The rise of UKIP

The recent rise in UKIP support is bigger and longer-lasting than anything in the party’s history. Here’s a long-term view:

(I’ve used ICM and Ipsos MORI because they both did well at predicting the 2010 election result and they both have a series of monthly polls, with UKIP numbers available, going back this far. It’s also worth bearing in mind that they tend to show lower UKIP scores than most other pollsters.)

Previously, UKIP has spent its life plodding along to very little effect until a European Parliament election comes along (2004 and 2009) and gives it the publicity it needs to make headway. It gets a modest but sharp boost, about half of which then vanishes almost immediately.

That’s not what’s happening now.

UKIP’s vote has been rising pretty much consistently for over a year. Whether you look at its monthly poll rating or the six-month average, which smoothes away blips, it has been above its 2009 peak for over half a year and is now at more than double that peak. And this is without the benefit of a Euro-election. Next year’s will help the party keep its momentum up.

Far more people than ever before are taking UKIP seriously, and they have been doing so for longer than ever before. The longer the idea of voting UKIP spends in their heads, the likelier it is to settle.

But I suspect UKIP is pretty near its limit now. I’d be surprised if it managed more than 10% at the 2015 general election, and even more surprised if it won any seats. That said, it could still make a difference by changing the balance between the bigger parties.

Why is UKIP doing so well?

It’s not that people are suddenly so much angrier about Europe and immigration. Rather, a generally culturally conservative group of people, who initially gave the coalition the benefit of the doubt (and gave the Conservatives the benefit of the doubt in opposition), are becoming more and more disillusioned. Look at the chart and you can see that the dam started to break after last spring’s ‘omnishambles’ Budget.

The Conservatives and Lib Dems have bound each other in to a mesh of governmental disappointments and half-hearted compromises, and Labour remains deeply unimpressive and tainted by its own time in power. These cultural conservatives increasingly think the mainstream, ‘modern’ political class has nothing to offer them.

As Kenan Malik argues, people are becoming more likely to vote as a personal statement of belief or outlook rather than as a way of choosing a government. This is borne out by the recent rise in people voting for no-hoper minor parties:

True, when push comes to shove, some of the UKIP’s current supporters will return to the bigger parties – but many won’t. In a large poll last November by Lord Ashcroft, only about half of people considering voting UKIP said that letting their most disliked of the bigger parties win would be a factor in their decision.

The largest part of UKIP’s new support comes from the Conservatives. From the details of the latest ICM and MORI polls, and the daily YouGov polls from the last week, UKIP is currently taking between a fifth and a quarter of the Conservatives’ 2010 vote and about a tenth of Labour’s. The overall effect of that is to increase Labour’s lead over the Conservatives by 4 to 6 percentage points.

If half of UKIP’s recently gained support goes back where it came from by 2015, that would still leave Labour a 2-to-3-point relative boost. That could swing maybe 20 seats.

Evidence-basted policy

A prominent economic study, supposedly showing that growth slows down once national debt gets above a certain level, has turned out to be based on a few simple errors.

Carmen Reinhart and Ken Rogoff’s research was quoted approvingly by supporters of austerity around the world, including George Osborne in a major speech in early 2010. Osborne has consistently argued that the government needs to reduce its borrowing and debt or risk all kinds of disaster, and this research gave him a handy few paragraphs of material.

But he won’t now reconsider.

Politicians like us to think – and they probably like to think themselves – that they go for evidence-based policy. This makes them look like wise, careful, well-informed pragmatists.

But, too often, they don’t go for evidence-based policy. What they go for is evidence-basted policy.

Here’s how to do it:

1. Choose your policy.
2. Scour the publications of friendly think-tanks and academics to find evidence that seems to support your policy.
3. If you also find evidence against your policy, cut this off and throw it away.
4. Marinate your policy in the evidence that most complements its taste, and cook as needed, sealing in that delicious evidential flavour.
5. When your policy is ready to serve, it will be all the more appetising.

All the austerity camp have lost this week is one ingredient for their marinade. But this hardly matters to them: that wasn’t the reason they chose this course. They’ll keep serving it, even if it now tastes a little bitterer. A change of evidence doesn’t mean a change of course.

