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1 June 2024

The 2024 General Election

Tag(s): Politics & Economics, Leadership, Education
Last year I resolved that as far as possible my blogs should be on more positive issues and indeed as a result, I find that I have been writing fewer of them. Now we're approaching a General Election, and, in the past, I have gone into some detail in advance of General Elections doing quite a lot of research on most of the key issues that seemed important to me and indeed to much of the public. For example, as we approached the 2015 General Election, we knew because of the Fixed Term Parliament Act when it would be and so I had more than six months to research and write these blogs. I wrote on six subjects on a monthly basis running up to the Election in May 2015. They were the NHS, immigration, education, Europe, the economy, and political leadership. That was nearly ten years ago but those six issues remain as important today, or even arguably more important, and the reason is that little progress if any has been made on resolving these issues and indeed many of them have got worse.

The NHS is of major concern as the number of people waiting for treatment has increased exponentially even though the costs have also largely risen. No one it seems has a solution to this problem. There isn't one and that's because we never try to tackle the flaw that has always been there. The structure of the NHS defies economic logic. If something is free at the point of use then there is nothing to control demand and you've broken the law of supply and demand and so the demand increases. The supply is fixed but the demand is uncontrolled. Therefore you get waiting times and other forms of rationing and all the rest of it. That can only change if we adopt the mixed principle common across most of Western Europe whereby a public service is provided but members of the public are also required to take out some form of insurance and fees are charged for some services.  To some extent that actually happens in the UK too except there is no requirement to do this. My wife and I have medical health insurance which costs us a few £1000 a year which we can afford but through our taxes we're also paying for other people’s publicly provided medical aid.

I appreciate that the manifestos have not yet been published but I assume that the kind of things that political leaders are all saying are intended to warm us up for the manifesto. On the NHS one of the steps Keir Starmer has announced is that he would cut NHS waiting times with 40,000 more evening and weekend appointments each week. Many people in the NHS already work in the evening and/or weekend and certainly virtually everyone who works in hospitals. It's impossible to see how this could make the slightest bit of difference but the Conservative record over 14 years with numerous Health Secretaries barely dabbling with the issue is not encouraging either.

Immigration is a much hotter issue than it was ten years ago when it was bad enough. More than once the Conservatives have announced that their policy was to reduce net immigration to 10s of thousands. But an aspiration is not a policy. In the last two years it has been nearly one and a half million. The population of the country has increased by an extraordinary amount in the last 25 years versus the previous 25 years when it barely increased at all. There are some people who welcome this, for example in business where they may be able to recruit people from Eastern Europe and other sources who are willing to work for much lower wages than those in the UK. This creates a false market for employment. Most western European countries do have a practical limit on immigration which they enforce while the UK does not. Labour has announced that it would launch a new Border Security Command to stop illegal immigration but there already is such a body that was set up by the Conservatives and it has failed to stop illegal immigration except in limited numbers. Illegal immigration is not simply a question of individuals arriving here without proper documentation. It is in fact a criminal conspiracy organised on a vast level by criminal gangs from countries like Albania and Bulgaria who make fortunes out of bringing people from overseas charging them thousands for their illegal boat trips. It requires a vast and internationally coordinated police exercise to stop this kind of traffic.

Education is one area where the Conservative government did make solid progress when Michael Gove was the Secretary of State and various changes were made restoring some discipline in the National Curriculum and the result of that has been an improvement in our standing in international comparisons on both mathematics and reading. However, one area where we continue to fall behind other countries is the way in which we have simply failed to develop the number of engineering apprenticeships and if we really are going to generate some growth in the economy this is one of the essential steps that has to be taken. Some of the political parties talk vaguely about increasing apprenticeships but there doesn't really seem to be any genuine attempt to make a difference in this area.

Another problem in education is with universities and there is no question that the finances of the universities are extremely unstable. Tuition fees for UK resident students have been maintained for far too long at the same completely uneconomic level. Therefore virtually all the universities have relied for their financial survival on recruiting very large numbers of students from overseas countries, particularly China and India. Some of these students were relatively mature and were allowed to bring their families with them with the resulting increase again in net migration even if it was legal. Both these areas require effective dealing and I have not heard any sensible statement made by any of the political parties so far in this General Election on this important area.

The question of Europe in the 2015 election was still whether the UK would stay in or out of the EU. David Cameron as far as the election campaign is concerned resolved that by saying that there would be a binding referendum on the subject in 2016. This of course was indeed held, and the result was not what Prime Minister Cameron expected and as a result he resigned.  Under Theresa May little progress was made in negotiations with the EU and indeed I have blogged several times on that subject because it seemed to be naive in the extreme for anybody whether or not they voted for leave or remain to expect the EU to fall over themselves and give us all the benefits we wanted from a new relationship with them. However, they could not stop the UK developing other relationships with other countries in the world now that it was free to do so and that has barely happened at all. Only a tiny increase in our trade could be expected from that quarter with agreements with a few countries like Australia. I don't think the question of Europe is a particularly big one in this General Election but that doesn't mean it's not a big question still for political leadership from whichever party. They need to take the initiative in deriving benefits from having left the restrictions of the EU. Sadly, as a result of this failure more and more people in Europe believe that the UK made a bad mistake and are therefore increasing their level of support for the EU despite all of its weaknesses. At the time the UK voted to leave very large numbers of people in countries like France, Germany and Italy and so on actually thought it also not only the right thing to do for the UK but it was the right thing to do for their own countries. That number has now fallen sharply.

