Peter Riddell slams Labour and Tory “peripheral initiatives” on economy

Peter Riddell is the doyen of Times columnists and his insights into politics are usually pretty spot-on. It was therefore gratifying to see him arguing in yesterday’s column that the “irrelevant initiatives and hectic trips around the country” of Gordon Brown and David Cameron are merely a substitute for action, and that their many and varied proposals are economically flawed and designed to buy-off political constituencies rather than achieve macro-economic recovery.

Brown's pledge to create 100,000 jobs and Mr Cameron's new savings package do not address the cause of the deepening recession: the lack of credit. Everything else is secondary… [T]he job and savings initiatives are distractions. They address symptoms not causes…

Both the Brown and Cameron initiatives are about political positioning: to demonstrate their concern about the recession and to show they are doing something. The most damaging charge now is of inaction. The plans are also aimed at potential supporters, with Mr Cameron generating a positive response from Tory websites and activists seeking tax cuts, even though he has been criticised by independent commentators.”

Riddell is entirely correct. The only way this recession will end is if the equilibrium between borrowing and lending is established, and preferably at a level that sees interest rates reflecting real time preferences, rather than being massaged down by governments in an effort to stimulate short-lived but vote-winning “booms” (today rebadged as “soft-landings” and even “recoveries”).

I am not entirely sure I agree with his thrust that this should be achieved by the Government pumping vast sums of extra money in to the banking sector: today’s Times headline brings tears to the eye. Excess credit expansion is what brought us to this sorry state and further credit expansion is only going to bring us her again in the future (‘If you are in a hole, the first thing to do is stop digging’). However, whether one accepts that the economy needs to go through a period of readjustment or you believe that masses of liquidity needs to be pumped into the banking sector to stop an outright collapse, the fact remains that bail-outs for car companies, government make-work schemes and financial gestures are not only going to fail in their objectives, but will in the process make the situation a lot worse.

Riddell is not nearly firm enough in this, however, and occasionally lapses into Keynesian fantasy. “Bringing forward capital projects makes sense,” he claims, before admitting that it “is unlikely to have more than a marginal impact.” Similarly, he thinks that “There is a case for boosting saving in the long term, but not in the short term when the need is to raise spending,” ignoring the fact that money saved equals money spent: banks can’t hang onto money for long, and sooner or later it has to be invested in businesses or – as the result of more misguided government intervention – used to buy government bonds, which means that either way it ends up in the “real economy”. One man’s saving is another man’s (or company’s) borrowing and spending.

He also gives his blessing to the idea of extended state guarantee for loans that has been proposed by both the government and the Tories. But this is an extremely dangerous proposal for two reasons. Firstly, businesses are currently going bust because lenders are not willing to extend credit to them for fear that they will go bust anyway and thus default. If government guarantees these loans, banks will have no reason to exercise one of their primary roles – as arbiters of who is credit-worthy and who is not – and will be inclined to loan money to all and sundry, knowing that the bank is shielded from loss. The result will be that the government will end up with huge numbers of loan defaults to cover.

And that creates the second problem, which is the moral hazard facing the government as a result of these loans. According to Riddell, “The answer is not unconditional bailouts, as in the 1970s, but some way of breaking the credit logjam”. But once a firm that has outstanding loans backed by government guarantee is faced with bankruptcy, it will have a far more powerful hold over government when it seeks a bail-out. The argument that a subsidy of a few million will avert a collapse and default that saddles the taxpayer with a debt of tens of millions will be hard for government to resist. Conversely, the flood-gates of industrial policy will be open as government will expect influence in return for its largesse: as Riddell himself admits, “the larger that government guarantees become - and they could be enormous - the greater the demand for specific commitments in return.”

Tories: if it’s fun, ban it; if it delivers papers, spy on it!

The Conservatives sometimes like to think that they believe in freedom. I’m not entirely sure where they get this delusion, but I am always assured that sooner or later they will expose themselves as the paternalistic autocrats that they naturally are.

