David Ottewell's Politics

Right, I’m off for a well-earned break.
Many thanks to everyone who has contributed or linked to this blog over the past 12 months. I will return early in the New Year.
All the best,
David.

Take a look at this. It’s an analysis of changing wealth patterns in the UK since 1977.
It spilts people into quintiles – the poorest fifth, the second poorest fifth, and so on – and considers their relative performance over the years.
In broad terms, the data confirms what most of us might have guessed – that the rich got proportionately richer during the Thatcher years, and that since then the gap has widened overall, but at a slower rate.
Then I read this section:

Hang on. Income inequality got smaller in the early 1990s and wider in the late 1990s? Wasn’t that the time when John Major was in charge?
There is a graph in the report that plots the data precisely. I decided to copy it and overlay the dates when Margaret Thatcher, Mr Major and Tony Blair came to power.
Here’s the result:

Now, okay. You can see from this that the rich were just beginning to get richer again at the end of the Major years, and that the trend simply continued under Mr Blair. You can also argue that the figures under Mr Major had more to do with general economic circumstances than they did with any particular Conservative policies.
Still, it’s ironic that Mr Major could justly lay claim to having done most to close the income gap over the last three decades, given that Labour came to power in 1997 on a manifesto that bemoaned “a wider gap between rich and poor than for generations”…

We all know that there is tremendous potential in the north. It’s a market of 15 million people – twice the size of London. In fact, if we were able to raise the economic performance of the north to that of the English average, the three Northern regions would be around £30 billion a year better off – that’s about £2,000 per person, per year. Catching-up with the country’s average economic performance would also mean an extra 200,000 people in work. That’s a huge prize.
- John Prescott, 2004, launching the Northern Way
We all know the northern economy lags behind that of London and the south. The government knows it too – that why Mr Prescott set up the Northern Way coalition of major cities when he was deputy prime minister. The group’s stated aim was to close the £30bn productivity gap between the north and south.
It takes time to turn round a super-tanker, as they say. But anyone was in doubt about the scale of the problem might want to cast their eyes over this research.
These days, the preferred measure of how well or badly somewhere is doing is “Gross Value Added” (GVA). GVA is essentially a measure of the contribution an individual, business or sector makes to the economy.
The following graph shows GVA per head for London, Greater Manchester, the north west and the UK:

What the graph shows, notably, is that Greater Manchester is far closer to the UK average than London. That might seem reassuring: oh well, we might think, our experience is pretty typical. It’s just that London is freakishly successful.
Unfortunately that would be wrong.
The north west contains both Manchester and Liverpool. While these cities will never match the economic clout of London, they should at least be acting as an engine for the region as the capital acts as an engine for the entire country. As such, the north west should not have a below-average GVA – and still less should Greater Manchester.
Fair enough, you might say, but at least the lines are slanting upwards; at least things are improving, even if the rate of improvement is too slow.
On closer inspection, even that claim is questionable. The research I linked to above breaks down the north west’s GVA by sector. I’ve turned the data into this graph:

What this tells us is that a great deal of the economic growth in the north west in recent years had been fuelled by the property boom, with the contribution of retail also rising sharply and manufacturing retaining a key role.
What do these three things have in common? They are all particularly susceptible to an economic downturn. Northern Way or not, times could be about to get hard.

A few days ago I whined like a big baby about my lack of work-related Christmas cards.
I’m now up to a grand total of five.
The latest was from James Purnell, who sent this:

And wrote this:

Local politicians of the world, take note: if you stamp your feet and hold your breath the cabinet will respond…

PMQs was a bit flat today, I thought. Harriet Harman was surprisingly good; William Hague was unsurprisingly good. But their exchanges lacked a bit of heat. Maybe everyone’s winding down for Christmas.
John Leech raised the issue of the Lancastrian School in Didsbury, which caters for children with disabilities and special needs, losing its secondary provision.
Ms Harman said the question of local education provision was one for councils, but that she would raise Mr Leech’s concerns with the secretary of state. She also pointed out the levels of investment that had gone into schools in Manchester in recent years.
And that, from a local viewpoint, was essentially that.

The Scottish Parliament has released a list of the most popular names, north of the border, in 2008.
Jack replaced Lewis at the head of the male list, while Sophie remained top for girls.
It’s customary when these lists come out to check on the popularity of your own name. Depressingly, there were fewer Davids this year than Jaydens:

You’ll have to forgive my lack of Christmas cheer at the moment. I blame British Gas.
For a few months now they’ve owed me a fairly significant sum on an old account. They issued a cheque – very promptly, actually – but they got my surname wrong.
I pointed this out in an email received by customer services on October 31 this year.
I got a response from them a few days later, apologising for the late reply and promising a replacement cheque had been “arranged” and would arrive at my new address by December 15.
I wondered at the time why it should take nearly six weeks to write my name, correctly, on a cheque, but let it pass.
Well, December 15 came and went – nothing.
I emailed customer services – nothing.
What I find a bit galling is that were I to miss a payment, I’m fairly sure that I’d get a couple of “urgent” reminders followed by the threat of legal action or disconnection.
Fair enough – but shouldn’t the same principle apply the other way around?

A few weeks ago, one or two of the nationals ran pieces suggesting that the economic downturn would hit the south as hard as, if not harder than, than the north.
The logic was that, this time around, those in the financial, technological and professional classes would bear the brunt of the downturn.
My suspicion, at the time and now, was that these pieces were probably sparked by one or two friends (lawyers, bankers or whatever) of management-level staff on the London-papers being layed off.
Those papers then made the mistake of confusing the (true) claim that the south would also be hit with the (false) claim it would be worst hit.
The figures said otherwise a little while ago, and they say the same again now.
I’ve been messing around with the unemployment statistics out today and produced this map. It shows percentage unemployment increases (in red) or decreases (green) in each region in the last quarter:

The northern economy, together with those of Scotland and Wales, will still suffer most from any downturn. There are a number of reasons for this, including (a) residual dependence on manufacturing in those areas, (b) the fact many old mill towns were already struggling to transform their economies, so their new technology- and service-based economies are still small and fragile; and (c) national and multinational companies tend to withdraw from the north before they withdraw from London and the south.

What better way to heal political wounds than through the shared misery of supporting Manchester City?
I’m told Manchester council bosses Sir Richard Leese and Sir Howard Bernstein were at the Everton match – and found themselves within hugging (or throttling) distance of Dave Goddard, leader of Stockport council.
Dave, you might know, was one of the leader “anti” voices in the congestion-charge debate. Sir Howard was the architect of the proposed charge-for-investment deal, and Sir Richard its main champion.

Michael Meacher has been laying out his plans for dealing with the recession.
His proposals include:
*Replacing the VAT cut with vouchers for domestic goods and services for people on lower or no wages – effectively forcing them to spend;
*Forcing energy companies to bid for their CO2 pollution permits, raising up to £30bn a year;
*Clamping down on tax avoidance by the super-rich, as well as “artificial” tax restriction measures, such as switching assets to other family members. This, Mr Meacher says, would raise a further £43bn a year.
Mr Meacher also had something interesting to say about the banks. He pointed out that while banks were being asked to pass on lower interest rates, there was no compulsion for them to do so. He compared this to the government’s “something-for-something” welfare reforms.
“In [James Purnell's] statement about welfare reform, conditionality was all the rage, but when it comes to the banks, in a much bigger economic forum, conditionality appears to go out of the window,” said Mr Meacher. “That is a mistake.”