Hung Parliament

(written on 7th May)

The British have voted in what some are now calling the Mick Jagger election – no one| can get satisfaction. No single party has secured a sufficient number of seats to govern with a majority. It is now clear, with all but one constituency still to declare (delayed due to the death of a candidate), that it will be a hung parliament, with the Conservatives having the largest number of seats (estimated to be 307 when all results are declared), with the Labour Party coming second and the Liberals a disappointing third. The Conservatives clearly won more of the popular vote and both Liberals and Labour lost a considerable number of seats – indeed it is a real defeat for Labour, the worst collapse in over eighty years.

The results contain a number of surprises. Several former cabinet members have lost their seats. The Liberals failed to secure the momentum which many thought would lead them to be either the second largest party or a breakthrough in terms of the total number of seats – they are actually worse off than before the election in terms of representation. In fact, the Liberals are down and some well known Liberal figures are no longer sitting members of parliament.

What happens now will be this. After a period of reflection during Friday, caused by the pending thirty or so seats due to be declared during the day, Gordon Brown as sitting Prime Minister will wait to see how negotiations between Nick Clegg and David Cameron go, since Cameron has offered a wide ranging alliance with the Liberals for a national government. Horse trading at the level of policy, position and program is already underway between Clegg and Cameron, with Cameron making the running. Brown is playing a wait and see game, but is likely to leave office by Tuesday at the latest.

There will be a concern to have a clear decision before the markets open on Monday. The last thing any Government needs is a run on sterling. However, this requires some real clarity on the part of all leaders and a sense of dignity coupled with foresight to ensure a smooth transition.

The talk, at least amongst the political chattering classes, is of coalition, with some key liberals occupying cabinet positions. The more likely decision, according to Conservative insiders, is for Cameron to govern as a minority, using Stephen Harper’s Canadian government as a model. While this will be his initial instinct, it means that a large part of his strategy would be sacrificed due to his inability to secure the support of the other parties for drastic cuts to public service and significant changes to the education and health systems. The art of the possible will replace the science of the necessary. Cameron will be working hard to craft an agenda which will keep him in power for at least two years if not longer – he will need the support of a cross section of the House to make this possible.

What will be different is that the Conservatives and Liberals will agree a program that they will both support for the medium to long term – scrapping identity cards, school reform, action of the economy, changes in the House of Lords and electoral system, some changes in the tax structure and a commitment to working towards a carbon free economy. There are many areas of policy where the two parties agree, but differences are substantial – especially over Europe, the need for a replacement for Trident missiles and the speed at which they need to act on the economy.
Until Cameron can secure an arrangement with Clegg, Brown remains Prime Minister and the cabinet is intact. Brown has made an offer to Clegg that, if talks with Cameron collapse, he will be willing to seek to make arrangements with the Liberal Democratic leader. Lord Mandelson, formerly known as the Prince of Darkness and now presented as the sage of the Labour Party, suggested this morning that the electorate had voted for change. Change in how Britain is governed and a change in who governs. We will see. What is clear is that the situation is unclear until such time as Cameron is called to the Palace. It will be a busy week-end for all concerned.

At the time of writing, with all but one result declared, the Conservatives have secured 306 seats (gaining 97), Labour 258 (down 91), Liberals 55 (down 5). The Conservatives secured 36% of the popular vote, Labour 29% and Liberals 23% - the Liberals being the biggest looser in this election, since they expected to beat Labour in the popular vote. An overall majority would require 326 seats.

A Conservative Minority in the UK

With just two days of campaigning left in the British election, David Cameron has what is known as “momentum”. Polling at 35% against 28% for Labour and Liberals, the Conservative leader is increasingly looking like a winner. However, this lead is insufficient to give him an overall majority of the parties in the election. He needs 326 seats and at 35% he would secure less than 315.

More importantly, the polls are suggesting that almost half of those polled may yet change their minds at the ballot box, switching their vote at the last minute. It is a cliff hanger.

Gordon Brown is fighting back. In a powerful and emotional speech yesterday, he vowed to spend his life fighting inequality and injustice. Triggered by an emotional story from a teenager at a conference of social activists he found his passion and spoke from the heart. Nick Clegg, the Liberal leader, continues to have appeal as a person, but now that many have started to look at the Liberal policy platform, he seems stuck – they like him, but not what he plans to do.

Cameron has laid out what the Conservatives would do in the first six months in office. Repealing a large number of Labour’s more recent legislation, introducing a new budget with significant cuts to public service, starting to close down a number of quasi government agencies and cutting the pay of cabinet Ministers are all part of the package. Early on they will also begin their major reform of the education system, focusing on reducing bureaucracy, enabling cooperatives to run schools within the public school system (Charter schools run by parents, teachers and others) and changing the role of government. While some have criticized Cameron for making clear his plan – Clegg called it measuring the curtains for Downing Street – the clarity of the plan is attracting support.

It is unlikely that the result of the election will be known on Friday morning, as has been the case for the last several elections. In fact, it could take some time for the dust to settle and the outcome to come clear. If the vote is not decisive, then horse trading between the parties will begin. Gordon Brown will be asked by the Queen if he is able to form a Government and will likely try and fail, unless he also steps down as Prime Minister to enable a deal with the Liberals. If he does fail, then the Queen will call on David Cameron to see what he is able to do.

What is worrying some is the impact this uncertainty will have on the markets and on the value of the pound. Some traders suggest that the money markets have already discounted the impact of a hung parliament on sterling. Business leaders are not so sure. In New Zealand, which has had minority governments since it introduced proportional representation, this kind of uncertainty always slows investment and slows entrepreneurial development. Britain cannot afford a prolonged period of uncertainty, given its slow and fragile recovery from the recession.

By Friday mid-day the shape of the negotiations will become clear. The Queen will be advised to act quickly so that she is not seen as delaying the process of arbitrage which will preoccupy the political class and the news media for several days. It may take several days for the dust to settle and a new Government to emerge.

Whatever happens, it looks like the final days for Gordon Brown. The press are already reporting behind the scenes maneuvering for leadership amongst potential candidates. Brown himself vows to lead the party into the future, but then what else can he say. It will take a remarkable shift of public opinion over a forty eight hour period for Brown to be able to withstand the pressure for him to go after the likely defeat he is about to experience.

As an observer, this is the most interesting election since the election of 1974. Too close to call and full of raw energy, the politicians have at least managed to engage the people in the election itself. Whatever the outcome, this in itself is quite the achievement. Let’s hope they will not be underwhelmed by the outcome.

Voting Begins in Britain

Postal voters are now casting their votes in the British election and election officers are gearing up for what they expect to be a larger than usual turnout in Thursdays general election in Britain. In the last two elections, turnout has been down – 61.4% in 2005 and 59.4% in 2001 – but the interest generated by the three televised leaders debates and the disgust the electorate feel over the political class is expected to lead to the higher figures which characterized the period between 1955 and 1970 – some 75% of electors voting or higher.

A You-Gov published today place the Conservatives in the lead with 34% of the poll, while Labour and the Liberal Democrats are neck and neck at 28%. When we take account the margin of error, the election is still too close to call.