So a hat tip to Conservative Home for highlighting

• the Tory council that has banned a lollipop man from adorning his lollipop with tinsel,
• the Tory council that is using anti-terror laws to spy on paper boys, and
• the Tory council that is trying to outlaw swearing.

The Revolutionary Conservative Party and other oxymorons

There is and have always been concern within the Liberal Democrats that we are not as liberal as we ought to be; that our party too often looks to the State to solve problems and is willing to curb individual liberty to achieve social goals.

It has long been a criticism of New Labour that they have abondoned their roots in the labour movement and spent too long playing court to big business rather than worrying about the working man.



Now David Cameron has decided to steal Barak Obama's clothes and take 'Plan for Change' as his party conference theme.

I have long maintained that the names of the political parties have a lot more to do with their roots than with any actual reflegion of their current policies or the philosphies of their members. But when faced with illiberal Liberals, Labour capitalists and revolutionary Conservatives a start to wonder whether the parties' names are supposed to be ironic!

Michael Gove attacks lads’ mags and steals the Pupil Premium

Earlier today I attended a speech by Michael Gove at the Institute of Public Policy Research (IPPR). Loosely entitled Liberty, Equality, Family? Why Conservative social policy delivers progressive ends, it was in fact a statement of the Conservative view of how policy toward the family, children and education can create a more harmonious society with more social mobility and better outcomes for the most disadvantaged.

Coverage in the press has mainly focussed on his attack on the objectification of women in “Lads Mags”, notably Nuts and Zoo. He was condemnatory, but it was interesting that he condemned without threatening action: the most he proposed was to “ask those who make profits out of revelling in, or encouraging, selfish irresponsibility among young men what they think they're doing.” (IPC and EMap must be quaking in their boots!) This is a shame, because this was not the most interesting or important part of the speech, but it seems that near-naked ladies on the covers of magazines, even when they are merely the subject of Tory criticism, are more interesting to journalists than school pupils graduating without any valuable qualifications.

Gove speech was another step in the attempt by the Conservatives to paint themselves as a modern, progressive party (indeed, as the modern, progressive party). He began with a (rather tired) discussion of “Ubuntu”, a Bantu word which, broadly translated, means "I am because you are". Bill Clinton famously used it a lot (notably in his speech to the Labour Party conference) and it was consequently a bit of a buzz-word in 2006, but I surprised Gove dragged it up again in 2008. However, it provided an opportunity for him to discuss Social Capital and the role of the voluntary sector and community politics. “One of the most profound, but under-appreciated, changes that David Cameron has brought to Conservative politics is a determination to put the strengthening of relationships at the heart of policy,” he explained.

Under Labour there is really only one relationship which matters. The relationship between the individual and the state.

The Labour conception of society is a thin, and impoverished, one in which there appear to be only two primary centres of decision-making, the central state organises and the individual is expected to respond appropriately.

Individuals are assessed by the State as economic units in need of upskilling, taxing, monitoring or redeploying as appropriate - according to priorities set, and policed, centrally.

Gove went on the criticise the Government’s depletion of social capital; its closure of post offices and GP practices because of a focus upon a “narrow cost efficiency over enriching personal intimacy”; the excessive regulation that has stifled “autonomous institutions which help bind communities together”. This is all startling stuff from a Tory, and shows how far they are prepared to go to distance themselves from the Thatcher era. It was summed up in one sentence of Gove’s that must have required the most enormous amount of gall: “for Gordon Brown, there really is no such thing as society - only the individual and the State.” So now it is Brown who is the heir to the hated Thatcher (hence, perhaps, that rumoured state funeral!) and the Tories who are committed to the “cause of social justice and the drive to make opportunity more equal”.

And then, while the audience were reeling from that act of repositioning, Gove reached out and deftly plucked a key plank of Liberal Democrat policy:

There is one specific intervention, however, the central State will make which is different from now, and which goes to the heart of one aspect of David Cameron's thinking on relationships which has been under-appreciated.

