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Newsnight

The end of economic niceness

  • Paul Mason
  • 14 May 08, 06:08 PM

Bank of England governor Mervyn King has warned that "for the time being at least the nice decade is behind us". He didn't accept recession was likely but admitted it was possible - even though the Bank's own "fan charts" do not give it even an outside, ten-to-one chance.

Coming on the same day as Gordon Brown's outline of draft legislation, the Bank's handily outlines the economic terrain on which the political battle of the next two years will be fought. And it's bumpy...


Inflation will hit 3.7% by the end of summer, according to the Bank's central prediction; and growth will fall to 1% by Christmas - much lower than the government expects. The problem for all policymakers is that, with the official end of economic niceness, you also get the end of the period where you have to put much less trust in the predictions of Bank economists.

For there is another view, held even on the Monetary Policy Committee itself. It goes like this: the Bank's restrictive monetary policy keeps interest rates too high when they should be slashed; Labour's refusal to countenance fiscal activism, indeed its inability to use tax giveaways because it is so close to its own borrowing limits, combine with a plummeting housing market and, to use the technical term, the economy tanks.

This view is held by a wide range of analysts, from ascerbic Bank critic and Newsnight regular Graham Turner through to loyal MPC member David Blanchflower. Indeed Blanchflower's Edinburgh lecture, , is well worth a read if you want to know how far from nice it could get if Mervyn is wrong.

So with the end of niceness, a debate opens up - not yet in government and not really even across the front benches - as to whether the UK's economic policy framework is adequate for a period of nastiness. Should rates be cut quicker; should the government have left itself room for Bush-style fiscal manouver with taxes or even higher spending. Should it change the interest rate target or even abandon its rules on sustainable investment? These are, after all, not God-given but invented in 1997 when Labour set up the current framework.

If today's Inflation Report outlines the terrain of the battle, contained some clues, even some dog whistle notes, as to strategy. I read today as Brown trying to establish "Brand Labour" during the economic downturn. Some commentators are focusing on how much is borrowed from the Conservatives - and this was the focus of Cameron's attack. But don't ignore the specific Labour flavour of some of the measures - especially those aimed at shoring up its "heartland" voting base - the people on 12k to 18k who revolted at the 1 May local elections: measures to reduce economic immigration, measures to allow the government to buy unsellable houses; the statutory right to an apprenticeship and above all the promise, after years of wrangling with the unions, of an Agency Workers Bill.

This latter issue is, I am told, "so totemic" that control of it has been taken inside 10 Downing Street. The unions are still not impressed by what's on offer - the wrangling point being how soon do agency workers get the same rights as other employees, months or days. Yet, along with various rights to request training, time off etc, it forms the core of Gordon Brown's attempt to get the centre left of the party back on board.

Inside Labour, influential voices, left and right, are still talking darkly about the short term prospects. While the PM's speech was designed to set the scene for a two year pre-election period, a senior party figure told me few are looking past the Crewe and Nantwich by election. "Lists" - ie the purported lists of MPs prepared to call for a leadership challenge - are circulating, I am told. This was also reported on Channel Four News last night. However, nobody has actually proved this to be the case, nor claimed to have seen one.

One final observation on today's gambit: I distinctly heard Gordon Brown speak of Labour's "economic plan". Since he is now surrounded by men with a combined experience in the PR industry surely totalling over a century, this cannot have been an accident. Indeed were:

"...in the next few weeks we will set out the elements of our economic plan as we steer our economy safely through the global downturn, the credit crunch and international oil and food price rises."

It's a long time since a government claimed to have an economic plan, so I am looking forward to the next few weeks. And if anybody out there has one of those "lists" that are supposed to be circulating, do forward it to the Newsnight Inbox!

Comments

  • Comment number 1.

    Hi

    I think Newsnight should do a programme on the way the 91Èȱ¬ is being dumbed down.

    Tonight a programme about people losing their virginity was shown (after Newsnight). It was about titillation (disguised in documentary form). The sort of programme that wouldn't have been broadcast, by previous Director Generals.

    Now it is NOT the programme I object to. But the fact that it was broadcast by the 91Èȱ¬.

