Coincidence, not quid pro quo

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It remains to be seen whether the large donations given to Reform Ltd by two economic migrants a week or so ago will still be legal when legislation going through parliament is actually enacted. Although the government was very clear in advance that the legislation would be backdated to the date it was announced, the level of detail needed to know whether a particular donation would or would not be legal was not provided. We do know that Farage and his team have said that the economic migrants concerned have asked for, and will get, nothing in return. Their donations might help to elect a government sympathetic to their modus operandi, but that will just be a fortunate (for them) coincidence.

One of the things that the money will be used for, according to the company, is the development of policy. Whilst the donations won’t determine the nature of the policies developed, it is not entirely unreasonable to suppose that the donors are unlikely to want to fund the development of policies which might impact them financially in a negative way. Again, that will just be coincidence, not cause-and-effect.

We’ve had a taster of the sort of policies which might emerge in this report today. We don’t know who has funded the work – ‘think-tanks’ are notoriously shy when it comes to financial transparency concerning their own activities. The organisation is described, though, as being “linked to Reform”, a formula (not unique to Reform Ltd; most parties seem to use similar mechanisms) which frequently allows policies to be floated with a degree of credible deniability should that be felt necessary.

Amongst the policy proposals are the abolition of capital gains tax and inheritance tax, along with a number of pension schemes enjoyed by public servants, including teachers. Oh, and the abolition of the state pension, which would be reduced to a means-tested benefit available only to the very poorest of pensioners. It doesn’t take a lot of thought to work out who might be the beneficiaries of such a policy. Those who see paying pensions as “unaffordable” seem to see reducing taxes on the wealthiest as entirely affordable. I can’t imagine a couple of billionaire economic migrants being exactly displeased if their donations were to lead to such policies. It would, of course, be another of those amazing coincidences rather than any form of quid pro quo.

Who loses when people don't vote?

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The hoary old chestnut of compulsory voting raised its head again this week, with Labour peer Lord Kinnock publicly backing the move. He’s not alone; a number of academics are also writing to the PM supporting the proposal, arguing that “Inequalities in turnout mean those who do vote do not reflect the wider population, but are richer, older, whiter, and more economically secure than the UK public at large”. They’re not wrong about that, but I’m not at all convinced by the implicit suggestion that forcing poorer, younger, more diverse and less economically secure people to cast a vote will produce the more left-wing skewed result that they seem to assume. At least some of those categories are fertile recruiting territory for the racist right.

In any event, is the assumed impact on the overall result the ‘right’ criterion for deciding whether to follow that route or not? It’s always seemed to me that the only safe assumption which can be made about the feelings of people who decide not to vote is that they are content for the government to be chosen by those who do vote. Sort of a mass proxy vote without naming the proxy or instructing him or her how to vote. The reasons for that attitude might vary – they might genuinely not care, or not believe that it will make any difference, or simply be too consumed by day-to-day pressures to take the time out to think about voting, let alone actually doing so. Looking at the record of UK governments, and the way in which the first-past-the-post voting system has traditionally created large numbers of ‘safe’ constituencies (although they may be breaking down now), it’s hard to argue with many of those who say that their vote won’t make any difference. I know – I’ve tried it often enough. It is surely for the politicians to demonstrate, by actions as well as words, that there is a genuine difference between them, and persuade people of the merits of that difference, rather than simply obligate them to go to a polling booth and complete a ballot paper. I certainly believe that people should engage with the process and that they should go out and vote, and it’s something that I encouraged throughout my time as an active political campaigner. And like most candidates, I would have been grateful to have been spared the effort of going round knocking doors of supporters on election day to remind them to go out and vote. But should they really be compelled to do so, and fined for not doing so?

My real objection to compulsory voting is based on the nature of the relationship between the people and the state. Does the state serve the people, or do the people serve the state? Forcing people to do something they don’t want to do looks more like the latter than the former. Now, of course, living together in a society means that we have to have rules, those rules are made by the people we elect to parliament as our representatives, and choosing those representatives is a serious matter. Freedom to choose which side of the road we drive is no freedom at all and freedom to kill infringes the right of others to live; restrictions on freedom are a key part of a civilised society, especially when those restrictions protect the freedoms of others. But whose rights and freedoms, exactly, are threatened by those who choose not to vote? It’s not only not obvious to me that the result would change, it’s also not obvious that anyone loses anything as a result of a non-vote. If the only losers are lazy and uninspiring politicians, which is what I suspect, there is no justification for compulsion.