We're explicitly committed to the creation of a premium to be added to the per pupil funding children from disadvantaged backgrounds receive. We want to ensure educational resources are targeted more effectively on those in need. And we want to create a dynamic by which schools are incentivised to take children from more challenging backgrounds and new providers are explicitly incentivised to locate in areas of greater disadvantage.

I’m not sure how new this is for the Conservative Party, but it is certainly very familiar to Liberal Democrats. Nick Clegg made this a key platform of his leadership campaign in Autumn 2007, reiterated it in his 2008 New Year message and in June wrote an article for the Guardian all about it.

Asked (by the author) to explain how his pupil premium “differed from that which Nick Clegg and the Liberal Democrats have been advocating for over a year”, Mr. Gove denied that it was Nick Clegg and David Laws who invented it, saying that it originated with David Willitts or Julian Le Grand. I'm not the first blogger to notice this, and David Laws and David Willitts have had this debate before, on the floor of the House. However, the fact remains that Willitts did not introduce it as policy and that Gove is bringing the Conservatives rather late to the Pupil Premium party.

What is frustrating is that it is highly likely that the Liberal Democrats will get none of what economists call “first mover advantage”. In other words, the Lib Dems will not get the credit for this policy: rather, it will be touted as a new Tory innovation with little reference to the fact that Clegg and Laws have been vocal advocates for this policy for over a year.

Gove went on to argue in favour of increased parental choice, a policy that this blog has long advocated:

We will make schools accountable to parents by allowing parents to choose the school they want for their child. We'll give every parent the right to take the money currently allocated to their child's education and then deploy it in accordance with their priorities, not the Government's.

We'll make it easier for new providers to enter the state system, reforming planning and other laws to increase choice and diversity. Parents will be empowered to
choose the school with the pedagogy, the disciplinary approach, the ethos
and the philosophy they believe in….

Again, Clegg and Laws have argued this case before. So far (and in my view, erroneously) the Lib Dems have been reticent is in including private schools within that choice and allowing parents to top up the public funding. Gove was equally vague: it remains unclear whether one can use one's (lets say it!) "voucher" to fund whatever education one feels is in one’s child’s interests, even where those providing the education might profit therefrom.

What this speech clearly reinforced was Michael Gove’s status as one of the most impressive members of the Conservative front bench. I first had a chance to hear him speak in January 2006 when he debated Vince Cable on the question of whether the Liberal Democrats or the Conservatives were the true heirs to Gladstone. Neither dealt a knock-out blow but I was impressed even then by how eloquently he spoke and how reasoned his arguments were. He has since become a regular guest on Question Time.

It is unlikely that Gove will suffer from having blatantly plagiarised Lib Dem policy. Rather, he will have demonstrated once again that in the coming electoral battle, the squeeze is going to be on, and the challenge for the Liberal Democrats is to make sure that they have a strong, distinctive voice and innovative policies. The pupil premium was to be one of those. Michael Gove may very well have shot that fox.

Rape, politics and populism

It is fair to say that nobody is going to feel much sympathy for the poor rapists, whom the Tories targeted in yesterday’s announcement. They plan a review of sentencing – “review” being political code for “lengthening”.

There may very well be grounds for a review. If Theresa May is correct, sentences have been falling over the past three years; if this is due to changes in, or poor application of, the law then a review is warranted. Similarly, if Mr. Cameron is correct that “as many as one in two young men believe there are some circumstances when it's okay to force a woman to have sex” then there is an urgent need to tackle the causes.

I have two reasons for feeling uncomfortable, however.

The fist reason for concern is that being tough on criminals is to politics what a steep gully is to water; it is the path of least resistance. Few people have any sympathy for criminals, and rapists in particular engender very strong feelings of anger among large numbers of people. It is thus all-too-easy to achieve what political analysts call “valancy”, a sense among people that a politician thinks like they do, by taking a tough line on crime.