    I have more respect for people on other channels showing these types of programmes - because they have to, at least, answer, ultimately, to share holders. But the broadcasters of this programme have to answer, ultimately, to viewers.
    Clearly, the people who run 91Èȱ¬2 are more concerned about short-term ratings over long-term respect and loyalty.

    I am sure many people watched that programme and didn't think too much about it. But whenever the future of the 91Èȱ¬ comes into question, people are going to think (taking into account a broad range of programmes): mm, well, I don't think there is very much difference between the 91Èȱ¬ and commcercial TV. Therefore why should the 91Èȱ¬ receive special treatment (and it wouldn't be the viewers' fault for thinking this but the 91Èȱ¬ itself).

    What kind of a broadcasting organization is the 91Èȱ¬ meant to be now. I thought it was meant to be about (innocent) entertainment - about being innovative, interesting, original, creative, inspiring and so on. 'Virgin Memories' left me feeling desperate and angry.

    I am a big supporter of the 91Èȱ¬. Because of all that it has achieved in the past. And because of what it has the potential to achieve. But, clearly, there are senior people in the 91Èȱ¬ who have no idea about what the 91Èȱ¬ is meant to be about / or, at least, lack the imagination and strength of character to broadcast the sort of programmes that viewers want, expect - and pay for.

    The 91Èȱ¬ has been ripping people off (telephone scandals). It failed (and deservedly so) to land more money (again, I am a big fan of the idea of public broadcasting, independent of commercial interests - and support larger licence fees if the 91Èȱ¬ is deserving of it). And it has been dumbing, even more, in recent years.

    I think it is time for heads to roll. Starting off with those in senior positions in 91Èȱ¬2 (and I will be really p****d off if this post doesn't get posted).

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  • Comment number 2.

    When will the government admit that we cannot afford wars in Afghanistan and Iraq. Those countries which cannot afford to take us on militarily are now defeating us using oil as a weapon. So many people have been killed and injured in these expeditions and for what? The worst sitiuation is in Iraq. Why are we staying? What exactly is being achieved now that the Americans are in Basra. As we work out exactly how much this is costing people will turn around asking why is our country being impoverished whilst money is being 'wasted' on these wars. I beg Gordon Brown to do the decent thing and get us out. Finally, there must be a public inquiry into why we went to war in Iraq and what exactly was being done in our name. Please I don't want any more blood on my hands.

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  • Comment number 3.

    NOTHING LEFT

    joshuamoran, #1 above, makes a restrained comment on what amounts to the end of the road for Britain. We have sold out to Europe (run by a central body that seems to have been corrupt from its inception). We have a system of government – Westminsterism – inhabited by a very strange sub-set of humanity playing (inept) games with our lives at home and with our country abroad. That leaves our national broadcaster – OUR 91Èȱ¬ – (what happened to that slogan?) for us to turn to, for a grounding in reality.
    But, increasingly, as joshuamoran has addressed, 91Èȱ¬ output is debased; not just dumbed down, but eviscerated. The questions: ‘Who is doing this?’ and: ‘Why?’ remain unanswered. It is so depressing to hear our ‘Word Service’ – Britain speaking to the world, OUR FLAGSHIP BROADCASTER - open up with enough raucous racket to make even Radio 5 listeners wince. I have said before: blogging is like shouting in a bucket – then ‘they’ take your bucket away. That is the measure of my desperation and, I suspect, that of joshuamoran. Hello 91Èȱ¬ – is there anybody there?

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  • Comment number 4.

    Barrie

    I think there is lots left. I am not a pessimist. The reason why I write to the 91Èȱ¬ is because, I believe, if enough people make a noise - and make a sensible noise (not that I do, necessarily) then someone might listen.

    The problem with the 91Èȱ¬ is quite simple, in my view:

    There are too many people in the organization who don't understand the 91Èȱ¬ or who don't have the imagination and strength of character to implement the sort of television that license payers want, expect and pay for.

