It seems to be de rigueur to praise Later and Jools Holland, if only for their ability to stay alive for 20 years. Ready Steady Go! (don't forget the exclamation mark) lasted only three years, The Tube five years. TOTP lasted 42 years, but that lacked a consistent house style or (by definition) a particular editorial bias, so it doesn't really count. Later is Holland, in the sense that the programme wouldn't work now with another presenter, much as The Old Grey Whistle Test was never the same without whispering Bob Harris, despite featuring better music after he left.
Holland is an accomplished musician but a bloody awful presenter, a talent he has cultivated over the years. The Tube gig was largely down to his chalk 'n cheese contrast to Paula Yates. He was meant to provide the working class grit to her middle class wild-child stylings. In reality, Holland is the genuine article, being far more difficult to pin down than the self-indulgent Yates. The guy's name is Julian and he plays the piano, which was borderline homosexual for South East London in the 70s, but he has the obsessiveness and magpie interest of the working class autodidact. So, just for fun, I have decided to inflict my views on Friday night's edition upon you ...
First up (indicating their current industry status and thus annual net worth) were Muse. Impressionable boys of 14 seem to be particularly taken with them, which for me is cast-iron evidence that they are Rush des nos jours. It's hard to describe to modern kids what the Canadian prog rockers were like, without being accused of Spinal Tap satire, but reference to Muse is helpful. Utterly unmemorable music that appears complex and banal by turns, and goes on too long. Like the Randian super-heroes of Rush, Muse are a three-piece of multi-instrumentalists, which means the necessary other musicians (you don't really think he's playing two guitar lines at once?) are kept in the shadows. Humourless, pompous, nonsense.
Everyone's favourite musical soap opera, the Beach Boys, were up next. Since recording, Mike Love has apparently disbanded them again, perhaps because he felt the revival of Dallas was becoming a distraction. Their appearance was reminiscent of the film Cocoon: old men with the magic, revived from senility by a strange power (pick any one from money, brand or legacy), reinforced by support staff, hangers-on and sons, who appear both as a backing group and as a proprietorial bunch of heavies. It was a genuinely weird scene, but the music was weak and quavery. You can get away with growling the blues at 70, but sophomore harmonies just don't work at that age.
Pick of the night was Public Image Limited. They started with a wonderful song about London, which had the vibrancy of William Blake. Lydon's declamatory style was in pointed contrast to his "fellow Californians", the Beach Boys. Many in the UK saw his emigration to the States as sell-out, a la Billy Idol, but in truth Lydon simply followed his nose to where the most interesting music was happening, as can be heard in the influence of Pere Ubu on PiL. As someone heavily influenced by Krautrock and Reggae, he was always going to sidestep English post-punk provincialism. His howl of personal resistance remains startling, and will outlast the obvious mannerisms of Liam Gallagher or Damon Albarn.
Next up were The XX, graduates of Elliott comprehensive, the South West London music band incubator (just up the road from me and subsequently assimilated by the academy Borg). Unfortunately, they've enjoyed success too early, which has meant their music moving swiftly from slightly better than average dream pop to backing for BBC links and adverts implying understated luxury. They are possibly the dullest band alive, plowing a relentless furrow of monochromaticism. That word is more interesting that what it represents.
And a brief word for Natalie Duncan: sorry. Nice, accomplished, undistinguished.
The abiding success of Later has nothing to do with the mutual love-in of the musos, which has disfigured the media for the last week or so. What matters is the unpredictability. Some weeks are just shit from end to end, other weeks contain multiple gems. You watch in the hope of the latter. In that sense it is not much different to the Whistle Test, but with the addition of an audience that will applaud anything and a compere who is closer to Leonard Sachs than Whispering Bob.
Saturday, 29 September 2012
Friday, 28 September 2012
LibDem's sign suicide pact
The LibDem annual conference has ended without the lynching of Nick Clegg. This is seen as a sort of success. In fact, what it highlights is the gulf that exists between party members (or more precisely those activists bothered enough to attend) and the wider electorate, as it is the latter that will do the deed in 2015. The lack of fireworks can be interpreted as evidence that the LibDems are so taken with appearing responsible in government that debate has been shelved for the duration, but I think what has actually happened is that the coalition has revealed the truth of the LibDem's core policies, or perhaps it would be better to say it has revealed the policies of the core of the party.
