With the window for taking part in Labour leadership election closing and ballot papers going out there were several polls over the weekend asking about the leadership candidates, though no fresh polling of people voting in the actual contest. ComRes, Opinium and Survation all had polls asking about the general public’s perception of the candidates. While the polls weren’t presented that way, I’ve seen various people writing about them as evidence of which candidate would actually do better as leader. In particular the Survation poll had Jeremy Corbyn ahead among the public after they were shown video clips, so was taken as a sign that he may not be as damaging electorally as the commentariat widely assume.

Questions about how well different leadership candidates would do in a general election are always popular and sought after, but extremely difficult if not impossible to make meaningful. Asking the general public who they think would do better or worse is perfectly reasonable, but is a different question. Who people think would do better is not the same as who would do better, it’s just asking the public to answer the question for you and a poll is not a Magic 8 Ball. Asking the general public who they prefer doesn’t answer the question either, it contains the views of lots of committed Labour and Conservative voters who aren’t going to change their vote anyway, and preferring is not necessarily the same as changing your vote.

If you ask how people would vote with x, y or z as leader, or if people would be more or less likely to vote Labour with each candidate as leader then you are getting a little closer, but the problem is still that people are expected to answer a question about how they would vote with the candidates as leader when the general public know hardly anything about them. A fair old chunk won’t even know the candidates names or what they look like, the majority will have little real idea what policies they will put forward. None of us really know how they will work out as leader, what the public, press and political reaction will be, how they will really operate. How can respondents really judge how they would vote in a hypothetical situation with so little information? They can’t.

Some polls try to get round that by giving respondents a little more information about each candidate: a run down of their main policy positions perhaps, or in the case of the Survation poll a little video clip of each respondent so people could see what they looked and sounded like. This is better, but it’s still a long way from reality. It’s like the famous market research failure of New Coke – in market research tests people liked the taste, but release it out into the real world and people wanted their old Coke back. A video clip or a list of policies won’t factor in the way the media react, the way the new leader is reported, how they actually handle leading, the way their party and their opponents react. There is no really good way of answering the question because you’re asking respondents something they don’t actually know yet.

Is there anything polls can really tell us about how the leadership contenders would do? Well, firstly I think we can be reasonably confident in saying the polls don’t suggest any of the four candidates is any sort of electoral panacea, the most positive net rating in the ComRes poll is Andy Burnham and just 19% think he would improve Labour’s chances, 14% that he’d damage them (Corbyn gets more people saying he’d have a positive effect (21%) but much more saying he’d have a negative effect (31%). None of them have obvious election-winning magic like, say, Blair did in 1994.

They can also tell us some things about people’s first impressions of the candidates, something that shouldn’t be underestimated (people probably made their minds up pretty quickly that Ed Miliband didn’t look Prime Ministerial, for example, or that there was “something of the night” about Michael Howard. Those early impressions are hard to shift.). On that front the Survation poll is pretty positive about Jeremy Corbyn with people saying he came across as more trustworthy and in touch than his rivals (though such polls are always a bit tricky because of the choice of clips – Survation tried to iron out any potential biasing effect by having clips from each candidate being interviewed on the Marr show, so they were all interviews, all the same setting and same interviewer… but even then you ended up with two candidates defending their position on the welfare bill, one talking about the EU referendum and one talking about rail nationalisation. It’s almost impossible to do such things and have a truly level ground).