David Cameron is on the streets, television and radio making the case for a strong conservative vote to avoid the quagmire of a hung parliament and another general election before the end of the year. Nick Clegg is arguing that the race is now between him and Cameron, with Labour clearly in third place – and he has the support of The Guardian newspaper, who recommend tactical voting to ensure a Liberal-Labour coalition of the centre-left. Brown is apologizing for being Gordon Brown, but defending his record on the management of the economy.

The key to the election will be undecided voters and the protest votes. A great many undecided voters are normally “decided”, but don’t want to declare themselves. On this occasions, they are genuinely undecided – unable to make a choice. Many of these undecided voters are former Labour voters who are now so disillusioned with Brown and disgusted at the expense scandal that they feel stranded in the middle of a raging river with debt, deficit, challenging issues in education, health and misery over the Iraq war raging past them. The Liberal Democrats are natural allies, but are not likely to form a Government. The Conservatives, who have adopted a manifesto that would have been a classic Labour manifesto under Harold Wilson, have an unpalatable past for a wavering Labour supporter, are a real choice, if they feel that they can trust Cameron to honour his contract with the people. It will be a difficult decision.

Some will make a protest statement. In the North, the British National Party (BNP), a neo Nazi coalition of odd balls and right wing fanatics, will likely retain their current two seats and possibly pick up another. The Green party may attract more voters, as will some of the independents. With over one hundred and fifty incumbents having retired – the largest number to leave Westminster since the 1920’s – voters cannot take comfort in many places by returning their sitting MP.

Having run a constituency at the time of a general election, this coming Monday and Tuesday are tough days. One mistake, one off the cuff remark, as Gordon Brown can attest, can lose the election for a party. More significantly, party organizers will be rallying their workers to get the vote out – praying for good weather and trying to firm up their base of support. Every vote will really count this time and the “agents”, as the managers are called, will be working overtime on logistics and intelligence – finding out who will vote for their party and making sure they get them out to vote. The weather forecast is for patchy rain and chilly – not a good omen.

Speaking with voters in Wales and others here in Lancashire, one has the impression that the leaders of the three parties have increased the level of resentment towards the political class rather than lowered it. All three are seen as “talkers, not doers” and all three are seen as avoiding the elephant in the room – real and substantial budget cuts and tax adjustments that are needed to get Britain back in the black. One business owner who runs a Wine Bar in Llangollen observed that not one of them has spoken clearly and specifically about what they will cut and when, but instead have talked in generalities. Another retired public sector worker wonders when the three parties will wake up to the bloated size of the public service – the public sector in Wales accounts for 64% of the GDP of the nations and almost all of the jobs created since Labour came to power are in the public sector or owe their existence to subsidy.

Five days to go – one hundred hours of campaign time. Pubs are filling up with political talk over beer, wine and coolers. The outcome is anyone’s guess, but polls have been wrong before. In 1992 the pollsters did get it wrong, and most of them didn’t cover themselves in glory in 1997. New methods and new companies may make polling more efficient and potentially more accurate, but the electorate have a habit of surprising people. In 1992, the opinion polls, which had normally predicted election results fairly accurately, were not just wrong but spectacularly so. The five main UK polls published on the morning of the general election predicted a Labour lead of 0.8 %, which would have ensured a hung parliament with Labour as the largest party. The BBC and ITV exit polls suggested a Conservative lead of 4%, which would have resulted in a hung parliament with the Conservatives as the largest party. In fact, the Conservatives were 7.5 % ahead and John Major was able to form a Conservative government with an overall majority of 21 seats. Cameron is hoping that the same story repeats itself on Thursday. We will soon know.

Liverpool and Brown both Lost Last Night

The British electorate faced a difficult choice last night. Should they watch the final Prime Ministerial debate, which focused on the number one issue – the economy – or should they watch Liverpool play Athetico Madrid in a semi final game of the Europa League? Most watched the soccer and they were wise to do so.

The debate, despite a few interesting moments, was as dull as ditchwater. Labour’s Gordon Brown hurled numbers and data at the viewer with no concern for their anger, despair or serious concerns about their jobs, inflation and rising prices of gasoline, housing and food. Nick Clegg, the liberal leader, was clearly out of his depth and struggled for coherence. David Cameron, increasingly looking like a future Prime Minister, scored goal after goal, yet never seemed to emerge as an insightful, caring and smart Conservative leader that the right wing press tell us that he is. The debate was tedious, uninspiring and contained only one new insight.

That insight is what the media picked up today – not one of the three leaders talked seriously about either taxation or spending cuts, both of which need to change if the next Government is to fight the growing problem of deficit, debt and out of control spending by the Government of Britain. And this matters. As the European Union is discovering, not tackling debt and not clawing back profligate spending has consequences – both Greece and Spain’s sovereign bonds are now officially “junk” and there is a growing concern that, even with both the IMF and the EU propping up Greece, there may be sovereign debt defaults in the Eurozone. Portugal and Italy are also in serious difficulties. Ireland and Britain are close behind. A failure to tackle this issue head-on and quickly will be disastrous for Britain. Everyone knows this and is ready for it, yet the leaders rarely talk about it.

One third of the British available for work population either works for Government or is paid in some measure by the Government. This is a large chunk of the electorate. The leaders fear that if they tell the truth about spending cuts, voters will desert them. Gordon Brown, for example, did not deny that some £20 billion will be cut from the National Health Service, but made the ridiculous claim that none of these cuts would have any impact on front line services – how naïve does he think the British electorate is. Cameron has also vowed not to cut health, yet it is a massively expensive and very inefficient service. Clegg’s position on cuts is also vague – he talks of efficiency and removing duplication.

Clegg’s most serious error is to insist that the banks should be forced to lend to those seeking to build small businesses or buy their first house. This is exactly what Governments should not be doing – creating a lend at any cost market for borrowers who cannot afford to pay back the loans. This is how the trouble began in the US and why lending has to be the target of tough regulation. Bank taxes and bonuses are not the issue – profligate risky lending is.

On taxation, all three are talking of taxing banks, outlawing bankers bonuses and making the financial system tougher. The Conservatives are talking about scaling back some payroll taxes, but they are not talking about increasing sales taxes and taxing inheritance – both of which they plan to do.

At the end of yesterday, polling still showed, all three parties are still so close that the election outcome still looks like a hung parliament. The Labour party is polling third, but the difference between the Conservatives and Labour are within the margin of error of the polls. The debate will have made no difference to the poll results. What will is the fact that Brown is increasingly looking and behaving like a loser.

On the day before the debate, Brown was confronted by a long time Labour supporter who asked him what he was going to do about jobs, adding that she thought the presence of so many Eastern Europeans was making it difficult for British workers to get jobs. He answered her question, not very coherently, but was heard to call her a “bigot” when he was getting in his car to be driven away. His comment was captured on tape and broadcast. He had to apologize and then work to recover his image, already that of a bully and an angry man. His recovery made, the people will not forget.

Cameron is increasingly looking like the main beneficiary of the peoples anger at Labour in general and Brown in particular, but not sufficiently statesman like to command the lead. In a hung parliament, he will need a large group of independent MP’s and the Liberals to form a coalition that can govern.