    How many in the 91Èȱ¬ now really care about programmes that are interesting, inspiring, creative, original, thought-provoking, and so on. A lot may talk about it. But, clearly, the people in the 91Èȱ¬ who broadcast that programme last night where clearly out of touch.

    The fact is that lots of people would love to see the 91Èȱ¬ disappear. For example, lots of licence payers see the 91Èȱ¬ as being indistinguishable from commerical TV (therefore why should the 91Èȱ¬ be treated with special treatment)? Then there is the pressure from the commerical broadcasters. And people from within parliament too - both Tories and one or two Labour members too. I think even Jeremy Paxman suggested that the licence fee should be dropped (I think, perhaps, he could clarify that). Mark Thompson failed to get an increase in the licence fee. Not surprising.

    The big picture is that if the 91Èȱ¬ carries on broadcasting c**p like that last night then it won't be around much longer. That is my real point. And that would be a shame because the 91Èȱ¬ has broadcast great programmes in the past. And because of its uinque set up (not being answerable to share holders) can do the same in the future.

    Again, I am an optimist not a pessimist. But I am, also, a relaist (I hope). And the reality is that if the 91Èȱ¬ carries on like this, then it won't be around for many more years to come. Yes it might still be called the 91Èȱ¬. But the big difference is that it would be a private commercial company answerable to share holders only. It would be like something between ITV / Channel 4 / Channel 5 / Sky (whoopeee).

    Having lived in America, I don't want this country going further down the dumbed-down TV route. TV can have an insidious affect on people. We need a strong 91Èȱ¬ to set standards. Not just that. But, also, to just to make and broadcast great programmes.

    If the 91Èȱ¬ (i.e Mark Thompson) doesn't get a grip, then the 91Èȱ¬ will be privatized, and who knows - maybe we will see naked ladies reporting the news items, instead of Jeremy Paxman and co (great fun for one or two episodes, maybe - but I want more than just titillating / sensationalistic TV (I can get that on other channels - porn channel, even - that is my choice). But I, also, want substance. And only a public broadcaster, financed by a licence fee and free of commercial pressures and share-holder accountability can achieve that.

    Thompson and co just have to realize that they can't pull the wool over people's eyes with short-term ratings over long-term respect and loyalty. I don't want them to lose their jobs. But at the same time I don't want the 91Èȱ¬ to be privatized. If they carry on like this then there is no other alternative but for them to go.

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  • Comment number 5.

    TWO FEW TO MENTION

    Pleased to meet you joshuamoran. I am in broad agreement with your #4 Only one quibble really: The ultimate optimist is a pessimist who won't give up.
    PS I am not sure about Paxman's qualities.

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  • Comment number 6.

    Barrie

    You too.

    'I feel that life is divided into the horrible and the miserable. That's the two categories. The horrible be like, I don't know, terminal cases, you know, and blind people, crippled. I don't know how they get through life. It's amazing to me. And the miserable is everyone else. So you should be thankful that you're miserable, because that's very lucky, to be miserable' - Woody Allen

    Apologies by the way: didn't mean to imply you were a pessimist! But I just wanted to make point that I am not about seeing all that is bad about the 91Èȱ¬ (as I have said the 91Èȱ¬ has achieved great things - and has the pontential to continue to achieve great things). Nor do I want to appear as if I am trying to stop people watching s*x on TV (if people choose to pay for porn / soft porn, or just watch titillation on a commercial channel - paid for by advertising - that is their choice) - but not the 91Èȱ¬ putting on programmes of titillation with tax payers' money).

    Paxman and Newsnight aren't that important in the big scheme of things. If the 91Èȱ¬ (Mark Thompson) carries on as it is at the moment - dumbed down TV, telephone scandals and so on - then it will, eventually, be privatized. And programmes such as Newsnight would continue to exist, no doubt, but things would be very different (who knows, someone like Murdoch could become owner) - so the same in name but not in values. But it isn't just about Newsnight. It is, also, about comedy, documentaries, drama and so on.

    Things started to go down hill, I think, in an important way, under Lord Birt. He achieved some things. But it was the dumbing-down of TV, and the 91Èȱ¬ becoming more about empire-building than creating quality TV, that he is remembered for. Thompson has just carried on in this vein. He isn't as bad as Birt. But Thompson has done little, I think, to suggest to me, at least, that the 91Èȱ¬ is much different under him than it was under Lord Birt.