The argument against Corbyn isn’t about his personal image and manner though, it’s that he’d put the Labour party in a ideological and policy position that wouldn’t win votes, that the Labour party itself would risk ripping itself apart under a leader with little support among the Parliamentary party and a long history of rebellion. On individual policies I’ve seen Corbyn supporters taking succour from polls showing, for example, that a majority of the public support rail nationalisation or much higher taxes on the rich and drawing the conclusion that there is a public appetite for much more left wing policies. Be careful – look at this YouGov poll which shows a majority of people would support renationalisation of the utilities, increasing the minimum wage to £10 and the top rate of tax to 60%… but also a total ban on immigration and benefits for anyone who turns down a job, making life mean life with no parole in prison sentences and stopping all international aid. There are some policies to the left of mainstream public debate that are popular and some to the right that are popular, it no more means that the public are aching for a far-left political party than for a far-right one. Essentially you can pick a list of appealing sounding policies from almost any ideological stance, from far-left to far-right, and find the public agree with them. In reality though policies require trade-offs, they need to be paid for, they are attacked by opponents and the press. They are judged as a package. In terms of how well the Labour party would hang together under Jeremy Corbyn, polling of the public can’t really tell us – a poll of Labour MPs perhaps!

Bottom line? There is no way of doing a simple poll that will give you a ready packaged answer as to how well or badly a potential party leader will do, and the things that Jeremy Corbyn’s detractors worry about are not things that are easily tested in a poll anyway. My own guess is that those who think Jeremy Corbyn would struggle electorally are correct, though it does depend on whether the Conservatives also pull themselves to shreds after the EU referendum. I am a little wary about arguments about parties not winning because they are too left or too right. While putting yourself broadly where most voters are is sensible enough, those voters themselves don’t necessarily see things as ideologically left and right and specific policies aren’t really that important in driving votes. However, broad perceptions of a party, its perceived competence and the public’s views on how suitable its leader is to be Prime Minister are incredibly important. It will be an extremely hard task for Labour to succeed if it is seem as taking up a risky and radical route, if it’s trying to rebuild a lack of public confidence by selling an approach that is radically different from what a normally risk-averse public are used to, if it is seen as being riven by internal dissent and splits, if their leadership patently doesn’t have the support of its own MPs. Maybe he’ll surprise us, but I wouldn’t count on it.

On other matters, the ComRes poll also had voting intention, their first online VI figures since the election (rather to my surprise. Their online polls for the Independent on Sunday dried up during the election campaign itself and I’d wrongly assumed they’d come to halt as part of ComRes moving their phone contract from the Independent to the Daily Mail. I’m pleased to see I was wrong, and the ComRes/Indy on Sunday relationship continues!). Topline figures are CON 40%, LAB 29%, LDEM 8%, UKIP 13%, GRN 4%, and ComRes have adopted the same socio-economic based turnout model for their online polls that they have started using in their telephone polls.


922 Responses to “Can polls tell us how well Corbyn would do in a general election?”

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  1. LisH
    “A Corbyn win will energise the left Parties in Europe and imo we will see either a move away from the Euro or an EU that will be unrecognisable from its current form.”

    Lis,
    I know foreign policy is supposed not to have salience in VI, and its substance largely unknown, not just to the hoi polloi, but it is impinging on us in the very real need to take the migrant crisis and its causes seriously. Jean-Claude Juncker and Federica Mogherini, the Commissioner for External Relations, and the whole of the Commission, are for that purpose Corbynista, backed by EU governments, notably Germany and its city governments – violently opposed,of course, by the far right, but not only within their own administrations (let alone only on the left) -also in planning and action to provide for the development of legitimate migration within migrant transit areas – a multi-service centre in Niger for migrants crossing from West and Central Africa over the Sahara.
    It will not be Corbyn who will appear to have been antiquatedly out of step with Europe. Cameron’s and May’s putting up of fences at Calais, while pouring aid into the Libyan Ministries of the Plan and the Interior – 62.8m at the last count – contrasts bizarrely with a DFID agenda which is precisely tailored to the programme which the EU proposes for investment in development and job creation within countries of origin.

    1. Bill Patrick

    “No one is doubting Corbyn’s popularity among his supporters. ”

    Very wise, Bill.

  2. @John Pilgrim

    Does seem that at least some of the people around Corbyn believe or choose to believe that many UKIP voters support immigration. Doesn’t make any sense to me at all but UKIP’s Douglas Carswell, who does, allegedly talks to Corbyn on a regular basis. Can’t imagine Corbyn has any other contact with UKIP.

