Scottish politics has turned upside down since the independence referendum

Events in Scotland illustrate how a political situation can change very quickly. Paradoxically, the real winner of the 2014 independence referendum was the SNP, who have seen a surge in membership, while Labour and the other unionist parties are floundering. Thomas Lundberg looks at the aftermath of the referendum and the puzzling situation of winners turning into losers.

People outside Scotland could be forgiven for being puzzled about recent events ‘north of the border’. After all, didn’t the Unionist cause triumph in September’s Scottish independence referendum? Since then, the Scottish National Party (SNP) and Scottish Green Party, both supporters of Scottish independence, have more than tripled their membership. The SNP has surged in the opinion polls, endangering Scottish Labour at next May’s Westminster election. Events in Scotland illustrate the importance of multilevel governance and party systems, as well as how a political situation can change very quickly.

While nearly 45 per cent of Scottish voters said ‘Yes’ to independence, the break-up of the United Kingdom was prevented by the 55 per cent who voted ‘No’. Only hours after this result was reached, Prime Minister David Cameron moved the proverbial tanks onto the Labour Party’s lawn, saying that any significant increase in the devolution of power to Scotland would require a change in voting practices so that MPs at Westminster from the 59 Scottish constituencies would no longer be able to vote on bills deemed as affecting only England. Labour Party leader Ed Miliband rejected the linkage of enhanced Scottish devolution to what is sometimes labelled ‘English Votes for English Laws’ (EVEL), proposing instead a convention to examine Britain’s constitution more broadly. Both politicians have been criticised for evading the so-called ‘vow’ to grant Scotland greater autonomy, a promise that might have persuaded some voters not to vote for independence in the expectation of having ‘the best of both worlds’, whatever that means.

It is unlikely that the Smith Commission, an all-party group investigating routes to greater autonomy, will propose significantly enhanced devolution of power to Scotland unless the May 2015 Westminster election yields a hung parliament. The Conservatives, while supporting more radical tax proposals than Labour, are probably concerned about the prospect of too much decentralisation and how that might harm the centre, while Labour worries about the potential for undermining the British welfare state and the prospect of curtailing the voting rights of MPs from outside England. The SNP, however, will seek to gain as much extra power for the Scottish Parliament as possible, trying to satisfy both independence supporters and those who want ‘devo max’, the devolution of all domestic matters (basically home rule). Recent opinion polling reveals that the SNP is so far ahead of its traditional rival, Scottish Labour, that the latter would be nearly wiped out at Westminster. Such an outcome in May would have implications beyond Scotland – it would probably deny Labour a majority, keeping David Cameron in Downing Street if he can do some kind of deal with the smaller parties that might hold the balance of power.

Labour’s problems in Scotland result from both the sudden resignation of its Scottish leader, Johann Lamont, and from the perception, held by many of its traditional supporters, that the party betrayed working-class Scotland in the independence referendum campaign, doing the Tories’ dirty work. Class was one of the biggest demographic dividing lines in the referendum, with poorer people more likely to support independence than the affluent, who would have more to lose if things went wrong. The likely replacement for Lamont, Jim Murphy, may have a higher profile, but he also comes with a lot of Blairite baggage, such as his support for invading Iraq and for maintaining Trident, the nuclear deterrent based in Scotland. Such right-wing positions, as well as the fact that he is currently a Westminster MP, may put him at a disadvantage against the SNP, soon to be led by Alex Salmond’s deputy, Nicola Sturgeon.

Governing since 2007, the SNP has managed to become a highly successful catch-all party, appealing both to independence supporters and to those who prefer greater Scottish autonomy within the Union, to all social class backgrounds and age groups, and to both women and men. While it has business-friendly policies that include cutting corporation tax, the SNP has managed to compete successfully against Scottish Labour, using its left-wing image and grass-roots campaigning to steal supposedly safe constituencies in Labour heartland areas. Despite its significant decline, Scottish Labour remains the SNP’s bitter rival, while the Scottish Conservative and Unionist Party now struggles to make an impact in polling and the Scottish Liberal Democrats scarcely register at all, with the latest Holyrood poll putting both Tories and Lib Dems behind the Scottish Greens in the regional vote part (the one usually cast for a party list) of the two-vote system. Despite the use of the mixed-member proportional electoral system for Scottish Parliament elections, the effective number of parliamentary parties in the body has dropped from a high of 4.2 after the 2003 election to 2.6 in 2011, suggesting that we should not give too much credit to the impact of the electoral system on the party system.