The economy is always an important issue in any General Election and some people believe it's the most important. Today most people would express their concerns about the cost-of-living crisis. The government can argue with some justification that there were external factors at play in many of the sharp increases in costs that individuals faced. That is certainly true of food where for example olive oil which is not produced anywhere in the UK has gone up by 40% in the last year or two. Other foodstuffs that are produced in the UK but are also imported include grain and one of the largest exporting markets for grain has been the Ukraine which, of course, has been badly affected by Russia's invasion. That invasion no doubt has had other knock-on consequences not only in food.

 I personally believe the rate of inflation as it applies to a household like mine has been badly understated but if the government is going to blame other external factors for the recent increases in prices, now that inflation as measured on the official rate has started to come down they're trying to take credit for that which seems to me to be somewhat inconsistent at best. Not only has olive oil gone up by 40% but so has car insurance; so have big ticket items in my household like flights and overseas holidays; like theatre tickets. While no doubt these cannot all be regarded as essential items, they are a factor in how we budget in the Pearson household. All Kier Starmer has to say on this is that he plans to deliver economic stability by sticking to tough spending rules. Governments don't really control much expenditure. Much of what is under their responsibility is nevertheless set out in detailed longstanding agreements with trade unions, policies with various parties and of course the need to continue funding affairs of state.

The Labour Party has announced one measure to take away what they describe as the exemption that private schools have of not charging VAT. This is completely misleading. Since VAT was introduced no educational institution whether it be a kindergarten, a primary school, a secondary school, a private school, a college or a university has charged VAT. So it is not that private schools get some special exemption. Education is exempt from VAT and the principle of charging VAT on education is absolutely unconscionable. The Labour Party believe that the additional tax revenue they derive from this measure will enable them to fund additional teachers in state schools. In my view this is extremely unlikely. What is more likely is that they will actually lose revenue as a result. I've seen one estimate from a reliable source that as many as 40% of parents who send children to private schools are considering withdrawing them if this measure goes ahead. It is a myth to think that only rich parents send their children to such schools. Many parents make great sacrifices out of their income and savings in order to pay for their child's education because they believe it is better for them. There are many couples where the second income whether earned by the husband or wife is used just for this purpose.

Albert Einstein is credited with the quotation “Insanity is doing the same thing over and over again and expecting different results.” Yet Rachel Reeves is planning to do this by introducing rent controls. Obviously, her hope is that this will benefit the kind of people who vote Labour by reducing or at least controlling rents for accommodation. But it has been tried a number of times before and it has the opposite effect because it drives many landlords to leave the market either by selling the property or even by closing it and altering its purpose. The consequence is a growing shortage of rental properties and an increase in homelessness.

Not exactly the same but a similar behaviour is to propose a policy that suits a left-wing view of the world but has been tried elsewhere and failed. That is the Labour party’s proposal to tax non-doms, that is people who live in the UK but are not asked to pay tax on their income because they have come here from another jurisdiction. Other ideas that are kicked around are a so-called wealth tax. When Mitterrand was President of France in the 1980s, he did this and hundreds of thousands of rich French citizens fled the country, many coming here. A few years ago, the Labour government in Norway introduced a wealth tax of 1% of assets. The result was that thousands of Norwegians fled the country going to countries like Liechtenstein and Switzerland. This included the richest individual Norwegian. The government lost millions of tax revenue as a consequence.

The economy is an important issue in any General Election but I have thought for some time that political leadership is more important. I have explained in previous blogs that we do not have a presidential system of government in this country and we have a system of representative government where in individual constituencies we are invited to vote for candidates from different political parties or even independent candidates and we should vote to choose who we believe is the best man or woman to serve the constituency in the Parliament. That is how it should work. Then the MPs elect their leaders because those people know them well and know who is likely to be the best leader of the party. That has now changed with most of the major parties allowing their members who are not particularly representative and are much smaller numbers to play a key role or indeed the only role and vote for the leader. That is how both the major parties have made serious mistakes in choosing leaders like Liz Truss and Jeremy Corbyn. However, the way the media report on most of the General Election is entirely through a prism focused on the leadership. Increasingly the leaders express their own views of what they themselves will do if they become Prime Minister rather than what they believe the party they lead is planning to do. It is not the individual Prime Minister who writes the manifesto. It is not the individual party leader who signs it off and indeed in the Labour Party the trade unions have a big say on what goes into and what doesn't go into the manifesto but you don't get much of that in the campaign and therefore I think it is most likely that Kier Starmer will get the largest number of seats in Parliament but whether it will be enough for the King to invite him to form a government may be a different question.

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