We have seen the upshot of this after ten years of Blairism (which if it exists as a philosophy at all is the belief that the primary goal is to remain in power, from which good must eventually follow). On average a new crime was created every day during the Blair years; there are 170,000 new pages of law; and our gaols are now bursting at the seems because of longer minimum sentences. Yet there is no evidence that we feel safer.

Which brings me on to my second reason for hesitancy: that one cannot change attitudes through legislation. I agree with Mr. Cameron that it is appalling (and indeed shocking) that up to half of young men think that a circumstance could exist where it would be acceptable to force somebody to have sex. However, I think the point is both a wider and an older one; that there are still many people in society who think that it is acceptable to use force to compel others to do anything. Rape is a particularly unpleasant example, but there are plenty of other instances where people are forced or bullied into obeying others. It is this general attitude that we should be addressing; rape is merely one symptom of a more prevalent disease.

Yet, as I have argued before, the law is not the solution (though we must in the meantime criminalise such behaviour so as to protect citizens both through incarcerating the abusers and deterring those who might abuse). People do not change their attitudes because something becomes illegal; indeed, legislation is only necessary because people have not been persuaded. What is necessary is to address the root causes – the beliefs of those who believe that force is justified in getting what they want. Unsurprisingly, the coercive power of the state will not achieve that goal.

So while I agree with Mr. Cameron that school is a perfect environment to address these attitudes, I would hope that our education establishments would go beyond focusing on sex education, and instead address the whole issue of freedom from compulsion, to instil in our children an understanding of why it is wrong to force people to do things against their will.

In the meantime, by all means address low conviction rates or inadequate sentences that result from failures in the system. But do not make political capital out of seeking to be seen to be “tough on crime”. Toughness may win the brief adulation of voters, but in the long run what they want is to be safe and secure. That would be popular without being populist.

You don’t have to be mad to support the Tories, but it helps

A judge today called a man who left £8.7m to the Conservative Party in his will mad.

Handing down his judgement, Mr Justice Henderson, said Mr Kostic would not have left the money to the Tories if he had been "of sound mind".

He said the decision to leave the whole of the estate to the party was "in part the product of the state of his mind".

One wonders why it takes a court case to figure that out. I would have thought that wanting to bequeath your money to the Tories was in itself evidence that one was not of sound mind and thus automatically invalidated the will.

Cameron: Tosh on the telly

As a committed Liberal Democrat I have no natural affinity for David Cameron, and tonight's Dispatches on Channel 4 hardly elicited great sympathy. But it did not trigger much righteous indignation either. This is partly because it has all been said before, but also partly because it was a rather unnecessary hatchet job. I was unimpressed.

Cameron: Toff at the Top always threatened to be predictable. Peter Hitchens, the presenter, has form as a right-wing Cameron hater. However, I found the early part of his televised character assassination both distasteful and bemusing. On the one hand, I have little interest in David Cameron’s background. Though hardly likely to be invited to join the Bullingdon Set, I find the efforts of some to revise the tawdry class politics of the twentieth century both irritating and facile. Some of our better Prime Ministers attended Eton, and still more Oxford. If we do not expect prejudice against any one class, we should not encourage it against another. There are many things about David Cameron that one might criticise, but the fact that he is distantly related to the queen or that he went to public school should not be among them.

On the other hand, it seemed a rather strange line of attack for a man who openly described himself as a traditional conservative (with or without a capital C remained ambiguous). Peter Hitchens will do the Conservative Party no good by adding fuel to the fire of class division. One of John Major’s better aspirations was to create a classless society – understandable for a Brixton schoolboy. It may have contributed to the Conservative victory two years later, and it is certainly true that social mobility has declined under Labour. By dredging up this class-war nonsense, Peter Hitchens is undoubtedly doing great harm to the Conservatives, as well as cheapening the level of political debate in this country. One might expect better from a journalist on the Mail on Sunday!

