Tag Archives: election

Autumn statement gives Lib Dems seven-year itch

George Osborne’s autumn statement generated a lot of discussion about its economic implications, with much gloom and foreboding. But it will also have significant implications for the politics of the coalition, particularly for the Liberal Democrats.

The coalition was founded on the basis of a fixed five-year term. It was coupled with a five-year economic strategy that would see the elimination of the UK’s structural deficit in time for an election in 2015. This all seemed like neat political and economic symmetry.

The Conservative Party took a deep breath and gave up the notion of governing on its own. The Liberal Democrats, grateful for their first experience of power in 90 years, clutched their garlic and joined forces with a political party whom many regarded as bitter enemies.

It would be a rough ride at times, as the Liberal Democrats found out over tuition fees, but it would be a five-year project at the end of which the two parties would go their separate ways and face the electorate.

But now the structural deficit will be with us until 2017. Thus, we now have a five-year coalition pursuing a seven-year economic strategy. The coalition parties cannot now plan to go to the country separately in 2015 claiming to have balanced the books. Treasury Chief Secretary and Lib Dem strategist, Danny Alexander, clearly grasps this, but his acknowledgement of the changed political dynamic is bringing out other Lib Dems in a rash.

Alexander appeared on BBC 2’s Newsnight following the autumn statement and said that the Liberal Democrats would fight the next election committed to the additional £15 billion of cuts in 2016 and 2017 that they had agreed with their Conservative coalition partners.

He said: “As a government we originally set out plans that would meet our targets a year early in 2014/15. But because of the way that economic circumstances have deteriorated we need to make this commitment for future years, so yes Liberal Democrats and Conservatives will work together in government to set out plans for those following two years and, of course, we will both be committed to delivering them.”

This caused consternation among some of his Lib Dem colleagues who are wary of being too closely allied to the Conservative Party. They are anxious to preserve their party’s independence and to go into the next election on a manifesto that is distinct and separate from the Conservatives.

We are all adjusting to coalition politics. All that Danny Alexander’s comments show is that he has adjusted better than some of his Lib Dem colleagues. It will be extremely difficult, not to say, implausible, for the Lib Dems to support an economic strategy that runs into the next Parliament, but cease to support it on the day that the next election is called.

As they enter the next election, both coalition parties will have to claim that their partnership has been a success. Having trumpeted the success of the coalition and tied it to an economic policy that will still have another two years to run, it will require fairly tortuous logic to tell the electorate that it must come to an end.

I wouldn’t bet against the next election producing another hung Parliament and another coalition. So Danny Alexander may well have put down a useful hedge that he can cash when negotiations for the next coalition open.

Of course both parties will stand on separate manifestos and fight their own election campaigns. We are some way from a repeat of Lloyd George’s and Bonar Law’s “coupon” election of 1918, when candidates who had the official support of the coalition were issued with letters of endorsement. But if we have entered a period of hung parliaments and coalitions, Danny Alexander will appear more astute than some of his Lib Dem colleagues are giving him credit for. The prospect of another five years in power could provide the balm to cure their itches.

From zero emissions to zero debate

The irony of the 2010 General Election campaign is that it is the most unpredictable for a generation, yet there has been little serious policy debate apart from on the financial crisis and National Insurance. Even the arch spin doctor, Alastair Campbell, is calling for more media coverage of policy.

There has been massive interest in the leaders’ debates, which has blown away all the early predictions of the likely result. It has also nullified the parties’ best efforts to devote discussion to specific policy areas on particular days.

So it should come as no surprise that polling by Ipsos Mori should show that, for the first time since 1987 (when the question was first asked), party leaders are as important as policies in deciding voters’ choice of party. The gap in favour of policies over leaders widened from 1997 to 2005, but narrowed dramatically by summer 2008 and is now level.

I know it’s the economy, stupid, so it is entirely appropriate for the level of public borrowing and the fragile nature of the economic recovery to dominate what little policy discussion there is. But there has been virtually no discussion of other issues such as transport, crime, health or education, education, education.

Does anyone recall being told that tackling climate change was the number one issue facing, not just the country, but the whole world? True, this and the related issue of future energy supplies, came up in last night’s leaders’ debate. But there has otherwise been virtually no mention of the subject.

