Should Brown lead Labour into the next election?

[Saracen]

IIRC, Tony B.Liar made it clear in the last election that he would stand down mid term.

Nope, 'fraid not. His swansong speech at his last conference included ""If I'm selected I would serve a third term - I do not want to serve a fourth term."

Margaret Beckett said Blair had said he would sand down mid-term, and minutes later on the same program, Peter Hain said Blair had said he would serve the full term. Blair himself, ever the master of the vague answer, said what I quoted above, and not that he would serve part of a third term.

It came as no surprise to anyone that watches politicians that he ducked out part-way thorugh tough, and the Tories certainly used the "Bite Blair, Get Brown" slogan.

[Fraz]

I'm in a total state of "meh" about what I should vote for at the next general election.

Most people seem to choose the party they vote for in a negative sense - i.e. they choose the party they don't want to vote for, and then vote for the opposition. And often this decision is reached based on some historical event that happened 20 or 30 years ago.

Does this really make sense? I don't know for sure, but I hardly think the two major parties we have now are at all representative of those we had 30 years ago.

Most people seem to hate the conservatives because of what happened with Maggie and the unions waaaay back when. Frankly, I believe both the unions and the government in this instance were at fault. The unions were a bunch of backward looking unrealistic Luddites who had way too much power and were standing on the ridiculous premise that people should be able to keep their jobs even if it was stupidly uneconomical. The government fought this ridiculous idea - and rightly so - but in a totally stupid way. It seems clear to me that the UK could have kept a lot of its manufacturing and mining industry if we'd got our act together and modernised properly, but at the same time the government should have seen job losses due to modernisation coming, and acted to provide communities with alternatives.

This all points to is a serious lack of long-term thinking on behalf of both politicians and the public as a whole, and this really annoys me. I do (vaguely) believe that Gordon Brown is actually quite a good long-term thinker as a whole, and I quite admire this trait. But in the end, it's somewhat ruined by many of the incredibly stupid things he also seems to do.

I can't say I feel strongly inclined to vote for any of them. This is a real shame, but at the same time I don't really imagine that it'll make much difference who gets into power. Is the UK a bad place to be? I don't have much to complain about really. I basically have a good life, and so does everyone I know.

So, in conclusion: better the devil you know. I'll probably end up sticking with Gordon Brown. Meh.

[pp05]

6 months is a long time in politics.

why would anyone want to win the next election.

[Saracen]

I hope you don't mind me saying, but you sound a lot like a Tory MP. I have no idea of your background, but I grew up in a relatively deprived area of Salford, it was the working class/poorer people that suffered under the Tories during the 80s and 90s and ....

I don't mind you saying so at all, but you're wrong. For a start, I wouldn't be an MP if you paid me ..... even if they hadn't had their expenses scam rumbled. I've got more self-respect than to serve a career if not outright lying, then at least using weasel words to deceive, while being slippery enough to not be able to be pinned down on it.

But as for why I sound like a Tory, it's because a common stunt of Labour is to harp on about cuts under the Tories without mentioning why there were cuts. And in large part, the reason is because Labour's tax and spend policies had got the country into huge debt .... so much so we were under IMF restrictions. It's like an individual having his credit card taken away, his pay packet commandeered and a few quid of pocket money handed back to live on, because of his profligate spending in the past, and his inability to live within his means.

As for my background, well, I don't say very much in public, but I'll give a pointer or two .... and point one is that I'm an economist. I studied much of what I referred to for my degree, as well as having lived through the 60s and 70', and the industrial trouble and strife.

Labour then, and it seems Labour now, mistake spending for results. How often have we heard Labour politicians crow about how much they've spent? Well, it's not just about how much you spend, it's about what you achieve with it. And there's no doubt that many things have improved because of all that spending. But have they improved by an amount commensurate with the money spent? Labour don't measure that ... and I'm not sure how you could.

Labour's current spin is that the Tories want to cut for the sake of cutting, and that they believe in small government. Well, to a degree, so do I, which makes me at least sympathetic with the Tories to that extent at least. But let's look at that.

