Wednesday, 22 April 2015

Tories Panic Policies Unravel

The name's Milibond - Ed Milibond
The Tories are clearly in panic mode. They were told, last year, by their election guru, Linton Crosby, that, by last Easter, they would have seen a breakthrough in the polls. They didn't. They thought they could rely on simply demonising and ridiculing Ed Miliband. They couldn't. They hoped the economy would be booming, and that people would be feeling the benefit from it. It hasn't and they don't. They thought they could get away with continuing to tell lies about the conditions that existed when they came into office, and get away with it, theycouldn't and they haven't. They thought they could hide from the election debates. They couldn't, and they lost where they took part. Rather than getting some boost in the polls, they have gone backwards and stagnated. Cameron's personal rating, over Ed Miliband, has all but disappeared. So, in the last two weeks, the Tories have panicked and even abandoned some of the ground on which they could have stood. That hasn't worked either, even as they have given money away like confetti. No wonder, their desperation has led to them resorting to the use of sock puppets to get over their message!

One of the first panic policies the Tories adopted was to look back to Thatcher, and say they would force some private landlords – housing associations – to sell properties to their tenants at a discount. Let's be clear about what this policy is, it is a policy of confiscation of private property by the state. Housing Associations are not parts of the state, like local councils, but private institutions, and their houses are private property. This is not a Communist government proposing this policy, but a Conservative government. Talk about political cross-dressing!

No wonder then that not only people in the Housing industry have described the proposals as dangerous. Representative of Hayeckian liberal thinking in the financial press, Moneyweek, called it “one of the worst policies of the election so far”. Others have pointed out that it would mean that the Housing Associations, who rely on an income stream from rents, to cover their debt financing, would find it increasingly difficult to borrow, if their assets, which provide that income stream was being forcibly sold off by the government.

But, as I'vepointed out before, this reaching back to Thatcher, whether it is in this policy, or previous policies over attacking unions, or introducing Enterprise Zones, is simply a reflection that Cameron's Tories not only lack a single innovative thought in their head, but they are so incompetent that they cannot even understand that the conditions that existed in the 1980's, are not the same conditions that exist today, and so the policies that might have worked for Thatcher then, cannot work today.

In reality, most of those policies, back in the 1980's, did not work either, other than in the very short term, but the cost was the de-industrialisation of Britain, the creation of huge amounts of private debt, and the blowing up of the huge asset price bubbles that corrupt and distort the economy today, and which led to the financial crisis of 2008, and will lead to an even more astronomical bust in the next year or so.

Policies like Enterprise Zones, did not work. They simply created a bureaucratic mechanism, whereby small businesses in one part of town, shut up shop, and took subsidies from the state, which did provide jobs for a series of government bureaucrats organising such facades, only to set up in an Enterprise Zone, where they escaped the taxes they were previously paying, and where their workers, often received poorer conditions.

The policy of council house sales did not work either. As soon as interest rates rose, after 1989, especially combined with the onset of a new period of recession, the thousands of former council house tenants, duped into buying homes they could not afford – which is why they had previously been renting them – found that, now, they could not even make the interest payments on their mortgages. Tens of thousands who had bought their council house found themselves evicted, and reliant once more on the local council, whose ability to house them had been diminished, because its stock had been sold off, and because the Tories had prevented councils from building new houses. The vast majority of the council houses that got repossessed ended up first in the clutches of the banks, and then in the hands of private landlords.

There is no indication that situation is any better under the current Tory version of the plan. Since 2012, when the Liberal-Tories introduced their previous Right to Buy incentive, for council houses, they have sold 26,000 houses. Their policy required them to build one new property for each one sold. In fact, they have not even achieved 10% of that, having built only 2,300 during that period. But, the same thing applies as to the fate of the council houses that were bought by tenants. Of the council houses sold in London, 36% are now in the hands of private landlords!

The same thing was seen with the 1980's policies introduced by Thatcher to create a share owning democracy, also didn't work. Having encouraged millions of people, who were not financially sophisticated, to buy shares during the 1980's, and to buy private pensions based upon the purchase of shares, many saw their shares crash in 1987, and sold in panic as a result. The shares were picked up cheap by the banks and financial magnates just at the time they were about to bubble up again. Having then been ripped off by pension mis-selling by the same banks in the 1990's, they saw their shares, and pension funds crater again in 2000, and again in 2008, and the biggest bust is yet to come. Although, many of the shares were picked up by pension funds, at the moment that provides no solace for workers because they are legally excluded from any organised, democratic control over their own pension funds, and that control is undertaken by the same banks that gambled and speculated, bringing about the crash of 2008.

The Tories then came up with £8 billion of additional funding for the NHS, from their secret money tree, as well as other unfunded promises to cut taxes for the rich, for those with £1 million properties in relation to Inheritance Tax and so on. None of it worked. When it came to the election debates, Cameron performed poorly, whilst Miliband did well, and worse for the Tories narrative, Nicola Sturgeon also did well, topping a number of polls.  In fact, in many surveys, people in Britain themselves have said they would like to be able to vote for Sturgeon!  For people in large swathes of the country, it is not a fear of Sturgeon and Scotland that is the issue, but a fear of Boris Johnson and London.  It is not Scotland that has, and continues to suck the economic lifeblood out of the rest of the country, but London and the continual formulation of national policy to meet its needs, one of the latest examples being HS2, which is designed to ship in cheap labour from the rest of the country to Gotham, no doubt with even more huge subsidies from workers to cover the rail fares.

The Tories incompetence and panic is further illustrated by the fact that they have continued with this narrative that a Labour Government would be in hock to the SNP. Firstly, the suggestion is ludicrous, because Miliband has made the obvious point. A Labour government would put its programme to Parliament, and dare all the other parties, including the SNP to vote it down. The SNP could not, because it would be electoral suicide for them to do so. What the Tory focus on this SNP threat amounts to is a recognition that they have lost the election.

No matter how much they repeat the slogan that they only have to win an additional 23 seats, its clear that they will be losing seats not gaining them on balance. Where they do gain seats it will be at the expense of the Liberal-Democrat wing of the Liberal-Tory Party, and so will make no overall difference to the situation, because its quite clear that the Liberals are fighting the election on the basis of stitching up another deal to stay in government after the election, with the Tories. Labour could no more do a deal with the toxic Liberals, in any case than they could with the SNP, but the Liberals are likely to be left with so few seats that it will be a moot point anyway.

The Tories know they have lost the election, and have simply thrown policies around in panic, in the hope of retaining at least their core vote, as well as trying to win back some kippers. They have played the nationalist card themselves, and the dangers of that have been indicated by other leading Tories like Michael Forsyth and Norman Tebbit. Its notable that for all the Tories bluster about only needing to win 23 seats, they have been deploying all of their resources in marginal Tory seats, rather than in trying to win marginal Labour seats.

And no wonder, because the Tories other gambit, of focussing on attacking the geekiness of Miliband has been a dreadful failure too. In the election debates Miliband came out on top amongst the main party leaders. Moreover, as the campaign has progressed he has become more confident, commanding and Prime Ministerial. In fact, not just that his image has undergone a dramatic transformation. Some observers even asked if he had grown taller? Of course, he hasn't but his stature has grown, whilst that of Cameron has diminished, and Osborne has more or less disappeared from sight.  The Tories should have read their Henry IV, Part I.

In fact, more or less from the moment of the Paxman interview, Miliband has become more laid back and suave with every outing, even to the extent of being invaded by a hen party. If Miliband gets any more laid-back, suave and sophisticated as the campaign continues, he will have the option, if he does not become Prime Minister, of putting himself forward as the next James Bond!

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