  3. Laszlo

    [In Liverpool] Labour was voted back in until it became completely shambolic. Then a little intermezzo with the LibDems running the city and now the Greens are the official opposition, but Labour more or less does what it wants

    The real oddity with Liverpool politically is how un-Labour it is. If you look at the balance of the City Council from its foundation in 1974 to when it had an elected Mayor imposed on it in 2012:

    https://en.wikipedia.org/wiki/Liverpool_City_Council#Leaders_and_Control_.281974.E2.80.932012.29

    of those 38 years Labour only had an overall majority for 13 of them and Lib Dems for 12 and Labour only actually ran the City for a bit longer. As Wiki says previous to that:

    In the 19th and early 20th Century the council was run by the Conservatives, whose policies were responsible for Liverpool leading the way in many areas of social reform, for example the provision of the first council-housing in Europe. Liverpool was one of the last cities in the UK in which the Labour Party gained control, this not occurring until 1955

    and the Conservatives and Labour swapped control after. As with Glasgow (also much less Labour in history than people think), some of this was sectarian – the last ‘Protestant’ councillors didn’t lose their seats till 1971 – and some may be sheer perversity (1955 was one of the Tories’ best years electorally ever). But the history is hardly one of unrelieved socialism.

    Not of course that anyone would know this from the way it is portrayed. To judge by, say, the Museum of Liverpool, the last Liberal to be seen in the city was Gladstone and no Conservative has ever set foot. As ever with the place, mythology trumps fact.

  4. Spearmint

    If the good people of the Islington North Constituency Labour Party decide that in fact, they’d rather not have an MP who has voted with the Tories 500 times…

    While Mr Corbyn’s rebellions are many and various, I rather doubt if all them have been alongside the Conservatives. I can’t be bothered to trawl through Public Whip, but I suspect most were either a lonely handful of the Campaign Group making a stand or siding with motions from smaller Parties (Lib Dems, SNP, PC) while Labour or Tories sat on their hands, as with the benefit cuts.

    I also read that a lot of his rebellions were justified with the claim that he was actually support Labour Party policy against what bit of triangulation the current leadership was attempting. So in his own mind at least he wasn’t rebelling.

    In other words, how badly would Labour have to perform in the polls or in next year’s elections before [it could be concluded that the Corbyn] strategy wasn’t viable?

    There are at least three problems here. The first is that any such strategy is a long term one involving trying to get the public to see topics in a certain way. So some time may be needed. The second is that we have no idea what the effects of the volley of toy-throwing that would follow a Corbyn victory would be. Certainly if the Establishment Toddlers try to scream the place down if they don’t get their own way, VI may well be affected in the short term. That can hardly be blamed on Corbyn and we all know that giving in to toddlers is never wise in the long run.

    The third problem is that the 2016 elections are a rum bunch anyway. The Scottish and Welsh ones will be (rightly) dominated by their own national issues. In any case I think we can all agree that Scottish Labour’s wounds are all self-inflicted – though they had enough over to give some to their southern colleagues as well. The Mayoral and PCC elections are dominated by personality issues – and again were designed to be.

    Only the English local elections will give any idea of the impact of a new Labour leader and this lot are the least extensive of the cycle with mostly the usual elections by thirds in the places that have them. Given that they will only be eight months after the leadership election they won’t be that informative of long term prospects.

  5. @Roger Mexico

    it’s called being a psychopath if you believe you’re never wrong Would tie in with his admiration for leaders that kill their opposition

  6. SPEARMINT

    @”Yeah, but it’s their shop, and like any good capitalist I support the right of the petite bourgeoisie to put whatever they like in their shop windows. ;)”

    Of course-and like any shop window , it may or may not appeal to the customer.

    Voters elect MPs.

  7. @ Colin

    ‘Voters elect MPs’

    It’s generally the sort of choice that Mr Ford offered his customers.

    ‘Any colour provided it’s Tristam Hunt’ etc etc

    I’ve rarely voted for the MP but voted for the ‘colour’.

