Logical and illogical privatisations

Can someone please explain the logic of privatising when you merely outsource to one company?

This post / rant has been bubbling away at me for years but reading this by Aditya Chakrabortty on the battle for public services in Barnet has prompted me to get it off my chest.

I often have arguments with my lefty friends because my default position is that privatisation is not necessarily a bad thing. There are some things the private sector can do better than the state (eg run restaurants) and there are many areas of life where competition generates a better outcome for the consumer. I am fascinated by the various utility models and often wonder why opening the telephone market seems to have worked (costs are coming down and customer service is improving) but it has arguably failed with electricity and gas. (I may post more on this with some actual evidence at some point)

However, I do struggle with outsourcing public services and assets to one privately-owned company. I might be tempted to make an exception for basic business process outsourcing  (BPO), i.e. financial processes such as payment of invoices, if I had ever actually worked somewhere where this had worked in practice. I’ll come back to BPO on another occasion as I think even in the private sector a lot of the thinking and practice here is flawed.

No, what I am completely bewildered by is outsourcing frontline services such as collecting the rubbish, running buses, assessing access to benefits etc. These are not areas where the private sector has specific expertise. These are not generally areas where the private sector can experiment with new delivery models (eg buses have to go on specific pre-planned routes, you can’t just rock up with a bus and start offering services for the public). These are not generally areas where investment in new technology will generate savings. These are not areas where failure to deliver will be punished by going out of business.So why privatise?

It is hard to avoid the conclusion that the only economic logic for outsourcing is a perception that the private sector will always be more efficient, which could also be read as “more ruthless in screwing down wages”.

But I am trying to understand the right wing state-shrinking world, so please help me out here. Please send me examples of where outsourcing these kinds of services has actually delivered the same or better service for less money.


Three clever bits of politicking?

Not even a week has passed since the election and the Tories are already manoeuvring for the next one with three expert bits of politicking.

(1) Suggest vote on foxhunting ban

Sends out the right message to the rural heartlands and winds up the metropolitan elite, who will be guaranteed to “over-react”. As David Cameron himself wrote in the Countryside Alliance;

“There is definitely a rural way of life which a born and bred Londoner might struggle to understand”

And sure enough, an outpouring of emotion on Twitter just seems to emphasis his point. This move is not about freedom, nor is it an outpouring of bloodlust (he’s not saying they will do it, merely that they will allow a vote on it) but it is excellent divisive politics.

(2) Make like you’re going to push ahead on the Human Rights Act repeal

There are many excellent and learned pieces on how complicated this is going to be in practice. David Allen Green is an excellent commentator on this and has summarised some reading here and Michael Gove’s former SpAD has some interesting views too.

Does any of this complexity really matter? If the Tories make great gestures about going for this and are thwarted by mandarins, devious lawyers or “Europe”, all of this plays into the narrative that the great nation of England is being pushed around by illegitimate powers. They may lose the battle but will win the (electoral) war.

(3) Be tough on extremism

Cameron’s wording about “passive tolerance” is, again, political genius. “Tolerance” is one of those words (like “human rights”) that is sadly undergoing metamorphosis from a great British value to some dirty activity that we should be ashamed of.

As with the Human Rights Act, what really seems to be going here is dog whistle politics at its most depressing. Cameron’s aides are borrowing heavily from the UKIP book of tricks. And why not, as that’s the share of the vote that’s grown most rapidly?

Five Questions for the pollsters

If the pollsters want to get back into everyone’s good books, here are some questions which every political party should want to know the answer to.

(1) Where did the core Lib Dem vote go and why?

The transfer of seats during the 2015 General Election.
The transfer of seats during the 2015 General Election.

This diagram from @pickardJE shows very little movement from Labour to the Conservatives and vice versa. However it appears to show a large movement from the Libdems to the Conservatives. However, if individual seats are looked at (particularly in the south west, the so-called Libdem heartlands) then in some cases there is hardly any gain for the Conservatives at all, but rather a complete scattering of the Libdem vote.

Libdems and other parties need to understand whether their voters really did turn to the Conservatives for being “better” liberals or whether their core vote in some areas came from being the main alternative party to the Conservatives, which obviously was undermined by entering into coalition. These are two completely different explanations for the same end result.