Political choice isn't the same as economic necessity

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One of the most widely-understood concepts in economics is the law of supply and demand, where the price of an item ends up being set at a level where the demand exactly equals the supply. It’s not only the best understood, it’s also an incredibly useful concept, underpinning the way in which markets work. It also gives rise to the idea that price increases happen when demand exceeds supply, and if supply cannot be increased in line with demand, then inflation results. It follows that one way of controlling inflation is to reduce demand – which is usually interpreted in practical terms as reducing people’s ability to spend. One way of doing that – and this is virtually the only tool available to the Bank of England – is to increase interest rates. People who have to spend more on borrowing money have less available to spend on other things, and are forced to concentrate more on the essentials of life.

The theory, though, is much cleaner and simpler than the practice. Not all inflation is caused by such a simple theoretical mechanism. Much of the inflation we are seeing today is a direct result of a perceived reduction in the supply of oil, caused, primarily, by Trump’s reckless bombing campaign in Iran. There isn’t an actual shortage (as yet), and if a real shortage does emerge, it will be more to do with the difficulty in getting the oil to market than with any underlying shortage. The perception of a threat of a shortage has, though, allowed speculators to push the price up, and the oil companies to increase their profits at no additional cost to themselves. Inflation caused by rising demand is not the same thing as inflation caused by a reduction in supply – especially when it’s not even a real reduction. The increase in the price of oil is real enough, however, and works its way through not just to the price of fuel at the pump, but to the price of everything which needs to be transported from one place to another – which is most of the things we buy.

The Bank of England seems poised to respond to ‘inflation’ in the only way it knows how, by increasing interest rates. It’s an example of someone with only a single tool in the box, a hammer, seeing every problem as a nail; but it’s a circumstance in which an interest rate rise does nothing to address the underlying problem. Far from prices rising because people have too much money, this type of inflation is already leading people to cut back on their spending; deliberately reducing their spending power still further just adds to the cost of living crisis. The government and its wholly-owned and controlled central bank cannot seriously claim to be addressing the cost of living crisis whilst simultaneously adding to it.

Then we have the Tories’ latest wizard wheeze of cutting welfare benefits to control inflation. There is no doubt that cutting benefits would reduce the amount of spending power in the economy, which is the stated objective. However, it would do so by reducing the spending power of some of the least well-off, almost all of whose income is already going on essentials rather than discretionary purchases. Reducing the spending power of those already struggling to pay for the basics is applying abstract economic theory without looking at the real impact on real people.

Whether the increase in energy costs is a temporary phenomenon or a longer term change remains to be seen, but either way, it will work its way through the economy in a way that a general  excess of demand over supply would not. Whether it therefore needs action at all is a judgement call, but it seems that judgement is being replaced by a blind commitment to a wholly arbitrary inflation target of 2%. And, as is ever the case in an economy run for the benefit of the few, it is those least able to cope who will bear the biggest burden. It’s a political choice, not an economic law, which underpins that.

What makes concerns 'legitimate'?

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The ‘independence’ referendum held in Piddington earlier this week has largely been treated as a bit of a joke and dismissed as symbolic rather than serious. Treating it as symbolic is not unreasonable – those behind it don’t really seem to be terribly serious about setting up border crossing points, let alone a police force and/or army to repel any asylum-seekers that might be sent to the area by the UK government. I’m a little puzzled about the mechanism under which the referendum was run – it surely can’t have been in any way publicly-funded, not least because a parish council running a publicly-funded referendum on an issue way outside its purview would be an interesting precedent. I doubt, though, that even a referendum run entirely by volunteers would be treated quite so indulgently if it were called by, to choose a body at random, one of the UK’s devolved parliaments.

It has had the effect that its instigators presumably wanted, which was to draw attention to local concerns about the plans to use a nearby MoD base as a temporary home for asylum-seekers. I’m not sure that it has shown the opponents of the plan in an entirely positive light, however.

