‘Tis the season for Christmas receptions at Westminster, where the hacks like myself compare notes with people who know a lot more about life than we do. There’s a distinct lack of bubbly this year – funny how ministers take special care over that, while the government overspend is (literally) enough to fill every bath in England with Moet – but the chat’s been first class, especially at the Centre for Policy Studies bash last night. I thought I’d share some of it with CoffeeHousers. Much of the below may be obvious to y’all, but I found it interesting and thought-provoking. Here are my top ten points from the right-leaning people I cornered:
1) EXPORTS Utter rot being talked about the economy now. Take the idea that the plunging pound will mean an export-led recovery. One must remember that overseas clients will demand a discount. If sterling is off 25% against the dollar they may demand 18%. Politicians never appreciate nuances like this, because none of them have run anything larger than a raffle.
2) SAVERS There are seven times as many savers as borrowers in Britain – something young people never believe because all their friends owe so much. It’s an important fact, and politicians should remember it when formulating policy. So Major’s idea of charging no tax on the first £5k would be very electorally popular, and not too expensive.
3) ECONOMY The Tory message on the economy is still too complicated. An idea for a simpler one: “We should be bailing out the people, not the banks.” An idea for a policy: “We’ll lift out of tax anyone earning less than £20k.” Clarity is needed. Not this worthy, complex stuff about asset-backed securities. Osborne has been spending too much time with accountants, and not enough on the doorstep.
4) CHILDCARE The American welfare reform may have shown a fall in lone parents on the welfare roll, but this should not be confused with a drop in births outside marriage. They continued, but mothers relied on family support more. Absent fathers reappeared, because suddenly they were needed for economic reasons. The most damaging aspect of UK welfare system is that it means mothers with low-income partners are better off alone. In this way, ‘tough love’ welfare reform for lone parents strengthens the family, because it restores the economic function of the family in the low-income groups.
5) MANDELSON The Prince is presenting a threat intellectually, as well as strategically. Look at his Hugo Young lecture where he discussed how to restructure the economy – brilliantly and powerfully argued, and the Tories don’t have a response to it. They’d better get one.
6) JOHN McFALL doesn’t like Alistair Darling. Why? It seems tribal: a Glaswegian disliking a snooty Edinburgh lawyer; making for a more interesting Treasury Select Committee. Strange place, Scotland. The internal rivalries eclipse any animosity they may have towards England. Also, McFall accepts that the crash was a regulatory failure, not a banking failure. This is a great attack line for the Tories.
7) NHS SUPER-COMPUTER axing it is a great example of ‘more for less,’ which is Cameron’s soundbite. You can do the same job with Google Health – a record system that the American clinics use all the time. And issues about security of data don’t arise, because the government’s record on data security is far worse on this front. Cameron will need more ammo on more-for-less. It’s the austerity theme, and the think tanks will have to help.
8) DAMIAN GREEN the imbroglio was fun while it lasted, but to concentrate on it too much was a mistake for Cameron in retrospect because it took away attention from the attack on the PBR, which was going well. No cock-up – you can’t choose the timings of these things, and it put Brown on the defensive for a week – but the indignation just wasn’t shared by the public. The average voter’s complaint is that the police arrested just one MP when there are 634 others still on the streets. Now folk have forgotten. Cameron realises that, hence all these speeches on the economy.
9) AFGHANISTAN It was in 1985 that the Soviets thought they’d won in Afghanistan – then things went south. There are a lot of parallels with them then, and us now. Gorbachev gave the military two years to make progress, or he’d pull them out. Obama may well say the same to the US military. He asked Brown for 2,000 extra troops and Brown gave him 300. There goes Brown’s chance of being first to get invited to Washington.
10) IDES OF MARCH The peak unemployment will be in January, when the claimant count is normally 15% up. But the delay in reporting means we may not hear about this until March. That is when the economic fertilizer will hit the fan. Then, finally, the public mood may shift from anxiety to anger.
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