  8. SYZYGY

    Sorry you can’t find what you want in your constituency.

    The choice in mine is always fine & covers the spectrum.

    Though I suppose it depends where you are on that spectrum-if you happen to be at one of the two extremities then perhaps everything else does look Fordian or Huntlike .

    As I said before , JC’s binary world isn’t the one most people inhabit.

  9. “The UK’s leading business group is forecasting 2.6% GDP growth for 2015, up from 2.4% in June, and 2.8% in 2016, up from 2.5%. The upgrade is due to a combination of factors, including signs of recovering productivity in the first half of this year feeding through to stronger wage growth.
    Combined with continued low inflation from falling commodity prices, this gives a welcome boost to household spending. Furthermore, business investment is also likely to remain healthy, with our surveys indicating robust plans for capital spending.”

    CBI

    Osborne v Corbyn will be fascinating.

  10. @ Roger Mexico

    Indeed (about Liverpool)

    One of the big things for Labour (and especially later for the Militant) was crossing Scotland Road to the Protestant areas. There is a BBC radio programme that discusses it (in the context of 1984-87) – I can’t find it right now.

    There is still a quite sizeable Liberal Party vote (especially in the South).

    Also the Conservatives have traditionally been more centrist, and Labour more rightist in Liverpool (and a large proportion of pretty “anarchist” population).

    Liverpool Echo, the most important local paper (still read) was anti-Labour throughout the 1980-90s, and started to change only after 2000. It is not pro-Labour, but pro-Labour council (and yes, personality politics plays a significant role, although diminishing, just as patronage).

  11. ROGER MEXICO.
    Good Morning to you.
    Thank you for your points on Liverpool Politics. In Liverpool and many other parts of England, Catholic (Irish) voters were sympathetic to the Tories, owing to their support for Voluntary Aided RC Schools.
    The Balfour Act of 1902 led to the Liberal campaign: No Rome on the Rates. Lloyd George and Churchill were prominent in this campaign, and, in fact, Liberal Policy has consistently been against denominational education.
    I think that it was the aftermath of the 1916-1922 Anglo-Irish Conflict which propelled Irish populations away from the Tories/Unionists.

  12. “Catholic (Irish) voters were sympathetic to the Tories”

    Certainly not the case in Glasgow where the Catholic vote was overwhelmingly Labour. Until the 1970s the Tories called themselves Unionists in Glasgow and had a very large measure of support among the Protestant working class.

  13. Good morning all from a warm but grey Mount Florida.

    CHRISLANE

    May I take this opportunity to congratulate you and your magnificent AFC Bournemouth for their first ever win in the Premier League.

    I see a lot of chat this morning is on Liverpool but no mention of my beloved Liverpool FC who of course play Arsenal today. Mon the Reds!!

  14. LASZLO

    “There is still a quite sizable Liberal Party vote (especially in the South)”
    _______

    Liverpool Riverside extends to the south of the city and the Lib/Dems came 5th with 3.9%. Then there is Liverpool Wavertree (furthest south constituency) where the Lib/Dems polled an amazing 6% and came 4th just ahead of the Greens so I think you have a point.

  15. @ AC

    I meant to he Liberal Party And not LibDems.And also it was the local government context and not GE.

    And in various wards in Riverside (and the areas surrounding South Liverpool) they have double digit votes.

  16. In Liverpool too Protestant areas were Tories (Orange Lodge is still going strong),. Major population movements and boundary changes were also contributory factors.

  17. @Colin
    “The UK’s leading business group is forecasting 2.6% GDP growth for 2015.”

    One day is a long time in politics!

    Headline in the DT “‘Black Monday’: £44bn is wiped off the FTSE in just two hours as panic grips global financial markets”
    http://www.telegraph.co.uk/finance/markets/11819812/Black-Monday-live-44bn-wiped-off-FTSE-100-as-China-fears-prompt-global-panic-selling.html

  18. Laszlo

    You’re right about the Orange Lodges. Last time I was in Liverpool, the bus I was on got stuck behind an Orange march (not for long, it wasn’t a big march).