2) Why the rise in UKIP in second place in many Labour constituencies?

This doesn’t show on this diagram because the diagram shows seats, not votes.

Can it just be explained by anti-immigration sentiment in poor areas? Or is it a more general rejection of the Westminster oligarchy? Voters in these seats are probably the most neglected in the country; their votes still taken as given by the Labour party because “they’ve got nowhere else to go”. Connected to this;

3) Why didn’t Farage win in Thanet South?

I have Googled this every day since the election but the coverage is still on the reaction and the moment rather than any analysis on why he lost. Did the anti-UKIP activism work? Can it be repeated on a much larger scale in dozens more consituencies?

4) Why did the SNP grab the Labour vote?

Labour commentators backing a move leftwards are keen to highlight the SNP’s anti-austerity message, but is that why the SNP swept to power or was it much more about a rejection of Westminster / England particularly following the referendum?

5) What on earth is going in Wales?

Looking at the “Best Welsh Tory election for years”, again this looks like Libdem vote scattering rather than decisive Conservative win. Conservative vote share is up in some of their held constituencies but down in others.

I don’t know the answers to any of these but I really hope someone spends some time finding out.

Everything is wrong, long live everything

I started this blog because I wanted to make loads of comments that were a fraction as eloquent and incisive as those made in Dougald Hine’s post “The only way is down; 18 Notes on the UK election”

The one cold comfort that Labour – and perhaps even the Lib Dems – could take from last night’s results is that events have forced them into a confrontation with reality, while the Tories will continue to govern on the basis of delusions, with ugly results, for a while longer, before gravity catches up with them. This could give the defeated parties a head start, but only if they are prepared to enter into a kind of soul-searching deeper than anything we have seen in British politics in a very long time.

For that to have a chance of happening, it will have to start somewhere else, somewhere beyond the party machines and the earnest, highly-educated, decent people at the centre of them, who are almost entirely unequipped for the journey to the political underworld which is now called for.

Before I read this I’d pondering on just how old-fashioned both the “Blairite” and “Old Labour” calls were sounding in 2015. There’s not a lot in either stereotype for the zero-hour worker, for the those attempting to balance multiple jobs to make ends meet, for the exploited Lithuanian immigrant, or for the bloke in the pub who feels that maybe things would be better if there weren’t so many foreigners around. (These could all be the same person, by the way – such is the diverse and complicated nature of the 2015 labour market)

The strength of Blairism was recognising that the landscape had moved on since the 1970s; the next progressive leader(s) will only triumph if they recognise that 2015 is as distant from 1997 as 1997 was to the 1970s. I’m not quite sure what the new politics will look like yet, but in a funny way, I’m looking forward to finding out.

Why we need proportional representation (and why it won’t happen)

This election in particular has highlighted the silliness of our current first past the post (FPTP) system, whereby the results of 650 individual elections are combined to form a government which may or may not represent the views of the people.

If this graph doesn’t do it for you;

Proportional Representation Graph

…then perhaps numbers will:

  • the Labour party increased its share of the vote by 1.5%, the Conservatives increased by 0.8%. This translated into Labour losing 26 seats while the Conservatives gained 24
  • the Scottish Nationalist Party got 56 seats with less than 1.5m voters; UKIP got 1 seat with 3.8m voters

How can this be defended as democratic? The strongest arguments in favour of FPTP tend to focus on the link between the local constituency and its MP. And yet time after time we hear that people do not feel they know their local MP or that their local MP does not represent them. (Eg see the ever-fascinating but depressing Hansard Audit of Political Engagement which in 2015 concluded that 28% of people did not know which political party their MP belonged to.) Furthermore, it is perfectly possible to have a voting system that combines an element of locality with proportional representation (PR) principles – both the Alternative Vote system proposed in 2011 and the Single Transferable Vote still use geographical boundaries, just in different ways.

Another argument in favour of FPTP is that it is simple – but I could name at least two acquaintances of mine who confess to not understanding how it works. Not because they didn’t get the principle, but because all the discussions and slanging matches about likely coalitions before the 2015 General Election confused this supposedly simple system. “How can my vote for party X mean that party Y gets in?” said one.

