Pre-budget report

The Shadow Chancellor (George Osbourne) just sat down after giving his response to the Chancellor's budget. The highlights of Darling's budget:
Economy has done significantly worse this year than expected - contracted by 4.75% rather than the 3.5% expected.
A raft of tax changes - an increase in National Insurance tax by 0.5%, a 50% levy on bank bonuses over 25,000 pounds, threshold for high tax rate is frozen (rather than increasing due to inflation) at 43,000 pounds - meaning more people will be in the higher bracket.
Public pay increases capped at 1% for two years
Deferred the increase of corporation tax for small business
Cutting the corporation tax to 10% for those companies who can prove they are using a British patent
Increase in pension by 2.5%
Child and disability benefit increased by 1.5%
Inheritance tax allowance frozen (a big political move to hit the Conservative position on inheritance tax)

The Chancellor has identified approximately 5 billion pounds worth of savings in the economy. That is about a sixth of the savings that he claims will be made. There are obviously a lot of dreadful spending cuts still to be announced...

Although he is trying to ringfence money for hospitals, schools and police (although note that he is not ringfencing the money for Education, Health or the Home Office!), there will be savage cuts to many government departments (more so to those he isn't ringfencing). According to the BBC, the cuts that will be made will undo 3/4 of the increases in spending that has occurred since 1997.

George Obsourne came straight back on the attack in his speech, calling it a total failure and a political budget (who'd have thought?). A very good, robust speech.

Has Labour given up on winning the election?

At PMQ's last week (and subsequently on TV) we have seen some members of the Government (although some are reportedly very concerned about the strategy) using class warfare language to attack the Tories (particularly David Cameron). The Prime Minister, to laughter and applause from his own benches, hit Cameron with the line that the Conservative economic policy had been 'dreamed up on the playing fields of Eton', while another Labour MP described the Tory policy as 'an Eton Mess' (I admit, I find that one significantly more amusing).

However, what does this mean politically? Well, it appears to show that, consciously or not, Labour have written off this election. Why? Because class warfare, by definition, energises working class Labour stalwarts, while angering middle class southern and middle England. So by engaging in these kinds of attacks, Labour will probably energise their voters in the north and Scotland, and by bringing them out significantly reduce the losses in some of those areas (for example, we may well see far fewer seats north of the Watford Gap going blue than the nationwide swing ought to indicate). However, by doing so, they are turning off exactly the kind of middle class voters in the Midlands and South that they would need to win an election. If it is a conscious decision (and if it is, it is actually a very reasonable one), then Labour strategists have written off the election, and want to make sure their voters come out in the north in order to stop the kind of wipeout that happened to the Conservatives in 1997 - hopefully (in their minds) holding on to 250-odd seats, meaning that Labour can seriously challenge a Conservative Government in the following election.

Will it work? Who knows! In Scotland Labour has been beset by the Scottish Nationalists (although the SNP being in 'government' in Holyrood seems to have reduced their popularity), and the Liberal Democrats seem keen to try to pinch northern seats of Labour (which they will probably fail at). Also there have been comments from more than one commentator that it is a bit rich for Labour to drape itself in the mantle of the working class when they have been a middle class party for the last twelve years (not forgetting as well that conditions for working class Britain have declined and income inequality is worse today than since the 1960's). So whether low-income Britons will 'come home' to Labour on election day is yet to be seen.

One interesting little tit-bit on this point, is to look at polling on who minor party voters want to form the next government. BNP voters (who are predominantly disgruntled ex-Labour voters in safe Labour areas) overwhelmingly want David Cameron to form a government after the election.

Sigh, this is the reason Labour is so unpopular

Labour is unpopular. There is the obvious reason of why this is; that their policies have caused many of the problems in society - whether the lack of trust between citizens and the government, the enormous deficit and the deterioration of health, police and education services. But there is another reason - one that often plays worse with the public than the policy failures. Arrogance.

At Prime Ministers Questions yesterday, Gordon Brown had a very good day. He got a few good whacks on the Conservatives, disdainfully put down the Lib Dems, and cheered his own side considerably. Cameron also had a very poor day, which further helped. However, because of the arrogance of the government this has already been forgotten in yet another stupid own-goal. During an answer to David Cameron, Gordon Brown claimed Britain was not the only country in the G-20 to still be in recession - Spain was still in recession. The only problem is that Spain is not a direct member of the G-20. Now, in PMQ's a Prime Minister does not know what the Leader of the Opposition will ask him, so it is forgiveable that he might get one fact wrong sometimes. I mean, Spain is not a direct member of the G-20, but it IS a member of the EU (which is a member), and is also an observer. Gordon could be forgiven for getting that wrong in the middle of unscripted debate in the bearpit of the House of Commons. Most politics watchers (and members of the public) would willingly accept this explanation.