Clegg’s naiveté will be a problem for Cameron. Clegg is insisting of electoral reform as a precondition to collaboration and is also suggesting that the Liberals should get some cabinet seats. This is not at all what Cameron has in mind, so we can expect a prolonged struggle over the shape of the Government. Meanwhile, Brown’s acolytes have been exploring options with their Liberal counterparts. Given Brown’s thirst for power, it is thought by some that he is more likely to cut a deal with the Liberals than Cameron. As sitting Prime Minister, Brown will have first run at cabinet making – in a hung parliament, the Queen is likely to call on Brown to see if he can form a Government, even if the Conservatives have gained significantly more seats than they had at dissolution. Clegg signaled last week that, if Brown came third, he can hardly lay claim to being Prime Minister, suggesting that any deal with Labour would need to be with a different leader – also unlikely. So it will be a messy few days or weeks before the Government becomes clear.

Anthony Howard, the seasoned political observer, appearing on television, reminded viewers that there is a big difference between opinion polls and elections and also a good few days to go. He still thinks there could be a swing to the Conservatives sufficient to give them a very narrow victory, though concedes the possibility of a hung parliament. The way seats are distributed requires a significant swing – 12% or more – to the Conservatives for outright victory in 326 seats or more. Voters are so disgusted with the political class as a whole that such a large swing is unlikely.

The vote is on Thursday May 6th. There is long week-end holiday just before this, which will give some respite from the bickering of the leaders and the relentless television coverage. No one is wasting time talking about real austerity policies or real change – it is all now about trust. No one seems to have sufficient trust in the political class to give them a right to rule, which is the real lesson of this election to date.

Liverpool lost, by the way.

Ten Days to Go and All Up For Grabs

Just ten days to go before the British general election and uncertainty about the outcome is on everyone’s mind. The latest opinion poll, taken after the TV debate on Thursday, shows the Conservatives in the lead with 35% and the Liberals and Labour tied for second place, with Labour just a point behind the Liberals at 27%. With a 3% margin of error in the polling, the election is too close to call, though it is clear that the momentum has returned to the Conservatives.

Nick Clegg, the Liberal Democrat leader, has occupied a great deal of attention during the last week or so following his surprisingly stong performance in both the first and second leaders debate. The third and last of these debates will take place on Thursday and the focus will be on the economy. This is the debate that matters. First, the economy is one of the two key issue on which many voters will make their decision – the other key issue is trust. Second, the parties have sharp differences on what they will do to restore Britain’s economy, now badly damaged after massive spending since 1998 leading to deficits and debt.

The conservatives want to cut programs. So does the Labour Party. Reports are beginning to appear of substantial cuts to the National Health Service, in the order of £20 billion by 2014, now being planned by Labour, despite promises to maintain health care as the top priority. Labour plans to find efficiencies without affecting front-line services – cutting most of the administrative trivia they themselves imposed on health, education, social services, policing and other agencies. They also plan increases in overall public spending while cutting.

The conservative party have pledged not to cut health and foreign aid, but to eliminate "the bulk" of the UK's structural deficit within five years beginning in 2010 with £6bn in cuts. One of the ways they intend to do this is by permitting charities, trusts, voluntary groups and co-operatives to set up new Academy schools, independent of local authority control, and to run other public services – doing for a range of public services what Margaret Thatcher did for housing.

The Liberals, whose policies are now being taken seriously, are also proposing cutting spending. They are identifying £15bn of lower priority spending per year which they will cut so as to protect front-line services while reducing structural deficit at least as fast as Labour plans, beginning in 2011 – basically, the same policy as Labour. They intend to raise the threshold at which people start paying income tax from £6,475 to £10,000, which is a populist move and will simplify the tax system. They will also impose "mansion tax" on the value of properties over £2m and increase capital gains tax to bring it into line with income tax. This “mansion tax” sounds like a lot, but a lot of people who bought houses in parts of the UK in the 1950’s and 60’s now find that they are worth close to or above this sum, so this will alienate some of the middle class. Finally on the economy, the Liberals plan to introduce a banking levy until such time as banks' retail and investment arms can be separated – a proposal also made by Labour.

The real difference is that Labour has demonstrated itself incapable of stimulating the economy, the Conservatives understand the challenge and the Liberals don’t expect to win, but are aligning themselves with Labour in case there is a coalition government.

Clegg is already laying out terms. Last week he made any coalition dependent on the speedy introduction of proportional representation into the British electoral system – it already occurs in Scotland and Wales. This week-end he had made clear that, if Labour comes third, it would be absurd for Gordon Brown to remain as Prime Minister in any coalition – a clear bid for the job in such a Government.

Talk of a hung parliament is making the financial community anxious. The key to recovery, they suggest, is stable government. As we can see from the Canadian experience, minority governments are constantly concerned about their ability to stave off votes of no confidence. Coalition governments, as we can see from many European countries, can be successful usually for a short period of time. At some point, a majority government is needed to govern effectively – the financiers say. Economic growth in the first quarter of 2010 was 0.2% - half of the growth predicted by the analysts. Investors are waiting to see the outcome of the election, and may show signs of jitters the day after if the outcome is unclear.

Meanwhile, the leaders are on the “stomp” pitching their ideas to a bemused public. While millions have tuned into the leaders debates, most remain ignorant of what the parties actually intend to do. Many are also meeting candidates they have never seen before. Some one hundred and fifty MP’s retired, the largest number to leave politics at the same time in over a century. Trusted local MP’s are no longer there, so uncertainty is increased. The poll is on May 6th – there is a lot yet for the candidates to do to get their message out.

Clegg, Cameron & Brown - Talking Suits

David Cameron began the second televised leaders debate of the British election with a lot to prove. Just two weeks to go and he is not doing as well as he needs if he is to ensure an overall majority on May 6th. For Cameron, the debate was meant to be an opportunity for him to capture some momentum and to put to bed the fantasy that the newly popular Liberal leader, Nick Clegg, could perhaps form the next government.

For Clegg, he could either build on the momentum he secured following last weeks debate or begin to lose ground. Gordon Brown, the hapless Labour leader who has been practicing smiling and learning not to be funny, sought to display his foreign statesman credentials as a way of trying to stall his inevitable demise.

Both Cameron and Brown sought to attack Clegg, Clegg came out the winner in the last debate and the task on this occasion was to bruise, blast and belittle the Liberal leader. He was not helped this week by the disclosure that some significant financial donations to his party were paid directly into his own bank account. He did, however, hold his own and came out well.

Clegg is articulate, insightful, funny and smart. Words that we could also use to describe Cameron. The difference between Cameron and Clegg is that no one expected Clegg to do so well and everyone was looking to Cameron to shine. Cameron was dull when compared to expectations and Clegg shone against the lack of expectation.

Nothing happened on this occasion to shift opinion. The debate was, if anything, solid and dull. The opinion polls will not be radically impacted by the debate this time round. There is one more debate next week, just seven days before polling which could be more important.

The big winner is television. Despite the fear of voter apathy and alienation, viewers have tuned-in in very large numbers to watch at least some of these debates. The fact that the first made history – both for the very fact of it occurring and for the impact Nick Clegg had – reinforced the importance of television.