    I think Thompson has done more damage to the 91Èȱ¬ than help it in the long-term

    - failed to get increase in licence fee
    - telephone scandals
    - more dumbing down of TV

    Just go to his personal 91Èȱ¬ webpage and you will see a section on his achievements over ratings.
    I quote:

    'As Controller of 91Èȱ¬ Two from 1996 to 1998 he saw the channel retain its share of viewing at a time of increased competition, rising from 11.2% in 1995 to 11.6% in both 1996 and 1997 and retaining a highly competitive 11.3% share in 1998'

    It is incredible. Thompson's personal website talks about 'competition'. But the 91Èȱ¬ has no competition because it is a public broadcaster. It is not meant to be competiting with commercial channels. Incredible I think. And just look at the language regarding ratings. Thompson might be a clever man. No doubt a clever broadcaster. But he should be in commercial broadcasting - not the 91Èȱ¬.

    Thompson and co are all about short-term ratings as opposed to being all about the quality of programmes and their effect on the long-term respect and loyalty of viewers (yes, they may talk about it but it is just talk at the end of the day).

    (and he failed to get increase in licence fee because, I think - and as do many others - the real reason being - that the 91Èȱ¬ is too much like a commercial broadcaster).

    Being an optimistic (as much as I love Woody Allen, I don't share his sense of pessimism ... ) I think that there is far more to life than the 91Èȱ¬! But by the same token, being an optimistic, I think that the 91Èȱ¬ does have a promising future, if only those at the top began to show a bit of understanding about what the 91Èȱ¬ and their viewers are really about - or, at least if they understand this, to demonstrate this - to demonstrate some imagination and strength of character. If not then they should go.

    If you or anyone else feels / thinks the same as me, then I urge you / them to write into the 91Èȱ¬ now - and voice your concerns. Write lots of letters. Be a complete pain. At the end of the day it is Thompson and co who are running down the 91Èȱ¬. And I think people should do what they can to stop this.

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  • Comment number 7.

    EXCELLENCE AND ELEGANCE

    I think the fault might lie in ourselves joshuamoran. The trouble with democratic righteousness is it doesn't cater for minorities but is nevertheless regarded as a given good. Anyway, I really doubt whether the 91Èȱ¬ or any other body responds to letters.

    Excellence, for it's own sake, would appear to be an outmoded concept. By the same token, I advocate elegant sourcing of energy over brute/dirty techniques followed by a clean-up but it is not regarded as a valid stance in political ecoland.

    But the elegant approach, in practical matters, ranks with honour and integrity in social ones. I doubt it is on the curriculum. It is certainly not taught by example from on high.

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  • Comment number 8.

    This comment was removed because the moderators found it broke the house rules. Explain.

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  • Comment number 9.

    The credit crunch together with the passing of a conventional oil production peak signals the need for a fresh look at recent government initiatives.

    New car registrations peaked in 2003, possibly due to congestion reducing use, but this trend will accelerate with rising fuel prices. So apart from a modicum of de-bottlenecking, no major road road expansion is needed.

    The proposed new runways at Stansted and Heathrow are clearly no longer necessary. Terminal 5 will soon suffice and the old terminals can be demolished. Attendance at Olympics 2012 will be poor - it will cost too much to fly in. Time for a pruning of facilities there.

    Due to the use of diesel for civil works, the costs of the nuclear new build from 2013 will be astronomical as will the uranium from ever leaner ores. Without subsidy, finance for the new fleet will not be forthcoming.

    Motor and airframe manufacturing will be the first casualties.

    The re-think has been done by Rob Hopkins and the Transition Town movement.
    Relocalisation is now the "nice" alternative - fortunately it has already started in Totnes, spreading to Lewes and Lampeter.
    Community self-sufficiency and "energy descent" are the new political slogans. We will get to know the neighbours as we work together for survival.

    Will Brown, Cameron and Clegg be able to adjust to new realities?

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