Perhaps paradoxically, the real winner of the 2014 independence referendum was the SNP. The party has emerged energised, larger, and better connected to the public. It now stands head and shoulders above its Unionist competitors. While the SNP finds itself in an enviable position, it must avoid complacency. The party began its ascent in 2007 by being seen as potentially more competent than Labour, and its performance running a minority government was rewarded in 2011 with a majority of seats; academic research has shown that public support for independence (typically among only about a third of the electorate in recent years) explains only a portion of the SNP’s support. Sturgeon must be careful to maintain her party’s image for competent management of Scotland’s affairs while appealing to the broad majority of Scots (even those who rejected independence) as their advocate when it comes to dealing with the UK government and the likelihood of further spending cuts after the 2015 election.

The big increase in the SNP’s membership following the referendum could pose challenges to the party’s leadership. The recent membership surge from some 25,000 to over 80,000 in the weeks following the referendum could make the party more difficult to govern. Many of the new members (perhaps alienated Scottish Labour members or voters) are likely to hold left-wing views and this could put pressure on what has been a remarkable effort to keep the party unified. Those disappointed or unimpressed with the SNP, however, could instead look to civil society, which has also been jolted by the referendum. The Yes Scotland campaign evolved into a social movement, with a range of organisations working together; aside from political parties, groups like Women for Independence, Business for Scotland, and the Radical Independence Campaign represented a wide spectrum of the public, and the movement included prominent individuals not associated with any party.

The aftermath of Scotland’s independence referendum resembles an upside down political situation: losers turned into winners and members of the public – including many from modest backgrounds – refusing to go ‘back into their boxes’. The supposed winners – the Unionist parties and privileged classes – must be just as puzzled as those living outside Scotland.

About the Author

Thomas LundbergThomas Lundberg is Lecturer in Politics at the University of Glasgow.

http://blogs.lse.ac.uk/politicsandpolicy/scottish-politics-turned-upside-down/

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The idea that there is a welfare-dependent underclass is wrong

A new book by John Hills explores key issues in the current debate about ‘welfare’ and the welfare state. The debate contrasts a stagnant group of people benefiting from it all with the rest who pay in and get nothing back – ‘skivers’ against ‘strivers’. John explains how, because people’s lives and circumstances change, most of us get back something at least close to what we pay in over our lives towards the welfare state.

Twenty-five years ago Granada television and my colleague in LSE’s social policy department, Julian Le Grand, came up with a novel way of presenting the effects of social policy. Instead of graphs, tables and talk, they used a TV game show between two families – the Ackroyds, from Salford in Greater Manchester, and the Osbornes, from Alderley Edge in Cheshire – to illustrate who got what out of the welfare state of the time. Which of these stereotypical working-class and middle-class families were the true ‘Spongers’ of the show’s title, most ‘dependent on government’ in current formulations, if one could look over their whole lives?

As it happens, the longer-living, university-educated, opera-loving middle-class Osbornes turned out to be the winners, getting more than the working-class Ackroyds. A follow-up programme which I helped with, Beat the Taxman, two years later looked at which family had done best as a share of income out of the tax reforms of the Thatcher years. Perhaps less surprisingly, the Osbornes won that one too.

What was special about these families was that, in the words of the game show host Nicholas Parsons, “we’ve invented them”. A quarter of a century later I’ve gone back to those families and their (newly invented) children and grandchildren to explore key issues in the current debate about ‘welfare’ and the welfare state.