There are certainly practical issues around moving 1200 people into a site: things like availability of public transport, shops, medical facilities etc. There will be issues of that nature wherever people are placed, and it’s entirely reasonable to check that they’ve been thought about and that provision is being made to match the need. And at least some of those objecting do seem to be talking about this type of issue. Others, sadly, less so.

Talk of women needing to attend self-defence classes, for instance, is based on some very dark – and unsubstantiated – assumptions about a whole group of people. Associated with that is the suggestion that these people are ‘unvetted’. It’s true, as far as it goes – but how many of the existing local residents have been ‘vetted’? We don’t really know our neighbours and the secrets they might be harbouring, even if we’ve lived in an area for decades, but we can be certain that, amongst them – even in a small village – there will be a sprinkling of actual or potential criminals. It’s true that we know even less about people moving in, but that’s true whether it’s an individual, a family, or a thousand people as proposed in the Piddington area. When it comes to people moving between villages and cities, no-one seriously suggests that all movement should be banned in order to prevent the movement of anyone who might turn out to be a criminal. In terms of sheer numbers, there are likely to be more potential criminals in a group of 1,000 than in a family of 4, but there is no hard evidence that the proportion will be any higher than amongst the existing population. All we have is an assumption, based on the assertions of racists and their enablers, that asylum-seekers always pose a greater threat than white British citizens.

We need a reasoned debate about how to treat people arriving in the UK by irregular means and where to house them pending any decisions on their longer-term future, but politicians leaping in to support people’s ‘legitimate’ concerns isn’t it. The only thing that makes those some of concerns legitimate is politicians describing them as such. Whilst facts and logic are never going to win an argument against prejudice and hatred of ‘the other’, reinforcing those attitudes by calling them ‘legitimate’ simply makes things worse.

Efficiency isn't the be-all and end-all

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It may be true, as this report at the weekend suggested, that the breakdown of air traffic control last week was due to a military aircraft entering ‘spurious’ data into the system. Further investigation might tell us that, and it’s reasonable to expect that the military will be looking into how and why one of their planes did whatever it did. That doesn’t exactly let air traffic control off the hook though: how did their systems, on which so many aircraft and people are so dependent, allow ‘spurious’ data to be entered in the first place, and how did such data then destroy the system? Computer systems only do what they’ve been programmed to do, and if unexpected data gets in, that’s a failure in programming and testing as much as of the user who inputs the data.

That aside, one of the other interesting questions which emerged was about the extent to which backup systems are in place. They offered two reasons, neither of which really stands up. Why NATS being in the midst of a “complete overhaul of its systems” is a reason for a lack of backup is something of a mystery: being in the middle of a change is precisely the time when having a backup in case something goes wrong is most immediately relevant. But perhaps the second reason – that it would cost “vast amounts” of money – is really the operative factor.

From my own background in IT, I’d say that they’re right about the cost. Building in redundancy and duplication can, indeed, prove costly, and there’s a danger that all that extra equipment and cost will never be used. There’s a judgement call involved though, and it’s one that the drive for ‘efficiency’ doesn’t always seem to recognise. It’s a feature of late capitalism in a globalised world that organisations have attempted to drive out cost by reducing the amount of capital employed. After all, the return on capital will always be improved if the same output can be achieved using half the capital. It’s an approach which has given us globalised supply chains and just-in-time deliveries, all built on the implicit assumptions that the world will become ever more integrated and that systems can be completely relied on. Most of the time, those assumptions have proved correct, and things have worked. Until they haven’t.

Whether due to war, pandemic, the capriciousness of nature, man-made climate change, or simple human error, the systems and structures on which we depend have been made increasingly vulnerable. And all in the name of ‘efficiency’ (or, rather, one particular aspect of efficiency, the use of capital), and the vulnerability is hidden from sight until something goes wrong. For sure, organisations routinely carry out risk assessments, but it’s often a tick-box exercise. Whether risks have been properly identified and their probability and impact correctly calculated is a much more open question, as is the issue of whether impact is measured in human terms, or merely financial ones.

It might look like a big extrapolation from a systems error caused by incorrect data entry, but the point is an important one. Humans need resilience; capital doesn’t. Yet much of our economic system has been hijacked to serve the interests of the latter rather than the former. It isn’t the only way of doing things.