The election outcome is still too close to call. What Clegg also did this week was to up-the ante on any post-election horse trading if there is a hung parliament – he is demanding immediate action on proportional representation as a condition of his support for either of the other parties. He is also making clear his expectation that support involves more of a coalition that, as with Canada, tacit support through parliamentary voting agreements. The real election result may not be known for some days after voting on May 6th.

Election TV

Fifty years after the US began Presidential TV debates, the British viewing public were treated to the experience of a debate amongst the three front runners in the British general election – Gordon Brown, David Cameron and Nick Clegg. In an otherwise average piece of television, Nick Clegg came out of the debate ahead of his rivals. Gordon Brown disappointed even his own champions. Cameron was acceptable.

There were no knock-out blows or disastrous gaffes, no jokes that were memorable and no new policies. This did not prevent fierce clashes over issues such as economy, MPs’ expenses and immigration, over which the parties disagree. On the economy, Brown wants more investment from government and Cameron austerity. On the MP’s expenses no one can agree what needs to be done now. On immigration, the parties take a different stance on the link between jobs and immigration – Cameron wanting to ensure that more jobs go to British born workers and Brown and Clegg preferring to remain vague. All three agree that immigration is too high and needs to be curtailed.
Clegg was polished, assured and articulate. He positioned his liberal party as a rational, mature alternative to the bickering of the traditional two parties of power. He outlined ideas and policies which, on the surface, sound rational and he won the popularity poll hands down. In snap surveys taken immediately after the debate, he secured between 43 and 51% of the poll, depending on which pollster you want to listen to. There are two more debates before election day on May 6th – the next one on foreign affairs and the final one on the economy. All three leaders will be working to improve their performance.

The themes of the election came out clearly. Cameron reiterated, every time Brown appeared to have a new idea, that the Government had been in power for thirteen years and is now seeking another five to do what they should have done all along. Brown speaks of his experience and being a steady hand on the tiller of the ship, which many see to be sinking. Clegg suggests that the more the Labour and Conservative parties argue the more they sound the same – it’s time for a change.

Close to ten million voters (9.9 million in fact) were watching peak time politics – a kind of job interview in front of a nation. This means that some twenty five to thirty million will be talking about this over a coffee or beer and a cigarette for the next few days. A novelty in itself. But they did not watch a great game changer or are unlikely to now see the parties in a different way and may well return to East Enders or Coronation Street rather than watch the next two debates. Though history was made by the fact of the debates themselves, what was said was not new.

Clegg will try and use the momentum from the debate to argue that this will be the breakthrough election for the Liberals. He will suggest that he has the momentum to form a Government. The Liberals have suggested this in every election since the second world war and have never come even close. This time, however, it will cement his position as the potential king maker if there is a hung parliament. Clegg did himself no harm. His challenge is to repeat this performance on two more occasions – all eyes will now be on him.

Brown is not good at television. His basic grumpy intellectual side seems to shine through the camera like a laser, even when he is trying to be funny. His humour is also, well, not funny. His big joke, wait for it, was to thank David Cameron for showing him as a smiling man in the posters which adorn the billboards across Britain. See what I mean. Cameron is a polished performer and that is his problem. He comes across as what the Brits call “smarmy” – a kind of performing spin doctor whose words sound good until you read them in the cold light of day. He is Blair again. This was very obvious in last nights debate. Clegg won because he seemed the only one who was both comfortable and genuine, but then he can afford to be – he has no real chance of winning.

The polls published today show the Conservatives with a seven point lead over Labour who, in turn, have a ten point lead over the Liberals. The election is still too close to call, though the Conservatives appear to have some momentum. It will be a few days before we can see what impact, if any, the TV debate had on core voter opinion. The race will begin to settle only in the final week of the race – the first week of May.

Knives and Politics

The three major British political parties have released their manifestos – a kind of blueprint for what they might do until they discover just how bad the situation really is once in office. The situation is serious – all agree – but none are tackling the challenge of debt, disaffection and continued economic uncertainty head on. It is as if the manifestos were written before Britain became a debt loaded country.

The Conservatives are the most radical. They are offering a “power to the people” strategy, in which public services are subject to more local control. Residents would win the right to instigate referendums if 5 per cent of local people backed the move. The Tories also want to see more elected mayors and police commanders. Communities would be allowed to take over pubs and post offices threatened with closure. Public-sector workers would be encouraged to form "co-ops" to run services like nursing teams, schools or other public services. They are focused on changing the way government engages with the economy, reducing some proposed tax increases, changing the way in which government programs are funded. In terms of health, the Tories have promised "real choice" by entitling patients to choose any healthcare provider – including private clinics – within NHS prices, while people would be guaranteed access to a local GP 12 hours a day, seven days a week. Top-down Government targets, such as waiting times for treatment, would be scrapped in a blitz on the "endless layers of bureaucracy and management". Schools would undergo their biggest reform for a generation, with the establishment of state-funded "free schools" run by parents, teachers' charities, trusts and voluntary groups.

The Labour party manifesto is offering more of the kind of government that has been in place since Blair won power in 1997. On education, Labour is offering a new idea: Promise of "a choice of good schools in every area". Where parents are not satisfied, they will have the power to trigger a ballot on bringing in a new school leadership team from a "proven and trusted accredited provider" through a merger or takeover. Up to 1,000 secondary schools would be part of such an accredited schools group by 2015. On the economy, Labour pledge to build a hi-tech economy, supporting business and industry to create one million more skilled jobs and modernising our infrastructure with High Speed Rail, a Green Investment Bank and broadband access for all. Nothing new there.

The Liberals are focused on their usual list of policies: fairer taxes, economic reform, a pupil premium for the poorest children worth some $2.5 billion in all and constitutional change. What is most important about the Liberal manifesto is that it is silent on the idea of coalition or support for a minority government, which is looking more like the outcome of the election. It is not possible to read their manifesto and detect a bias which would favour an alliance with one either the Labour or Conservative parties.

The polls now show a narrowing of the gap, already slim, between the Conservatives and Labour, with one poll having the Tories lead by just 3% - the same as the margin of error. The average is a six point lead – not enough for the Tories to secure a majority government. The British people are having a hard time buying into the idea that David Cameron is a statesman like leader who is right for Britain at this time, but they also dislike Gordon Brown. Trust is the real issue here.

There are three weeks to go. Harold Wilson, former Labour Prime Minister, was fond of reminding his audiences that a week is a long time in politics. A lot can yet happen. Usually at this point, clear patterns of voter interest, concerns and behaviour begin to emerge. Not this time. Most pundits are convinced that there will be a hung parliament and furious efforts are been made behind the scenes to see what alliances and alignments can be made. One insider has indicated that the trade off process from the minor parties has already begun, with Plaid Cymru (the Welsh Nationalists) offering to support Labour under certain conditions.

What is certain is that a large number of the British electorate are yet to show any real interest. The campaign has not got them fired up or engaged. Despite the hype, its business as usual for the majority of Brits. The front pages of the newspapers carry some election news, but are more concerned with gossip and froth than with the future of the country. Front page news today – butchers at one of Britain’s largest supermarket chains have been advised not to use knives, since these are dangerous. It seems that there is more interest in this story than in creating a new golden age of politics.

The Canadian Broadcasting Castration

What is a commercial, as in radio commercial? There are several definitions. One is this: “pertaining to commerce and having either monetary or non-monetary gain as motive”. Keep this in mind.