Good times bad times [FC]In my new book, Good Times, Bad Times: The welfare myth of them and us, I present the results of research over the last decade or more in LSE’s Centre for Analysis of Social Exclusion (CASE) and elsewhere using large datasets, our own surveys, government statistics, and the results of computer simulations.

But the continuing lives of the Osbornes and the Ackroyds may bring home some of its key points. There are Gary and Denise Ackroyd, whose incomes vary widely from month to month as his hours as a van driver change and her work in a school only brings in pay only in term-time, contrasting with the stable and predictable incomes of people like young civil servant Charlotte Osborne (and of many academics).

Over the 2000s, the circumstances of the Osborne parents, Stephen and Henrietta changed a lot, particularly after Stephen’s heart attacks and decision to down-shift his accountancy work, but they still remained in the top 2 per cent of the income distribution. By contrast, the changes in the size of their family and the effects of Jim Ackroyd losing his job in 2006 meant that he and his wife Tracy bounced around the income distribution – close to being in the poorest tenth in two years, but just above the middle by the time they were empty nesters in 2010.

The book also looks at the life chances of the newest grandchildren, George Ackroyd and Edward Osborne, born at the same time in July last year. If we knew nothing about them apart from where they were born, we would already expect Edward to live nearly four years longer. And although some of the educational gaps have closed in the last decade, the chances are that Edward will be doing better at school from the very start, leave with better qualifications, go to a better university, earn much more and build up a far higher level of wealth. There’s nothing predetermined about that, and George Ackroyd might buck the trend – it’s just that he starts with the odds against him.

And looking at the recent past, the poorest of the families, lone mother Michelle Ackroyd, working 16 hours a week on a low wage, turns out to have lost 6 per cent of her income from tax credit and benefit cuts and austerity tax rises since May 2010. By contrast the most affluent of the families – Stephen Osborne with £97,000 per year earnings and his wife with £9,000 from her part-time teaching, plus significant investment income – have lost slightly less in weekly cash than Michelle, and only 0.7 per cent of their income.

Twenty-five years on, more than ever, the debate around ‘welfare’ contrasts a stagnant group of people benefiting from it all, while the rest pay in and get nothing back – ‘skivers’ against ‘strivers’; dishonest scroungers against honest taxpayers; families where three generations have never worked against hard-working families; people with their curtains still drawn mid-morning against alarm-clock Britain; ‘Benefits Street’ against the rest of the country; undeserving and deserving; them against us. We are always in work, pay our taxes and get nothing from the state. They are a welfare-dependent underclass, pay nothing to the taxman, and get everything from the state.

But we don’t need made-up examples to know that arid picture of unchanging lives is wrong. We know from our own experiences, those of our families – and from TV soap operas and nearly every novel – that people’s lives and circumstances change, and what we get out and put in changes over our lives.

It remains true that people starting advantaged remain much more likely than others to end up advantaged, and those who start poorer are more likely to end up poorer. But there is considerable variation and uncertainty around such average differences in life trajectories. This does not just include the long-term changes over the life cycle that we all go through, but also other variations and changes, from at one end the rapid variations many people experience in circumstances and need for support from week to week to, at the other end, the factors that affect the life chances of our children and our grandchildren.

As a result of all this variation in circumstances over our lives, most of us get back something at least close to what we pay in towards the welfare state. When we pay in more than we get out, we are helping our parents, our children, ourselves at another time – and ourselves as we might have been if life had not turned out quite so well for us. In that sense, we are all – or nearly all – in it together.

Good Times, Bad Times: The welfare myth of them and us is published by Policy Press. For further information, follow this link: Good times, bad times

About the Author

John HillsJohn Hills is Professor of Social Policy and Director of the Centre for Analysis of Social Exclusion (CASE) at the London School of Economics.

http://blogs.lse.ac.uk/politicsandpolicy/the-welfare-states-surprising-winners/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+BritishPoliticsAndPolicyAtLse+%28British+politics+and+policy+at+LSE%29

The increasingly close ties between leading politicians and journalists in Britain have been to the detriment of the public interest

The British press, from the Sun to the Telegraph and most points in between, were quick to castigate the Crown Prosecution Service for its attacks on the ‘free press’ after the acquittal of Rebekah Brooks and despite the conviction of Andy Coulson. There are no winners in this case, writes Mick Temple. Neither the press, police nor politicians emerge well from the hacking trial.

