Political Economy

Seven score and eight years ago a man spoke to dedicate the cemetery on a battlefield which had seen over 46,000 casualties including nearly 8,000 killed.

He pointed out that the living could not dedicate that place since the dead had already consecrated the ground with their blood. The living, rather, had to dedicate themselves to the unfinished work for which the dead had died.

That work was to ensure “. . . that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the people, by the people, for the people, shall not perish from the earth.”

The man was Abraham Lincoln, President of the United States of America and the battlefield was that of Gettysburg, the key battle in a civil war that saw a total of over 210,000 killed in action so that his nation “. . . shall have a new birth of freedom”.

Lincoln was not the first person to enunciate such a  belief. In 1830 the Senator Daniel Webster in a speech described the federal government of the USA as “made for the people, made by the people, and answerable to the people,”

So freedom is protected by the correct form of government and Lincoln tells us how to distinguish such a government from others. Do we, the People of England, have such protection for our Freedom? The answer is not difficult to deduce.

Government of the People

Government “Of the People” is government “Made by the People”. It is government hewn from the people and it has in all times and in all places been a government that People have had to fight for.  In January 2007 a poll for Newsnight showed that 61% of the People of England wanted a devolved Parliament for England. In April 2010 an ICM poll showed that 68% of the People of England wanted a devolved Parliament for England.

Do we, the country where parliaments were invented. have a Parliament for England? No! Have the political elite in England said we will get such a Parliament? No! Do we have “Government of the People of England”? No!

Government by the People

“Government by the People” is the people governing themselves via the election of a representative that will do what the people want. Do we have such representatives? No! Why not? There are many reasons. The first and most important reason is that Edmund Burke, MP for Bristol, said in 1774 in a speech to the electors that he could vote in the House as he chose and not as they wanted, a vote mark-you that had been given him by those electors. Burke was hardly an objective observer in this and as a piece of self-serving claptrap this one has been religiously parroted by MPs ever since. Burke did not believe in democracy and is claimed as a founder of modern Conservatism.

Secondly few MPs actually have the integrity to vote according to their own opinions. Instead they hand their vote over to their party in return for a continuing flow of cash, perquisites and honours! Thirdly most MPs are not voted into office by a majority of those who vote. To get 40% of the vote is considered good and this of course usually represents less than 30% of the electorate.

Do we, in England, have MPs who represent their voters? No! Have the political elite in England said we will get such MPs? No! De we have “Government by the People of England”? No!

Government for the People

And so we come to the final act. I have already shown that in England we do not have “Government of the People”. I have shown that in England we do not have “Government by the People”. Do we have “Government of the People, by the People” in England? No!

So, do we have “Government for the People of England”?

In 1975 when the referendum on remaining in the Common Market was held I listened carefully, as did many, to the views expressed. We were told we needed to remain in the Market because of  trade despite the fact that we had a trade deficit with them of £2bn. Well now the Market is a Union and we have a trade deficit with the rest of the Union of £36bn. This deficit is equivalent to exporting some 1,000,000 jobs to Europe.

In the 13 years of Labour government from 1997 some 1.67 million jobs were created in the UK but 1.6 million of those jobs went to people with no prior connection to the UK. It appears therefore that the UK government has provided 2.6 million jobs to the world. The jobs that remain are increasingly part-time, minimum wage and unskilled. Recent data has shown the trend has continued and will continue, particularly since the coalition government has set no restrictions on the so-called Mode 4 immigration. This is where a company from another country is allowed to set up in the UK and bring in all its labour from its own country. These workers will be paid minimum wages plus a tax free living allowance. The Tory party will of course be the grateful recipients of political donations from these “UK” companies. UK workers will receive only the dole that has been much reduced by the Tories.

Will MPs work to protect and grow the number of meaningful jobs open to us? No! Will the political elite in Westminster allow us in England to get the jobs we need to lead satisfying and creative lives? No! Is this “Government for the People”? No!

