What Britain could learn from Lebanese voting

Admit it, no one was surprised by the outcome of Thursday’s General Election.

The spin, the hype and the mood of this being a genuinely generation-defining vote turned out to be little more than a reiteration of the electorate’s long-held prejudices and an exposure of a voting system heaving under the weight of successive governments’ failure to implement reform.

Lebanon, you may not have heard, is having its own elections at the moment: the 2010 Municipal Elections, which decide the make up of municipal councils and local mukhtars (sort of like mayors).

Britain – both its candidates and its public – could learn a thing or two from the way these local votes are conducted:

1. Be less strict at polling stations.

One of the biggest stories from last night was that thousands of voters were turned away from polling stations after officials struggled to deal with massive numbers turning up. In Lebanon, there are ways of getting round security measures. Firstly, you can – at least some of the time – get in and vote without showing a valid ID. You can, as I found out covering the Mount Lebanon round of Elections last Sunday, even vote in towns in which you’re not registered.

The kids aren’t alright

In the summer of 1978, a group of young Conservatives from Hendon answered an emergency call to meet near the Welsh Harp reservoir in North London. Although 100 were invited, less than 20 turned up, but they still contributed to arguably the most famous political campaign of all time, Saatchi & Saatchi’s Labour Isn’t Working.

It seems appropriate, even 30 years on, that the Tories used the young to act as an icon for Britain’s unemployed. There are now almost 2 million people out of work, one third of which are aged between 16 and 24.

The total rate of unemployment is set to hit 10 per cent by 2010. This could mean that by the start of next year, over one million young people will be without jobs. No shortage of extras for Saatchi then.

Round the houses

It’s becoming clear that, over the last decade, house prices have been wildly and unsustainable high. The news from Nationwide today that house prices have fallen 18 per cent in the last year is both arresting and oddly comforting.

Too many young people have been unable to even claw at the first rung of that Jacob’s housing ladder. Far too many mortgage borrowers were forced to take loans that they must have known would lead to negative equity.

Bankers, politicians and regulators have all landed in the public blame cross-hairs when, in a way, they should turn the gun on themselves. Private debt is a product of individual greed and capitalist competition, yes. But it was also, in many cases, the only way that people could afford to get a place of their own.

Mr Brown has a plan

After the Second World War, Prime Minister Attlee inherited a country on the verge of bankruptcy. The war had ravaged the nation’s finances and it wouldn’t be long before America decided they didn’t trust Britain to pay back the money we had borrowed.

Attlee, invoking measures proposed by the economist John Maynard Keynes, sought to secure employment through increasing the public sector. By 1951, 20 per cent of the British economy had been taken into public ownership.

On Friday, shares in Lloyds slumped 35 per cent after the announcement that its HBOS bride had lost £10bn last year.The shotgun wedding of the banks seems now to have been overly salacious; many senior government officials are now having wedding night nerves. Titters of HBOS’ nationalisation are spreading.

Tread carefully, Mr Brown

From the smallest acorn the mightiest oak may grow.

There once was a miner from Worsbrough Dale, Yorkshire. He worked hard, as his father had, in Woolley Colliery. Disenchanted with the deal he perceived British miners to be getting, he joined the Young Communist League in 1955 – a minor leftist sect at the time. That man was Arthur Scargill, organiser of the miners’ strike of 1973-4 which lead to the slaying of prime minister Ted Heath.

Our current PM has never been one to shy away from an argument. But Gordon Brown ought look very carefully over his shoulder to the annals of time before accusing striking workers of “xenophobia” as his government did yesterday.

Labour won’t make banks and businesses kiss and make up

Lord ‘of the Underworld’ Mandelson is expected to unveil new plans tomorrow outlining the government’s commitment to help small businesses through the recession. The £20bn scheme will increase the percentage of small business loans backed by the treasury from 75 to 95 percent.

This sounds like a good idea. Restore the confidence banks have in small business transactions by insuring they will see almost all of their money returned, even if a company goes under. How can the banks lose?

The Federation of Small Businesses even likes the scheme. In principle. But they seem more pragmatic than ministers. They can see the motivation behind such a scheme or, rather, the lack of it.

Stephen Alambritis, of the FSB: “Banks don’t like to process government ideas. The small-firm loan guarantee scheme took between five and ten years to gain traction. This is the last throw of the dice.”

As the sluggish reception of successive interest rate cuts shows, what the government wants is not the same as what the banks want. Banks’ confidence has been shattered by a quick shock of defaulted mortgages and business insolvency. Big high-street chains are dying.

The government’s plan threatens yet again to secure the imprudent. If there is anything positive to take from recession, it is the ability of good, frugally-managed businesses coming through stronger than before. Those with successful  and sustainable business models will survive.This plan seeks to help those taking big risks with borrowed money. Inevitable failure will only further shake lender confidence.

If a business is financially nonviable, why guarantee it? That will only charge the taxpayer for company mismanagement.

If a business is robust and sustainable, why guarantee it? Borrowing within its means should ensure a company’s future without the need for central back-up.

The government is slowly realising that banks do not look after the interests of their customers – they look after profit margins. There is little compulsion to partake in a central scheme that will likely force lending with stringent conditions.

Labour’s matchmaking service for banks and businesses needs much work.

We’re all Slumdog Millionaires now

Congratulations to a gushing Kate Winslet. Congratulations too, to those who worked on Slumdog Millionaire, the film that last night won five awards at the 66th annual Golden Globe Awards.

Based (loosely) on Vikas Swarup’s novel, Q & A, about a Mumbai chai boy winning the Indian equivalent of Who Wants to be a Millionaire? It’s a game show that the producers hope will never be won for one reason: they don’t own the jackpot.