Their acceptance of the Tory claim that the financial crisis was all Labour's fault, and their consequent commitment to austerity and bank bailouts, should be evidence enough of their essential neoliberalism, not to mention their opportunism. What government has also shown is the superficiality of their localism and commitment to civil liberties, as they have happily participated in further centralisation. Anti-state rhetoric from the party of Asquith and Lloyd George was only ever the mewling of the disempowered. Don't expect David Laws to undermine Michael Gove's policy of having Whitehall directly manage schools, or Danny Alexander to advocate cuts in VAT instead of cuts in benefits.
The relationship of party activists to the leadership is always coloured by an underlying suspicion. For Labour, the rank and file traditionally fear betrayal by a leadership seduced or gulled by The Establishment. Blair's triangulation trick was to convince enough of the party that he was the one doing the seducing, and the City and others played along with this. His fall from grace over Iraq owed much to the realisation that he was a willing stooge in a scam. He was The Establishment, as his post-PM career has shown only too clearly. For the Tories, the fear is that they will be let down by spineless aristos, wets who will appease the "enemy" within and without (Brussels, benefit claimants, gays etc). Cameron's strengths with the electorate (pragmatism, clubbability, metropolitan sophistication) are weaknesses in the eyes of the party. The popularity of Boris Johnson is purely the result of his Churchill tribute act, which deliberately plays upon this fear of appeasement.
The Liberal rank and file have tended to be more socially and politically varied that the two main parties, which is inevitable when you are a home for protest votes and have never been forced to crystallise policy through office. From Orange Book neoliberals to Northern municipalists, from West Country organic farmers to London human rights lawyers, the Liberal party is more fox than hedgehog, something they are proud off as pluralists. But the consequence is that these natural dissenters and independents have less stickability as regards party membership. Their suspicion is that the core of the party remains a socially-exclusive, upper middle class set, ever ready to shut the door on the fringe. Too proud to make a fuss about rejection, they tend to drift off when they feel out of sympathy with the leadership, more in sorrow than in anger, rarely banging the door as they go.
The paradoxical result of the LibDem's stint in office has been the narrowing of the party to the true believers, rather than its reaching out to attract more supporters. What Nick Clegg promised them this week was more Nick Clegg, and what he implied for their election manifesto was a clear shift to the centre-right. As more and more social liberals drift away, the party will be reduced to a fervent neoliberal cadre. Ironically, many will find this liberating, allowing them to finally come out as pure liberals: pro-business, anti-state, europhile and libertarian. More like the FDP in Germany. They think they will pick up disaffected Blairites and pro-EU Tories, but this will be a trickle compared to the desertion of their centre-left base. The lack of dissent at their annual conference was a sign of weakness and impending irrelevance, not a sign of a "grown up" party taking "hard decisions".
This has prompted some Tories to advocate that their party pitches for LibDem votes, presumably on the grounds that this will secure marginal seats while losing equivalent votes on the right to UKIP will make little difference in safe seats. Meanwhile, social democrats like Polly Toynbee are talking up the merits of a Lib-Lab coalition. This is misguided if the LibDems are moving centre-right, but it fails on its own terms as well: "how much better would the last Labour era have been in coalition with the Lib Dems? No Iraq, no civil liberties abuses, less defence spending, no soaring jail numbers, stronger climate change action, and bolder Europeanism". The idea that Blair would have been constrained over Iraq by Nick Clegg as deputy PM is risible, but leaving counter-factuals aside, there is little evidence that the LibDems have mitigated the Tories' austerity, dismantling of the NHS, tax cuts for rich or anything else of substance.
The reality is that coalitions can only work where there is a congruence of interests. This means an electoral landscape of many parties with overlapping policies, which in turn means a PR system. In the UK system, coalitions usually damage at least one of the parties because they either find insufficient room for compromise or the leadership's willingness to adjust policy loses rank and file support. The judgement of history on Clegg will be that he blew the LibDem's best chance of securing electoral reform, being bought off by the baubles of office. Marching the party to the centre-right, from where he hears the "sound of the guns", will result in electoral annihilation. This will probably produce a split, with much of the Orange Book rump folding into the Tories and helping to counter the Euro-sceptic right (clearly in the best interests of hegemonic neoliberalism), while social liberals drift back to Labour in the hope that Milliband turns out to be less of a duplicitous control-freak than Blair.