The Canadian Broadcasting Corporation (CBC), which some wits now call the Canadian Broadcasting Castration, following the cuts made to classical music programming over a year ago, is funded by over $1 billion of public funds. It constantly complains of poverty and constantly irritates the public by its whining and general misery-boys performance when in front of Senate and Commons committees.

But it is now unbelievably frustrating to listen to. One reason, and for me it is serious, is that is constantly runs commercials (see definition above) saying that it is commercial free. This nonsense is repeated three or four times an hour – trailers for other CBC shows or just the annoying repetition that you are listening to CBC Radio 2 which is commercial free.

When I wrote to the CBC, both by snail mail and email, I receive no response. As an owner of this Castration I feel demeaned by this lack of interest in the views of shareholders. As a listener to CBC Radio 2 between 9am and 2.45pm on weekdays (Mountain Standard Time),this is slowly driving me to drastic action. I don’t know what form this will take, but it could well be streaming BBC Radio 3.

Its no wonder that the CBC gets a rough ride in the public mind when it both disregards us and then insults our intelligence.
Rant over.

REBOOT, RETHINK, REGROUP - The New Reality of Climate Change Science and Policy

A parliamentary committee in Britain has largely exonerated Dr Phil Jones, Director of the Climate Research Unit at the University of East Anglia and a key figure in Climategate. While they wee very critical of the practice in climatology of not releasing raw data at the same time the analysis of that data is published and of not responding to legitimate and entirely correct requests under the Freedom of Information legislation in the UK to release these data, the committee was in a forgiving mood.

Their review and conclusion do not alter one basic fact. The global temperature data set which came from Dr Jones and his two colleagues is not readily available for public scrutiny. This is important, since the data set is at the heart of the claims made by the Intergovernmental Panel on Climate Change (IPCC) that there is aggressive warming of the planet taking place. The raw data does exist and can be reconstructed from other records. What does not exist is the systematic adjustments made to these data by Phil Jones and his colleagues to account for urban heat sinks and other anomalies – adjustments which, when made, make all the difference between the raw data and the published data.

Here is why. Measurements of the surface temperature are made by simple instruments which are meant to be located in places which are unaffected by human activity – cars, heat sources, large buildings. Many are inappropriately located and adjustments have to be made to take into account the impact of these factors on the measurement. Thus whenever you see reference to global temperature you are not looking at a reading from an instrument, you are looking at data output from a model of what the instruments would say if only they were located in a different place. How the model is built has a major impact on what the surface temperature will be.

Ross McKitrick at the University of Guelph has analyzed the published data and used it to reconstruct models and then tested these against raw data sets which are available. His conclusion is simple. Most of the warming reported in the literature can be explained by the urban heat sinks and locations of the measuring instruments. Rather than measuring climate, the Phil Jones data is actually measuring industrialization – where industry and man has an impact on measuring instruments. Almost all of the temperature rises reported in the Phil Jones models can be explained by non-climatic factors.

It gets worse. The IPCC claim that the matter is settled – there are no significant effects of industrialization on the measurement model. In fact, the IPCC say in the Summary for Policymakers, that the impact of such effects have a “negligible influence” on the data. They cite no substantial evidence for this claim. It is now clear that the evidence does not support this view and that the IPCC fabricated the evidence to support their claim.

This is a crucial matter. If the basis of the warming claim is problematic, what else is problematic? We know that the IPCC got it wrong on the claim that the ice caps on the Himalayas were melting so fast that they would soon be gone. We know that they got the measurement and claims about sea level rises in the northern hemisphere. We know they are dead wrong in the claims that the warming climate is increasing the number and severity of storms. We know they got claims about the Amazon rainforest wrong. In all, we know that there were sixteen claims that cannot be supported by the available peer reviewed evidence and that many of the claims made by the IPCC were based on what is known as “grey literature” – non peer reviewed materials in newspapers, leaflets, pamphlets and magazines.

Der Spiegel, the German insight newspaper, has published a major eight part series of online articles this week about the “superstorm” affecting climate change science. Written in English, the articles explore the mistaken claims of the IPCC and use simple language to make clear that the science is not settled and that several major claims of the IPCC are demonstrably false. They look to what they call “politically charged science” as an explanation for why the boundary between science and politics has been so blurred and how campaigners become scientists who use their own scientific claims as a basis for their own campaigns.

They look at several examples, but the most telling is the generally accepted political idea that temperature rises must be limited to 20C or the planet is in peril. This idea was central to the conversations at Copenhagen and remains at the heart of policy debate in Governments around the world, most especially in Europe. Climate models involve some of the most demanding computations of any simulations, and only a handful of institutes worldwide have the necessary supercomputers. The computers must run at full capacity for months to work their way through the jungle of data produced by coupled differential equations. All of this is much too complicated for politicians, who aren't terribly interested in the details. They have little use for radiation budgets and ocean-atmosphere circulation models. Instead, they prefer simple targets. For this reason a group of German scientists, yielding to political pressure, invented an easily digestible message in the mid-1990s: the two-degree target. To avoid even greater damage to human beings and nature, the scientists warned, the temperature on Earth could not be more than two degrees Celsius higher than it was before the beginning of industrialization.

Der Spiegel suggests that this is scientific nonsense. "Two degrees is not a magical limit -- it's clearly a political goal," says Hans Joachim Schellnhuber, Director of the Potsdam Institute for Climate Impact Research (PIK). "The world will not come to an end right away in the event of stronger warming, nor are we definitely saved if warming is not as significant. The reality, of course, is much more complicated." Schellnhuber is the “inventor” of the two-degree target. This one idea, which has no basis in science, made him Germany's most influential climatologist. Schellnhuber, a theoretical physicist, became Chancellor Angela Merkel's chief scientific adviser.

Half truths, fabrications and outrageous claims do not make for a science. More specifically, they do not create the conditions under which a science can be “settled” or trusted by the public. Der Spiegel’s eight part series is a major challenge to the scientific community and to those who claim to be using science as a basis for policy. Trying to use fear to secure a radical agenda is not what we expect of either science or government. What needs to happen now is for us to start again with a dispassionate look at the science, pressing the restart button on public policy and stop the use of fear as a basis for action.

We have time. There have been many periods in human history when the planet has been warmer and when CO2 concentrations have been higher. We are adapting. Great work is taking place to reduce CO2 emissions, to increase our use of renewables and to green the planet. We can get science back from the post-modernists and return to a critical, sceptical and transparent form of science which truly engages the scientific community in scientific work stripped of polemics.

Now what we need is for the politicians to catch up and to understand that their religious fervour is out of place with their public and that the parade they thought they had rushed to the front of has dispersed behind them. Its time to rethink public policy.

The Phony War

The Prime Minister of Britain gets to decide when an election will take place. Right now, Gordon Brown has not declared his intention. Everyone expects that it will take place on May 6th of this year. The horses are at the starting gate, but the starter gun has yet to go off. It looks like this could be a classically short election – just three to four weeks. Expect the election to be called in the next ten days.