UK and international welfare spending

Using OECD data from Declan Gaffney (a great blog post – do read it), I’ve made the two charts below. They look at the amount of money different countries’ governments spend on benefits, excluding pensions and benefits in kind.

The first shows that benefit spending in the UK has fallen as a share of GDP, not risen. Of the 18 countries Declan compares, the UK spending fall was the fourth-largest from 1980 to just before the financial crash, and the fifth-largest from 1980 to 2009.

 

The second chart shows in more detail how spending has gone up and down. To avoid a mass of criss-crossing lines, I’ve included just six countries. This also shows that the UK welfare state – not counting pensions – is not particularly expensive by international standards.

Osborne unveils Plan D

Plus c’est la même chose, plus ça change…

The more George Osborne insists on sticking to his policy, the worse the results become.

He’s like a driver who refuses to reset his faulty satnav long after it becomes clear that the geography is nothing like what he’d expected. He’s still turning right in 200 metres, but the turn takes him into a ditch instead of the hoped-for motorway.

In 2010, we planned to borrow an extra £471 billion by 2015/16. Today I can announce that we will hit this target two years early.

He didn’t say that, of course. But it’s true.

So imagine what he would say about a Labour Chancellor who had presided over this:

At some point, the government has to take responsibility. Three years is past that point.

(Note on data: The public finance figures are becoming harder to unravel. The ones I’ve used above exclude the effects of various special factors such as the asset price facility and financial transactions. The result of this exclusion is to raise the borrowing and lower the debt in the most recent figures. See tables 4.36 and 4.37 of the OBR report.) 

The press regulation deal is both more and less than it seems

I wonder whether our political leaders know what they are doing.

Their agreement includes a draft Royal Charter establishing the new press regulation system. The Charter states that, once passed, it can only be altered by a two-thirds majority in both the Commons and the Lords.

This provision is being given legal force in an amendment to the Enterprise and Regulatory Reform Bill:

Where a body is established by Royal Charter after 1 March 2013 with functions relating to the carrying on of an industry, no recommendation may be made to Her Majesty in Council to amend the body’s Charter or dissolve the body unless any requirements included in the Charter on the date it is granted for Parliament to approve the amendment or dissolution have been met.

This amendment is deliberately general. As David Cameron, fearful of charges that he had caved in, explained:

 

This is not by any stretch of the imagination statutory regulation of the press. Nor is it even statutory recognition of either the independent press regulator or indeed the Royal Charter. It is a three line clause which applies to all Royal Charters of a particular nature from this point onwards.  

Colleagues may ask whether this no change clause could be used in future for a more aggressive approach to regulation of the press. Because it doesn’t mention press regulation and it doesn’t even mention this Royal Charter it is no more in danger of being used in this way than any other piece of legislation on the statute book.

But the objection he didn’t anticipate is the opposite one: couldn’t this no-change clause be used to set up other Royal Charters in defiance of the will of Parliament?

It looks like it could. The Privy Council – which is, in effect, the Cabinet – could create a Charter regulating some other industry, and include a no-change rule that required a two-thirds (or three-quarters, or nine-tenths) majority for its amendment or repeal.

But there’s a but.

The Enterprise and Regulatory Reform Bill, when passed, won’t itself be subject to the two-thirds rule. It could be amended by a simple parliamentary majority to remove the no-change clause. So a Cabinet that tried to bypass Parliament could be reined back in.

But there’s another but.

This also applies to the current Royal Charter. The no-change clause can be overturned by a simple majority, and then the new press regulation system can be scrapped in the ordinary way.

This feels like locking your valuables in a strong safe and then putting the key to the safe in a shoebox.

So, I wonder whether our political leaders know what they are doing.

Cameron opposes faster cuts. But why?

The hole in David Cameron’s economy speech is telling. Here it is:

Some say cut more and borrow less, others cut less and borrow more. Go faster. Go slower.  Cut taxes. Put them up. We need to cut through all this and tell people some plain truths. So let me speak frankly and do just that. There are some people who think we don’t have to take all these tough decisions to deal with our debts. They say that our focus on deficit reduction is damaging growth. And what we need to do is to spend more and borrow more. It’s as if they think there’s some magic money tree.

His argument against slower deficit reduction is pretty feeble. But his argument against faster deficit reduction is non-existent. After the brief initial mention of people who take this view, that’s it.