Their acceptance of the Tory claim that the financial crisis was all Labour's fault, and their consequent commitment to austerity and bank bailouts, should be evidence enough of their essential neoliberalism, not to mention their opportunism. What government has also shown is the superficiality of their localism and commitment to civil liberties, as they have happily participated in further centralisation. Anti-state rhetoric from the party of Asquith and Lloyd George was only ever the mewling of the disempowered. Don't expect David Laws to undermine Michael Gove's policy of having Whitehall directly manage schools, or Danny Alexander to advocate cuts in VAT instead of cuts in benefits.
The relationship of party activists to the leadership is always coloured by an underlying suspicion. For Labour, the rank and file traditionally fear betrayal by a leadership seduced or gulled by The Establishment. Blair's triangulation trick was to convince enough of the party that he was the one doing the seducing, and the City and others played along with this. His fall from grace over Iraq owed much to the realisation that he was a willing stooge in a scam. He was The Establishment, as his post-PM career has shown only too clearly. For the Tories, the fear is that they will be let down by spineless aristos, wets who will appease the "enemy" within and without (Brussels, benefit claimants, gays etc). Cameron's strengths with the electorate (pragmatism, clubbability, metropolitan sophistication) are weaknesses in the eyes of the party. The popularity of Boris Johnson is purely the result of his Churchill tribute act, which deliberately plays upon this fear of appeasement.
The Liberal rank and file have tended to be more socially and politically varied that the two main parties, which is inevitable when you are a home for protest votes and have never been forced to crystallise policy through office. From Orange Book neoliberals to Northern municipalists, from West Country organic farmers to London human rights lawyers, the Liberal party is more fox than hedgehog, something they are proud off as pluralists. But the consequence is that these natural dissenters and independents have less stickability as regards party membership. Their suspicion is that the core of the party remains a socially-exclusive, upper middle class set, ever ready to shut the door on the fringe. Too proud to make a fuss about rejection, they tend to drift off when they feel out of sympathy with the leadership, more in sorrow than in anger, rarely banging the door as they go.
The paradoxical result of the LibDem's stint in office has been the narrowing of the party to the true believers, rather than its reaching out to attract more supporters. What Nick Clegg promised them this week was more Nick Clegg, and what he implied for their election manifesto was a clear shift to the centre-right. As more and more social liberals drift away, the party will be reduced to a fervent neoliberal cadre. Ironically, many will find this liberating, allowing them to finally come out as pure liberals: pro-business, anti-state, europhile and libertarian. More like the FDP in Germany. They think they will pick up disaffected Blairites and pro-EU Tories, but this will be a trickle compared to the desertion of their centre-left base. The lack of dissent at their annual conference was a sign of weakness and impending irrelevance, not a sign of a "grown up" party taking "hard decisions".
This has prompted some Tories to advocate that their party pitches for LibDem votes, presumably on the grounds that this will secure marginal seats while losing equivalent votes on the right to UKIP will make little difference in safe seats. Meanwhile, social democrats like Polly Toynbee are talking up the merits of a Lib-Lab coalition. This is misguided if the LibDems are moving centre-right, but it fails on its own terms as well: "how much better would the last Labour era have been in coalition with the Lib Dems? No Iraq, no civil liberties abuses, less defence spending, no soaring jail numbers, stronger climate change action, and bolder Europeanism". The idea that Blair would have been constrained over Iraq by Nick Clegg as deputy PM is risible, but leaving counter-factuals aside, there is little evidence that the LibDems have mitigated the Tories' austerity, dismantling of the NHS, tax cuts for rich or anything else of substance.
The reality is that coalitions can only work where there is a congruence of interests. This means an electoral landscape of many parties with overlapping policies, which in turn means a PR system. In the UK system, coalitions usually damage at least one of the parties because they either find insufficient room for compromise or the leadership's willingness to adjust policy loses rank and file support. The judgement of history on Clegg will be that he blew the LibDem's best chance of securing electoral reform, being bought off by the baubles of office. Marching the party to the centre-right, from where he hears the "sound of the guns", will result in electoral annihilation. This will probably produce a split, with much of the Orange Book rump folding into the Tories and helping to counter the Euro-sceptic right (clearly in the best interests of hegemonic neoliberalism), while social liberals drift back to Labour in the hope that Milliband turns out to be less of a duplicitous control-freak than Blair.