So now we know. The ‘wicked witch’ was not wicked after all – just ignorant. Rebekah Brooks was so unaware of  the methods employed by journalists under her command that we shall have to reassess the well-founded stereotype of the all-knowing editor with their fingers on the pulse of their newspaper. Innocent of the charges against her, are we to conclude that she was merely one of the most incompetent editors Fleet Street has ever seen?

 

Apparently unaware of this reading of events, Rebekah Brooks left court feeling, in her own words, ‘vindicated’ by the jury’s decision that she was innocent of hacking telephones, perverting the course of justice and conspiracy to pay public officials. And our national newspapers felt equally vindicated.

 

Despite former News of the World editor Andy Coulson being found guilty of conspiracy to hack voicemails, the British press, from the Sun to the Telegraph and most points in between, were quick to castigate the Crown Prosecution Service for its attacks on the ‘free press’. The Daily Telegraph’s editorial trumpeted that Brooks’ not guilty verdict was a ‘devastating blow’ to those who have attempted to ‘besmirch’ all newspapers with the bad practices of some journalists.

 

The Sun’s front page proclaimed a ‘Great Day for Redtops’. But for most of us long-term observers and supporters of the British press – and I must add, opponents of press regulation – there was little to celebrate. In addition to Coulson, let’s not forget that a number of people employed by the News of the World have already admitted or been found guilty of phone hacking, and that two dozen journalists, mostly from the Murdoch press, are still awaiting trial on comparable charges.

 

Image: Duncan C (CC BY-NC)

 

The press also made a lot of the huge cost of the trial, at the expense of ‘terrorist’ and ‘paedophile’ investigations. For the Daily Mail, this ‘disproportionality’ of the police response was led by ‘the left-leaning Guardian’ and a ‘handful of tabloid-hating celebrities’. The result was that the ‘public purse has paid the most outrageous price for politicking and expedience’.

 

In truth, neither the press, police nor politicians emerge well from this trial. The police directed unprecedented resources at this case, for their critics far beyond an appropriate level. Their own wrongdoing appears to have been largely swept under an increasingly grubby carpet.

 

Our newspapers, and not just the redtops, have suffered a considerable blow to their already dreadful public image. The press, still resisting the post-Leveson calls for statutory press regulation from pressure groups such as Hacked Off, have retreated to the ‘few bad apples’ defence which was formerly the exclusive property of our police force.  As some of us predicted in the immediate wake of Leveson, don’t hold your breath waiting for press regulation. It won’t happen now.

 

But perhaps it is the image of politicians, and in particular that of the prime minister, that has fared the worse. And our newspapers have been quick to try and swivel the spotlight onto political malpractice. On the day after Ms Brooks was found innocent and Coulson guilty, the increasingly critical Daily Mail focused on the consequences for David Cameron: as its front page headline starkly put it, the verdict on Coulson was ‘Humiliation for Cameron’.

 

Adding further to the pressure on him, the Guardian’s Nick Davies alleged last week that David Cameron had misled the Leveson Inquiry with his account of the appointment and vetting of Andy Coulson. Mr Cameron has also been publicly criticised to an unprecedented degree by the trial judge. The prime minister’s apology for believing Andy Coulson’s lies to him when he appointed him as chief spin doctor was made while the jury was still deliberating on charges of conspiracy against Coulson.

 

To coin a cliché, there are no winners in this case. Despite their triumphant response to Rebekah Brooks’ innocence, a section of the press has been exposed as even more vicious and sleazy than we suspected. Our police have been exposed as at best incompetent and at worse corrupt. And our politicians, most damagingly of all, our prime minister, have been clearly shown to lack essential judgement. Despite many warnings from those who knew, the prime minister allowed a corrupt and mendacious journalist into the heart of government.