Labour want to do everything through government. The Tories want more done by people.

Consider a country's finances. This really is public finance 101. A government only really has two sources on money to fund it's spending. One is taxation, and the other is borrowing. That's why Blair/Brown cosied up to the City, and why Brown kept on about "economic stability and prudence". as long as the economy is growing, tax revenues are solid and money flows in, so they could spend it. And of course, as long as money flows in, you can "finance" borrowing too, and spend that.

But sooner or later, anything you borrow has to be paid back, and the more you borrow, the more of your income has to go to servicing that debt. Like any household, you can have a wonderful time on credit cards, until you lose your job. Then, all that credit card debt is a millstone round your neck. Well, Brown spend himself stupid with the country's finances for 10 years, and that, in large part, is what achieved that mythical stability. In fact, all it really did was let the instability build and build, and then along with a lot of the rest of the world, the damn burst.

So ... the country "lost it's job" .... government finance started to collapse, in that tax revenues started to fall, because of a collapse in confidence not only in banks, but in the whole financial system. We came really close to what turned into a crisis actually being an utter catastrophe. And at exactly the time tax revenues started to look weak, partly because of the collapse in housing causing a crisis in confidence due, in large part, to people suddenly realising their personal debt levels were very iffy if their house wasn't the asset they thought it was, and partly because of the double-whammy of tax revenues going down at exactly the time benefit payouts started going up as unemployment grew.

For instance, stamp duty had become a major source of revenue under Brown. If you look at receipts before he came in and after, you'll see the change, as house prices increases far exceeded any growth in SDLT thresholds. But that all changed with the collapse in housing confidence. If banks can't or won't lend, house sales stop. It's not about house values even, but simply transaction volumes. No sales = no stamp duty revenue. Similarly, as retail sales declined and the high street reported very weak figures, so VAT receipts declined. As people get thrown out of work, income tax and NI declines. As people are left jobless, so their spending declines, and even as people fear being out of work, so they spend less, don't increase or even pay down credit card debt, opt for cheaper brands and cancel extravagences like foreign holidays or new cars. Again, VAT receipts drop, income tax and NI goes down, companies go broke and Corporation Tax goes down. And so on.

Hence the analogy with the government "losing it's job". Large scale unemployment has a similar effect on public finance to at least reduced hours, if not job loss for the country.

And we've been through all this before, albeit that the trigger was different last time. Last time, largely speaking, it was industrial unrest, strikes and hugely inefficient industry that led to financial disaster. It was also Labour;s apparent belief that it could tax (and redistribute) it's way put of problems. It's easy to blame the wealthy and decide to tax them 'until the pips squeak'. Remember the hugely punitive levels of income tax (supertax) that previous Labour regimes thought were such a great idea? An 83% marginal rate of income tax, and an unearned income surcharge taking the effective marginal rate for many to 98%.

The trouble is, you can only increase such taxes to a point before the actual tax revenue starts to fall as a result. You either get a brain drain with those that can afford to leave doing so ... and those that were hit by such taxes were exactly those that could afford to leave, or you get a disincentive to earn, or to invest to earn. The result is that for many taxpayers, you end up with 98% of nothing, because they've left, or simply decline to invest or work the extra. You certainly stifle entrepreneurship, because people won't risk an invest if the government grabs the vast bulk of the returns (such as via that unearned income surcharge).

Labour would have people believe that the Tories belief in "small government" means not providing any public services, but in fact, it reflects a different creed in how to go about it. Labour believe that government should do all it can, and that huge levels of public spending are the best way to stimulate the economy. The Tories attitude reflects the idea that every pound the government taxes for it to spend is a pound less in our pockets that we'll spend ourselves. Think about it. If your tax bill goes up by, say, £1000 a year, that's £1000 more for the government to spend, but £1000 less for you to spend. Every time the government takes money off people, the tax revenue they would have earned by that money being spent by us is lost. This reflects a basic economic principle called opportunity cost, and the opportunity cost (i.e. what doesn't happen being the price you pay for what you do do) of public spending is less personal spending, and the economic benefit and tax revenue that personal spending would have resulted in.