It may be, of course, that this is his plan: either that it will require drastic surgery to get the party back on track; or that he feels that the party has betrayed its supporters so badly that it must be destroyed. Either way, this focus on class deserves little but contempt.

Other attacks in the programme at least had some substance. The antics of the Burlington Club (sic.) do sound distasteful, though the tone of high-minded disgust that Hitchens affects makes one wonder whether he spent his university years in the chapel choir. That Cameron used charm and contacts to climb to the top is hardly new in the Conservative Party, and other parties have probably witnessed such methods too. Cameron’s rise may have been undeserved, but this is not a concern because it is unfair so much as because it suggests he lacks the talent one would hope for in a future prime minister.

As for his ability to cut his cloth to fit the present mood of whomever he is addressing, it is an open goal for his opponents, and we will certainly use our boots to best effect.There is little doubt in my mind that David Cameron would be a sorry excuse for a Prime Minister. Peter Hitchens clearly agrees. Nonetheless his broadcast tonight added little that was new to a debate – and a British political landscape – that is in desperate need of more substance. It may not have done much for Cameron’s reputation, but neither did it do much for Hitchens’.

Cameron allies denigrate Conservative Home and Tory activists in general

A couple of interesting comments from David Cameron’s camp in Monday’s Times.

[T]hose close to Mr Cameron [pointed] out that the Conservative membership was not representative of the country as a whole. “A quarter of a million people are members of the Tory party. The important point is that’s less than one per cent of the electorate,” said a party source.

I seem to remember another party leader building his career by riding roughshod over his party. I agree that governments should answer to and respond to the electorate rather than just their activists. But leaders should not assume that they are more in tune with the masses than tens of thousands of party members. Otherwise we get policy-making by polling-agent and government by focus-group. That is where that other party leader ended up. Is there no end to how much Cameron will emulate Blair?

Then, for good measure, a spokesman decided to slag off Conservative Home (for which I have some sympathy!).

A senior Tory close to Mr Cameron said: “It’s 30 people talking to 30 people. People sometimes assume it represents a bigger slice of the party. But it represents a specific strand of thinking.”
True, but I would caution against attacking your own base too often!

Latest lunatic Tory idea: The return of the Permit Raj

Is there no act of idiocy to which David Cameron will not ascribe in his attempt to woo votes? The latest suggestion from the Conservative’s Working Group on Responsible Business is to impose quotas for producing fatty or sugary foods and alcohol in an attempt to tackle obesity and binge drinking.

If it is true – and so far it is only part of a consultation document – it is a sign of how far the Conservatives have moved from the economic liberalism they briefly espoused under Margaret Thatcher.

Quotas for anything are a disaster. They are aspects of the planned economies that so blighted the lives of billions during the last century. In the first place they are based on the idea that government knows better than individuals how much of a commodity is needed, and that overproduction is wasteful. Liberals understand that overproduction reduces prices, which in turn discourages further production until an equilibrium is found between how much consumers want (and are prepared to pay for) something and how much producers want to make. A quota system assumes that too much is being made, which in turn assumes that too much is being consumed, because consumers are allocating their resources (spending their money) “on the wrong things”.

In other words, Mr. Cameron and his apparatchiks are suggesting that because we are too keen on fatty food and booze, the best solution is to reduce supply through handing out a limited number of production licences.

As well as being obviously illiberal (who is Mr. Cameron, or indeed his 643 colleagues, to decide how much I or any of us want or ought to have of a commodity?) it is painfully stupid. Anybody with an A Level in Economics (that’s a lot of people other than me, then!) knows that quotas are an inefficient and harmful means of reducing supply. A far more effective method and one that distorts economic exchange far less is a tariff or tax system. Rather than reduce the quantity produced by government fiat, the government adds a tax, thus raising the cost and so reducing demand. This is cheaper to administer, raises revenue for government, harms business less than arbitrary quota systems (which might see a firm suddenly lose its quota and so lose its business) and allows individuals to continue to allocate their resources as they see fit.