 

While I concur with The Economist’s judgement of the Leveson Report as decidedly ‘mediocre’, Leveson’s central message was clear and indisputable. The relationship between British politicians and journalists needs to change. Senior politicians have for too long responded like Pavlov’s dogs to the temporary obsessions of newspapers like the Sun and Daily Mail, and are so afraid of powerful press barons like Rupert Murdoch that they openly court their approval and support in return for policy pay-offs. Our politicians maintain a belief in the king-making powers of the British press, whose influence on the public is in all probability far less than frequently claimed.

 

The evidence presented to Leveson showed a relationship corrupted by mutual suspicion and cynicism in which the public have been the chief losers. In a democracy, the exchange of information between journalists and politicians is both necessary and inevitable but the increasingly close ties between leading politicians and journalists in Britain have been to the detriment of the public interest. The public sphere has been poisoned by a ‘daily drip-feed of falsehood and distortion’, as Nick Davies so aptly puts it.

 

If we believe that an informed population is essential to democracy, then public trust in our press is crucial. If the electorate’s perception of both the press and politics is predominantly of worlds inhabited by the devious, ill-informed, corrupt or incompetent, they are unlikely to believe political news reporting and far less likely to engage in any meaningful political activity. Declining electoral participation rates, falling party memberships and unprecedently low levels of public trust in both politicians and journalists do not suggest a thriving political public sphere. Although our newspapers are only one factor, they have contributed to the decline.

 

But perhaps the biggest danger to our public institutions is not the aura of sleaze that the last few years have fostered. The appearance of incompetence is potentially far more damaging. For example, Bill Clinton’s competence turned out to be more important to the American public than his somewhat sleazy personal life.

 

We appear to have an incompetent political class, exemplified by the inappropriate appointments and friendships of David Cameron and his knee-jerk response to the trial; an incompetent police force whose failure to investigate the original allegations of press (and police) corruption contributed to an even bigger scandal; and an incompetent press where the owners, executives and editors of some of our major newspapers seemed unable to comprehend the corruption within their own empires.

http://blogs.lse.ac.uk/politicsandpolicy/politicians-and-journalists-in-britain/

 

 

 

Mark Carney is saying invest your money, but there are still risks

Governor has given the green light with continued low interest rates, but markets, inflation or a housing bubble bring caution

Larry Elliott, economics editor
The Guardian, Wednesday 7 August 2013 14.25 BST

Mark Carney, governor of the Bank of England at the quarterly inflation report.

Get out there and spend. Feel free to take the plunge and buy that house. Go ahead with plans for new investment mothballed since the recession.

That, in short, was the message from the Bank of England to consumers, property hunters and entrepreneurs on Wednesday. Why? Because unless something unexpected happens, official interest rates are staying where they have been since early 2009 until 2016 at the earliest.

Such a long period of cheap money would be unprecedented. The Bank of England has never had interest rates this low in its 319-year history and is on course to keep them pegged at 0.5% for longer than it took the allies to win the second world war, longer than the French Revolution between the storming of the Bastille and the topping of Robespierre, and longer than it took the Beatles to record everything from Love Me Do to Abbey Road.

Quite a period, and evidence of just how fragile Threadneedle Street thinks the economy remains following the deepest recession and the slowest recovery in recorded history.

The financial crisis has left deep scars on the UK. This was an economy, after all, which became chronically dependent on the casino activities of the City and an over-heated property market. Matters have been made worse by the debt crisis in the eurozone, which has hit exports, and by the government’s deficit reduction plan.

That has left the Bank of England with responsibility for keeping the economy going and, fearful that recent signs of green shoots could be nipped in the bud by unwarranted suspicion that it would soon tighten policy, the Bank provided guidance on how it intends to play things.

Monetary policy is now unashamedly pro-growth and deep into uncharted waters. It has raised the inflation target to 2.5% in all but name and is effectively operating the sort of twin mandate system used by the US Federal Reserve in which growth and price stability carry equal weight.