A broken Democracy

In England we do not have “Government of the People”. We do not have “Government by the People”.  We do not have “Government for the People”. We live in a broken democracy where our freedom is compromised and not, as the Prime Minister would have us believe, a broken society where our property is compromised. Indeed the Prime Minister is currently driving this broken democracy deeper and further than anyone before.

Is it possible to fix the problem, to regain our freedom by instituting “Government of the People, by the People, for the People”? The answer is yes, but only if the a range of policies like the following are adopted. It cannot be fixed by adopting one or two of these policies, such as creating an elected upper chamber or adopting a parliament for England. It cannot be fixed by adopting policies but implementing them in such a way that they will not work. For example Cameron’s promise to make it possible for voters to recall their MP is going to be implemented by creating a committee of MPs to decide if one of them should be “thrown to the wolves”! Such a committee will only be used to punish an MP who has annoyed the party leaders!

So here is the list:

Government of the People

• A devolved Parliament for England with a government and First Minister.
• A smaller House of Commons and elected Upper Chamber to take on the role of a federal Parliament responsible for reserved matters.

Government by the People

• Power for the voters to recall a sitting MP for re-election
• Devolving additional responsibilities to the County level and its elected Mayor.
• Increased use of the referendum so that voters can decide what is done.
• Reform of the voting system to ensure that 50% is required for election

Government for the People

• A referendum on leaving the EU
• An end to mass immigration
• An immigration system that ensures that jobs are not taken from the People of England and that immigration is run effectively.
• Protection for companies from takeover and closure by foreign companies

A Party that Will

There is one political party that does have all of these policies, and more. It is the only party that has as one of its objectives the institution of “Government of the People, by the People, for the People.” That party is the English Democrats.

The Price of Freedom

Now here is the rub. It is your freedom and your government that I have been talking about. The good news is that you can do something about it. The price is your time and your interest. If you are concerned that your freedom is compromised then join the English Democrats, donate to their funds and get active in any way you can. There are a wide range of opportunities such as forming a county or constituency branch, or joining one if it already exists, leafleting, letter writing, standing in elections, writing articles or blogs, helping to run facebook, twitter and web sites. The list is almost endless.

Its Your Freedom. You Do Something About It.

GHTime Code(s):              nc nc nc nc nc 

Goave’s White Paper “The Importance of Teaching” is based on England’s falling position in the PISA league tables. Note that the problem is not falling performance, that has remained basically the same, but other countries have improved.  PISA (Programme for International Student Assessment) is an OECD programme to measure performance of 15 year old’s. PISA is not a value-free test of knowledge in the English sense. It  is designed to support and embed the OECD culture and values. (The hidden curriculum of PISA – the promotion of neo-liberal policy by educational assessment by Michael Uljens 12.7 2007). So the English performance may just be bloody-mindedness! Certainly in tests like TIMMS, which take as a starting point the national curricula of countries, and which do use value-free tests, England has been performing well.

One of the features of the PISA league tables is the outstanding performance of Finland who are at the top of the table. This surprised even the Finns who in 2000 when PISA held its first round of tests were dissatisfied with their educational system outcomes and were contemplating major changes. Since then Finland has done well despite the fact that research has shown a 25% drop in cognitive (thinking) ability of its students over that time. So PISA clearly does not measure thinking ability.

Apart from basing his White paper on Finland Goave is also enamored with Free Schools along the lines of those in Sweden and the USA.

But Per Thulberg, director general of the Swedish National Agency for Education, said  “This competition between schools that was one of the reasons for introducing the new schools has not led to better results. The lesson is that it’s not easy to find a way to continue school improvement. The students in the new schools have, in general, better standards, but it has to do with their parents and backgrounds. They come from well-educated families.” - Reported in guardian.co.uk, 9th February 2010.

So Goave’s White Paper is looking more and more like a big girl’s blouse. What is he to do?