Thursday, 27 September 2012
Arsenal face Terry, and some other blokes
The judgement of the FA that John Terry was guilty of racially abusing Anton Ferdinand should come as no surprise. Not because of the lower burden of proof required by the FA, compared to a court of law, but because Terry himself conceded the game was up by his earlier decision to retire from international football. This spared the very same FA the need to instruct Hodgson not to pick him for England, which they would have been under immediate pressure to do. I doubt Terry was motivated by a desire to avoid any awkwardness for the FA, so you have to assume it was another self-serving manoeuvre by an egotist who has built a career on equal parts bullying and victimhood. A classic case of getting your retaliation in first.
The sentence has been suspended for a fortnight, to allow poor wee Terry time to consider whether to lodge an appeal, which means he will be available for the game against Arsenal on Saturday. He will no doubt be desperate to score, in order to "silence the critics", as the cliche has it, though you can be sure the home crowd will barrack him relentlessly no matter how many goals he contrives to punch over the line. It's a shame that Terry will be on the pitch, as this will probably distract from an interesting game between two teams that are evolving and in form. In Terry's head, the match will be nothing more than the latest chapter in his glorious life story: My Struggle (it sounds better in German).
I had deliberately held off airing my opinions on the Gunners until now, figuring that it would take some games for the new team to settle down and for a pattern to emerge. Man City away was my mental target for a stock-take. I still think it's too early to make any sort of confident predictions, but I've been pleased by the attitude and performances to date. The lower tally of goals conceded will be down to more than just the miraculous powers of Steve Bould, in fact my own suspicion is that it is due to the higher positioning of the full-backs. Jenkinson and Gibbs may be raw, but they are able to pose more of an attacking threat than Sagna and Clichy did in recent seasons, which has helped keep the pressure off the defence. Arteta has been exemplary in the screening role, and his promotion to vice-captain after only one season seems strangely overdue. If we can just stop the 'keepers dropping the ball we should be fine.
Cazorla has proved a worthy successor to Fabregas in terms of vision and switching the angles of attack, but what's caught my eye is his urgency and willingness to speed up play. Overall, the biggest change for me has been the greater mobility across the forward line. With van Persie, our approach play was often predictable, and too often flanking moves were held up waiting for his runs in the middle. The busier style of Podolski and Giroud, allied with Gervinho and Oxlade-Chamberlain's variety, looks like it has sharpened our cutting edge, even if it did take a couple of games to whet the blade. On this reading, it's hard to see a future for the less mobile Chamakh, while Arshavin's lack of stamina means he'll probably be restricted to the bench until he departs.
The big debate at present is the role of Walcott, particularly whether he should play as a central striker after his two goals against Coventry last night. He might well have converted one of the chances that Gervinho passed up against City at the weekend, however I've never been convinced by his positioning before he receives the ball. A central striker has to make space for himself, so he can spin and attack the centre backs. Walcott has traditionally used his pace against the full-back to make that space (i.e. he runs past them), which is not the same thing.
Assuming the contractuals are resolved (and that in turn assumes Arsene actually wants to keep him), then he may get a chance this season, but I think he'll need to learn a lot to become the heir of Henry. Ultimately, he would do better to try and become more of a hybrid, occupying the wide berth but being more willing to cut inside, much as Podolski does. I'd love it if he could engineer a one-on-one with John Terry this Saturday and leave him on his arse. While many Arsenal fans would spit at the name of Robin van Persie now, he'll always have a place in my heart because of this.
The sentence has been suspended for a fortnight, to allow poor wee Terry time to consider whether to lodge an appeal, which means he will be available for the game against Arsenal on Saturday. He will no doubt be desperate to score, in order to "silence the critics", as the cliche has it, though you can be sure the home crowd will barrack him relentlessly no matter how many goals he contrives to punch over the line. It's a shame that Terry will be on the pitch, as this will probably distract from an interesting game between two teams that are evolving and in form. In Terry's head, the match will be nothing more than the latest chapter in his glorious life story: My Struggle (it sounds better in German).
