indeed a whole range of other racially targeted comments? The point is not that the police need to better reflect the community. The point surely is the police need to achieve standards of propriety in speech and conduct that far exceed the community.

    And as for linking it to the police response to child abuse, I am really perplexed by that comment. It suggests that any reluctance by sections of the police service (and trust me, the parts that actually deal directly with child abuse are not included in this) to accept the reality of widespread child sexual abuse is a “police-specific” problem. Having spent 20 years trying to get extended family members, lawyers and juries to believe abuse allegations, I can tell you that any police cynicism is simply a reflection of a far more widely held attitude in the public at large. Again, it’s not about the police reflecting the public’s views, but about having better-informed and more accurate views.

    You may have meant something completely different, and if so I apologise for the meandering!

  32. The Financial Times are predicting another coalition – a Labour/Tory one. What do you think?
    It will stop the SNP holding the balance of power – but really if we are in a union there should be nothing wrong with a Scottish party holding the balance of power.

    It would solve some of the issues of the likely hung parliament but wouldn’t it be death for Labour at least.

  33. @John P/Neil A

    If there’s anything meaningful to dig out of the anecdote I shared about my old friend’s rather gauche joke relating to the acronym BMW, it’s that these essentially benign and harmless “in jokes” can have unexpected consequences and are probably best left untold in public spaces, especially if you’re a senior police officer. The person in question is a perfectly decent individual, but he’s strictly conservative old school and was probably soliciting easy laughs in the sort of way that he was used to doing in the golf club bar and on his hunting and shooting jaunts. He knew his audience and pandered to them. We’ve all done that from time to time and then probably regretted it but he’s certainly no racist from my memory of him. Completely at the other end of the political spectrum to me, but I shared many a social drink with him in our cricketing days, and he’s a very decent chap without a malicious bone in his body.

  34. @Couper

    I think it’s nonsense and a lot of casualties would be incurred in the stampede from – I suspect – both Labour and Tory parties if something so egregious was proposed.
    There could be no justification for such a denial of democracy.

  35. COUPER

    If that were to happen then I think Labour would be confined to the political wilderness in Scotland and Wales and possibly the North of England for a very long time.

    The Tartan rampage is coming and I think this time it will get further than Derby and only stop when it reaches Westminster.

  36. COUPER2802
    The Financial Times are predicting another coalition – a Labour/Tory one. What do you think?

    URL or headline?

    I’ve been looking a while on the FT site and can’t find the relevant page.

  37. @ Barb

    h ttp://www.ft.com/cms/s/2/fb55f168-807f-11e4-872b-00144feabdc0.html

  38. GUYMONDE

    Thanks. 2nd prediction in their FT Predictions: the world in 2015.

    Archived at http://archive.today/ClsCz for anyone without an FT account.

  39. @peter Cairns – “Show me the list of countries that have used default as a way out and which have gone on to prosper and why they did.

    I know it’s been done in the third world but I am at a loss to remember and advanced economy with the kind of social provision that Greece has and Greeks expect actually getting it to work.”

    I think that’s a bit of a naughty question, to be honest (a bit of a naughty three questions, to be more precise).

    It’s also worth bearing in mind that defaults come in different guises, including restructuring of debt and other currency/debt measures.

    In 1971, the US effectively defaulted when they abandoned the convertability of dollars into gold. This was accompanied by a three month wage and price freeze and a 10% import surcharge. Not quite the same kind of default needed in Greece today, but the support measures are similar and the US has been reasonably successful since then. In fact, the US has imposed de facto defaults on sovereign debt on 5 other occasions in the past.

    While it is commonly held that the UK has never defaulted on our debt, this isn’t true. Between 1749 and 1889 we effectively defaulted 4 times. These weren’t full scale defaults, where debts were not repaid, but were mainly imposed replacement of coupons of a lower interest rate, effectively unilaterally scrapping the bond holders contract and replacing it with one more favourable to the state. As a nation, we didn’t do so badly afterwards.

    Japan effectively defaulted in 1946 -52, by replacing the old currency with a new one at face value, which was effectively much lower, and imposing large losses on currency holders.

    India has defaulted in 1958, 1969 and 1972. Germany defaulted on it’s external debt in 1932. Look at them now.

    In fact, there aren’t many countries that haven’t defaulted at some point, often several times, with the defaults varying in the nature, type and scale. There doesn’t appear to be any long term evidence that default harms the countries concerned in the long term, so really my response would be to turn the question back to you and ask whether you have examples of countries suffering from long term, irreparable damage caused directly by a default?

    Our approach to state debts is somewhat illogical. We all accept that any shares we own (loans to companies) could become worthless if the company goes bankrupt. We all accept that an individual who borrows from the bank may find themselves unable to pay their debts, so that they need to be written off.

    But we apparently don’t seem willing to allow nations as a whole the benefit of a debt default or restructuring, even though this has been a very normal way to repair national balance sheets throughout modern monetary history.

    The point in this is that our approach to individuals and companies is one of reassessing the situation once it becomes apparent that the borrower is in difficulty. Restructuring is very common, with the lender often accepting some short term loss, in the hope that the borrower can return to financial health in due course, free from some of the burden of debt. In this way, we seek the least worst option.

    This is what is needed in Greece and elsewhere now, and it should have been happening for the last few years already.

  40. @ Peter Cairns,

    Look at Iceland for the example of a country that chose to default.

    The Graun has also posted an Ian Birrell article floating a ‘national unity’ government. National unity against the government, possibly.

  41. Peter,

    There are many instances of nations “successfully” defaulting. For example, Iceland recently. Or the US in 1933, or Germany (several times). In fact, Wikipedia has a long list of sovereign defaults to chew over.