The answer is to do what Westminster politicians have turned into a fine art – Fiddle the Figures!. In another blog The English Bac I showed that Goave’s new measure had little educational value and was designed simply to show in four years time that his policies had worked – even though they had not.

However this left him with a big problem. Currently schools are measured on their CVA (contextual value added). This measures the improvement over earlier achievement levels adjusted for things like deprivation, students in care, first language and so on. This is instead of just measuring schools on their raw GCSE results where schools in leafy suburbs will always do better than, for example,  inner city schools with high immigration levels.

Why is it necessary to get rid of CVA? Ministers will give all sorts of reasons, all of them rubbish. The real reason is the one Per Thulberg gave. Free schools attract middle-class parents whose children will do well, even with poor teaching. Those left behind in the old school will not do as well no matter how good the teaching. The CVA measure would show the free school is not adding much in educational terms and that the old school is adding a lot, so proving what an expensive scam the Free Schools are.

The key point here is that the new measures are guaranteed to show that Goave’s policy is a success – even if it is not.

Is this sort of scummy behaviour from a government minister acceptable? No!

Is this sort of scummy behaviour from a government minister fit for purpose? No!

Is this sort of scummy behaviour from a government minister decent and honest? No!

So who will end up crying. In a just world it should be Goave. That might just happen. Research, based on 500,000 pupils, published in the journal ‘Significance’ (of the Royal Statistical Society) concluded that 40% of the difference in students’ education results were down to the family. The rather limited family intervention programmes tend to be successful at raising standards. So who is handling the government research into this? Why, according to a story in the news last year it is Mr Cameron! Very wise Dave, make sure your name is on the successes.

In the real world however it is going to be the poor and disadvantaged who will end up in tears. The Nasty Party are back!

GHTime Code(s): nc nc nc 

Increase taxes say many. But tax take averages 35% – 37% of GDP whatever is done. Tax Freedom Day http://www.adamsmith.org/tax-freedom-day/ has varied little over the last 40 years

Harold Wilson                 1969       29th May

Margaret Thatcher         1979        29th May

Tony Blair                        1999        25th May

Gordon Brown                2009       14th May

(but 25th June if based on government spending – the worst since 1984.)

This time round tax receipts have plummeted.  As of August 2009 VAT was down 13%, income tax down 12.5%, corporation tax down 49%.  Taxes in total were down 9.2%.

The data for government surplus/deficits since 1947 from the Office for National Statistics is as follows:

 

For 30 years up until 1974 government budgets were in balance, taking one year with another. For the last 36 years the balance has oscillated widely but has been in deficit for 28 of those years. The truth of the matter is that government budgeting has been out of control for all those years and that as a result  we have become a nation of debt junkies. We have no business making fun of the Mediterranean countries over their foolish policies because we were doing exactly the same thing. We have been saved only by not being in the euro.

Gordon Brown as Chancellor said he was going to stick to the golden rule of public finance. This is that the budget will be in deficit, made up with borrowing, during a recession and during periods of growth it will be in surplus so that the borrowing taken out during the recession can be repaid. This refers to current expenditure not capital expenditure on things like roads, schools, hospitals and so on. That sort of expenditure should be be paid for initially by borrowing that is repaid by the taxpayers who benefit from it over its useful life.

In early 2010 I estimated that government expenditure had been too high by £90 bn in the good times. These were times when we should have been running with surpluses to pay off the borrowing  of more than £150 bn incurred in prior years, but were instead running with substantial deficits.

In 2010 the government deficit was £85 bn (excluding financial interventions such as support for the banks). Government net borrowing, that included capital expenditure,  (excluding financial interventions) was £147 bn. Approximately one in four pounds the government spends is borrowed. Based on past trends it could soon be one in three unless something is done.

So what could be done? Try putting up taxes? The Laffer curve, proposed by Art Laffer says that as taxes increase a point is reached where actual tax take starts to decline rather than continue to increase. Tax increases made by the coalition and Labour are about £30bn so they will not mend the problem although it should alleviate it. More tax however is likely to be counter-productive.

