Tag: politics

Jun 16 2010

A sceptical look at the economy

This blog post was written partly because I’d got fed up with hearing about how all cuts were evil, without hearing an alternative plan. It has ended up more a collection of interesting data sources, and some mild ranting.

First to define some terms: The gross domestic product (GDP) is a measure of the total economic output of the country. It’s handy because we can use it to compare any other number we come up with to see how big they are. £1billion may sound like a lot, but the GDP is £1.5trillion, so £1billion is a less than 0.1% of GDP.

The debt is the total amount of money that the state owes; the deficit is the annual gap between what the state takes in taxes and what it spends. A debt is sustainable in the long term but running an annual deficit above a certain size, for a period, is not sustainable. The deficit can be divided into two components: a cyclical component which goes up and down with current economic conditions and a structural component which is on top of this. The structural component is the bad bit. There is some dispute over the validity of this division since economic cycles are not easy to define.

As Mr Micawber says in David Copperfield: “Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

I’m a big fan of the Guardian’s government spending chart (see the image at the top of page), it’s a rather pretty way of seeing where government spending goes. For the year 2008/9 the total spending is £621bn, in this year the Treasury gets an enormous, anomalous amount in financial stabilisation (18%) – this will not recur in future years. Beyond this there’s the Department of Health, spending about 18%, Department of Work and Pensions (22%) with the largest fraction of this going on the state pension, Department for Children, Schools and Families (10%). The key point here is that a very large chunk of the money spent is spent on things that people very vocally want (schools, health care, state pensions).

The figures for where tax comes from are perhaps a little surprising, extracting the data from table 1 in this report by the Institute for Fiscal Studies. The major chunks are shown in the piechart below:

The “other” category is made up of various minor indirect taxes (tobacco, alcohol etc) and capital taxes (3%). The surprising thing to me was the relatively low level of corporation tax. There seems to be evidence of tax avoidance by corporations amounting to something in the region of £10bn, but this would only be roughly 1.6% of the tax take.

By the way, as a physicist, I look down on piecharts!
The total tax take of around 36% of GDP puts the UK roughly in the middle of the OECD table of taxes, with countries like New Zealand and Germany taking very similar levels of tax, France, Italy and Finland taking rather more (at around 44%) and countries like Ireland, Switzerland and the United States taking rather less at ~30%. The full OECD data is here, and wikipedia has a sortable list for all the countries of the world. An interesting exercise is to consider this list, and think in which countries you might want to live.
Of income tax the top 1% of earners pay nearly 25% of all income tax, you can see the full breakdown in this article on the BBC website. Put another way, the 40% tax band covering perhaps 15% of tax payers provides nearly 40% of income (here). This does exclude National Insurance contributions though. I was surprised by these figures, I’d assumed that the relatively small number of higher tax rate payers would result in a much lower total take.

The net result of these incomings and outgoings is that we had a national debt of 68.1% of GDP at the end of 2009, and a total deficit of 11.4% of GDP. (According to the Office of National Statistics). According to the newly formed Office of Budget Responsibility  (table 4.5) the national debt (which they call net debt) is 53.5% this year and the deficit (net borrowing) is 11.1% of which 8.8% is structural. 

Numbers without context are meaningless: a priori I have no idea how these numbers for debt and deficit compare to the past. However, help is at hand: this report shows how they have varied over the past 100 or so years. I’ve copied the key figure for national debt below:

At the end of the second world war the UK had a national debt of around 250% of GDP, much larger than our current debt (and even our predicted debt over the next few years). Interestingly we see in the same report (figure 1) that the deficit is rarely negative (i.e income greater than expenditure), hovering around 2% (i.e. still a deficit) debt is still paid off via growth in the economy and inflation.

I suppose the purpose of all of this preamble is a discussion of cuts, or if you prefer tax increases. Prior to the election everyone seemed to agree on the size of the gap to be filled but none of the parties managed to fill more than 25% of the gap, as evidenced in this report by the Institute of Fiscal Studies, the Guardian’s data blog had a nice breakdown of the measures proposed by the three main parties. The major political point of departure was when cuts should start (not if cuts would start), and my view prior to the election was that whoever won broadly similar levels of cuts would be made although there was some evidence that the balance between taxation and cutting would be different depending on party but since none of them revealed (or had) much of their plan it’s rather difficult to say.  It is a very minority view that no cuts are required, although I see the unions are trying that one out today along with threats if there are any cuts.

YouGov,  for the Sunday Times, helpfully asked the public:

“The government has asked for public advice on where it should cut public spending. Which, if any, of the following areas do you think should be targeted for cuts? Please tick up to three”. 