    The Liberal stronghold is Tuebrook:

    https://en.wikipedia.org/wiki/Tuebrook_and_Stoneycroft_(ward)

    which I’d say was more North Central than South. They lost the seat there this May, presumably due to the higher turnout of a GE (this often hits small Parties hard.

  19. It’ll get worse once the US markets start trading too. End of the day equities are over priced and low interest rates are a ticking time bomb. They need to take the hit and raise rates.

  20. Fraser

    The problem is that keeping interest rates at 0.5%, or raising them would both be disastrous.

    Had we had a proper counter-cyclical fiscal policy over the last five years, the recovery would have been far stronger and 0.5% interest rates would have ceased to be necessary some time ago.

    It is too late now. Osborne owns this one and it could ending up owning him.

  21. @ Liz H & Roger Mexico,

    Here’s the problem.

    A few Blairite babies will throw tantrums, but I think most fair-minded people on the soft left and the old right- people like me and Mr. Nameless and the majority of the PLP- will be willing to give Corbyn’s strategy a fair try if he wins the leadership, perhaps through gritted teeth in some cases. But we- and definitely the MPs- are not willing to sacrifice 100 Westminster seats trying it.

    What you’re describing here is a belief that is essentially unfalsifiable until 2020, if then. And that won’t wash.

    Holyrood is a write-off anyway and I think people will be willing to sacrifice the Welsh Assembly because

    a) It’s Wales
    b) Even in a horrible year for Labour I don’t see how the Conservatives can put together a majority in the Welsh Assembly
    c) There is literally no mechanism to remove Corbyn before the 2016 autumn conference

    But if the Welsh Assembly elections are a disaster people will want him out. Wales is a fair test case. Labour performed poorly in Wales in 2015, it shares many of the characteristics of the white working class areas in England where Labour is struggling, and if the old-time socialist religion can spark a revival anywhere it’s there. If Corbyn can’t win in Wales he can’t win at all, and if that’s true he needs to be removed.

    But then Liz will say “But you never gave him a fair chance!” for all the reasons Roger listed, and we’re going to end up with this whole stabbed-in-the-back mythology and it’s going to be a mess.

    in his own mind at least he wasn’t rebelling

    I can just see the whips’ faces as he explained that to them.

  22. @Lizh

    “One day is a long time in politics!”

    That’s the thing with economists: they always have a great sense of comic timing :)

  23. Spearmint is right. He can have a fair crack of the whip (ironic). If he fails to tame the lion, the whip should be handed to someone else.

    The same rules apply to any Labour leader, by the way – unless the situation looks absolutely hopeless and it’s better the captain goes down with the ship (Brown) or we think they’re going to win until they don’t (Miliband).

  24. LIZH

    You almost sound pleased .

    Don’t confuse panic amongst the fickle traders in the gambling den at the heart of our corrupt neo-liberal financial services mafia , with the fundamentals of the UK economy. lol.

  25. @ Colin,

    The problem with the current structure of the UK economy is that the fickle traders in the gambling den are one of its fundamentals…

  26. @ANARCHISTS UNITE

    The forecast of 2.6% GDP growth for 2015 was a quote from the CBI that @Colin posted. Isn’t it worrying that the Heads of our Industries have so little insight into what is going on in the world and rely on wishful thinking.

  27. LASZLO
    @ AC
    .
    “And in various wards in Riverside (and the areas surrounding South Liverpool) they have double digit votes”
    ____

    Okay so they are popular in a couple of streets but it’s hardly groundbreaking stuff when considering the buggers were in power in Liverpool.

  28. LIZH

    “Headline in the DT “‘Black Monday’: £44bn is wiped off the FTSE in just two hours as panic grips global financial markets”
    _______

    Hopefully it’s just a blip and shows how much China’s economy can have implications for the wider global economy but with the Wests continuing sanctions against Russia which is now proving to be counterproductive then I assume we will see more dips in the financial markets.