It will be close. As of today, the Conservative lead is just six points – not enough for them to form a Government, but close enough to the Labour party to make for a hard fight. Even after the Chancellor, Alistair Darling, and his opposite numbers in the Liberal and Conservative party did a television debate, following the presentation of Labour’s budget, the parties remain close. None of them could convince the British public that they had a handle on the country’s finances.

Meantime, Gordon Brown is enjoying a renewed sense of energy. Boosted by a strong endorsement by Tony Blair and a weak performance to date by his opponent, David Cameron, Brown is beginning to look statesmanlike. He has weathered accusation of being a bully and a bore, and has started to appear as a strong man with a soft spot for his family. He is changing his appearance and starting to look, well, smart.

Cameron, in contrast, is looking hapless. He just can’t get his mojo to work, as they say. A speech on the family went nowhere and his rhetoric of change, mirroring Obama’s during the US election, just sounds vacuous. His strong stance on the economy, which is attracting strong support from British industry, is weakened by members of his own party undermining his policy.

Labour has focused its big guns on attacking the Conservative finance spokesman, George Osborne. They don’t like his elitist background – wealthy family, public school and a good university. But their major concern with Osborne is that he is proposing policies which challenge the tax and spend strategy Labour is fond of. But Osborne is smart. He has secured support of the leaders of industry for a campaign aimed at lowering a tax on employers and employees which Labour intends to raise. He has connected this to a strategy for job creation and is winning the argument that tax and spend will slow recovery, increase debt and cause more and more to become dependent on the State. He is fast becoming both the lightening rod for attack and the bedrock of a fight back by the Conservatives.

Osborne is also suggesting that there is a lot of waste in Government – something the Government denies. Yet the budget brought down by Alistair Darling just a few days ago also seeks efficiencies and more effective government – around $20 - $25 billion a year. In a nanny state where over a third of the population receive state subsidies, waste and inefficiency is inevitable.

What the general public have yet to realize, but will as soon as the election starter gun goes off, is that this election is about more than the economy and finance. It is also about the nature of Government. Labour believes in big government, central planning and high levels of target setting and accountability measurement. One example of the change that the conservatives envision is in education. The manifesto commits the Conservatives to developing vouchers which will follow the child, reforming the system so that Charter schools can be created to meet student needs and restoring the role of parents, teachers and community in designing education. Modeled on developments in Sweden, the strategy is one of ending the state control of the system and enabling massive privatization.

They have a similar strategy for health. Rather than insisting that services be provided by the National Health Service – the third largest employer in the world – the Conservatives will permit state employees to privatize the services they offer. They will also give real authority to local health providers and reduce the power of central government.

This major ideological difference will become a campaign focus during the election – it will rival the economy as a deciding issue when voters stand in line to vote.

The betting is still on a hung parliament – no one party having a sufficient majority to command the levers of power. In this event, the Prime Minister may be given some considerable time – some suggest up to a month – to form a coalition. Britain is used to a change of power within twenty four hours of the election result are known. Sir Gus O’Donnell, Secretary to the Cabinet and the most senior public servant, recently told a Commons committee that it would be up to the Prime Minister to decide when to resign even if the Conservatives had the majority of the seats in the house. It will be tense and interesting.

Right now it’s the phony war. When Gordon Brown calls “start” we can expect fireworks. It is the most important election since Thatcher stood down.

After Health Care, Climate Change

With health care almost through the US Congress – just the small hurdle of a simple majority Senate vote to come – the attention is now moving to the climate change legislation that has been stalled in the Senate for some considerable time.

Democrat senator John Kerry has been working for several months with Republican Lindsey Graham and independent senator Joe Lieberman, to develop a compromise version of a bill that they think could secure bipartisan support. This move has received support from the environmental organizations as well, surprisingly, from the American Chamber of Commerce. There appears to be fast moving support for the new bill, due to be released before the end of this week.

The new bill downgrades emission reduction targets as set out in the original and much derided Boxer-Kerry bill, proposing cuts in emissions of 17 per cent by 2020 on 2005 levels as opposed to the original 20 per cent target. The new bill also proposes increased financial support for the nuclear energy, domestic oil and gas, and clean coal industries, and sets out many safeguards designed to support those sectors that would be hit hardest by the introduction of a nationwide emissions cap-and-trade scheme. For example, it raises the prospect of a price ceiling for carbon credits, financial assistance for those sectors that face the threat of "carbon leakage", incentives to help farmers cut emissions, and trade measures to protect US firms from "imports from other countries that do not adhere to emissions-cutting measures". This last provision targets, according to some commentators, bitumen from the Alberta oil sands.

Gone, at least for now, is any suggestion that a new draft bill will include cap and trade arrangements covering all of US industry. Instead, it is likely to focus initially just on energy producers, with provisions for this to be extended later to other manufacturing sectors.

One other provision of the bill will to encourage and enable investment in green technology. This will be done in part by direct government investment, support for feed-in tariffs and other R&D investments, but may also include other measures. Meantime, in Britain, the Government has indicated its intention of creating a state run Green Investment Bank with initial capital of £2 billion ($3 billion) and other jurisdictions are looking at issuing Green Bonds to support technology developments related to climate change mitigation, renewable energy and transport systems.

Opposition to the bill will likely be strong. Senator Inhoffe, the High Priest of climate change skeptics, will oppose any attempt to introduce emissions controls, cap and trade and supports for renewable energy on the ground of it not being needed (the science is corrupted) and being bad for the economy. Others will oppose the bill on the grounds that it doesn’t go far enough. Yet others will suggest that the US cannot afford to do anything while its debts are so high.

Canada will watch these developments with interest. There is a clear commitment that the Canadian cap and trade and climate change policies will be aligned to those adopted by the US. Based on the idea that doing otherwise might create competitive disadvantage for Canada, focusing cap and trade on energy producers and creating incentives for technology based innovation is in line with the current Canadian governments thinking. The Liberals, NDP and Bloc will likely seek to push Canada to do more than the US.

Health care reform is a key moment for the Obama administration – a turning point from being a “no change yet” President to becoming “a yes we can, a little” President. Climate change is likely his next challenge.

Clegg - The Kingmaker

With six weeks to go before the British general election, not yet called by the Prime Minister, betting on the outcome is moving quickly. The online betting store paddypower.com is looking at a very close election. David Cameron’s Conservatives had odds of 1-7 and Gordon Brown’s Labour Party have odds of 4-1. A hung parliament is looking increasingly likely. Polling on St Patrick’s day gave the Conservatives a five point lead over labour, with a 3 point margin of error. Its very close.

These odds and polls gives the spotlight to the would be “kingmaker”, Nick Clegg of the Liberal Party – the odds of him winning the election outright are 150 – 1. The Liberal Party is being courted by the outriders of the two main parties, since his guarantees of support would enable either Labour or the Conservative party to claim victory in a minority government, supported by Liberals.

But what would Clegg want in return? Clegg is, by instincts, a watered down version of David Cameron and he would be most inclined to cut a deal with the Conservatives. However, his party – once the bastions of power in nineteenth century Britain, are generally left of centre and more sympathetic to Labour. He has established four tests for power sharing or support for Government. These are: lower taxes on the poor, a pupil premium in education, a greener economy, and political reform. Each of these are accompanied by policies which he would expect his political partner to endorse.