I had deliberately held off airing my opinions on the Gunners until now, figuring that it would take some games for the new team to settle down and for a pattern to emerge. Man City away was my mental target for a stock-take. I still think it's too early to make any sort of confident predictions, but I've been pleased by the attitude and performances to date. The lower tally of goals conceded will be down to more than just the miraculous powers of Steve Bould, in fact my own suspicion is that it is due to the higher positioning of the full-backs. Jenkinson and Gibbs may be raw, but they are able to pose more of an attacking threat than Sagna and Clichy did in recent seasons, which has helped keep the pressure off the defence. Arteta has been exemplary in the screening role, and his promotion to vice-captain after only one season seems strangely overdue. If we can just stop the 'keepers dropping the ball we should be fine.
Cazorla has proved a worthy successor to Fabregas in terms of vision and switching the angles of attack, but what's caught my eye is his urgency and willingness to speed up play. Overall, the biggest change for me has been the greater mobility across the forward line. With van Persie, our approach play was often predictable, and too often flanking moves were held up waiting for his runs in the middle. The busier style of Podolski and Giroud, allied with Gervinho and Oxlade-Chamberlain's variety, looks like it has sharpened our cutting edge, even if it did take a couple of games to whet the blade. On this reading, it's hard to see a future for the less mobile Chamakh, while Arshavin's lack of stamina means he'll probably be restricted to the bench until he departs.
The big debate at present is the role of Walcott, particularly whether he should play as a central striker after his two goals against Coventry last night. He might well have converted one of the chances that Gervinho passed up against City at the weekend, however I've never been convinced by his positioning before he receives the ball. A central striker has to make space for himself, so he can spin and attack the centre backs. Walcott has traditionally used his pace against the full-back to make that space (i.e. he runs past them), which is not the same thing.
Assuming the contractuals are resolved (and that in turn assumes Arsene actually wants to keep him), then he may get a chance this season, but I think he'll need to learn a lot to become the heir of Henry. Ultimately, he would do better to try and become more of a hybrid, occupying the wide berth but being more willing to cut inside, much as Podolski does. I'd love it if he could engineer a one-on-one with John Terry this Saturday and leave him on his arse. While many Arsenal fans would spit at the name of Robin van Persie now, he'll always have a place in my heart because of this.
Sunday, 23 September 2012
When leverage isn't debt
On the Andrew Marr show today, Nick Clegg outlined a new LibDem scheme whereby future pensioners could use the lump sum amount of their anticipated pension pot to guarantee an up-front loan to pay for the deposit on a house or flat for their offspring (amusingly, while the Guardian and others describes this in terms of parents, the Telegraph pitches this as an issue for grandparents - they obviously know their readership). On the face of it, this sounds like a spot of inter-generational rebalancing, but another interpretation would be that "leverage is good", which isn't perhaps something they want to brag about.
The obvious trigger for launching this is the LibDem annual conference, but it shouldn't be dismissed at as a cynical PR skyrocket that will be forgotten by Bonfire Night. Though it will have almost no impact on housing or the wider economy, it plays on a number of popular anxieties and is interesting for what it indicates about both the LibDems' future positioning and the plans of the coalition government. This far out from a general election, the conference goodies of both Tories and LibDems will have been coordinated, as anything else would run the risk of embarrassing contradictions that would undermine the government over the coming months. The delineation is quite subtle.
The LibDems themselves have admitted that the number of beneficiaries will be modest, perhaps fewer than 13,000 will be helped onto the property ladder, and the macroeconomic impact will be lost in the noise. They have also admitted that many well-off people will not avail themselves of the scheme as they will have other assets or disposable income that they can use to fund the deposits of their children. In fact, there is nothing to stop a person with a private pension arranging a loan now on that future lump sum. This is nothing more than an "option", after all. Indeed, some of those better-off folk may already be doing this, as interest rates are historically low.
In other words, this policy is targeted at the "squeezed middle", those who have a potential pension pot of at least £40k and may thus anticipate a lump sum (at 25%) of £10k, but who wouldn't be prepared to gamble with it unless underwritten by the government (the details of the scheme have yet to be announced, but this is probably the key commitment, i.e. an indemnity in case your pension pot does not reach a minimum threshold come retirement age). Of course, this will only pay for roughly a third of the average deposit required nationally, and about a fifth of the amount you'd need in London, so the upper limit of the range may be a future pension pot of £150k or more.