  29. @Lizh

    “Isn’t it worrying that the Heads of our Industries have so little insight into what is going on in the world and rely on wishful thinking.”

    The trouble is that the models they use are essentially assuming that the conditions of the present (low inflation, low interest rates etc.) will remain the same into the future, a fairly heroic set of assumptions all told.

    More generally economic models rely on the idea that people are rational, where rational means being able to know every possible future state of the economy and adjust plans accordingly (for a pragmatic reason that this is the only way you can get the marths to work.) Unfortunately that’s not people their describing, but gods. Consequently they don’t allow for the fact that something catastrophic could happen and disrupt everything. Indeed the models they’re using are basically the same ones they were using prior to the 2008 Great Recession, which is worrying.

    Whether these present events spiral into something worse, or whether it comes under control, remains to be seen, but that largely is dependent on what Beijing does. As the Communist party presently rules on the ground that it can provide continuing economic growth, if that falls through then all of this could end up being the least of their worries (though not the least of ours).

    @Spearmint & MrNameless

    I agree that Corbyn should not be given indefinite time, but I feel that one year would be too short (for a variety of reasons). Two years would be fairer I feel.

  30. ANARCHISTS UNITE

    “More generally economic models rely on the idea that people are rational, where rational means being able to know every possible future state of the economy and adjust plans accordingly (for a pragmatic reason that this is the only way you can get the marths to work.) ”

    That is not true of Keynesian models. Indeed, since the last crash, I am not sure that many academic economists would defend rational expectations, (as opposed to those being paid by City interests).

  31. @Spearmint & MrNameless
    “Spearmint is right. He can have a fair crack of the whip (ironic). If he fails to tame the lion, the whip should be handed to someone else.”

    Then do we give the next leader one year and if he/she is not successful, we appoint someone else. We could end up with 3-4 ex leaders before the 2020 GE and do we have enough people of calibre to stand in all these leadership elections, assuming those that stood once and did not get selected were not up to the mark.

  32. SPEARMINT

    No that isn’t right-any more than the Bourse in any country is.

    Markets are Markets & Fundamentals are Fundamentals. The former , of course, is there to analyse and assess the latter so that a price can be made in equities.

    But they do panic, and don’t always get irt right. In UK also, FTSE 100 now is not an indicator of UK economic activity.
    77% of FTSE 100 companies’ turnover was derived from overseas sales.(1)
    The pattern holds true for other developed market indices, the Capital Group found. 79% of CAC 40 revenues are earned outside France, for example, and 77% of the DAX’s turnover beyond Germany’s borders.(2)

    So these are not signals about the UK economy. You know as well as I that China is spooking the markets. We saw it first in commodoty prices where China has been such a huge consumer, now in oil price-and finally in equities.

    It remains to ne seen what direct effect on UK fundamentals China will have. Our exports there are small.-but time will tell when the smoke clears

    (1) Capital Group/ City Wire Nov. 2013.
    (2) City Wire Nov 2013

  33. Regarding getting rid of Corbyn before 2020 the problem is that even if you do (because the 2016 results are a disaster and Labour’s polling is dire) that still wont be the end of it.

    Lets presume Corbyn is deposed and replaced with a Blairite. there are then two potential outcomes….

    1) The Blairite is also a disaster in which case Labour descends into a petulant bickering match of who would have done worse in 2020. I can guarantee that if a Liz Kendall led Labour party flops in 2020 the Blairites would use all the same “excuses” they accused the left of making in the 80’s and 90’s “it wasn’t the right time” “we made progress just not enough”, “it was always going to be difficult to gain power in these circumstances” etc etc

    2) The government screws up/economy tanks and thus a Blairite candidate wins in 2020 (or at least performs very well) in which case the Blairites will see it as a vindication while the Corbynites will see it as a lucky set of circumstances (1997 all over again) and will be momentarily shut up but will still harbour their beliefs.