There’s a reason for this. Any argument he makes against faster public-spending cuts is an argument that Labour (or Vince Cable, or the Economist, or anyone else) can quote against his policy.

In exactly this way, the general points in his argument against slower cuts are used against him by people who are urging faster cuts. But clearly, he feels either that those people are politically insignificant or that he doesn’t have the strength to fight on two fronts.

Cameron, Osborne and Clegg have created an arbitrary timetable of cuts and then nailed themselves to it.

For instance, in 2013/14, the government plans to borrow £99 billion. Why is that the correct number? Why would £109bn or £119bn cause a market panic while £99bn is OK? Why would £89bn or £79bn stifle the recovery while £99bn is OK?

As Cable says, “nobody knows how the markets might respond” to a change of plan. “The balance of risks remains a matter of judgement.”

I’ll leave it to others to make the case for faster cuts. But the case for slower cuts is not the insanity he presents it as: “They say that by borrowing more they would miraculously end up borrowing less.”

The case can be summarised simply: more haste, less speed.

If you fire public-sector workers and scrap investment projects and cut benefits too quickly, the economy suffers. Cameron knows this, which is why he opposes faster cuts. By making less haste at cutting the deficit, he hopes to make more speed.

The argument for slower cuts is the same, only more so.

Nobody knows the optimum speed. But Cameron asks us to trust that the plan he worked out with Osborne and Clegg back in the summer of  2010, based on economic forecasts that reality has torn to shreds, managed to get it right.

The inevitability of bad predictions

Yesterday the Guardian published a piece of psephology by John Ross. He gets one thing right but almost everything else wrong.

I’ll start positive. The thing that Ross gets right is his main point: Conservative support has been in decline for a long time. He says that since 1931, the Conservative share of the vote has dropped by an average of 0.2% a year.

I agree. I’ve only looked back to 1945 (covering 18 general elections rather than Ross’s 20), but I also get an average 0.2% decline a year – with, of course, a lot of variation around this general trend.

But what Ross doesn’t mention is that the Labour vote has also declined, by an average of 0.2% a year (since 1945). Conversely, the Liberal/Lib Dem vote has risen over this period by an average 0.3% a year. You can see the rough picture from this chart:

 

These numbers do, though, depend on your starting-point. As Hopi Sen points out, 1931 was a stunning Conservative landslide; 1945 was a Labour one. If you start at 1974, after the first Liberal surge, the Labour trend is, on average, flat and the Lib rise is under 0.1% a year. If you start at 1983, the Libs are in slight decline. If you start at 1997, the Conservatives are on the up.

But for the sake of argument, let’s stick with the longer-term picture.

Things really go wrong when Ross looks to the future. This paragraph contains one of the highest concentrations of wrongness I’ve ever seen:

Taking these projections, if the Tories won the next election, they would get 34.6% of the vote, and if they lost they would get 30.3% of the vote. As there is no doubt at present that the Tories will lose, they will get 30.3% of the vote. As always there is a bit of statistical noise in any calculation, so 29.3% to 31.3% would be a reasonable range, but 30.3% is the central figure.

What he seems to be doing is separating elections that the Conservatives have won from ones they have lost, and then extrapolating the trends for both categories.

This is a logical flub. You don’t first ask whether the Conservatives will win and then go on to wonder what vote they’ll get. You first ask what vote they (and other parties) will get, and then use that to see who’ll win. Votes determine victories, not the other way round.

So, having established that there are only two possible Conservative vote shares in 2015, he then says “there is no doubt at present that the Tories will lose”. Might there be doubt in the future? I guess it’s doubtful. But the interesting thing here is that Ross already has the election result predicted without even using his system. Presumably he’s looking at opinion polls like the rest of us. So what’s the use of the system?

Then there’s the “bit of statistical noise”: he reckons his system’s predictions have a margin of error of plus or minus 1%. That’s a lot better than the 3% that a normal-sized opinion poll has. I wonder how he arrives at this number?

He doesn’t say, but if I wanted to arrive at such a number, I’d start with this chart:

The dots are actual vote shares and the lines are the overall average trend. The distances between the dots and the lines show how close the model has been in the past. You’ll notice that most of the dots are more than 1% away from the relevant lines.