He would also expect, though it is difficult to understand why, a raft of cabinet positions in a true coalition government. Indeed, Vince Cable, his very capable shadow finance minister, has already been in talks with officials from the Treasury and he is touting himself as “the next Chancellor”, likely to be the most unpopular person in Britain once the election is over. Britain is mired in debt and the EU are demanding that taxes increased and programs be cut dramatically so as to pay down deficits and reduce debt. Britain already has the highest personal tax rates in the G8 and has a deficit close to 12% of GDP – twice the average of the EU. Personal debt levels of British households are also very high - 170 percent of overall annual income, compared with 130 percent in the United States – indicating that any reduction in social support services or increase in taxation will be very difficult for the public to tolerate.

Clegg’s thinking is based on the idea of a coalition – power sharing. Based on the election results, whoever is successful in courting Clegg would allocate a number of key cabinet positions to the Liberals and would form a power sharing executive. The least likely position the dominant party will allocate to the Liberals is the position of Chancellor of the Exchequer – the finance ministry. This will be the central position in any British government for a decade to come. More likely are positions in Education, Health, Social Services or Justice. The problem here is that the benchstrength of the Liberal Party in these portfolios is weak.

It is also unlikely, given Cameron’s desire to be an agent of social change in Britain – especially in relation to health and education – that a Liberal coalition would last long. Disputes at cabinet, significant tensions over policy direction would flare quickly and the whole enterprise might fall apart almost before it got started.

A more likely model for resolving a hung parliament is the Canadian model now in place in Ottawa. The party with the most seats, but not enough to form a majority government, acts as the Governing party and trusts in the support of the house issue by issue. While this is less stable in theory than a coalition, given the scale of the challenge Britain faces, it is more likely to be the case that the Conservatives could govern in this way for a period of time – say two years – before being defeated on a key issue. It is known that the “backroom boys” in Cameron’s conservatives are looking closely at Stephen Harper’s strategy for maintaining an aggressive minority government.

Whatever happens, this will be the most interesting election in Britain since Thatcher was first elected Prime Minister on 4th May 1979. Should Cameron repeat her success on the 6th May 2010, he will have an urgent set of tasks to start to restore confidence in Britain’s economy and to reduce the size, scope and intrusion of Government. Should Labour win, which is still a possibility (though remote), Brown will have succeeded in proving that miracles can happen and that Lazarus is not the only person to have come back from the dead.

What we know for certain is that paddypower.com, in taking all of its bets on the outcome of the election, will be the sure fire winner.

Reviewing the Review - IPCC Whitewash

When the environment ministers from around the world met earlier this year, they concluded that the IPCC should be reviewed. They based this decision on the evidence of a growing catalogue of demonstrable errors of fact in the 2007 Fourth Assessment Report (FAR) and on the clear evidence that many of the key findings were not based on peer reviewed evidence but on the so called “grey literature” – magazines, pamphlets from environmental lobby groups and other material. They also expressed concern about the way in which the IPCC behaved whenever criticism was made – essentially using a combination of arrogance and abuse against its critics. While some had expressed serious concerns about the credibility of the Chairman of the IPCC, Dr Rajendra Pachauri, who defended many of the worst examples of error and process failures until his colleagues apologized for them, it was also clear that no immediate effort would be made to either review his role or remove him.

The review body, demanded by the ministers, has now been established. Who appointed the review team? The Chairman of the IPCC, Dr Rajendra Pachauri , working in cahoots with Ban Ki Moon, Secretary General of the United Nations. What is the mandate of this review body? It has four key tasks: to analyse the IPCC process, including links with other UN agencies; to review use of non-peer reviewed sources and data and evaluate the process of quality control; to assess how procedures handle “the full range of scientific views are managed in fact and to recommend changes; and to review IPCC communications with the public and the media. In making the announcement last week, Ban Ki Moon reiterated his view “that the case for man made global warming is sound” and Dr. Pachauri said "We believe the conclusions of the IPCC report are really beyond any reasonable doubt".

The review team will take for granted that the substance of the 2007 report is robust – an idea that many scientists would now like to question. A total of eighteen key areas – the heart of the “warmist” science – are now shown to be problematic, the latest being the claim that the Amazon rain forest is especially vulnerable to very minor changes in temperatures – a claim now known to be based on contaminated data and poor analysis.

Who will conduct the review? The review will be conducted by the Inter-Academy Council and headed by its co-chairman Professor Robbert Dijkgraaf, a professor of mathematical physics at the University of Amsterdam, who told reporters that the review would be entirely independent of the United Nations but would be funded by it. The Inter-Academy Council is a representative body for a number of national academies of science, almost all of which are committed to the climate change cause. Indeed, Dijkgraaf recently broadcast on Dutch radio a statement about the “consensus” on climate science, suggesting that the science is settled and that there was nothing substantially wrong with the 2007 report.

Writing in the Daily Telegraph this week, Gerald Warner suggests that we know already what this panel will suggest – remove the Chairman, clean up the process but continue to argue that the science is settled. When the panel reports in August 2010 they will likely repeat the Ban Ki Moon line that a few paragraphs in a 3,000 page document which are problematic do not lead to the conclusion that the substance of the 2007 assessment is wrong. Warner suggests that this would be “not only a whitewash but one in which the paint is spread so thinly as to be transparent”.

What many in the science and public policy community are hoping for is for a more open, self reflective and critical review of all aspects of the science of climate change, untainted by the political agenda of those lobbying for green policies and the “green economy”. Professor Mike Hulme of the University of East Anglia Climate Research Unit, for example, has suggested that the IPCC has had a tendency to politicize climate change science which in turn has also helped to foster a more authoritarian and exclusive form of scientific knowledge production – just at a time when a globalizing and wired cosmopolitan culture is demanding of science something much more open and inclusive. Suggesting that the IPCC may have run its course, he is recommending a more open approach to the science, which makes extensive use of the tools of social media.

Whatever the panel reports, any attempt to “whitewash” the IPCC will be its death knell. Large numbers of the citizens of the world now see climate science and the politics of climate mitigation as so tainted and corrupted by vested interests that they will have no truck with a set of recommendations that perpetuate current practice with some slight modification.

Rather than review the IPCC processes, the team should have been asked to suggest to the environment ministers how they can get themselves out of the quagmire they have created by their own relentless pursuit of a partial view of science as a basis for their own public policies. Unless a radical rethink of how the analysis of current evidence from all viewpoints becomes the normative practice of these ministers, we will continue to see half-baked policies being pursued through grey literature fed science by ministers unwilling to listen to a range of views which may caution their reformist radicalism.

Is Canada's Budget 2010 Good for Innovation?

The Federal budget is out and the decisions are made and, as expected, no imagination is shown.

Just focusing on the innovation agenda, the Government of Canada announced these decisions:

• $108 million to support young workers through internships and skills development to help them find jobs and to support Aboriginal students.
• Over $600 million to help develop and attract talented people, to strengthen our capacity for world-leading research and development, and to improve the commercialization of research.
• Making Canada a tariff-free zone for manufacturers, by eliminating all remaining tariffs on machinery and equipment and goods imported for further manufacturing in Canada.
• Establishing a Red Tape Reduction Commission to reduce paperwork for businesses.
• Measures to support investment in clean energy generation.