    The interesting question in the euro context is whether defaulting on official debts (i.e., to other countries) will ever be put forward by politicians. It is a perfectly reasonable strategy from the economic point of view, but the politics, and public perception of it, is the key to whether it will ever happen.

  42. The attitudes of young people came up on the thread earlier.

    This is an interesting report-and perhaps mirrors the Demos survey more than the Opinium one-both of which were referenced up-thread.

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/389086/Horizon_Scanning_-_Social_Attutudes_of_Young_People_report.pdf

  43. @ Alec
    ‘While it is commonly held that the UK has never defaulted on our debt, this isn’t true. Between 1749 and 1889 we effectively defaulted 4 times. These weren’t full scale defaults, where debts were not repaid, but were mainly imposed replacement of coupons of a lower interest rate, effectively unilaterally scrapping the bond holders contract and replacing it with one more favourable to the state. As a nation, we didn’t do so badly afterwards. ‘

    This also happened,I believe, in 1932 when Neville Chamberlain as Chancellor reduced the coupon rate of interest to be paid to holders of War Loan stock issued in World War 1.

  44. Belatedly, I’ve just read that article by Neal Lawson where he writes an open letter to Tony Blair and, going beyond the usual parodies and selective quotations that I’d previously seen, it appears to be a perfectly reasonable riposte to Blair’s recent interview with the Economist. It’s a piece of polemic, admittedly, but that’s what political commentators tend to write, isn’t it, and even his much quoted observation that the “wrong people voted Labour in 1997” is, when taken in context, a reasonable arguing point. Blair’s landslide was as much a rejection of 18 years of Toryism as it was an endorsement of New Labour and, as Lawson observes, all sorts of people vote for the main opposition party when they want rid of the incumbents. Blair took on board many and varied types of “time for a change” voters who were never going to be committed or long-standing passengers on Blair’s big tent bus. Many disembarked fairly quickly, I would have thought. Lawson’s use of the term “wrong people voting Labour” and citing BMWs and gravel drives was a little over-journalistic and lurid, but his point was a good one. Labour in 97, as any party does when winning a landslide against an unpopular government, attracted people who were never converts to the party or its core values but were merely using Labour as the best way of getting rid of the Tories.

    Thatcher needed these sort of voters in 1979, ideologically and politically lightweight, but keen to oust Labour and usher in a change. My wife was one of them but, within years, regretted a voting decision she never made, or is ever likely to make, ever again. A “wrong” sort of Tory voter? Probably.

    Lawson also posits a potent critique of the way New Labour governed. He argues that Blair became too preoccupied with trying to keep these transitory non-converts on board, believing that the best way to retain their support was to convince them that they’d elected a de-facto centrist Tory government. He did this rather than trying to convert them to genuinely centre-left values. He also argues that the really radical things that Labour did in government were by stealth, apologetic and usually under disguise in order not to frighten the horses that were herded in the 97 landslide. As someone who quite admired Blair, I think, on reflection, Lawson’s critique has more than a grain of truth about it.

  45. @Barnanzero, Guymonde
    Thanks for link to FT 2015 predictions. On past form they usually get about 50% of their Yes/No questions right. I’m predicting they’ll achieve a similar result this year.

  46. Etienne,

    I thought Iceland had allowed it’s banks to go bust rather than nationalise them and accept their private debt as sovereign debt, which isn’t the same thing.

    America and others have defaulted or altered part of their debt but usually to private bond holders not the IMF or world bank and of course due to it’s size and being a reserve currency the U.S. could still borrow and relatively cheaply.

    Russia has defaulted and recovered but that was more due to a fortuitous rise in oil and gas prices and to a lesser extent agricultural surpluses with rising prices than an economic transformation.

    I remain to be convinced that default would give Greece anything but more grief than it has already gone through or will need to under the current terms.

    As I’ve said before the price of being in a monetary union with Germany is being as productive and successful as Germany.

    That means being able to make as much as you spend rather than living beyond your means. For me default is running away from your problems and hoping they won’t run after you rather than facing them.

    Peter.

  47. As I’ve said before the price of being in a monetary union with Germany is being as productive and successful as Germany.

    This is major argument why the Euro is such a terrible construct.

    Monetary union only really works with a fiscal union, which in turn requires political union.

    This is the reason why the Euro must succeed, and why Greece by hook or by crook is required not to default. That isn’t in the script.

    If the Euro fails, so does the long term project of political union.

  48. @CatmanJeff

    The Euro wasn’t a bad idea. The potential pitfalls were well known at the time of its inception, and guarded against by the Growth and Stability Pact. Unfortunately, the rules of the GSP were not exactly enforced against errant member states (including several of Europe’s heavyweight states).

  49. @CB11
    I think Blair 97 wasn’t much like Thatcher 79. She didn’t win a landslide in 1979,for a start, and didn’t win by stealing Labour’s clothes either. She didn’t try to maintain those “wrong” voters in 1979 by moving left, yet the Tories only lost 2% of their vote in the 13 years between 79 and 92! If your wife tired quickly of Maggie she was part of a small group by comparison comparison to Blair’s “wrong voters”, 2.5% of whom rejected him in 2001 after just 4 years.

    But on the general point, that Blair won a landslide with voters who weren’t natural Labour voters, Lawson has a case. I just don’t think it’s very new or interesting. Which is ironic, since new, interesting alternatives are what Neal Lawson is always banging on about.

  50. @RAF

    I think there are many folk who believe the Euro was a terrible idea from across the political spectrum.

    At the time Europe was enjoying low inflation and benign economic conditions, so the true risks were either specifically under played by the key drivers of the project, or under estimated in a false glow of unreality..

    I think we are in a position where too much time, political will and money has been spent defending an essentially flawed concept.

    That only leads to bigger tears in the end.

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