And the public demonstrated that if you ask a stupid question, you get a stupid answer (or, being generous to the public, if you ask a question without providing contextual information you get a stupid answer). I considered trying to find a fancy way of presenting this information, but in a nutshell: by far the most popular area for cuts (61%) is in international aid whose total budget is 0.8% of total spending (i.e. pretty much the smallest bit of the budget you can find).

To be fair to the public, many of them will be working in the private sector and will have variously experienced pay cuts (or at least freezes), reduced working, redundancies, budget reductions and frozen recruitment and they may well be feeling it’s someone else’s turn.

You can experiment with cuts yourself with this handy tool from the FT, have a play and think about how you’d stand up and justify the cuts you’ve made. To paraphrase Polly Toynbee: “Don’t be young, old, vulnerable, one of our brave boys, sick etc”.

The alternative to cuts are tax increases, but nobody seems keen to talk about them. Prior to the election there was a report stating that the deficit was equivalent to about 6p on the basic rate of income tax. Proposals to raise tax were normally described as a “Tax on jobs” or “Death tax”, which is unhelpful to say the least. Another popular idea is to tax the bankers, one option here is the Tobin or Robin Hood Tax which puts a small tax (typically fractions of a percent) on every financial transaction, because there are very many of these transactions potentially the amount raised could be large this would seem to require international coordination and it isn’t clear where the money raised would be spent (climate change, international aid, fund for future bank collapses have all been suggested). The banking sector contributes approximately £70bn to GDP, or 6.8%. The structural deficit isn’t about any money spent rescuing banks though, it’s about an ongoing gap between spending and taxation.

My personal view is that we should be talking about taxation, and where the balance between cuts and increased taxation should lie (currently it looks like 80/20 cuts to taxes). There should be some discussion of where tax rises are best levied : “on someone else” isn’t really a proper answer. Income tax seems like the best place to me, probably at basic rate with uplift of the lower threshold to protect some of the least well off, but possibly lowering the threshold to the upper tax bracket. In the longer term making the public sector more flexible to economic hardship would be nice, this time there seems to have been much more flexibility in how companies have approached recession – not necessarily painless, but better than losing your job. One element of this could be variable pay in the public sector (or bonuses as we colloquially call it) this provides two things to an employer: the ability to vary pay when income to the company is poor and some decoupling of current salaries from pension entitlements (since bonuses are typically not counted towards pension payments).

So to end on a happy note: I propose bonuses for the public sector!

* Update: hat-tip to AlexConner who pointed out that it is Mr Micawber not Uriah Heep who is responsible for the quote from David Copperfield. 

May 29 2010

That’s nice, dear

This blog post is about programming, for people that don’t program – at least that’s the effect I’m aiming for. The title is in recognition of my tolerant wife, The Inelegant Gardener, who has learnt the appropriate response to my enthusiastic displays of the results of my programming: “That’s nice, dear”!.

I started programming a long time ago – in around 1980, at the school computer club, when I was 10. Since then I’ve been taught odd bits of programming by scientists, and done quite a lot of programming as part of my scientific job. I’ve started to get more interested in proper software engineering in the last few years. This is a roundabout way of saying I am an enthusiastic amateur.

People associate programming with the mathematically minded, but this isn’t necessarily the case: the codebreakers at Bletchley Park, who were amongst the first users of electronic computers, had a range of skills – amongst them were linguists and crossword wizards. I was talking to a Fellow in linguistics, who’d helped write his college’s library software – as he pointed out: a very logical view of language is a great benefit for a programmer. Programming is about giving an idiot very exact instructions, if the instructions concern maths then you need to know maths – otherwise you don’t.

The core of programming is still what I learned years ago, data (numbers or letters) is stored in “variables” that have names. There are conditional statements: “If [something is true] Then [do this] or else [do the other]”. There are looping statements: “Do this 100 times”. And there are functions: “add 2 to this number, square it, add the number you first thought of and tell me the answer” or “how many times does the letter a occur in this sentence”.

These simple statements are being buried under an increasing depth of additional ideas. Since the 80’s the big thing in programming has been “object-orientation”. In object-orientated programming you package up data of a particular sort with functions that relate to that data. So if you had data modelling an octopus you would include functions such as “wave-tentacles” and “change colour”, such functions would be useless for data describing a horse. The real benefit to this is comprehending larger software systems, because a sea of functions and data is grouped together into logical islands. Beyond this there are design patterns – reoccurring systems of objects which I haven’t entirely go the hang of.

