Looking on the bright side

Opinion polls don’t tell you much really – a snapshot of the public’s views that depend almost entirely on the differing methodologies of the pollsters for their newsworthiness.  My default position has been the same for a couple of years now – that the Tories will win the next election, and that they will get a decent majority.  Much of the talk of the ‘electoral mountain’ that the Tories face seems to ignore the fact that Blair won his huge majorities by winning seats where it mattered most – the marginals.  It is precisely here that the Tories are doing best.

Nevertheless, the Tories have been decidedly underwhelming these last few months.  Why?  They still hold most of the aces, not least the ideal opponent.  And yet they seem to have been sucked into a deeply depressed narrative – we’re all doomed, and it’s going to hurt.  Now, this may be true, but it does leave them open to a counter-attack from Labour  that, really it’s not as bad as all that, and the Tories’ medicine may prove worse than the disease.  Only one Prime Minister has come to office promising nothing more than unremitting pain, struggle, misery and effort, and the circumstances were a little different.

So, George Osborne’s article in the Telegraph indicates a welcome change of mood, if not of the underlying message.  We’re not quite doomed, it says, but we sure as hell will be if Labour win again.  The analysis that it is based on is pretty sound too – none of those Labour ‘black hole in Tory plans’ shenanigans.

By testing the patience of international investors, Labour are playing with economic fire. As Moody's, the rating agency, said this week: "AAA countries will probably not have the luxury of waiting for the recovery to be secured before announcing credible fiscal consolidation plans." Already investors are demanding higher interest rates on our national debt – heading towards a whole percentage point above the equivalent rates on German debt. If the Bank of England stops buying government bonds next year, as is expected, it believes market interest rates will rise almost another percentage point on top of that.

This is an important point.  The only net buyers of UK gilts this year are the Bank of England (through Quantitative Easing) and UK banks, thanks to a Govt. requirement to improve their capital adequacy.  Fund managers and overseas investors are net sellers.  When QE stops, who is going to do the buying?  And at what price?  This is the risk that people should be worrying about.  The reason that this recession – the worst Britain has faced in 70 years – doesn’t feel as bad as those of the 80s and 90s is that interest rates have been so low.  When you’re up to your eyes in debt, it’s important that repayment is so cheap.  If the price of Govt borrowing goes up (and it is going up already) that will hurt everyone.

So it’s a good tactical message – we really are doomed if Labour get in – that has the added bonus of being basically the truth.  It also leaves the Tories free to run two campaigns, a positive one about the benefits of a Tory Government, and a negative one about the disastrous results of a Labour win.  It never pays to be too negative for too long.

Fundamental Heffer Error redux

Oh, and while we’re talking about the Heff, it’s a belated but welcome return to the Fundamental Heffer Error.

Hard-working people want the state to contract. They want big public spending cuts. They want the public sector to endure the same pain as the private. They want to see tax cuts, to make their own jobs safer by reversing the tide of shrinking demand. They understand that the economy must be restructured. They hear very little of this from the Conservative Party. As a result, many of them do not propose to vote, or will support a "proper" conservative party such as Ukip.

The definition of an FHE?

Simon is confusing what he wishes were the case with what is actually the case…I have decided to call confusion between believing a policy to be right and believing it popular the Fundamental Heffer Error.

It’s hard to imagine a more perfect example than the one above.

Best. Metaphor. Ever.

The Heff, showing us what we’ll all be missing when he goes of on his academic sabbatical:

Yet that is but a fleabite on the ugly dog of disincentive that smothers our recovery.

Best.  Metaphor.  Ever.

Marching orders?

While we’re talking about the PBR, I mentioned a couple of weeks ago that there could be a couple of advantages for Labour in going for a March election.  Iain Martin thinks, on the basis of the PBR, that this is precisely what Labour are gearing up for.  The main reason for believing this is what the PBR was not – it was not a serious attempt to deal with our current spending crisis.  Not only were there no significant immediate cuts to public spending (which can be portrayed as a reasonable policy – no cuts before recovery and all that), but there were no plans set out for cuts in the future either.  It really was a case of ducking the issue.