Growth is unlikely to get above 1.5% which means that unemployment could continue to rise.

One solution could be an enterprise led recovery with lower taxes paid for by lower spending.

• In 2000, three years into the Labour administration, the government spent £343 billion. In 2010-2011 it planed to spend £653bn: nearly twice as much.
• If it had only grown in line with inflation since 2000, government spending would be £407bn – £246bn less than this year’s proposal.
• That’s enough to wipe out the deficit, abolish VAT entirely, cut corporation tax to match Ireland’s 12.5%, abolish Council Tax, and still have some spare.

Labour has suggested that the correct approach is to make the cuts at a lower pace. But this will mean a greater level of borrowing for longer, a greater level of total public debt as a result and the need to run surpluses for longer to pay down some of these borrowings in preparation for the next recession. But the economy is cyclical and the next recession will come around again, perhaps by 2017, perhaps sooner. The current high level of cuts are designed to bring the economy back into balance by 2014 leaving only three years to pay back some of the borrowing before the likely date of the next recession. That is simply not enough time. Public sector net debt at the end of April 2011 was £910 bn or 6o.1% of GDP (gross domestic product, a measure of the total value of output of the economy). In 1998 it was 39%! This is likely to rise to £1,200bn or more over the next 3 years.

What else could be done? Well part of the problem is that it is an English problem. The devolved assemblies in Scotland, Wales and Northern Ireland have been shielded to a large extent from the cuts by the English taxpayer. A fairer division of the burden could lead to a savings to England of £10bn or more.

The Taxpayers Alliance estimated that the actual cash cost of the European Union is between £20bn – £40bn, which is in effect all paid for by England. Leaving the EU would lead to savings of this level and in total the two measures could amount to £30bn – £50bn.

These saving of around £40bn would not be reached immediately and would be unlikely to exceed £50bn, or less than 5% of total borrowing over the next 5 years. The truth of the matter is that we cannot afford government expenditure of more than about £550bn at present.

If we want to get back to the heady days of expenditure at £650bn we will need GDP, in current prices, of £1750bn which is 17% higher than at present. Even at an average of 2% real rate of growth in the economy this will take 8 years, and by then we will back into the next recession. Perhaps we need to pay attention to a saying of our mothers  that “you have to cut your cloth to suit your pocket”!

But can we get back to where we were? In addition to the tax rises we have had and the large cuts in government expenditure, and things the government is not talking about like a fairer division of expenditure between England and the other countries and leaving the EU, we would still need a sustained period of 3% per annum real growth in the economy from 2012 to 2017. With that, some real efficiencies in public spending and some luck, particularly with regard to the start of  the next recession we could make it.

How best do you think can we engender this growth?

GHTime Code(s): nc nc nc nc 

Worse, Key Advisors on the English NHS Listening Project cannot Evaluate Evidence!

In a recent blog Sir Stephen Bubb  http://bloggerbubb.blogspot.com/ publishes a letter from friends in Australia describing vividly how AV  pushed

“a man named Steven Fielding from the Family First party (think American tea party, you know conservative, homophobic, sexist ”family value” type agendas) was elected into the Senate (where all laws have to pass through) on 1.88% (yes that’s right just under two per cent) of the vote in Victoria! . . . But that’s how the AV system works”

Unfortunately this is all rubbish. Elections to the Australian Senate use PR not AV and if you go to http://www.abc.net.au/elections/federal/2004/results/sendVIC.htm you can see an example of a PR system whose demonic properties defies belief. Compared to it the d’ Hondt method used in EU elections here in the UK is child’s play.

The writer goes onto complain that in another election a deal done by the Greens to transfer votes to Labour who would implement Green policy resulted in Labour winning but not sticking to their agreements. Political lying is nothing to do with AV! What is more, because the PR system used for Senate elections uses a measure of transferability we do not know if this result was due to AV or PR.