The quintessential example of the quota system is the Permit Raj or Licence Raj that afflicted India between 1947 and 1990. India’s government was so enthralled by the Soviet Union that they attempted to plan their economy. The Indian State Planning Commission would issue licences for any and all production; without a licence, production of something as mundane as steel was illegal. The result was rampant corruption, as these precious licences were worth a fortune: with supply limited, prices rise, so licensed production of a commodity is even more profitable. In a real sense, quota systems issue licences not just to produce fatty food or steel, but to print money. They also distorted the economy, because Indian manufacturers were not able to use the price signals in the market to respond to consumers needs. Between socialism and corruption, the Indian economy shrank, poverty worsened and people starved.

The Conservative’s quota system would subject to the same problems. The issuing of licences to produce fatty, sugary or alcoholic products would encourage corruption and harm British industry. British consumers (that’s all 60 million of us) would suffer as prices for goods we clearly want would rise. It is one of the most crass examples of interventionist economics in some times. Friedrich Hayek was right to opine that the Conservatives are only fair-weather “auxiliaries” of liberty whose real interventionist instincts will always come through.

What is particularly surprising is that even if they want to impose it, I cannot see how they can. The free movement of goods throughout the EU prevents them from placing quotas on European food entering the UK, so the upshot would not be rising prices and reduced consumption but simply a transfer of supply from the UK to Europe. This whole proposal smacks of one that has not been thought through.

This is very disturbing. There is nothing wrong with politicians seeking to improve public health, though that does not justify their dictating to individuals how they live. However, one would hope that they would utilise intellect and experience in perusing our interests. Indeed, that is rather the point of representative democracy: we cannot all be experts in everything, and where public policy is concerned most of us cannot be experts in very much as we have real jobs to do. Thus we look to our leaders to exercise their knowledge and utilise the time that we free up by paying them to be full-time politicians to pursue our interests.

Sadly, it seems the Conservatives have not been using their time wisely. Instead, they have reverted to type: tell people how to live their lives and damn the consequences!

Who really represents the working class

Having posted a couple of criticisms of fellow bloggars’ postings recently (hating the sin and not the sinner, I hasten to add!), it is a pleasure to be able to cite an excellent entry by Tristan about David Cameron’s recently announced aspiration to make the Conservatives the party of the working class.

Much as we may want to ridicule this, Tristan is right to note that for a long time the Tories appealed to the naturally conservative tendency within a big proportion of the population, while Labour’s intellectually-driven egalitarianism only appealed to the working class when it was combined with cynical class-war populism.

Where I would question Tristan (there’s no point in just agreeing meekly with him, after all!) is where he writes that “Neither party could ever truly claim to be the party of the working class, and no party can today…” This overlooks the very interventionist sentiment that suffuses much of the working class (though if his point is that interventionism isn’t a class issue I would have to agree, for the middle classes seem equally convinced in the merits of paternalism).

One thing that Margaret Thatcher did brilliantly (better than we ever did, sadly) was to convince large swathes of the population that it was in their interests to vote for a party that espoused economically liberal doctrines. For the past decade the majority of voters in the UK have been of the opinion that their interests are best served by paternal government – so much so that the Conservatives have now jettisoned their economically liberal beliefs and are returning to the Conservative-Interventionist position that they occupied in the third quarter of the twentieth century.

My first reaction to this is to shake my head sadly as these auxiliaries abandon their association with liberty as soon is it no longer advances their real aims. But in fact there is an opportunity here, if we have the courage to seize it. I believe that David Cameron is making a mistake in shifting his party back towards the interventionist axis just as people are beginning to tire of Brown’s “nanny state.