In fact, the median error is 3.8% for the Conservative vote, 2.1% for the Labour vote and 3.6% for the Liberal/Lib Dem vote: half the time, the model was wrong by more than these amounts.

But bear in mind that this model is based on a very small sample of data: 18 election results since 1945 (or 20 for Ross since 1931; adding the extra two really won’t change the picture). So the confidence intervals of any conclusions we draw from it may well be large. And they are. The standard deviation of the error in the predicted Conservative vote is 4.1%, in the Labour vote 4.6% and in the Lib Dem vote 4.3%.

Assuming a normal distribution, two-thirds of observed results would be expected to fall within one standard deviation of the central result. For a typical 95% confidence interval, we need to go plus or minus two standard deviations: 8.4% for the Conservative vote, 9.2% for Labour, 8.6% for the Lib Dems.

So, my version of Ross’s model gives these central projections for 2015: Conservatives 34.3%, Labour 31.5%, Lib Dems 26.4%. But all I’d be confident in saying is that the Conservatives will get between 25.9% and 42.7%, Labour between 22.3% and 40.7%, and the Lib Dems between 17.8% and 35%.

Probably. Assuming that there’s a genuine phenomenon here that will continue in the future. And ignoring all polling evidence.

In conclusion: Yes, long-term trends are noteworthy. But let’s not read too much into them.

Pursued By A Bear Market

A tale of fiscal policy and self-justification

The Royal Palace. The KING holds court with CAMERON, OSBORNE and CLEGG, Lords of the Treasury, and MILIBAND and BALLS, courtiers.

King:

Lords Cameron and Osborne, here you stand

To bring us tidings of financial woes.

You feared that those three Fates of credit would

Condemn us for our royal borrowing

And curse our land so nothing more could grow.

Thus warned, we charged you to avert this doom,

To halt the spending of our ministers

And raise such levies as could bring us gold

So that our monstrous debts would grow no more.

Now speak! We yearn at last for happy news.

Osborne:

My lord, we were entrusted to reduce

The vastness of your annual deficit.

And now it is my honour to declare

We’ve cut a quarter of this giant sum.

King:

That’s but a quarter – this news meets our ears

With disappointment, and familiar ring:

Was this not what you said a year ago?

Osborne:

It was.

King:

And now?

Osborne:

A quarter still, my lord.

King:

So when will all four quarters then be gone?

Osborne:

I swear, my lord, within five years from now.

King:

Was this not what you said a year ago?

Osborne:

It was.

King:

And what you said two years ago?

Osborne:

It was.

King:

And now?

Osborne:

Five years from now, my lord.

King:

These riddles disenchant us. How can time

So dance away as we approach each year

And stay as distant as horizons far?

Cameron:

My lord, I can explain my kinsman’s words.

When you appointed us, we sought to change

The short-term thinking of past ministers

And always turn our eyes to future times,

Determined that they must be better days.

We screwed our courage to the sticking place,

But now we find the sticking place can move

And so our constancy demands we change,

For we are bound to keep our fiscal oath:

‘Five years from now’, my lord. Always five years.

King:

How now, what craven sophistry is this

That conjures strength and virtue from a wreck?

Balls:

Methinks that ‘screw their courage’ gets it right,

For fools stand fast where angels fear to stay.

Cameron:

Damned knave! Your wretched insolence is cheap

And marks you out as low-born scoundrel, sir.

Balls:

Such ready fury boils your noble blood

And gives the lie to your play of command.

For you have marched us all into a swamp

In which our people cannot hope to thrive

Nor even stem His Majesty’s great debts.

And now you cannot dare to lead us out,

So make us all the captives of your fear.

Cameron:

This barking oaf! He tries to slander me

Before the very presence of the King.

I take no lectures from the gentleman

On courage; if he seeks to challenge me

I’ll slit his smug, fat belly with this blade!

Osborne:

Now cuz, hold still, for though he is a rogue,

The temper that he slyly sparks in you

Is crafted to repel you from the King,

Who cherishes good manners over all.

So douse your voice, and breathe until your face

Can lose this violent hue: a red as bold

As those bewitching locks of your true love.