Inability to Think Critically

However there is worse news to come. Sir Stephen is chairing the “Choice and Competition” strand of the coalition’s “Future Forum” set up to ‘Listen’  to critics of the bill on the English NHS. If you went to the blog above you will see that Sir Stephen thinks a lot of himself “This CEO blog promises to reveal the inside track of a third sector leader influencing in Whitehall, championing professionalism and causing a stir.” Perhaps he is correct.

However, as his publishing of the letter referred to above, before checking if it was correct shows, Sir Stephen is a prisoner of his prejudices – he supported the NO campaign – and is clearly not driven by checking facts and doing research. There is plenty of that available to him on how to produce high quality health care in England. See my blog http://www.politicaleconomy.me.uk/2011/04/can-the-english-nhs-survive-the-coalition/

It seems that the coalition’s listening campaign is not what it has been described. Perhaps the story above of the disappointed Green party in Australia was just a coded message from Sir Stephen about what we can expect from him!

GHTime Code(s): nc nc 

The fact that there are so many voting systems in use around the world implies that the choice of system is more likely to rest on cultural values and context rather than on some scientifically developed, or socially accepted, theory.

The referendum today appears to be heading towards a defeat for the proposal to change to the Alternative Vote (AV) system. If that happens it will be a disaster on two levels.

On the level of national democracy we have been subject to an increasing number of parliamentary seats where the winner fails to win a majority of the votes. That means that the MP has failed to get democratic legitimacy for their position and is entitled to act in any way they wish, no matter how inimical that may be to the majority of voters who voted against them, provided they protect the interests of the minority. Currently only around 200 out of 630 seats in the House of Commons enjoys democratic legitimacy and this figure has been falling for decades. Under the current voting system it will continue to fall.

It is a disaster on the level of the English Democrats whose objective is a devolved parliament and government for England, the achievement of which will have been set back by decades by this vote. This is because under AV the winner has to get more than half of the votes (assuming all candidates are ranked by all voters). Since more than 60% of English voters want an English parliament and since more than 60% of seats currently fail to get a majority,  some, perhaps many, of the candidates would have to adopt support of devolution for England as part of their programme. Or if not devolution a referendum on leaving the EU! What’s not to like about that!

An early move to devolution for England will only happen if one of the major parties takes up the policy. Under AV it is reasonable to forecast that we would have an English parliament within 10 – 20 years. Under first-past-the-post system a better forecast is 60 – 80 years, if ever.

In a rational world all English Democrats would support AV but they do not; all those who say they believe in democracy, in the sense of rule by the majority, would support AV, but they do not; all those who want a voting system whose subtlety allows them to express their choices in an increasingly pluralistic world would choose AV, but they do not.

There appear to be two main arguments against AV. One is the principle of “One man One Vote” and the second is that it is “too difficult for people to understand”.

The first principal appears to come first from the USA where the framers of the constitution were keen to ensure that the number of seats in the federal Congress was apportioned on the basis of population so that equal population numbers gave rise to equal numbers of representatives and so, and this is the key issue, an equal chance to gain resources from the federal government http://bit.ly/kRzW4G.

In this sense the people of England have not had “One man, One vote” since the start of the Goschen formula in 1888 which was the start of systems to give more money to the People of Scotland and we are unlikely to ever have it in England. The “One man, One vote” mantra is in fact an argument for the equalisation of government funding on a ‘per head’ basis through the UK.   That Mr Cameron understands this interpretation is shown by his plan to equalise the number of voters in each constituency. In reality he wants to increase the likelihood of more conservative seats and hence more government resources to the Conservative Party money men. That he will not use the principal in its original form to make funding fairer in the UK is axiomatic – to do so would lose any chance of building up a significant number of conservative MPs in Scotland and Wales.

However most people will understand the slogan as meaning that one person has only one vote in an election. What they do not understand is that meaning in England dates only from the post-World War II period when most, but not all, plurality of voting was stopped http://en.wikipedia.org/wiki/One_person,_one_vote. So Cameron’s claim that “One Man, One vote” has served this country well for centuries is false, and as a student of politics at Oxford he knows it is false.