In addition to the changes in language, there are changes in the tools used to program: syntax highlighting is nice, it amounts to colouring the verbs, nouns and proper names in programming in different colours – makes it easier to spot mistakes. Auto-completion is another handy tool, in a well-designed language there are only a limited number of next possible statements when you are programming – auto-completion presents you with them as you type. Sites like Stackoverflow are great for asking programming questions, and there no end of function libraries available on the web to help you out.

I have a number of little software projects on the go, you can see them in much the same way as woodworking projects, suduko or crosswords: they keep me out the way, muttering quietly to myself and exercising my brain. It doesn’t matter that what I’m doing isn’t groundbreaking and new.

Programming does lead to some odd habits; when I started programming it was useful to know binary and hexadecimal number systems, as a consequence I believe that numbers such as 1024 and 128 are nice and round. I’ve come to appreciate a wide range of bracket styles [] (){} since they are all used for different things and the semi-colon is one of the most important pieces of punctuation in my life. If I program for too long in a stretch I start to forget how to speak to people.

And just to show off the results of my latest fiddlings: maps of the UK election results. I got interested in doing this just after the General Election. The Guardian has published a lovely spreadsheet of election results, including data on every single candidate. You see lots of maps of data of this sort, I wanted to know how it was done. (Technical details beyond the maps.)

First of all the gender of MP’s by constituency: constituencies represented by ladies are marked pink, those by men marked blue:

The black constituency in northern England is Thirsk and Malton, which held its election on 27th May, following the death of one of the candidates during the general election campaign.
The population of each constituency is also interesting, here I have coloured the constituencies with 9 different shades of green, the palest shade corresponds to a voting population of between 20,000 and 30,000, the darkest shade corresponds to a population of between 100,000 and 110,000:
The Western Isles (now known by it’s Gaelic name: Na h-Eileanan an Iar) has the smallest population at about 22,000 and the Isle of Wight has the largest population with just under 110,000 potential voters. I used ColorBrewer to find a nice set of colours.
Finally here’s a map of which party came second in each constituency in the 2010 General Election:
Red for Labour, blue for the Conservatives, orange for Liberal Democrats, yellow for Scottish Nationalists, pale green for Plaid Cymru, dark green for Sinn Fein, blue for Ulster Conservatives and Unionists, and there are a few independents and minor Northern Island parties which are all coloured white.

Footnotes

So the task is to get the spreadsheet data into a map: To get started I did a bit of memory trawling and googling, a couple of people have written about colouring in maps: this one uses shapefile format map data and the R programming language, whilst this one uses SVG format map data and Python (another programming language). It turns out the shapefile format data for constituencies is a little difficult to get – you have to fill in forms! However enterprising people on Wikipedia have made SVG format constituency maps available. SVG stands for Scaleable Vector Graphics, it’s an XML format which means it’s plaintext and there are standard means to extract data from it and manipulate it. The only real problem is that the constituency names in the spreadsheet don’t exactly match the names inside the SVG format map – I had to resort to some horrible constituency by constituency coding for a load of them. To do this I used the C# programming language, largely because Visual Studio Express C# is a very nice, free development environment which I’ve used before. To view the SVG maps inside my application I used the Webkit .NET library to provide a webbrowser control (which wraps up the rendering engine used in the Safari and Google Chrome browsers) – the native C# webbrowser control is based on Internet Explorer – which doesn’t render SVG. Output to bitmaps is a bit clumsy, Inkscape (a free SVG editor) wasn’t keen on displaying the original constituency map, so I resorted to viewing the map in Google Chrome and taking a screen shot (a terrible bodge).

May 12 2010

Go back to your constituencies and prepare for government!

I think this will be my final political blog post for a while. I’ve written quite a few over the past month: I started with an explanation as to why I was a member of the Liberal Democrats here. I hunted out some data on the occupations of MP’s and made a graph here (what a lot barristers!). Then I wrote a blog post about the statistical errors in opinion polls, which I think was a little prescient (latest reports suggest that the voters that didn’t turn out were predominantly LibDem – hence biasing the pre-election polls). Approaching the finishing line, I wrote a post on my plans to stay up late on election night, followed by a post on my crashing gloom of the night itself. Then I made a post on what it might mean as the negotiations for coalition continued.

This post is about coalition, and a look at the debris of the election. My friends at work from Labour and Conservative tendencies called me a “turncoat weasel” today (in a friendly manner) so I have illustrated this post with a picture I took of a weasel.