The Guardian did at least host a debate between Energy Secretary, Ed Miliband and his Conservative and Liberal Democrat shadows, Greg Clark and Simon Hughes. After 36 hours, the paper’s online report had attracted 52 comments. By contrast, just one of its comment articles on last night’s leaders’ debate received 281 comments in half that time.

There is no shortage of policy or initiatives on energy, climate change or reducing carbon emissions. We are told that so-called green industries have the potential to create up to half a million jobs. Yesterday, I attended the 2010 Sustainability Live exhibition in the National Exhibition Centre in Birmingham. This brought together hundreds of exhibitors, from renewable energy equipment manufacturers to sustainable waste disposal and water treatment specialists, university research departments, trade associations and professional bodies.

There is huge commercial and academic interest in developing the means to reduce harmful emissions, and to develop a more sustainable economy based on innovative and more secure energy supplies. Yet none of the exhibitors that I spoke to were aware of any discussion in the election campaign that is relevant to this burgeoning sector.

When it comes to climate change, we seem to have gone from zero emissions to zero debate. There will, eventually, be plenty of discussion on the policies that the new Government should pursue, but not till after the election.

X Factor politics, Hammer Horror policies

I attended a Conservative Party business event this morning, addressed by David Cameron. It was billed as Supporting Small Business and Building the Big Society. Unfortunately, the clamour from the media throng for his answer to the X Factor-like surge from the Liberal Democrats, meant that there was precious little space for him to say much about business.

But beyond the brouhaha surrounding National Insurance Contributions, you will learn little from the media on what each of the parties are offering business. The curse of reality TV politics, is that there is now even less space for policy debate in any area, let alone on business issues.

True, David Cameron did mention cutting Corporation Tax and exempting new businesses from paying National Insurance on the first 10 new jobs. But it was hard to get away from hung parliaments and attitudes to Nick Clegg.

Each of the parties has dedicated sections in their manifestos and websites on policies for business. The Conservatives will reduce red tape and form filling, simplify business taxes and make rates relief automatic for small business. Labour’s proposals include cutting regulatory costs, doubling the capital gains allowable under Entrepreneur’s Relief and temporarily increasing small business rate relief. Like the two main parties, the Liberal Democrats say that they will remove unnecessary regulations. They will also establish local enterprise funds, stimulate bank lending to business and part-privatise the Royal Mail.

As with manifestos as a whole, the wording can often be couched in such general terms that the promises can, sometimes, mean anything to anyone. People running businesses will make their own judgements on which party they would prefer in power. But regardless of which party wins, scrutinising manifestos will not be enough for business to ensure that the new Government implements policies that enable them to flourish. Businesses, whether individually or through trade associations, will need to engage with policy makers as soon as possible after the election. The purpose is not just to anticipate policy but to try and shape it before it is finalised.

Forecasting the election result has now got a lot more complicated. We may even be facing the prospect of a hung Parliament, with either a minority Government or a coalition. In these circumstances, and especially in the latter, manifestos go out the window to be replaced by policy programmes based on political horse-trading.

Businesses, as well as the financial markets, don’t like uncertainty. But post-election uncertainty is also an opportunity for business to exert its influence on future policy. But they must engage proactively with policy makers, be they ministers, advisers or officials if they want to see a policy mix that enables British business to thrive and expand. Failure to do so could result in the X Factor politics being generated by the leaders’ television debates, producing a Hammer Horror for business.

Cadbury’s Law is a fruit and nut case

“There’s no difference between any of them” is, we’re often told, how electors view the political parties. But ever since the days of “Butskellism” there have been more similarities than differences between the parties.

And while there is not a revolutionary gulf between the 2010 election Labour manifesto and Conservative manifesto, there are some clear differences. One significant difference for business interests is on takeovers.

Labour holds that many takeovers are good for neither predator nor prey and that the system needs reform. By contrast the word “takeover” doesn’t even appear in the Conservative manifesto.

Labour is playing to the gallery, substantially orchestrated by the Unite trade union’s anger over Kraft’s hostile takeover of Cadbury. Labour wants to introduce a higher threshold of support among shareholders to agree a takeover; increasing it from a half to two thirds. It also says that the case for limiting the right to vote to those on the register before a bid “should be examined”.

Speaking for the Conservatives, Shadow Business Secretary, Ken Clarke dismissed these proposals as “populist nonsense” and vowed to adopt a “hands off” approach to business.