That;s the big difference between the two. Labour beleive the government knows how to spend money better than we do, and the Tories believe that Government should ONLY do the things that it needs to do. That does NOT mean sweeping cuts for the sake of cuts, but it does mean not doing it unless it needs to be done and there's no better way to do it.

Also, remember that until the end of the last Parliament, Brown was denying that labour would cut, and kept going on about "Labour 'investment' versus Tory cuts"? You only had to look at Labour's own PBR to see the falsity of that characterisation. Now, his story is that his cuts are better than the Tories, and that he'll "preserve" the recovery .... and that's assuming we've actually in one, which is far from a given.

But the price of his fiscal (and other) stimulus is HUGELY increased debt. So now, the differences brown is going on about aren't actually about investment versus cuts. It;s about which is more damaging .... cuts now, or risking even greater cuts in the future, and for much longer.

So, of course, the "prudence" that he has been harping on about for years is now borrowing huge amounts.

Make no mistake, whether Labour or the Tories win the next election, people ARE going to end up out of work. Unemployment WILL keep going up for some time to come, and how long that is varies according to which model you look at. But it could keep rising for up to two years or so, even if we are actually in a recovery phase and not heading for a double-dip.

It's an unpleasant and unpalatable fact that people ARE going to have a rather rough ride for a few years, and obviously, the unemployed are going to be among the worst affected, and so are those in deprived areas, and those with little personal resources or reserves.

If we take the Tory view, it's better to take more painful medicine earlier, because that way, we all (including those in deprived areas) don't have to take it for as long. Labour take the view of mitigating the degree of pain, but extending the duration.

Let me give an example. 4 million unemployed is really bad, yeah? But what's better .... 4 million unemployed for 6 months, then it falls back to 3 million over a year, then heads back down to around 2 million over the next couple of years ..... or unemployment being capped at say 3.25. million, but staying at that for a decade?

Obviously, the extra 750,000 unemployed for a year aren't going to like it much, which suggests Labour's plan is best. But what of the million or so that avoided 7 or 8 years of unemployment because we accepted the extra unemployed for a short period?

While entirely hypothetical figures merely for the sake of example, that's the difference in approach. Labour want to maintain public spending which, they claim, will protect the recovery and hold down unemployment and, short term, they're no doubt right. But the price will be HUGE debt, and that debt will not only take an extremely long time to pay off, but it'll be terribly expensive on the public purse while we do pay it off. The alternative is to be as restrained as you can with spending, short of triggering a recession, but the gain will be that debt doesn't grow anything like as much, and that the long term bill paying off that debt will be much lower. That way, you no doubt will face higher unemployment in the short term, but the public finances recover that much more quickly, meaning you can return to stable and affordable public spending that much earlier.

What do we want? A short period of higher unemployment, or a lower maximum figure but at the cost of a higher overall average for a lot longer? Just how do we put a value judgement on that?

Add into that mix that a large part of the current "stimulus" is "quantitative easing". i.e. printing money. This is not some magic fix. It might put a degree of extra notional cash into the economy now to create an impression of funds slowing, but at the end of the day (or year). it's inflationary. The true value of the currency depends on GDP, and if you increase the amount of "money" in the economy without increasing output, all that happens (medium/long term) is that the value of that money decreases. i.e. inflation, and we'll all pay it. Oh, and by the way, those on low or fixed incomes, those on benefits, those on government pensions, WILL be the worst hit. Anyone living on a low income or in a deprived area ought to be seriously concerned about exactly what impact all this quantitative easing is going to have on their non-index-linked incomes, because prices ARE going to rise as a result. maybe not for a year or two, but it IS coming ... but of course, you won't hear Gordon Brown telling you about that when he's going on about how great his stimulus package is or how Tories don't care about the poor. And I might remind you that this is the same Gordon Brown that cut income tax to the benefit of many, and paid for it by scrapping the 10p introductory rate, which if course hit the very low earners .... and then flatly denied that it did any such then when anyone with a calculator and a basic understanding of income tax could tell you that it did in about 30 seconds. This is, of course, a perfect example of preaching one thing and doing the opposite, doing what seems to be electorally popular, while hiding the catch in the fine print.