Having experimented with quantitative easing, the Bank is now trying forward guidance: sending messages out about how it intends to conduct policy in the future. Unemployment as measured by the internationally agreed labour force survey measure of joblessness, will have to come to 7% before the monetary policy committee will even consider raising interest rates or starting to sell back to the financial markets the £375bn of government bonds it has bought under the QE scheme.

Unemployment on the LFS measure is currently 7.8%, and according to the Bank’s forecasts will not hit 7% until 2016. Conveniently for George Osborne, that means well after the next general election. Carney was hand-picked by Osborne to replace Mervyn King and the chancellor must have been well pleased with his first big public outing.

The new governor made it clear that he considered the strong data in recent weeks no big deal: “There is understandable relief that the UK economy has begun growing again. But there should be little satisfaction.”

Even after raising its forecast for growth this year to 1.4% (from 1.2%) and to about 2.5% next year, the outlook is for weak post-recession expansion by historic standards.

The MPC wants to see this recovery fully embedded and believes that there is plenty of scope for expansion while keeping inflation to 2%. But the plan to keep monetary policy ultra-loose is not a hard-and-fast promise and there are three circumstances (or knockouts) in which the MPC would consider action before the 7% threshold is reached.

The first would be if inflation 18-24 months ahead was expected to be more than 0.5 percentage points above its 2% target.

This, though, is much less of a “knockout” than it looks. The Bank invariably says inflation will be back to 2% within two years, and did so even when it was running above 5%.

The second knockout – that action would be contemplated if medium-term inflation expectations slip their anchor – is also a bit fuzzy since it will depend on the subjective judgment of the MPC.

Finally, the MPC would rethink its policy stance if it thought an abundance of cheap credit was fuelling an asset-price boom that could not be controlled by the bodies charged with regulating the City – the financial policy committee and the Prudential Regulation Authority. Even so, it would probably want to see whether imposing specific capital requirements for lending to certain sectors of the economy (such as real estate) would work first.

So, in reality policy is not going to change anytime soon, despite the risks.

The Bank believes there is plenty of spare capacity in the economy following the slump but it doesn’t know exactly how much. If there is less than it thinks, faster growth will quickly feed through into higher inflation. Nor does it really know whether there is a stable relationship between inflation and unemployment in the UK, in the way there appears to be in the US.

Nor can it confidently predict how the financial markets will respond to the news that monetary policy will remain unchanged for another three years at a time when other central banks – the US Federal Reserve for example – will be tightening. Sterling looks vulnerable to a tumble on the foreign exchanges, thereby stoking imported inflation.

Finally, there is the risk that when policy is tightened it will need to be tightened aggressively. Britain’s predilection for booms and busts in the past 40 years means that a good, old-fashioned housing bubble, with its attendant balance of payments deficits, cannot be ruled out.

The Bank, though, considers this to be a risk worth running. It has plenty of experience of recessions caused by over-heating and knows how to deal with them. But the slump of 2007-09 was different. Normal policy tools weren’t effective in a downturn caused by global financial systems failure. That’s why exceptional measures were deemed necessary. And are still deemed necessary, whatever the side effects may prove to be.

LSE British Politicast Episode 2: Austerity Economics and Central Banking

LSE British Politicast Episode 2: Austerity Economics and Central Banking

Posted: 31 Jul 2013 04:00 AM PDT

In this episode, we focus on austerity economics and the role of central banks in times of financial crisis. The UK coalition government embarked on a programme of spending cuts when it came to power in 2010. Since then many economists and academics have argued that the intellectual justification for austerity has crumbled and it is a self-defeating strategy in bad economic times. Mark Blyth, Professor of Political Science at Brown University in the US, takes this view in his new book Austerity: The History of a Dangerous Idea. He discusses why he thinks austerity is merely a form of self-harm. We also hear from Claire Jones, economics reporter at the Financial Times about the role of central banks, particularly that of the Bank of England, in the age of austerity.LSE British Politicast Episode 2: Austerity Economics and Central Banking.