Labour is clearly throwing a sop to unions, leftwingers and little Englanders, upset about losing control of a British-owned chocolate manufacturer. But it is short on specifics and clearly wants to avoid joining France in regarding the British equivalent of yoghurt makers as a strategic interest of the national economy.

No one is seriously proposing the “Cadbury’s Law” that the unions were looking for. Nevertheless, Labour is more likely to place some restrictions on takeovers, even if they turnout to be a lot weaker than its supporters hope for and that business fears. A two-thirds rule would enable at least some inefficient managements to use minority coalitions of shareholders to protect themselves from proper scrutiny, and dismissal. But it is not in the interests of businesses or the UK economy to enable blocking minorities to protect weak, inefficient or incompetent management.

Earlier this year, the Takeover Panel announced a consultation on the Takeover Code to look at how shareholders decide on the merits of takeovers. Labour’s manifesto partly pre-empts this consultation and should the Conservatives win the election, it may never see the light of day. But the political difficulties that come with some takeovers cannot be wished away.

Most business takeovers run their course without much discussion beyond the City pages of newspapers, but there will be some that run the risk of public controversy and a minority Conservative Government or one with only a small majority could come under political pressure to protect, so-called, vital British interests.

Under such circumstances, whether a takeover bid is accepted or resisted, all parties involved will need to explain proactively to all stakeholders, the case for or against a bid. Whoever forms the next Government will not thank the combatants in takeover battles for dragging them into political controversy. If that happens, they may yet find the Takeover Panel stepping into the ring to call time out.

Manifesto makes a point

The Labour, Conservative and Liberal Democrat manifestos will be published next week. These will provide an invaluable resource for insomniacs and political anoraks around the country, as well as giving us an insight into the likely policy priorities of the next Government.

Manifestos are necessarily limited in what they cover, with the infamous exception of Labour’s 1983 offering, “the longest suicide note in history”. They are usually confined to broad policy statements and worded with enough ambiguity to allow future ministers a liberal interpretation of what exactly are their commitments.

But elections also provide an opportunity for outside interests to enter the policy debate. That’s why the run-up to the General Election has seen various businesses and campaign organisations put forward their own manifestos, visions and policy demands.

One valuable contribution comes from vaccine manufacturer, Sanofi Pasteur MSD’s manifesto, Putting vaccines at the heart of health care. It calls for a full-scale review of vaccination policy to give it a more central role in the provision of health care.

In his first speech as Health Secretary in June 2009, Andy Burnham said that prevention is a “long-term insurance policy against spending challenges”. The focus, however, has been on attempting to change life-style choices. No one is arguing against this, but if policy makers want to enhance prevention, then greater importance should be given to vaccination, which is a far more effective means of preventing ill-health than relying on people to change their eating and drinking habits.

Vaccination can prevent more than 20 infectious diseases and has helped eradicate smallpox. Only the provision of safe water has done more than vaccines to reduce mortality. But too often it is seen as something that is only for children. The NHS Choices website lists 17 vaccines (including next stage doses and boosters) that are offered routinely to “everyone” in the UK. Yet only two, flu and pneumonia, are for adults.

Our immune systems decline with age, which leads to more frequent and more severe infections. And with the over-60s population predicted to increase by 160% between 1999 and 2050, increasing infections in the older population will increase the burden on the NHS.

That’s why Sanofi’s manifesto echoes the calls of European health academics for a “life course” approach to vaccination. Vaccination programmes should start from 50 years of age, before age-related decline in the immune system begins. The recent approval by the Joint Committee on Vaccination and Immunisation for a shingles vaccine to be available on the NHS, albeit from the age of 70, is a start. This could help reduce the incidence of this debilitating disease by half, and thereby save the NHS care costs.

Judging by the three-way bun-fight between Andy Burnham and his Conservative and Lib Dem shadows, Andrew Lansley and Norman Lamb on Newsnight yesterday, the election campaign is unlikely to see serious debate on the future of health policy.

Officials and health professionals will read Sanofi’s manifesto with care but will politicians get the point about vaccination? Perhaps when the election is over, they will read other people’s manifestos.

Crying foul on football’s debt junkies

Early in March, Chester City Football Club folded following a compulsory winding up order for debt of £26,125 owed to HM Revenue and Customs for unpaid tax. A group of City fans under the banner City Fans United is now trying to form a new club owned by its supporters.