With less and less discernable policy-space between the Conservatives and New Labour, the Liberal Democrats alone can argue the case for a society based on individual autonomy and limited government. Rather than appealing to any one class, we should appeal to that part of every voter that recognises that they are best placed to make decisions about their own lives.

I am frankly tired of being associated with the Conservatives just because they have on occasion shared with us an opposition to socialism. Too often when we champion the market or question state monopolies we are accused of being Thatcherites. The fact that the Tories arrogated our beliefs in a free economy has created a daft situation in which economic liberalism is seen as Conservative philosophy while the Liberal Democrats are left with only the social aspects of liberty. This perception is widespread in the media and even some within our own party are afraid of liberal economics because of its association with the old enemy.

So let David Cameron try to win the working class by stripping them of autonomy and expropriating their assets. Let us empower them and offer them freedom. It may seem at present that intervention and the large state dominates, but the tide will turn. The voters, be they the over-taxed middle class or working class playthings of bureaucracy, want freedom.

Faint praise from The Economist

The Economist gave faint praise to the Liberal Democrats in its article on party funding this week.

Describing the loans parties had taken out, it said "Labour owes £23.4m, a sum that exceeds... its spending... in last year's election campaign. The Conservatives have piled up even more debt, worth £35.3m... The Liberal Democrats are in the happier position of owing only £1.1m."

Sadly, the dire state of the two main parties' funding suggests that the chances are growing of their using their power to oblige the taxpayer to provide them with cash directly. They will argue that to save politics from the grubby world of donations and loans, and the influence they buy, parties should in future receive direct funding from taxpayers.

One cannot help but wonder, as our venal leaders feather their own nests, whether what the parties really need to save them from sleaze and corruption is a some honour - and not the kind that gets doled out in return for a loan.

Electoral Commission report on donations and loans to political parties casts a shadow over Labour and the Conservatives

The latest figures from the Electoral Commission on the loans and donations received by Britain's political parties provide fascinating reading. Sadly, reporting on them has been less enlightening.

Indeed, there is something rather disingenuous about the BBC’s claim that “the main political parties owe a total of £60m in loans”.

£58.7m of this is owed by just two parties, The Conservatives and Labour.

As Labour admits struggling to pay its loans, it’s claim that “political parties should live within their means” sounds hollow. Labour has been living well beyond its means for some time, with the 2005 general election a lesson in how to finance the present by borrowing from the future. While it may be an exaggeration to suggest that it would not have won the 2005 election without the tens of millions of pounds of debt it ran up, it is undoubtedly true that its majority would have been far more precarious had it not chosen to mortgage its future in an effort to win a third term.

The issue of loans raises serious questions about the credibility of the financial arrangements of political parties. The Conservatives appear not to have declared loans on the grounds that they were made “on commercial terms” despite those loans being at preferential rates, below bank lending rates. The Labour party’s “cash-for-honours” scandal continues to cast the shadow of sleaze over the Government. By comparison, the Liberal Democrat’s outstanding loans could be cleared by a £15 donation by each member; it is unlikely that Cowley Street will be on the market in the near future.

LOANS OUTSTANDING
Conservatives: £35.3m
Labour: £23.4m
Lib Dems: £1.1m
SNP: £525, 393
Plaid Cymru: £352,000
Respect: £34, 878
UKIP: £19,200
Source: BBC Online

Meanwhile, donations to the major parties seem to eerily reflect the parliamentary landscape, with the Labour Party receiving slightly more than the Conservatives while the Lib Dems received approximately a fifth as much as Labour. On the other hand, a couple of the minor parties have received significant donations that belie both their small size and their supposedly-socialist roots. Both the Green Party and the Co-Operative Party have received large donations that should help them pursue their radical socialist agendas.

DONATIONS
Conservatives: £2,867,019
Labour: £3,227,340
Lib Dems: £629,903
SNP: £52,430
Plaid: £12,250
Co-operative Party: £142,036
Ukip: £17,913
Green Party: £138,396
Scottish Greens: £31,373
Source: BBC Online