First up, my take on the agreement between the Liberal Democrat and Conservative Party: remind me not to negotiate with Nick Clegg for anything, I think he’s played a blinder on this one. The agreement contains a mix of LibDem and Tory policies, and five positions in cabinet. It’s quite clear that the LibDems are a junior partner, but then that’s what you’d expect. I’m also pleased Nick Clegg did what he said he would do before the election: go to the party with the largest electoral mandate in the first instance.

Despite the massive apparent differences on Europe, I suspect it won’t be a big problem for the coalition. Liberal Democrats have a principled view that power should dissociate to the appropriate level – some things are best handled at a local level, some at a national level, and some to the European level. My guess is that over the next five years there will not be another major treaty moving power towards Europe, and joining the Euro in the next five years, as we all crawl out of recession, would be unwise as far as anyone is concerned. Perhaps David Cameron will value a coalition partner who has not isolated itself in Europe.

I’m wondering whether the Labour Party are trying to take the mantle of “the nasty party”, in the background to David Cameron’s speech in Downing Street could be heard a chant of “Tory scum”. David Blunkett described Nick Clegg as a harlot, amusing coming from an adulterer. And this morning Nick Cohen, left-wing columnist for the Observer and various other places, tweeted:

Here’s my writing sorted out, Will crucify every fucker who voted Lib Dem, one by one, in the national press. Better you had voted Tory.

I suppose I should proviso this last one, on the whole I don’t believe a single tweet means national news, perhaps Cohen was joking, perhaps he was tired and emotional. But it picks up the tenor of quite a few of the tweets I’ve seen from Labour supporters today.

Maybe this is why I’m a natural Liberal Democrat, I feel nothing like a visceral hatred for either of the two other main parties. I believe that people are largely in politics for the right reasons, I may think they are wrong but I don’t question their faith in what they believe is for the best. Getting a glimpse of how elections work via twitter, I see just how much work is involved in getting elected as an MP (at least in a contestable seat).

It’s tickled my fancy that much of the discussion of the last few days has centred around the percentage share of the vote that a different alliances would get, that’s lovely and I agree entirely with that line of argument but your past record: opposing proportional representation, tells me that you’re a hypocrite if you raise it just now.

I’m still glad I voted Liberal Democrat, I didn’t vote Tory because of the social conservatives, Margaret Thatchers “no such thing as society”, Michael Howard’s blind faith in market solutions, isolationism in Europe, Peter Lilley and his little list, John Major’s denial of support to the Iraq rebels after the first Gulf War and the moves of senior Tories into directorships of companies benefiting from their privatisations. The Tories claim to have changed, perhaps they have, perhaps the LibDems will reinforce that strand.

I hope the move for fair votes takes off, in a sense this is one of the key things I’m after long term in politics. Democracy is important, when I go to the ballot box I want my vote to count just as much as yours. Sorting out the deficit is ephemeral, fair votes will be a lasting legacy.

Perhaps the coalition will fall apart before the end of its term, perhaps the LibDems will suffer for this coalition in the next election (there’s some suggestion that this happens to smaller coalition parties). But for the first time in 70 years people who call themselves “liberal” are in government.

May 10 2010

May you live in interesting times…

It turns out that a chunk of my audience for my last blog post were my colleagues at work, they thought it a bit of a gloomy rant. These days I’m a bit more perky: in contrast to every election since 1974, this time the Liberal Democrats (my party) have something to be cheery about following the despair of election night! Usually post-election we are most definitely not in government, returning wearily to our constituencies to prepare for more time in opposition. This time it’s different!

Watching the comments on twitter as events have unfolded has raised a few questions, and clear misconceptions which I thought might try to address from my point of view as a long (21 years) term party member.

What are the Liberal Democrats?
Some Liberal Democrats were carried over from the old style Liberals, some Liberal Democrats split off from the Labour party as the Social Democrat Party, since 1988 they were simply Liberal Democrats. I’ve always been a Liberal Democrat but my political origins are probably closer to the soft-right of the Tory party. I’ve never been tribal Labour (or Tory) for that matter. It’s fair to say that the majority of the Liberal Democrats are left of centre, but we’re in the party for a reason – we don’t want to be in any other party.

What is coalition government?
The way people talk you might get the impression that the Liberal Democrats in coalition would simply be there to prop up their coalition partners. Labour seem to view this almost as a right, that the Liberal Democrats are a little turbocharger for those elections where they didn’t quite win in their own right. Consequently they believe that a LibCon coalition would simply prop up a Tory government with a Tory agenda. This misses the point of coalition entirely, why on earth would we sign up to such a deal? The point of coalition is to get at least some of your agenda implemented, if you’re not in the governing coalition then none of your agenda is implemented.