This news may not have travelled far beyond Chester but it is symptomatic of how English football is exposed, not just financially but politically too. Football clubs have racked up massive debts, fans are making ever-louder protests and the Government senses it has an open goal to force change on the clubs.

Cardiff and Southend owe the Exchequer nearly £2.5 million between them and are regarded as insolvent by HMRC. The Guardian has exposed the complex web of debt and holding companies behind Hull City. The club’s auditors, Deloitte, have added a warning to its accounts that there may be a “significant doubt over [its] ability to continue as a going concern”. Can anyone remember who owns Portsmouth this week while it tries to escape administration? And Arsenal fans laugh nervously everytime they see Liverpool and Manchester United fans protest against their US owners for landing their clubs with debts which, together, total nearly £2 billion. I say nervously, because Arsenal’s own debt, although reduced, is still over £200 million.

With the 2010 election now unofficially underway, Labour has sensed an opportunity to weigh in on the fans’ side. A Department for Culture, Media and Sport statement last week called for the Burns Report recommendations on governance to be implemented in full and for further unspecified improvements in financial regulation.

The Labour Party, however, senses a good populist cause. With more than half a million fans attending top-flight football matches each week and four million subscribers to Sky Sports, it is probably right. It has lost patience with the football authorities and its manifesto is likely to include a requirement on clubs to give fans or supporters’ groups a 25% stake. There will also be a change-of-control clause that would give fans time to put together their own takeover proposal if their club is up for sale or goes into administration. The FA and professional leagues will also have additional oversight of club takeovers.

Barcelona and Real Madrid are both partly member-owned yet have debts of £312 million and £610 million respectively. So giving (some) control to fans won’t, on its own, usher in an era of board room parsimony. But club owners – be they foreign billionaires, Goldman Sachs bankers or local builders – could, at the very least, have a vocal share-holding minority ready to cry foul at every play they make.

Labour’s plans may last no longer than UEFA’s disciplinary decision against Eduardo. But with the Conservative Party also pledged to take action and give fans a greater voice, the rules governing football club ownership look set to change regardless of who wins the general election. And if football’s plutocrats get their fingers burned as a result, there will be no referee to blame.

Lobbying on behalf of the lobbyist

As the green shoots of spring and recovery are appearing, so are the traditional signs of an impending election: the Conservatives are avoiding talking about Europe, Labour is defending its financial links with the unions and the party leaders’ wives are competing with their spouses for media column inches.

A more subtle sign is that politicians are diverting criticisms from the political arena onto soft targets. Bankers are number one on the list, but lobbyists are also in their sights. David Cameron has promised a crackdown on lobbyists if he becomes Prime Minister and it is rumoured that Alistair Darling’s budget will propose a ban to stop publicly-funded bodies from hiring them.

This bothers me on many levels, principally because the term “lobbying” just doesn’t apply to what our industry actually does. In more than a decade of working in public affairs in the UK, I have not been asked, either by a client or an employer, to undertake any sort of duty that would breach the spirit or principles of ethical lobbying. This is in stark contrast to my experience of working on Capitol Hill, where I saw the sort of real hard-nosed, direct lobbying that the public is being told is tainting British politics.

What we “lobbyists” do is to help our clients to identify, define, hone and articulate their messages, and to advise them who their target audiences are and how best to engage with them. Our clients might sometimes be multinational corporations, but so too might they be charities, trades unions or local government, or operating in highly-specialised industries or policy climates.

Sensible, robust governance depends upon clear, informed communications between the Government and those stakeholders which its policy, regulation and legislation will affect. And that communication is more crucial now than in the past, as career politicians with little experience outside the Westminster bubble are increasingly replacing MPs with real world experience, whether it was from commerce, the public sector, education or the armed forces.

Calling for transparency in public affairs is a no-brainer and our industry knows that its future depends upon maintaining a reputation for probity and professionalism.

My hope is that the fuss about lobbyists is simply diversionary pre-election politics. In my years in public affairs there has been one “scandal” that I can recall and that involved Derek Draper saying something a little silly, but ultimately harmless, about who he knew in Government. Hardly on the same level of deceit as, say, deliberately fiddling your expenses, is it?