    Really the only way to achieve unity in the Labour party is to ensure a left wing candidate wins in 2020. Thus arguably acing as “proof” that the New Labour project was unnecessary, that Labour can win in the modern world on its traditional platform thus keeping the left happy and the Blairites have to then make up their mind. Either they do what they have always said which is “move where the public are not where you wish they would be” and accept the new left wing Labour party can win or quietly leave because it doesn’t fit in with their philosophy which would destroy their credibility because it would essentially be a acknowledgment that they never belonged in Labour in the first place.

  34. If this goes on, it will be the third consecutive time that there has been a market crisis less than six months after a Conservative election win (1987 – Black Monday, 1992 – Black Wednesday, 2015 – Black Monday II?)

  35. SPEARMINT

    You might be interested in this thoughtful analysis :-

    http://www.bbc.co.uk/news/business-34040418

  36. “Markets slump as world realises main growth engine in hands of incompetent, secretive police state that thinks it can dictate equity prices”

    Paul Mason
    Tweet.

    You gotta love him -for clarification that’s China he is talking about-not UK or USA lol.

  37. @ Colin,

    It’s a question of what percentage of the national economy is based on financial services and therefore vulnerable to the inevitable market fluctuations caused by other people’s crappy fundamentals. Which in the UK’s case is: still far too much. There was nothing wrong with the UK housing market (aside from what’s always wrong with the UK housing market) in 2008, but bad mortgages in the US still took down British banks.

    Global markets are less exposed to China so this probably is not a crisis on the scale of 2008 even if it has got itself a “Black X-day” label already, but there’s less room to manoeuvre now.

  38. I think Labour lost in 2015 because of its leader it was all entirely predictable and predicted. Only the polling mistake threw people but numerous posters pointed out Ed was not prime ministerial. Now David would not have had that problem as he had been foreign secretary. If David had been chosen he would probably be PM now,

    Chosing Corbyn is an entirely predictable disaster for Labour but again Labour seem determined to make a bad choice I am sorry for all the people Labour are meant to represent having to suffer a decade plus of the Tories.

  39. Spearmint

    I have to be disagree about UK house prices. If you treat rental yields as a proxy for price/equity ratio, they were (and still are) ridiculously overpriced. This is even allowing for the fundamentals (small island, population growth etc).

  40. HAWTHORN

    @”That is not true of Keynesian models”

    I’m sorry to shatter your believe in the Keynsian wisdom of State administered “infrastructure investment”-but all I would say to you is-have a look at how it worked for China.

    Have a read of this-

    http://chinaworker.info/en/2014/12/24/8759/

    if its too much -here are a few quotes :-

    “A report in November by two government economists estimates that up to half of all investment over the past five years, 42 trillion yuan worth, has been wasted (Xu Ce of the National Development and Reform Commission, and Wang Yuan of the Academy of Macro Economic Research). The problem has worsened, they say, over the past two years i.e. since Xi came to power.

    China’s steel output is now seven times greater than that of Japan, the world’s number two steel producer. Idle capacity alone is more than twice the size of the US steel industry. Overproduction has led to a price war with steel prices in some regions of China falling as low as the price of cabbage. In 2012, China had the capacity to produce 2.9 billion tons of cement, but actual demand was only for 2.1 billion tons. Three quarters of China’s 200 biggest airports are losing money, but there are plans to build 100 more.

    A similar pattern has been repeated in industry after industry as cities and regions attempt to outstrip each other with little consideration for the overall state of the national economy. The result has been an extremely rapid accumulation of debt by companies and local governments that threatens a wave of corporate failures and a banking crisis, as the market is flooded, profits are squeezed, and credit costs shoot upwards.”

    Note that it was written last year

  41. Spearmint

    There is a lot of misinformation going around about what took down the UK banks – or to be more precise RBS and HBOS as most of the others were fine.