Cameron:

The thought of dear Rebekah cools my bile,

But quickens yet my blood, for how I long

To be with her again, at last, to ride –

Miliband:

Rebekah, lady once of Wapping, stands

Accused of treason. Hold you her so dear?

Cameron:

I know! I know it! And she shall face trial.

I will denounce her crimes, if proved.

(If not, I shall her favour once more seek.)

King:

Pray stop this wanton prattle. We care naught

For squabbles or ill-chosen loves.

Our business here is fiscal. Miliband?

Miliband:

My lord, we seek to build one nation here:

Unsqueeze the middle and let fairness reign

Throughout the realm, as in your own good heart.

My raft of policy initiatives

Is not quite yet constructed to be launched

But, as I argued in my speech last week

To that esteemèd think-tank called –

King:

Enough!

Is there much more of this? Our bones grow old.

Balls:

If I may speak my mind, my lord, you’ll hear

My language is more plain than my wise friend’s.

Your ministers have failed, as you have seen,

When few can prosper and your debt still grows.

King:

They are your rivals, yet we find it sad

That now you smirk; this failure taints us all.

Balls:

I swear, my lord, it is no gleeful smirk

At their humiliating haplessness,

Which surely will entail their public fall

And clear a path for better men to lead.

I smile in nothing more than humble joy

At being granted your majestic ear.

And with this honour, I shall now explain:

Their folly is to try to cut too fast.

Dismissing servants of the Crown to save

A penny here and there may seem to help,

But if too many quickly lose their wage

Then how can merchants hope to sell their wares

And earn the gold with which they pay their tax?

And if proud Osborne asks them to pay more,

However can they hope to trade at all?

King:

You bring to us a thrifty paradox

That seems to beg we borrow more to save.

We would have further counsel on this point,

So let us hear from our Lord Clegg now. Clegg!

Where are you, man? Come forth! Now speak.

Clegg:

Sorry.

King:

Indeed! A sorrier sight we never saw.

And now we see it, we have quite forgot

All reason to have sought to see. Begone!

Cameron:

If further counsel do you seek, my lord,

Then I, unlike that grey-faced mope, can talk

And warn against the madness of these two,

Whose optimistic fancies are a dream

As fever’d as the mad Caligula

And surely as destructive to your realm.

Miliband:

Why, sir, if mad destruction do you seek,

Then walk the streets of any English town

And see the pain that your infernal cuts

Have wrought upon the visages of all.

Cameron:

I surely walk, and I can see each day

That everyone is grateful for my work

To build up our society so big.

But what, I ask, would you do in my place?

If you lack now the stomach and the will

To dam the fearful flood of royal gold,

How long yet must we wait? When will you act?

Miliband:

In time, and in a very real sense,

But I shall not get into that today.

Instead, I say again that you have failed:

Your recklessness has undermined your plan;

More haste has now resulted in less speed.

Osborne:

Your clumsy wits have led you far astray:

We made great haste to guarantee great speed.

And now, when it appears that speed is low,

This grim misfortune only proves us right,

And heralds the necessity of haste.

King:

Now gentlemen, we tire of these words

That tie themselves in cruel, ingenious knots,

To trap the earnest listener in a noose

While failure wears the robes of victory

And solid now dissolves to future mist.

We know from sad acquaintance what we have.

But tell us, clear and true, what else might be?

Balls:

I plead for lower taxes, for a year

So that our merchants may advance their trade

And earn a profit that they then can spend

Elsewhere, so new prosperity can spread.

And when, after a year, they all have thrived,

We can return to levy our demands

Now knowing that they have the strength to pay.

King:

You plead for lower taxes, for a year?

Balls:

For just this year, then we’ll have no more need.

King:

Was this not what you said a year ago?

Curtain.

A bad recession and a terrible recovery

The UK recession of 2008-09 was a bit deeper than the 1980s recession but shallower than the 1930s one – and briefer than either. It was much deeper than the 1970s or 1990s ones: by historical standards, it was pretty bad.

But what about the recovery from recession? I find it hard to get too excited about whether the technical definition of a double-dip or triple-dip recession has been met: the overall picture is two-and-a-half years (so far) of stagnation. And it’s this that is so terrible by historical standards.

For about the first five quarters after the end of the recession – up to autumn 2010 – it looked like a normal recovery. And then it stalled. We haven’t seen anything like this before.