However, in an absolutely breath-taking display of hubris, the government has argued today that Brown was completely correct. There is no real justification for this claim. It is pretty obvious that any claim to the PM being correct is disingenuous. So now, after putting some runs on the board yesterday, the Government has stupidly hit its own wicket and now the story around the papers and the blogs isn't "Didn't Gordon do well yesterday", which played nicely into a general story of Labour recovery after a couple of improving polls. Nope, now that story is "Is Spain a member of the G-20, and was Gordon being disingenuous or just ignorant when he claimed they were?" For the love of anything, just suck it up, accept you made a mistake, and move on - it shouldn't be this big a deal!

What the hell is wrong with the Cameroons?

I've said this before - I am not a scientist. When it comes to the science of climate change I am willing to be influenced by any scientist who puts up a robust and peer reviewed (for what that process is now worth) work on the subject. Some say it is (mostly) natural, some say it is (mostly) man made. I'd love to actually hear pro-climate change people contradict the sceptics with data, rather than waving their arms and yelling 'deniers!', but I guess I'll have to just muddle through.

However, I also know enough to see that there is a large chunk of scientific opinion, and an even larger chunk of public opinion, that either does not believe that climate change is predominantly man-made, or are not overly concerned with the consequences of it. And I know enough about politics to know that when that is the case it is unwise for Conservative Party MP's and supporters to publicly attack members of their own party who do not agree with their position on climate change. In a previous post I mentioned what has happened in Australia. Now, David Cameron is safe. But he would do well to remember that it is likely that, at best, he will have a narrow overall majority, and the last thing he needs is to have a major split inside his caucus room even before he gets into Downing Street! And his minions should remember something else. Much like people who have honest disagreements on immigration do not like to be called racists, people who have honest disagreements on climate change do not like being being referred to as 'the dying gasps of the deniers'. Not least, because if we hark back to the first time climate change scepticism was declared as being 'in its death gasps', we are witnessing a medical miracle!

Cameron does need to be very careful that he does not (between climate change and Europe) turn off his supporters - or send them to UKIP. Capturing the centre is important, but will count for nothing if he can't get the base out as well - especially when there is campaigning to be done!

Australian Liberals - when ideology is a bad thing

Political people often decry that political parties do not stand for anything any more. They (often myself included) hark back to a happier time when parties took strong positions on issues and offered voters a real choice. All too often now we see parties becoming mushy groups who offer the barest differences between them as a 'choice', and often ignore issues that seem too hard or too controversial.

However, there comes a time when pragmatism must win. Major political parties are by definition big tents. First Past the Post governments are as much coalitions as proportional representation governments - except the coalition is within the party, rather than between them. And as such there will be issues that will fundamentally divide parties and risk major splits and the flight of support from one party to another. This appears to be happening in Australia to the conservative Liberal Party.

The party has been rent asunder by the Rudd Labor Government's Emissions Trading Scheme, that has already destroyed one leader, as well as a challenger for the leadership. Malcolm Turnbull, the former leader, was rolled after (perhaps imprudently) committing the party to vote for an amended Emissions Trading Scheme, after a very fractious party meeting, and a vote that was, by all accounts, decided by a single member while leading sceptics were out of the room. This is perfectly reasonable. A party leader does not have the right to commit a party to a course of action if the majority of members are opposed to it (are you listening, Mr Cameron?). However, this is where things start to break down.

Mr Hockey, shadow chancellor and the man expected to carry the leadership, decided on a pragmatic policy on the ETS. He said he would offer every Liberal MP and Senator a conscience vote on the issue - meaning there would be no party whip and they could vote however they chose. This was the best solution. There were obviously a large number of MP's who opposed the ETS, and a large number of supporters. With a party so evenly split, the best solution was let each MP and Senator make their own decision, and justify it to their own constituents and local party organisations. However, climate sceptics announced this was unacceptable and backed hard-right candidate Tony Abbott (by a single vote).

Abbott has committed the Liberals to oppose the ETS. It was voted down in the Senate yesterday (where the Government does not have a majority). The Government has announced the bill shall be voted on again in February. Assuming Abbott still has control of his party room, the bill will be defeated again. Under the Australian constitution, multiple defeats in the Senate gives the Prime Minister the right to dissolve both Houses of Parliament and call what is known as a 'double dissolution' election. Which Rudd probably will. The Liberals then risk not only losing more seats in the House (where they are already reduced to a 1997-like rump), but will almost certainly lose seats in the Senate, and probably hand control of the chamber to Labor, ending the ability of the Liberals to at least delay laws in the Senate.

Abbott will certainly not become Prime Minister. Rudd has been handed a second term - and for once, maybe, pragmatism should have trumped ideology...