    RBS made the disastrous decision to buy ABN Amro (among others) at a wildly inflated price that destroyed their balance sheet to such an extent that they couldn’t survive the prevailing maket conditions.

    HBOS was brought down by making some frankly ridiculous commercial loans in the UK – it had almost no international or investment banking exposure.

    The UK banks like Northern Rock which did suffer because of the housing market only had themselves to blame. Making 125% “secured” loans doesn’t really qualify as prudent banking practice.

  42. SPEARMINT

    Is it “financial Services” which are being hammered right now?-actualyl, I think they are probably in great demand.

    It is asset prices being caned out there-some of your least favourite people are losing a lot of money :-)

  43. @ Rivers 10,

    I wouldn’t worry; the chances of a Blairite winning are 0%. If this leadership contest has demonstrated anything it’s that they’re intellectually bankrupt, politically incompetent, chronically lazy, and so far out of touch with the rest of the Labour Party that they’re unelectable.

    If someone from the right wins it will someone like Stella Creasy who has a new paradigm. Or possibly Chuka 3.0, since he seems to be the only one of that gang who has realised they have no good ideas and they need to shut up and go away until they can come up with some.

  44. @ Hawthorn,

    That’s what I meant by “what’s always wrong with the UK housing market”.

    @ The Monk,

    Fair point.

    @ Couper 2802,

    The face of a Prime Minister, to be sure:

    http://i.telegraph.co.uk/multimedia/archive/01217/banana_1217414a.jpg

    People don’t remember this now, but a big part of Miliband Minor’s pitch was that he was the more normal, electable brother. And the sad thing is, he was.

    @ Colin,

    Tsk, tsk. Politics of envy! I’m all for people getting filthy rich as long as they pay their taxes, etc.

  45. SPEARMINT

    @”It’s a question of what percentage of the national economy is based on financial services ”

    For UK :-

    1997 6.6%
    2001 5.6%
    2005 8.0%
    2009 9.3%
    2014 8.0%

  46. Colin

    I was discussing rational expectations theory, not the competence of any particular government.

    Spearmint

    Nope – yields were >10% in the 1990s (when BTL made financial sense). It is just yields have been so pathetic for so long now that people think it is always that way. This is due to the banks massively misallocating capital to the housing market (and other asset classes).

    Both

    At least China will still be an industrial society once the dust settles.

  47. HAWTHORN

    @”rational expectations theory”

    Is this a Labour Party thing?-how does it work?

  48. HAWTHORN

    @”At least China will still be an industrial society once the dust settles.”

    China’s GDP breaks down roughly :-
    Agriculture 10%
    Construction and manufacturing 44%
    Services 46%

    And I think you will find that they have been trying to move GDP out of the second component into the third one-that’s what is causing the problems right now.

  49. @Hawthorn and others

    Voters will only jump if Labour has a safe pair of hands to catch them. If they think the Labour leader is dodgy, they will hold their noses and stick with the incumbent govt no matter how bad things get (better the devil you know).

    A good example is the US presidential elections of 2008. At a crucial moment in Oct, at the height of the financial drama, McCain made a fool of himself over the TARP vote, plus selected Palin as his Veep (prompting many moderate Republicans to shudder, especially as McCain was an old man with some health issues).

    The safe pair of hands in that election was Obama. He was very cool. very calm, intelligent and personally unimpeachable.

    In his person he’s actually the most scandal free president since Calvin Coolidge, which is the reason he’s managed to do things that eluded his Dem predecessors such as healthcare reform.

    If Lab really wanted to make the case for anti-austerity, they should have selected someone with unimpeachable credentials, so that the focus was solely on the economic argument. Corbyn is not that man. Nobody would mistake him for a safe pair of hands. He an islamist sympathiser, friends with holocaust deniers and other dodgy folk. He’s not going to get a hearing at all. It’s simply too dangerous to put him into Downing Street because of his foreign policy stuff. He’s a write off from the get-go.

  50. HAWTHORN

    Thanks-I expect there are lots of books too :-)

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