How should the political system respond to defections?

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As long ago as 1908, in Human Nature in Politics, Graham Wallas argued that political opinions and actions are largely the result of habit based on irrational assumptions. The idea that choosing for whom to vote is an essentially irrational act is not an entirely bad starting point for any discussion of politics – and perhaps we can extend it to the choice of which party to join. The defection of a Reform Ltd MS to Plaid Cymru was a superficially stunning one, although from an interview with her that I read a few weeks ago, I did wonder how on earth she had ended up as a member of Reform Ltd in the first place. Her views seemed to be so much at odds with the political platform of that company. That essential irrationality referred to above is one obvious potential explanation, even if it might be a little harsh to say so given the obvious genuineness of her concerns now. I find myself wondering exactly what selection process led the company to place her as their lead candidate – did she give the ‘expected’ answers to the questions, did they ignore her answers completely, or did they not even question her at all?

Whatever, the fact is that she has defected, and it looks as if she might be a great deal more comfortable in her new political home. Given the record of parties led by Farage, an implosion is as unsurprising as it is welcome. It’s still early in the Senedd term, and there is probably more to come, although whether it will involve a move as extreme as a leap from Reform to Plaid remains to be seen.

The defection highlights (another) problem with the new voting system for Senedd elections. People who voted solely on the basis of party affiliation now find their vote over-ruled a matter of a few months after the election. It seems to be a golden rule in politics that the party from whom a member defects demands a new election, whilst the party receiving the defector denies that one is necessary. It’s a rule which seemingly applies to all parties in all elected bodies.

Underlying the legal fact that no election is necessary when a politician switches party is the fiction in Westminster politics that the electoral mandate in a constituency is given to the individual not to the party. Indeed, naming the party affiliation on the ballot paper is a relatively new innovation – in 1948, it was explicitly banned. Yet, having moved from a situation where it was at least arguable that people were voting for both a party and an individual to one where we only vote for a party, the Senedd has retained that Westminster fiction as though it is some sort of divine law. Reluctant as I am to bolster Farage’s shysters in any way at all, I have to acknowledge that keeping the law as it is because it reduces Reform Ltd’s score by one is not a good enough reason to justify the current practice. It would surely be a fairer reflection on the voting which took place just a few months ago for the seat to be declared vacant and awarded to the next placed candidate for the party concerned. Too late for this instance, of course – but defections can affect any party, and this early in the Senedd, the chance of there being more cannot be ruled out. Personally, I’d prefer a full STV system, with any defection leading to a by-election, but if we’re to have a ‘party-only’ vote, let’s at least be consistent about what it means.

At least our First Minister can walk and chew gum at the same time

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Unionists aren’t exactly frothing at the mouth over yesterday’s meeting between the First Ministers of Wales, Scotland and the north of Ireland, but some seem to be getting close to doing so. The allegation, apparently, is that the leader of a party committed to independence for Wales has dared to talk to like-minded others about the difficulties placed in the way of leaving a ‘voluntary union’, despite having said that he would not call for a referendum during his government’s first term of office.

Whether winning at least two elections first was a wise caveat to place on independence aspirations is another matter. The real determinant of when we can seriously discuss holding a referendum will be when there is a majority in the Senedd in favour of doing so. Since that didn’t happen, not holding a referendum during the current Senedd term is the inevitable outcome of the election; in practical terms the caveat about two elections makes little difference. It does, though, frame the terms for debate in a way which may come back and bite us in the future.

Whatever the reason for the lack of a referendum during the current Senedd, nothing said during the election campaign precluded a party (and First Minister) committed to independence as a goal from continuing to campaign for that aim or talk about how it might come about, whilst also getting on with the day-to-day business of government. Yet that is what the government’s political opponents seem to expect. In the case of some of them, I can understand why they might have difficulty in believing that the First Minister can walk and chew gum at the same time (as Lyndon Johnson didn’t quite say); it’s not a feat which they could emulate. It’s disappointing, but by now not surprising, that a Labour Party founded on dreams of what might be is so tied in to the Overton Window that it has become incapable of even having any real long-term aspirations of its own.