Proportional Representation
A lot of the discussion at the moment is around proportional representation, personally I think it should be around the economy first: massive deficits don’t get reduced by themselves. I don’t intend to discuss proportional representation properly here, but simply highlight three systems:
The pure Alternative Vote system is the one proposed by those that don’t actually want proportional representation, it doesn’t actually provide a proportional output. The Jenkins Commission, set up by the Labour government following the 1997 election, recommended Alternative Vote plus top up (AV+). In AV+ there are constituency elections with a top-up from party lists that provides proportionality, the benefit here is that there are still relatively small constituencies. The output should be pretty proportional. The Electoral Reform Society prefers Single Transferable Vote, this provides broadly proportional output, but requires the use of large constituencies to work.

Labour and Proportional Representation
Labour’s new-found enthusiasm for proportional representation leads to hollow laughter amongst Liberal Democrats. For why? Go have a look at the evolution of the Labour commitment to a referendum. Basically a referendum was promised at the 1997 election, this referendum never happened and although it remained in the manifesto for subsequent elections the commitment became ever weaker. You can see why Liberal Democrats don’t trust Labour on proportional representation.

I’d like to present a slightly heretical opinion for a Liberal Democrat: an absence of a commitment for a referendum on proportional representation should not be a deal breaker. My reasoning: I don’t believe either Tory or Labour party could currently deliver a majority in parliament for such a referendum. It is possible that a referendum would not require a parliamentary vote, but let’s assume it does. A commission on electoral reform means that at least the Tories will have to start thinking about it on their own terms, something they haven’t been doing, even if it is a self-evident kick into the long grass. The next time there’s a hung parliament we will then have fruitless electoral reform documents from both Labour and Tory parties, but here’s the good thing: that means that they can’t really ask for another one. Furthermore there appears to be a groundswell of opinion in favour of electoral reform, and I don’t think it’s party political. Over the coming parliament, and at the next election I really hope this groundswell is directed into contact with politicians, we shouldn’t be hearing “This isn’t an issue on the doorstep” next time.

Under proportional representation coalition government is likely to become a fact of life so a successful Lib-Con coalition in the absence of a deal on PR would be worth having. I must admit the green shoots of coalition are promising. Rather than a pointless exercise in taking chunks out of each other we are starting to see politicians talk about what they agree on.

In a way we have nothing to lose, what’s the worst that can happen? Things fall apart and an election is called where we lose some percentage share of the vote leading to a reduction in seats – unpredictably fewer due to first-past-the-post system. We’d still be an opposition party with little power in parliament, so in a place broadly similar to the one we found ourselves in before this election campaign. What’s different now is that there is a broader movement for electoral reform, that may be the thing we won at this election.

In posting this now (5:30pm on Monday 10th May) I am very aware that I may be overtaken by events!

Footnotes

May 07 2010

I was up for Evan Harris

This is a graph that shows you the number of seats (actual seats) each of the three main parties will get*, and the number of seats (proportional seats) they would get under a pure proportional system. You notice for the Labour and Conservative parties the number of seats they actually get is more than the number of seats in proportion to their votes, for the Liberal Democrats the opposite is true and by a very substantial margin.

When Liberal Democrats went into the polling stations yesterday they were given a single polling card, their Labour and Conservative comrades had three. Look them in the eye, ask them:

What is it about you that makes your vote three times more powerful, three times heavier, three times more important than mine?

What is special about you but not about me?

Explain to me how this is fair.

Explain to me how this is democracy.

To put it another way, every Labour or Conservative seat requires about 33,000 votes to win, a Liberal Democrat one requires 100,000 votes. We are the Great Ignored.

We have come to accept this inequity, it’s happened in every election since the early 80’s. As a country we just accept it as part of the way things are. It’s the defining feeling of being a Liberal Democrat, seeing the overall share of our vote creep up election by election and receiving the same feeble, disproportionate harvest in seats. The sinking feeling in the middle of the night that, no, of course there has been no breakthrough. It’s not because we perform poorly, it is because we have one polling card each, the others have three.

In 1997 the defining moment was Michael Portillo losing his seat to Stephen Twigg. My defining moment for this election was seeing Evan Harris lose his Oxford West and Abingdon seat. “I was up for Evan Harris”, I had a tear in my eye.

Footnote
*This is based on the exit poll (see entry at 23:11), which looks consistent with the results of the actual election as of 10:30am May 7th which are Conservative 291, Labour 247, Liberal Democrat 51 616 of 650 seats declared. Under pure proportionality UKIP would receive 20 seats, the BNP 12.