However, the argument that really, really gets my goat is that FPTP protects from extremism. Several commentators have pointed to the success of UKIP in the 2015 General Election as a reason for why we should stick with nice, safe FPTP. This firstly assumes that everyone would vote the same way under a PR system, when in reality we know that lots of tactical voting happens under FPTP. Secondly, and more importantly, this is a rejection of democratic principles. Yes, extremists may get elected; it is up to us progressives to argue convincingly as to why their views are wrong, not hide behind a constitutional safety blanket.

However, I’m not optimistic about us getting electoral reform any time soon. It failed decisively in 2011 (possibly due to misleading campaigning, but it was still a low turn out and a convincing defeat). It still benefits the two biggest parties the most, and with a conservative majority elected who have done very well out of FPTP it is hard to see this changing in the next parliamentary term. One can hope that Labour’s drubbing in Scotland will finally convince them of the need for proportional representation and that any future campaigns may have more concrete support from them.

In the meantime have a look at the Electoral Reform website, support them and spread the word.


The death of the coalition experiment

Angela Merkel and David Cameron
Angela Merkel is alleged to have advised David Cameron that in coalitions “the little party gets smashed”. Picture from number10gov via creative commons.

One of the many disappointments about the 2015 General Election is that it seems to demonstrate fairly comprehensively that the British electorate is not keen on coalitions. It also suggests that the strength of LibDem local activism has been overstated.

Up until the exit poll, I would have gone along with @timwig‘s 2013 view that the Libdems wouldn’t collapse. I thought the tribalist anti-Libdem sentiments from many of my lefty friends was typical of a metropolitan bubble, and that it underestimated the strength and importance of local activism. I was expecting them to lose seats and vote share in London and other metropolitan areas where they had perhaps picked up opportunistic votes from Labour in 2010. I was not expecting the complete wipeout in their southwest heartlands.

While there is further geeky number crunching analysis to do, it’s clear that in many former LibDem strongholds, their vote has collapsed and spread to the four winds, rather than go to a specific party; in some of their former constituencies, the Conservatives won despite polling around the same or indeed fewer votes than in 2010.

While I’m not instinctively a LibDem supporter, up until Thursday 8th May 2015 I genuinely believed that they had support because of local activism and connections (A Good Thing IMHO), and also because they were successfully able to present themselves as above party politics and tribalism, one that was able to exert a moderating influence and ensure there was more debate on a number of issues (Also A Good Thing IMHO). I wanted them to be a thoughtful alternative to two-party politics and felt our political system was stronger because of them, and naively thought that a significant part of the electorate might also share that view.

So hence the personal disappointment. But here’s the thing; even if you have nothing but hatred and contempt for the Liberal Democrats, if you believe in greater democracy and accountability, their collapse is bad news for you. Firstly, there is no way proportional representation is going to work without coalition politics. You can’t rally against the idiocy of the first past the post system without accepting that greater representation of smaller parties will lead to coalitions, negotiations and compromises. Secondly, it has completely destroyed the illusion that local activism (in its current form) is important. I think this is the biggest shame of all.

Twitter and blogging doesn’t solve anything so I’ve started both

If the 2015 election has shown anything, it’s that Speaking Your Brains on social media has very little influence on anything. At best, it helps you connect with like-minded people. At worst, it helps you connect with like-minded people. We all echo each other and share things that support our existing views, and feel comforted that we’re not in a minority, and from within the smugness of the bubble we lazily dismiss other views as stupid or malicious.

So the irony of starting a blog and Twitter account in reaction to the 2015 election is not lost on me.

But I have a feeling there’s going to be a lot to say in the next five years and I don’t have a ready outlet for it. My mixture of left-wing sympathies and free market economics already sit awkwardly together. My varied experiences as an accountant in public and private sector organisations, in large and small entities, encourages me to consider issues from various perspectives and despite a tribal Labour background I get very irritated by glib assumptions, simplistic slogans and hysterical tribalism.

So the point of this blog is to explore various issues and attempt to understand and explain other perspectives, particularly when it comes to economics, tax, business, employment, banks etc – stuff that I deal with in my day job. But I can’t promise it won’t descend into a rant.