Thursday, 15 January 2015

Another Hung Parliament, Please

With the UK general election looming in May, I thought I'd declare my apolitical hand: I'm hoping for another 'hung' Parliament and a coalition government.

I've been a fan of the idea since the opportunity presented itself in the last general election. I think the beast has worked pretty well for the pragmatic amongst us, and is well suited to dealing with the nasty challenges ahead. As I hoped in April 2010, politicians on both sides of the coalition have had to behave much more reasonably and responsibly in seeking solutions to the root causes of our problems than their party-political dogma would have otherwise dictated. This has spiked the guns of an extremely dogmatic opposition. And even the media's doom-mongering about instability and chaos has proved groundless. Sure there have been U-turns and major disagreements between the coalition parties, but the democratic progress should be dynamic, open and messy - not engineered, top-down, by a party leader with a Whip.

The same form of government is needed over the next five years because the long journey out of the tunnel has barely begun. That light up ahead is not looming economic recovery, it's an on-coming train laden with vast public sector debt, slowing Chinese growth, savagely low oil prices that might rebound higher than before, the Russian Problem, insanity in Greece, negative real interest rates and a stagnant Eurozone. Oh, and a new global financial crisis, as Hank Paulson infamously forecast in 2010:
"...We'll have another financial crisis sometime in the next 10 years because we always do.""
The public finances are still in a parlous state. So all the UK political parties face the need to cut public spending, whether they like it or not. Raising expenditure is out of the question, because it would mean borrowing more - and higher taxes won't bring in any more money. The total UK tax receipts have hovered at or below 40% of GDP for over 40 years. We're bumping along the ceiling, people! Raise taxes, the economy grinds to a halt and the best you'll get is 40% of a smaller pie. Cut taxes to around 35% of GDP,  the economy roars into life and you get a smaller slice, but of a much bigger pie.

But, hey, if you think the UK should drift into the next financial crisis with even higher debt and taxes, why not simply move to Greece?

What's left to cut? There's no end to it: we need our politicians and civil servants to remain focused on making the public sector more efficient, by removing waste and insisting that services be designed to operate more efficiently in future, particularly in the major spending areas. The defence budget, for example, is a rounding error on a more efficient tax and benefits system and a leaner, better co-ordinated public health and social care sector (20% of hospital beds are occupied by people who aren't even sick!). Money could also be saved by addressing root causes instead of their many symptoms. For instance, would more social housing have helped ease the pressure on first-time buyers, avoiding government subsidies to them and pre-empted the policy battle over immigration levels? Similarly, we must continue financial reforms to increase the sources of funding and the range of payment services for consumers and small businesses (who create half of all new jobs) because the economy is still too dependent on a few major banking groups who remain a millstone around the country's neck.

Some people will say this is dry, boring and unimaginative. But if you want entertainment, head to the movies. 

Others want something to believe in. For instance, they accuse David Cameron of lacking political ideology or a 'pattern of belief', an '-ism'. Yet they claim that his "legacy will be a collection of tactical manoeuvres, with as many prominent surrenders as victories." Apparently these people have never heard of pragmatism. But they've also unwittingly hit on the benefit of the hung Parliament in restraining coalition parties from implementing their more extreme policies. By contrast, the 'believers' expect us to cling to the idea that Ed Miliband is "in politics for the right reason" (just the one?) or "propelled by something more noble than the salvation of his own skin", which you could choose to mean anything that gets you through the day. But beware words like 'right' and 'noble'. They are the cloaks of dogma and moral panic - rallying cries for the likes of Tony Bliar's weird crusade or Gordo's crash, in which Miliband (and Balls) played key roles - not to mention the ballooning cost of the Security State. So, actually, if we believe anything in this vein, then it's surely that such 'noble' ambitions make Labour governments the kind of luxury that only a much wealthier country could afford

But, who knows, maybe being trapped in a coalition would even convert Ed to pragmatism.

Whichever way you look at it, we need a government that's forced to focus on resolving the root causes of society's actual problems - not one driven to distort the facts to suit its own dogmatic solutions. And my sense is that only another hung Parliament will ensure we get it.

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