Well-educated doctors and lawyers rarely get past the 60,000 rupees round, so imagine the public’s surprise and joy at a slum-dweller bagging the billion grand prize.

Slumdog Millionaire is an important film for these times for a few reasons. First are the parallels we can draw between the financial management of the game show’s organisers and investment bankers, hedge fund managers and Bernie Madoff.

All have been subsequently reviled for being perfectly happy in betting long and hoping that they will never lose; assuming an elaborately packaged web of debt would never catch up with them.

Slumdog Millionaire marks another significant step forward by Indian movies  in Western film industries.

The film’s most important facet in a recession is its rites-of-passage plot focusing on social mobility. A lower caste individual climbs the financial and social ladder, demonstrating such a possibility to the countless millions starting in his position.

The last decade of prosperity has seen an increase in wealth disparity as the rich, taking risks with money they already have, get richer and the poor stay the same. Such a failure by a Brown-financed Labour government has led the PM to draft in arch-Blairite Alan Milburn to get British social mobility moving again.

The number of entrepreneurs increases during recessions. Resourceful individuals see gaps in a market in the first throws of re-finding its feet and act decisively. If they are are suitably financed in the short-term (this is a big if) they can emerge richer from slumps.

Another reason people move up the wealth ladder during recessions is that they recognise what goods and services consumers need, not necessarily what they want. Recession tightens the belt and focuses the mind.

One can only hope the banks allow the next generation of entrepreneurs the finance to kick-start their dreams, and our economy.

Lower duty on whiskey? I’ll drink to that

In the first of what could be many PBR u-turns, Alistair darling has been forced to renege on a pledge to increase alcohol duty. Proposed rises in duty have been halved to 4 percent. He got his sums wrong, honest mistake?

Well, no. Duty rises are permanent, VAT reductions are only set to last for the next 13 months. This covert tax rise had not gone down well with Scotch Whiskey producers, claiming that an extra 29p a bottle would have been added in order to cover duty rises. And that would mean Scottish people couldn’t afford to get drunk.

Darling, ever the Scottish sympathiser, has acted swiftly, and this should be applauded. But his covert tax hike in fuel and alcohol duty should not.

An increase in the highest band of income tax to 45% has been treated by many papers as the end of New Labour policy forbidding tax rises. This is absurd. It is merely the first time they have been explicit about it.

The spin coming from Labour is that this budget is designed to help the worse off and tax the super rich. Aside from the fact that if you tax the rich people of the City, they will leave, this budget will affect people on middle incomes a lot more than the Government is letting on. National insurance increases will see to this.

Labour’s pledge to help poor people seems to be based on their ability to create a lot more of them.

Pre-Budget Report – Web grab

Here’s what papers and bloggers are saying about Alistair Darling’s Pre-Budget Report.

The Guardian had a good rolling blog on the Pre-Budget report. So, if you missed all the drama, here’s what happened, as it happened.

Phillip Webster of the Times argues that after yet another broken promise from Mr Brown (this time about raising taxes,) New Labour is becoming very old hat.

The Times also has a rather handy questionnaire on the PBR, not that it’ll ever get to Mr. Darling.

The FT is concerned about how exactly Mr. Darling plans to pay back £120bn. That’s billion.

The Telegraph claims that an increase in national insurance will help fill some of Mr. Darling’s alarmingly empty coffers.

The Mail asks what all the fuss is about: our country’s books will be balanced by 2016. That’s alright then.

The Mail also features the headaches a VAT cut is likely to give retailers. Apparently they’re a bit miffed. Oh no they’re not, says the Guardian.

The Mirror’s Kevin Maguire reckons that 45p in the pound is not enough for Britain’s wealthiest to pay.

Fraser Nelson on the Spectator’s Coffee House blog argues that since the top 1% of earners already provide almost a quarter of all income tax, they already give quite enough, thank you.

Sunder Katwala on the Fabian Society’s blog goes further. He reckons that the 45p tax band will prove so popular, even the nasty Tories won’t oppose it.

The Conservative’s blog warns about increased government borrowing, as if we didn’t know.

And good ol’ safe hands Vince Cable agrees with Labour’s assertion that urgent action is needed. He’d just like to know exactly how such action will be affordable.

U-turn if you want to

David Cameron has risked derision by abandoning plans to match Labour spending until 2010. The Tories’ argument centres around a public spending framework rooted in financial responsibility.

Bloggers have been quick to draw blood, but if the Saviour of Capitalism can change his mind, why can’t Mr Cameron?

Cameron is now on more traditionally Conservative ground, in spite of a new found aversion to tax cutting. Unsurprisingly, this has received widespread support among Tories. But is there anything in it? How can all nations of the world (apparently) support uniform tax cuts and Her Majesty’s Opposition not?

The arguement that short-term tax cuts, coupled with increased public spending will eventually lead to equal tax rises – possibly when Mr Osbourne has wrestled the keys to the treasury from Mr Darling’s cold, tenacious fingers – is a sound one. Sort of.

A tax cut of, say £20bn now will not necessary lead to an increased treasury debt of £20bn. With more money in their pockets, people will spend more and potentially generate more jobs. Jobs mean tax so the Government could potentially end up more people paying tax (albeit a little less). Just the shot in the arm the economy needs.

If this is the case – and Labour are clearly hoping it is – then why haven’t this Government been one of low taxes since the start?

It’s amazing to see the two main parties posturing for position, and how they’ve changed tunes with the times.

Cameron knows his ‘it’s going to hurt, but eventually you’ll thank us’ will prove unpopular compared to internationalista Santa Brown. He’s banking on the next general election being in 2009 and, given how desperate Brown has been to get into Blair’s slippers, it’s unlikely to be any sooner.

By then the public may come round to Dave’s hastily scribbled way of thinking. Of course, if superGord saves the world, the Tories could end up ruing such vacillating.