Could you enhance the democratic legitimacy of the current system? Yes and quite easily. You run the elections in a series of rounds, each round separated by perhaps a week or less and with no campaigning between rounds. At each round if no one has more than half the votes one or more candidates is eliminated and the voting goes through to a second round where once again the electors cast their one vote. No one has more than one vote in the voting ‘pool’ at any one time. This goes on until one candidate has more than half the vote. It is tedious but it ensures democratic legitimacy and it is fair. It is called, in the USA, a run-off system of voting.

But AV is merely an ‘instant’ form of the run-off voting http://en.wikipedia.org/wiki/Alternative_vote. AV ensures that no one has more than one vote in the voting pool at any one time and, like run-off voting, ensures that everyone has one vote in the voting pool all the time, if they wish. So if you like FPTP and you want democratic legitimacy you should like AV!

The second reason that ‘NO’ people go for is that AV is too difficult for some of us to understand (actually they mean “some of you”). In 1963 I became an apprentice in an explosives factory. One of the weekly rituals was placing a bet on the horses (but not by apprentices!). The work of collecting the bets on behalf of the bookie and calculating the odds of the complex bets that were placed was given to the labourer.

Now in the industrial triad of Journeyman-apprentice-labourer the latter was definitely bottom of the heap. Yet the labourer could do more complex calculations of odds than I could then, and probably even now. That was when I learnt that anyone can learn just about anything provided they are motivated to do so and have the time, means and persistence. That was also the time when I realised how arrogant I had been. If you want to see how simple AV is then review the ‘choice of crisps’ analogy in this leaflet

Attending the lectures of Prof. Hans Morgenthau at the University of Chicago I learnt that in a democracy, when the people realise that they no longer have the means to control their state, violence becomes ‘existential’. If violence does occur then the people to blame are the political elites who allowed this situation to arise.

How we vote is one of the many means we have to preserve out control, but only if the mechanism works. FPTP does not work in today’s England because it cannot deliver democratic legitimacy.

That is why, if the referendum vote today goes against AV, the issue will come back. The fight is not over!

GHTime Code(s): nc nc nc 

As the months go by the chances of the people of England retaining a National Health Service get lower and lower.

The latest shock is the news that, compounded over five years, the efficiency target for hospitals is 37%!. John Appleby, chief economist at the King’s Fund was quoted in the Financial Times (29th April) “Its like the unit cost of a hip operation has got to decrease by 37%. How?”

Currently a hip operation costs about £6,000 so a 37% decrease will mean a cost of £3,780. We all know how this will happen. Cut a theatre nurse or two,  reduce the ward staff, cut corners on the rehabilitation and no one will ever know that the quality of the outcomes drop because they will not be measured.

So much for the conservative election pledge to protect front line services with “real terms” increases.

As the FT article said this “may have made it more likely that struggling [English] NHS organisations will be offered to private companies rather than merged with existing foundation trusts”.

In a recent blog, http://bit.ly/ifLlwG, I pointed out that to get a high quality, high value for money health service current research indicated that first you had to spend money on creating the health structures focused on, and with sufficient throughout to deliver, high quality care. Once you have this costs decline because the high quality reduces readmissions (rework), and legal claims (warranty costs) as well as reducing the time required to effect the cure (reduction in cycle time so reducing costs of hospital stays, clinics and so on) and the high throughput reduces unit costs through better utilisation of fixed costs.

The coalition’s NHS strategy for England is schizophrenic, based on political dogma and is almost unbelievably uncaring about those of use who have to use it.

The English Democrats manifesto has a strict recall of an MP by his constituency clause. Coupled with AV working to ensure that politicians produce programmes that are acceptable to more than half the voters would ensure that the sort of fraudulent election promises made by the conservative party would no longer be possible.

So on the 5th May vote English Democrat and vote YES on the referendum!

GHTime Code(s): nc nc