It should be immediately obvious that if you anticipate a pension pot of only £40k, then you are looking at a retirement in poverty anyway. With current annuity rates as low as 2%, this pot will produce an annual income of £1,300 (assuming you take 25% as lump sum, otherwise it would be £1,700). The state pension will deliver approximately £5,600 in today's money, so you would need a private pension pot of at least £100k to match this and double your income, without any lump sum deduction.
The LibDems are obliged to pitch the scheme at the £40k level, as this matches the likely outcome for someone on median earnings (£21k) putting £40 a month (2.3%) into their pension, with zero employer contributions. In reality, the scheme is more likely to attract those with an annual salary nearer £50k, making contributions of 4% with employer contributions at the same rate, which would produce a pot of £350k. In other words, the professional and managerial classes and those with decent employer pensions. Those on a £40k "promise" are struggling due to low annuity rates (a byproduct of quantitative easing, in part), and may not feel confident about either future rates or property value appreciation (outside London and the South East). Those with larger anticipated pots have sufficient slack to gamble. A £50k draw-down on a £350k pot (14%) would largely pay for a deposit on a London flat. A 25% draw-down would allow for a significant reduction in mortgage repayments, which would be a good investment if you expect property prices to remain firm at worst.
The significance of this initiative in terms of the LibDem's positioning is the attempt to convince those on median incomes, many of whom will have working children at home, that Clegg & co have their best interests at heart. In combination with the much-discussed (but little seen) mansion tax, this paints the LibDems as the party of property owners of limited means. I suspect they are on a hiding to nothing here. As many have noted, the only realistic direction the UK property market can take, with the prospect of persistent low GDP growth over the near-term and stagnant wages for median earners and below, is down. When the inevitable crash happens, it will take chunks out of some pension pots and leave parents in conflict with their children. What median income earners need now is a higher income, not the ability to leverage their modest pension pot.
The reason why the Tories are presumably cool with the LibDems flying the "pension collateral" kite is that it is consistent with the belief that property values will (indeed must) stay high. Ultimately, this benefits financial institutions (i.e. lenders) and helps move capital to those who already own property assets (i.e. disproportionately the better-off and speculators). These groups, rather than median-income families, are now the key constituency for the Tories. The transition from the nouveau riche Thatcher, and her sympathy for the aspirations of first-time property owners, to the Cameron and Osborne clique of inherited wealth and City connections, is not an accidental social change but the manifestation of a more profound shift in the raison d'etre of the modern Tory party.
This reinforces the suspicion that the coalition government will not do anything to jeopardise house prices between now and a 2015 general election. That means no prospect of a large-scale house-building programme, continued support for builders of higher-value properties in London and the South East, no penalties for banking land or keeping properties empty, and continued quantitative easing and other monetary policies to cushion bank and building society balance sheets. While public debt remains anathema, private, property-based debt remains virtuous to the point of being the poster-child for growth.
The obvious trigger for launching this is the LibDem annual conference, but it shouldn't be dismissed at as a cynical PR skyrocket that will be forgotten by Bonfire Night. Though it will have almost no impact on housing or the wider economy, it plays on a number of popular anxieties and is interesting for what it indicates about both the LibDems' future positioning and the plans of the coalition government. This far out from a general election, the conference goodies of both Tories and LibDems will have been coordinated, as anything else would run the risk of embarrassing contradictions that would undermine the government over the coming months. The delineation is quite subtle.
The LibDems themselves have admitted that the number of beneficiaries will be modest, perhaps fewer than 13,000 will be helped onto the property ladder, and the macroeconomic impact will be lost in the noise. They have also admitted that many well-off people will not avail themselves of the scheme as they will have other assets or disposable income that they can use to fund the deposits of their children. In fact, there is nothing to stop a person with a private pension arranging a loan now on that future lump sum. This is nothing more than an "option", after all. Indeed, some of those better-off folk may already be doing this, as interest rates are historically low.