The real issue being addressed yesterday was a very simple one. If the union is, as we repeatedly told, a ‘voluntary’ one (and that is arguably true in the case of Scotland – especially after the 2014 vote – albeit rather less so in the case of Wales or the north of Ireland), what is the mechanism by which the decision can be revisited? If one of the members of that union has an absolute veto on when the other members might even be ‘allowed’ to vote on the matter, in what sense is it ‘voluntary’? It’s a question to which they have no rational answer, which might explain the diversionary tactics of telling the ‘lesser’ members of the union to shut up and get back to the knitting.

The bit that really surprises me though is this: if I were a unionist and wanted to maintain the union of the UK, I’d want to hold referendums sooner rather than later, choosing the time and the question myself, as well as, perhaps, formally setting a (lengthy) timeline for any future reconsideration. It might already be too late in Scotland (although sooner rather than later might give unionists their best chance of winning), but in Wales and the north of Ireland, holding a vote whilst the majority opinion still seems to be against any change might enable the ball to be kicked further down the road than delaying a vote. Sometimes, unionists are their own worst enemies.

Distinguishing between bribes and gifts isn't as easy as we might think

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The essential difference between a bribe and a no-strings gift is not as straightforward as one might think; it appears to revolve around the presence (or absence) of a clearly stated quid pro quo. Give a politician a sum of money to change his views on an issue of importance to you, and it’s a bribe; give it instead to a politician whose policies just happen to include agreeing with you on the same issue, in order to help him win an election, and it’s just a simple gift. Haven’t all those of us who have ever donated to a political party wanted to see people who support our own personal priorities win? There might be something of a moral difference between wanting to see a party win because of a belief that it would be a good thing for people at large on the one hand, and a belief that we will gain personally on the other, but it’s hard to define – and sometimes the two things will, inevitably, overlap.

That distinction between the presence and absence of a quid pro quo might look a little different from the perspective of a mega-donor, though. Reform Ltd have stated that “Our donors want nothing and will never be given a peerage, knighthood or a government contract”. Maybe not. They don’t need government contracts, and peerages and knighthoods are over-rated anyway. Getting a government which is ‘friendly’ towards crypto-currency speculators would certainly benefit them though. Charitably, it might be possible that such a thought has never crossed the minds of either of the two mega-donors, but if we look at action and outcome from their perspective, the lack of a direct, stated quid pro quo doesn’t alter the fact that they’ve paid a lot of money in the hope of achieving a particular result from which they might just happen to benefit. Purely coincidentally, of course.

The difference between the tens, or perhaps hundreds, of pounds which many of us will have donated in any given year in the past, and the millions being placed on the table here is primarily one of scale. Scale matters, though. A party receiving thousands of small donations towards a campaign can never end up being, or merely just feeling, beholden to any one of those donors: it isn’t the same for a party whose entire election costs are being more than covered by just two donors – who just happen to have similar financial interests in the outcome. A cap on the size of any individual donation is long overdue, and the government’s prevarication on the issue is more than a little puzzling. It would be possible, of course, simply to scrap political donations altogether and fund parties from the public purse. It’s not likely to be popular and would probably create a whole industry finding work-arounds, but it’s an option.

A cap is more likely and practicable but where that cap should be set is another question, because there isn’t a clear and obvious point at which any given donation ceases to be just one of many and becomes election-changing. Maybe it should be set by reference to a variable which is outside the immediate direct control of any government or party – something like the average wage for a full-time employee. Maybe we could get lucky, and the scale of the two latest donations will have the opposite effect to that intended, and encourage Reform Ltd’s potential voters to wonder whether a party funded like that can really represent them. I won’t hold my breath, though.

A trillion here, a trillion there - pretty soon, you're talking serious money

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Sometimes, politicians’ promises are never intended to be serious, it’s more of a nod and a wink between the promiser and the electorate. Trump’s promise to pay every adult in the US a sum of $5,000 if his party wins the mid-term elections surely fits into that category. There cannot be any serious observer who believes that Trump will be able to fund a pledge which would cost more than a trillion dollars, even if he wanted to. Well, maybe Trump believes it – I suspect that he might actually believe that everything he says is true at the time he says it, but that just reflects how far gone he is.