And then there's the single greatest question about Gordon Brown's credibility as an economic guru .... if he's so wonderful competent in economics, and if the country's economy has been run by him for a decade, how the hell are we in this mess? Who, I ask, has been running the economy since 1997, and spending every chance he got crowing about his "prudence"? Not a word we hear him use these days, is it? Small wonder. Not even he has that much chutzpah.



So if I sound like a Tory MP (and I don't accept that characterisation, by the way) it's because I don't swallow the particularly foul line of bullpoop coming from Brown et. al, because they always go on about how hard things were under the Tories without ever admitting why the country was in such a mess as to need those measures. It's Labour's biggest single con trick, and it's worked in the past and will no doubt work in the future. But right now, I think the public can detect the stink of hypocrisy in such propaganda. Brown's campaign actually amounts to "having been the one that so royally screwed things up, I'm uniquely placed to get us out of the poop". I wonder what he's been smoking?

[Saracen]

Phew.

[pp05]

blimey saracen, I'll read that with my morning coffee.

[Saracen]

How many mornings?

That one I had to edit, because I went over the character limit. I think that's a record, even for me.

[Saracen]

....

why would anyone want to win the next election.

Five years preening in front of the cameras, posturing on the world stage, and unless you're a complete muppet (without mentioning anyone in particular that might have a colourful name) a few lucrative consultancies or directorships afterwards.

One report I saw said Blair has amassed a larger fortune in the couple of years since he stood down than Thatcher did in her entire post-office life .... and she allegedly did extremely well out of it. Blair has allegedly earned millions. I wonder if he's UK resident for tax purposes?

[MarcSten]

Yes because if he resigns it would precipitate an almost immediate general election and Labour can't go into an election divided and up to their ankles in each others' bodily juices following the inevitable bloodbath that would follow his resignation. Divided parties lose elections badly, and that would not be good for Labour or the country. As it stands, I think he still has a whisker of a chance of pulling it off, or least denying the Tories a working majority. If the idiots like Charles Clarke and loony left would shut up...Brown could still deliver victory.

[SeriousSam]

Scarily I actually understood what Saracen was on about, though compared to my brothers outpourings on the economy (he’s an economist) it was quite succinct. Not sure how anyone would read him as being “Tory”, but I suppose people can get a bit sensitive about the “Maggie vs. the Unions” era. Any suggestion that she did the country some good and you are a rabid right wing fascist. Personally I wouldn’t have shed a tear if she’d wiped them off the face of the earth, but that’s more down to personal experience of dealing with unions. I used to do value engineering and they were the biggest obstacle to doing anything that involved changing things in factories, irrespective of the fact that the whole point was to save money & protect jobs. Atavistic, ignorant and Luddite would be my words to describe them… but I digress.

In terms of the next election it doesn’t matter whether Brown is in charge or not the basic result will be the same, Labour will no longer hold a majority. If he stays people won’t vote for him and if he goes the Labour party will be in such disarray without a credible successor (and that’s saying something if you aren’t credible compared to Brown) that they won’t be able to mount an effective campaign.

What is still uncertain is how well the Lib Dems will do, as they have benefited from Labour’s troubles as well. I think that they will do a lot better than previous elections and I don’t think it would be a bad thing if they became the opposition to the Conservatives.