In other words, this policy is targeted at the "squeezed middle", those who have a potential pension pot of at least £40k and may thus anticipate a lump sum (at 25%) of £10k, but who wouldn't be prepared to gamble with it unless underwritten by the government (the details of the scheme have yet to be announced, but this is probably the key commitment, i.e. an indemnity in case your pension pot does not reach a minimum threshold come retirement age). Of course, this will only pay for roughly a third of the average deposit required nationally, and about a fifth of the amount you'd need in London, so the upper limit of the range may be a future pension pot of £150k or more.
It should be immediately obvious that if you anticipate a pension pot of only £40k, then you are looking at a retirement in poverty anyway. With current annuity rates as low as 2%, this pot will produce an annual income of £1,300 (assuming you take 25% as lump sum, otherwise it would be £1,700). The state pension will deliver approximately £5,600 in today's money, so you would need a private pension pot of at least £100k to match this and double your income, without any lump sum deduction.
The LibDems are obliged to pitch the scheme at the £40k level, as this matches the likely outcome for someone on median earnings (£21k) putting £40 a month (2.3%) into their pension, with zero employer contributions. In reality, the scheme is more likely to attract those with an annual salary nearer £50k, making contributions of 4% with employer contributions at the same rate, which would produce a pot of £350k. In other words, the professional and managerial classes and those with decent employer pensions. Those on a £40k "promise" are struggling due to low annuity rates (a byproduct of quantitative easing, in part), and may not feel confident about either future rates or property value appreciation (outside London and the South East). Those with larger anticipated pots have sufficient slack to gamble. A £50k draw-down on a £350k pot (14%) would largely pay for a deposit on a London flat. A 25% draw-down would allow for a significant reduction in mortgage repayments, which would be a good investment if you expect property prices to remain firm at worst.
The significance of this initiative in terms of the LibDem's positioning is the attempt to convince those on median incomes, many of whom will have working children at home, that Clegg & co have their best interests at heart. In combination with the much-discussed (but little seen) mansion tax, this paints the LibDems as the party of property owners of limited means. I suspect they are on a hiding to nothing here. As many have noted, the only realistic direction the UK property market can take, with the prospect of persistent low GDP growth over the near-term and stagnant wages for median earners and below, is down. When the inevitable crash happens, it will take chunks out of some pension pots and leave parents in conflict with their children. What median income earners need now is a higher income, not the ability to leverage their modest pension pot.
The reason why the Tories are presumably cool with the LibDems flying the "pension collateral" kite is that it is consistent with the belief that property values will (indeed must) stay high. Ultimately, this benefits financial institutions (i.e. lenders) and helps move capital to those who already own property assets (i.e. disproportionately the better-off and speculators). These groups, rather than median-income families, are now the key constituency for the Tories. The transition from the nouveau riche Thatcher, and her sympathy for the aspirations of first-time property owners, to the Cameron and Osborne clique of inherited wealth and City connections, is not an accidental social change but the manifestation of a more profound shift in the raison d'etre of the modern Tory party.
This reinforces the suspicion that the coalition government will not do anything to jeopardise house prices between now and a 2015 general election. That means no prospect of a large-scale house-building programme, continued support for builders of higher-value properties in London and the South East, no penalties for banking land or keeping properties empty, and continued quantitative easing and other monetary policies to cushion bank and building society balance sheets. While public debt remains anathema, private, property-based debt remains virtuous to the point of being the poster-child for growth.
Friday, 21 September 2012
The time for sadness is over
What exactly is Nick Clegg apologising for? Ostensibly it's the LibDem's failure to keep their promise over increasing tuition fees, but I'm inclined to think otherwise. Some think he should apologise for the coalition government's broader record. I think that is actually what he is doing.
Clegg and Vince Cable have both claimed that the timing of the apology was down to waiting for "the right moment", with the suggestion being that the public were not prepared to give them a hearing before now ("to be frank people were so angry they weren’t listening", claimed Cable on Newsnight last night). This is tosh. It's like Goering at Nuremburg saying the time was not right for an apology but if the Allies would give him another 5 years, so tempers could cool, he might then be able to say sorry to a more receptive audience. Is that too extreme an analogy? Consider the FA's recent decision to wait 23 years after Hillsborough to apologise for it's deadly disregard for fan safety, something which has not been in dispute since the original Taylor report. Were they just waiting for the "right moment"?