Labour are like drivers in a 24 hour rally whose car is coming apart around them.  They are just desperately hoping that they can keep it together long enough to get over the finish line. What happens to the car afterwards doesn’t seem to worry them too much.

So the last thing they want to have to do is present a full budget, where questions over actual numbers will be much harder to duck.  Anyway, by April the figures of 2010 Q1 will be out, and it would be virtually fatal for Labour were they to show a dip back into recession.  Go early, and you can avoid all this.  You can see why it’s tempting.  Against this is the residual cowardice (or, to be fairer, risk averse nature) of Gordon Brown.  Something might turn up.  The polls could just get better.  Lets not face reality just yet…  And the polls have been narrowing.  Labour’s core vote does seem to be hardening.  The Tories are getting a little jittery.  Perhaps one more push?

An empty PBR

Well that was a bit of a shower wasn’t it?  Whatever this was, it wasn’t a sober and honest reappraisal of Britain’s finances and analysis of what the hell we’re all going to do now.  Instead it was a hodge-podge of tiny announcements, baffling priorities (a cut in the bingo tax?  For fuck’s sake…) and an overall sense of the unreal.  Oh, and a tax increase on employment, while unemployment is rising – really brainy.

The rise in NI should actually be a gift to the Tories.  Not only can they pledge to reverse/not apply it, but they can also state that, since this is their absolute priority in straitened times, unfortunately other planned tax cuts (such as the rise in the IHT threshold) will have to take a lower priority.  That ought to shoot Labour’s class war fox at any rate.

Labour are running out of game-changers.  A quick look at today’s headlines ought to confirm to them that the PBR has turned out to be anything but.

Oh no it isn't!

Incidentally, while we’re talking about PMQs, there was an interesting little exchange between Cameron and Brown.  It went something like this:

Cameron – why is Britain the only member of the G20 still in recession?

Brown – it isn’t!  Spain’s still in recession.

Knock-out blow and Cameron retires hurt etc…  Except that, as more or less everyone has pointed out, Spain isn’t a member of the G20 except in its capacity as a member of the European Union.  When Cameron mixed up two Government pathfinder schemes he apologised, even though the thrust of his argument was unaltered.  Who wants to bet that Brown won’t be apologising for this one?

Grown up political discourse

A strategy!  At long last Gordon Brown has thought of a strategy to beat the Tories!  Unfortunately, it’s the ‘Eton toff’ attack.  There’s no question that Brown feels most comfortable with this line – he was pushing Tony Blair to use it against David Cameron from the very beginning.  It is also true (up to a point anyway), which is always a bonus.

Alice Thomson flagged this approach up in this morning’s Times saying that

Class warfare was the tactic that Mr Brown, when he was Chancellor, always wanted Tony Blair to deploy. “It’s as though Gordon has found his favourite old jumper that we thought Sarah had binned, and slipped it on again,” said one Blairite.

Well, it obviously fits comfortably.  In today’s PMQs Brown said that Tory tax policies were dreamt up on the playing fields of Eton, and there was another reference to them being an Eton mess.  A strategy is born.

Is it a terribly good strategy though?  Well there is a bit of evidence on this front – the Crewe and Nantwich by-election.  This was the one where Labour activists dressed up in top hats and tails and trailed around the Tory candidate looking like snotty little twats.  Which, of course, is what they were.  Labour posters and leaflets carried mocked up photographs of Ed Timpson in, sigh, a top hat.  The overall tone of the election was that ‘Tory toffs’ were the enemy.  How did that work out?  Not so well.

Ed Timpson (Conservative): 20539 (49.5%) +16.9
Tamsin Dunwoody (Labour): 12679 (30.6%) -18.2

Maybe it will work better when the entire Labour party’s national strategy is based on a line that ‘Oooh, those Tories are well posh’.  And at least Brown will look a bit more cheerful.  But I don’t think that this is quite the killer argument that Brown (and presumably Alastair Campbell) think it is.