As an aside I was sat watching BBC1 Sunday morning when he was being interviewed (if you can call it that) and I was stunned by his sheer arrogance and audacity. He was trying to defend the attacks on the conservatives relating to 10% cuts, after it had been revealed that the ones in the labour figures were 9.3%. His defence was basically “the evil conservatives will do this and wonderful labour will do something else”. Now I accept he may have an idea about what Labour is doing, but I defy him too actually to be able to say with any degree of certainty what the conservatives would do. They themselves are still hedging until they see the actual state of the books, and have said that they would protect the quality of frontline services, just get better value for money (believe me it isn’t that hard to save money without affecting quality of service, you just have to be committed to it and put resource in place to drive it through).

Now I know all politicians do this sort of thing but most have the good sense to be dissembling to a degree, rather than sitting there all pompous and self important. You’d think that being Prime Minister was some big deal

[TheAnimus]

I think you are right in how there is still a lot of hatred for the Tories, from, and i know this sounds someone rude, but un-educated people, who associated the emotional stress at the hands of Maggie, as been the fault of the Tories. As Saracen puts it the Medicine tasted fowl.

The thing is will this happen again, Labour have lost, it seams right now they have no hope.

When things get worse for the poorer people (those effected by say the 10p tax stupidity) and also those who are going to full victim to the inevitable rise in 20p rate (which even the Tories claim labour are planning). Even the more risk taking middle classes will find themselfs victim, how can you keep up repayments on the TV and Sofa you obviously needed, when your £150 a month worse off!

The real sad thing about this, is that as someone who the average salary for my role which is about 120k plus (i'm on a lot less starting own business n all). This economic downturn is nothing but a good thing. The irony being, Labour have done more to increase my 'relative worth' than the Tories, if all they wanted to do was help the rich whilst robbing the poor in a RMT Bob Crow esk view, could ever get away with without riots.

Starting a business in the middle of the recession (and I do hope it is the middle) is actually great, the costs are a lot less, and our funding is pretty much guaranteed.

This is what I think leads a lot of people to then hate the Tories even more, they will see people already earning far more than they do, do better, whilst the relative gap of the money widens, all under the Tories, but entirely because of the actions of Old Labour, if Old Labour where still in power continuing doing this, it would get even larger, to the point they would just put a windfall tax on say people over £150k, and I would either have to get a better accountant, or skip country, as the relative gap between rich and poor got so much worse due to rapid inflation on 'Giffen goods', but stable inflation on the more conscipcious items.

[Englander]

Yes, I do believe Derren Brown should lead Labour into the next election.

[santa claus]

Epic posting . I'm prepared to change an earlier statement that 'Labour will win' to ' Labour will not lose' the next election.

[Saracen]

Epic posting . I'm prepared to change an earlier statement that 'Labour will win' to ' Labour will not lose' the next election.

I'm inclined to think that if we end up with a Tory government (and according to the bookies, that's an 'odds on' prospect at, IIRC, about 14:1 at the moment), it won't be so much that the Tories won it, but that Labour actively lost it. Or perhaps, in large part, that Brown did.

It looks to me like, right now, the sentiment isn't so much that people want the Tories in but that they want Labour out, and the Tories are a price they'll pay to achieve that. On that basis, I think Labour will lose .... though probably not by quite the margins current polls suggest. I also think they won't be in government in some 7 or 8 months, with early May being the most likely election time-frame.

[Dragonclaw]

Can't see labour winning the next election. I for one won't be voting for them either!

[santa claus]

I'm inclined to think that if we end up with a Tory government (and according to the bookies, that's an 'odds on' prospect at, IIRC, about 14:1 at the moment), it won't be so much that the Tories won it, but that Labour actively lost it. Or perhaps, in large part, that Brown did.

It looks to me like, right now, the sentiment isn't so much that people want the Tories in but that they want Labour out, and the Tories are a price they'll pay to achieve that. On that basis, I think Labour will lose .... though probably not by quite the margins current polls suggest. I also think they won't be in government in some 7 or 8 months, with early May being the most likely election time-frame.

Electioneering will change those odds. I just don't think there's opposition with enough gravitas to effect a change. The current Cabinet has some very good people.