The time for making an apology is when it is demanded. So why did the LibDems delay? Presumably they hoped that the golden age that the coalition would usher in would push the memory of their inept opportunism to the back of everyone's mind. And they would've gotten away with it if it weren't for those meddling kids, banging on about it all the time. Is it a coincidence that this comes in fresher's week, when students will be distracted by cheap booze and new sexual opportunities? Has it taken two years for Clegg to master the right level of hangdog sincerity, practising each morning in front of the bathroom mirror? That might explain his near-permanent look of secret sadness.
The timing of Clegg's apology-porn-vid has to be seen in the context of the LibDem's desperate plan to avoid electoral annihilation in early 2015. They need to distance themselves from the Tories, not just to offer a distinct policy option going forward, but to allow responsibility for the coalition's "achievements" to be apportioned. That will be the subtext over the next 30 months. Clegg is now banking on Cable being able to deliver sufficient initiatives that can be cast as stimulus, and business reform that can be presented as responsible and mature (unlike the Tory lunacy), to distract attention from welfare cuts, the evisceration of the NHS, and the failure to address the structural flaws of the economy. The Tories will be allowed to take credit for all of that. Expect to see much more of Cable and David Laws, and much less of Danny Alexander.
The strategic purpose of the tuition fees apology is to reset the LibDem's focus from the past to the future, changing the agenda from the already discredited coalition agreement to the debate on plan B. This not only draws a line under tuition fees, but pushes the failures over AV and Lords reform off-stage, and even leaves health and education on the margins. The big debate will be about "responsible stimulus" and growth. The LibDems clearly won't go into the next election promising more of the same, i.e. plan A part 2. That would be suicide, not least because austerians might as well vote Tory. The person whose heart may have sank most on seeing Clegg indulge his emotions is the increasingly isolated George Osborne.
Clegg and Vince Cable have both claimed that the timing of the apology was down to waiting for "the right moment", with the suggestion being that the public were not prepared to give them a hearing before now ("to be frank people were so angry they weren’t listening", claimed Cable on Newsnight last night). This is tosh. It's like Goering at Nuremburg saying the time was not right for an apology but if the Allies would give him another 5 years, so tempers could cool, he might then be able to say sorry to a more receptive audience. Is that too extreme an analogy? Consider the FA's recent decision to wait 23 years after Hillsborough to apologise for it's deadly disregard for fan safety, something which has not been in dispute since the original Taylor report. Were they just waiting for the "right moment"?
The time for making an apology is when it is demanded. So why did the LibDems delay? Presumably they hoped that the golden age that the coalition would usher in would push the memory of their inept opportunism to the back of everyone's mind. And they would've gotten away with it if it weren't for those meddling kids, banging on about it all the time. Is it a coincidence that this comes in fresher's week, when students will be distracted by cheap booze and new sexual opportunities? Has it taken two years for Clegg to master the right level of hangdog sincerity, practising each morning in front of the bathroom mirror? That might explain his near-permanent look of secret sadness.
The timing of Clegg's apology-porn-vid has to be seen in the context of the LibDem's desperate plan to avoid electoral annihilation in early 2015. They need to distance themselves from the Tories, not just to offer a distinct policy option going forward, but to allow responsibility for the coalition's "achievements" to be apportioned. That will be the subtext over the next 30 months. Clegg is now banking on Cable being able to deliver sufficient initiatives that can be cast as stimulus, and business reform that can be presented as responsible and mature (unlike the Tory lunacy), to distract attention from welfare cuts, the evisceration of the NHS, and the failure to address the structural flaws of the economy. The Tories will be allowed to take credit for all of that. Expect to see much more of Cable and David Laws, and much less of Danny Alexander.
The strategic purpose of the tuition fees apology is to reset the LibDem's focus from the past to the future, changing the agenda from the already discredited coalition agreement to the debate on plan B. This not only draws a line under tuition fees, but pushes the failures over AV and Lords reform off-stage, and even leaves health and education on the margins. The big debate will be about "responsible stimulus" and growth. The LibDems clearly won't go into the next election promising more of the same, i.e. plan A part 2. That would be suicide, not least because austerians might as well vote Tory. The person whose heart may have sank most on seeing Clegg indulge his emotions is the increasingly isolated George Osborne.
Subscribe to:
Posts (Atom)