But supposing, as a thought experiment, that he were to try and implement it, how could it be funded? Trump and the UK government operate under the same arbitrary neoliberal economic constraints so, according to them, it can only be funded by one of three routes: increasing taxes, borrowing more, or cutting other spending. Increasing taxes in order to issue cheques to citizens would be strange, to say the least. And the cuts made to date have been unpopular enough. So, in practice, the money would show in the accounts as having been ‘borrowed’ – and that means selling bonds on the market. Those bonds would be bought by those who have the money to buy them – i.e. the wealthiest, whose taxes Trump has already cut significantly. Trump has said that the richest will be excluded from his ‘dividend’, although without defining who is included in the term ‘the richest’. They are unlikely to worry, whoever they are: they might not get the $5,000, but they’ve already had the tax cuts and they’ll also get interest on the money that they deposit with the US government – together worth far more. And the bonus (for them) is that selling that amount of additional bonds will lead to an increased interest rate. What’s not to like?

For ordinary Americans, already struggling with the cost of living (exacerbated by Trump’s tariffs, wars, and cuts to health care), the promise of $5,000 might look attractive. Increasing spending power on that scale in a short time will probably lead to inflation, and in some corner of their minds they might well be conscious of the improbability of it actually happening anyway (has Trump ever made a promise that he had any attention of keeping?), but when things look hopeless, even a small spark of hope can be worth clinging to. Whether it will keep enough waverers on his side remains to be seen – it may be a reckless and unfulfillable pledge but it isn’t entirely stupid, politically.

There is a lesson for others, though. Hopelessness is a powerful emotion. Debunking an unfulfillable pledge is easy enough to do in rational terms, but even rational acceptance of the nonsensical nature of a pledge isn’t always enough to overcome the faintest of hopes that the snake oil might just work. We should have learnt that from Brexit, but I don’t always see signs that we have. Defeating those who make pledges that can never be fulfilled requires more than rationality and logic – it requires a restoration of hope. And, as Burnham will find out, restoring hope requires a bit more than smoother rhetoric.

Israel's fury is disproportionate to the substance

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It’s not quite a golden rule, more a rule of thumb; but sometimes it appears that the degree of fury surrounding an issue bears an inverse relationship to the importance of the substance. Israel’s fury at the long-overdue statement by the UK government that sanctions will be imposed on imports from illegal Israeli settlements in the West Bank is clear and visceral. The UK’s condemnation of the illegality is welcome nevertheless; the attempt to conflate disapproval of illegality with antisemitism is nonsensical but just about par for the course. But what is the substance involved?

The amount of trade between the UK and Israeli West Bank settlements is hard to calculate, but certainly tiny. It’s not as if the ‘country of origin’ of settlement-grown dates is going to be emblazoned on the packaging as ‘illegal settlements in the West Bank’. There are rules, of course, banning such goods from being labelled as ‘product of Israel’, (although it seems to be a fairly widespread practice) and perhaps, as this report from the BBC suggests, the ban will act as something of a deterrent to that, although the co-operation of the Israeli authorities is something that maybe we shouldn’t rely on too heavily. Labelling them as having been produced in ‘Palestine’ is another route currently being used, and is accurate in geographical terms at least. One assumes that the intention of the UK government is not to target Palestinian-produced produce, but, again, that’s easier to say than implement.

Al Jazeera (not always the most reliable source, but this piece seems balanced and reasonably well-researched) estimates that total UK trade with settlements amounts to around £40 million annually, but the bulk of that is exports to the settlements (which are not covered by the ban), leaving a maximum of around £6 million annually in imports, a total which may well include goods produced by Palestinians as well as those produced by Israelis. Obviously, other countries imposing a similar ban (whilst facing the same problems of correctly identifying the affected goods) will increase the extent of the economic impact, but it still looks like pretty marginal sums.

It could be argued, not unreasonably, that it’s more of a symbolic gesture than an immediately effective one. No less welcome for that, but hardly an explanation for the ferocity of the response it has provoked. I suspect that the response is aimed less at undoing the sanctions being imposed now and more at mobilising opinion against any ratcheting up of sanctions in the future, when the current sanctions will, inevitably, have proved themselves to be of minimal effectiveness. How willing the UK Government is to go further in the face of that fury is the real test.