The $600 million for innovation looks like it is headed to Universities rather than firms. Let us just document how this money will flow:

• Providing $45 million over five years to establish a post-doctoral fellowship program to help attract the research leaders of tomorrow to Canada.
• Delivering $222 million in funding over five years to strengthen the world-leading research taking place at TRIUMF, Canada’s premier national laboratory for nuclear and particle physics research.
• Increasing the combined annual budgets of Canada’s research granting councils by an additional $32 million per year, plus an additional $8 million per year to the Indirect Costs of Research Program.
• Providing Genome Canada with an additional $75 million for genomics research.
• Doubling the budget of the College and Community Innovation Program with an additional $15 million per year.
• Providing $135 million over two years to the National Research Council Canada’s regional innovation clusters program.
• Providing $48 million over two years for research, development and application of medical isotopes.
• Providing a total of $497 million over five years to develop the RADARSAT Constellation Mission.
• Launching a new Small and Medium-sized Enterprise Innovation Commercialization Program with $40 million over two years.
• Renewing and making ongoing $49 million in annual funding for the regional development agencies to support innovation across Canada.

This is largely cosmetic. They are restoring cut funds to granting councils, propping up agencies they have cut in the past. They are adding capacity to the College and Polytechnic sector, which should now be seen as the engine of applied research and a direct route to real innovation, as well as increasing funding to organizations like Western Economic Diversification and ACOA.

At best, this is a “touch up: job – painting over the cracks in the existing innovation system caused by past decisions. At worst, this budget shows the lack of courage at the national level and will do little to move Canada from 14th place out of 17 countries, according to the Conference Board of Canada.

What should the Government have done? To be bold, eve within the constraint budget of $600 million, they should have allocated half to IRAP and half to the College and Polytechnic sector – organizations closest to firms. This would have signaled to firms that innovation is about firms, not about researchers pursuing their own interests. While university based research is not unimportant, it is not the engine of innovation that Canada needs – at least, not as we are doing this work right now.

The good news here is the action the Government are taking positive action to stimulate productivity. The budget announces that Canada will become a tariff-free zone for manufacturers, by eliminating all remaining tariffs on machinery and equipment and goods imported for further manufacturing in Canada. This enables firms to invest at a lower unit cost in equipment needed to improve productivity and competitiveness and to lower the costs of renewal of business processes requiring technology. This will be helpful.

Also good news is the recognition that we need more and more people with skills inside firms, withv$108 million going to this work. Co-op programs, industrial placements, post-doctoral positions inside firms could all be supported, though these funds are small relative to the challenge and opportunity.

On balance – is this a good budget for innovation? The answer is, a reluctant, possibly. It shows little imagination, no courage and no effective response to Canada’s declining competitive position in the innovation league table. Some of these investments will accelerate commercial activities, but most will not lead to new products and services or accelerated access to new markets. My definition of innovation requires sales of new products and services to occur and new jobs to be created as a result – this budget will have a very modest impact.

The Green Job Myth - Or Is It?

There is a strong claim by politicians in a variety of countries that climate change policies and regulation, coupled with investments in green technologies, will create green jobs. Al Gore suggests that the right kind of strategy could create 1.7 million US jobs. Michael Ignatieff, Canada’s liberal leader, suggests that Canada could create, well a lot of green energy jobs with the right policies – cap and trade, investments in a smart-grid, non fossil fuel power policy and carbon taxes. Gordon Brown, the current British Prime Minister, speaks of 400,000 green jobs in eight years.

These claims are based, in part at least, on the 20087 IPCC Fourth Assessment Report report, especially Chapter 11, which looks at the economic costs and opportunities linked to climate change action. This chapter did not go through the normal double review process the IPCC always says is the hallmark of its quality assurance process. Had it done so, some key problems may have been caught.

The first of these it that there are few peer reviewed papers which support the position taken in the summary of this chapter in the Summary for Policy Makers associated with the IPCC fourth assessment. One of the authors of several IPCC documents and one of the world’s top economists, Richard Tol, has now suggested that the basis for many of the claims are papers in the so-called “grey” literature – magazines, pamphlets and other documents – rather than peer review literature. Despite claims that the processes of the IPCC focus only on peer reviewed cases, this is clearly simply untrue as has been shown in other chapters of this report and is now shown to be untrue here.

The second problem a sceptical and thorough review would have revealed is that the claims made for the economic impacts of carbon mitigation and other measures are based on computer models and simulations, which are in turn based on the assumptions made by the modelers. One of these assumptions is that policies for the environment will always be smart and well designed – something it is difficult to imagine coming out of the US Senate. One peer review study of the EU policies – the 20% reduction in CO2 emissions by 2020 – shows that it is poorly designed as a strategy and will cost more than twice the amount needed to achieve the outcome, thereby costing jobs.

The third problem is that some of the caveats disappeared between various drafts of this Chapter. For example, a key assumption in some models is that revenues from carbon taxes and emission permit auctions are used to reduce taxes on labour. If this revenue is not dedicated to this, but instead used to invest in technology (which is what Obama plans), then jobs will be lost. Further, there is no positive impact on employment and job creation if emission reductions are achieved by subsidies for renewables or if emission permits are given away for free – both actions being commonplace amongst governments, as we can see in Spain. There every “green job” created with government money in Spain over the last eight years came at the cost of 2.2 regular jobs, and only one in 10 of the newly created green jobs became a permanent job, according to a study released in 2009.

This Spanish experience is noteworthy. Dr. Gabriel Calzada, an economics professor at Juan Carlos University in Madrid, has said the United States should expect results similar to those he found in Spain. "Spain’s experience (cited by President Obama as a model) reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created, to which we have to add those jobs that non-subsidized investments with the same resources would have created,” wrote Calzada in his report: Study of the Effects on Employment of Public Aid to Renewable Energy Sources.

So we now have an uncertain basis for predictions with respect to green job growth, a string of caveats which, when taken together, suggest a high degree of risk in the predictions and firm evidence from the Spanish experience that the risk associated with a strong push for a green job economy are very serious indeed – especially now that Spain, together with Greece, Ireland and Portugal are on the EU’s “critical list” in terms of economic well being.

Don’t panic, say some politicians, we have another source for our confidence: the Stern Report, released in 2004. This political document – it came from a the UK Finance Ministry – suggests that that tackling climate change will cost 20 times less than doing nothing and thus underpins UK political initiatives, such as emission trading or energy-efficiency actions. It also suggests that such policies will create a green economy, with thousands of new jobs. In a thorough review of this document, Richard Tol suggests that it uses only the most pessimistic impact studies, starts from a too-low discount rate and has no real cost-benefit analysis. Tol therefore called the report "alarmist and incompetent".

His main criticism of the Stern report are these: (a) the Stern Review Team used the scientific literature selectively and the bias systematically favoured the worst case scenario; (b) they made technical errors (counting risks twice over, refusing to take into consideration the considerable attenuation of net damages obtainable via adaptation strategies, forgetting some of the economic costs of prevention policies, discrepancies between the damages as described and economic growth assumptions, in Africa in particular, etc.); and (c) they manipulated the economic concepts and tools, in particular the discount rate, so as to paint the most alarming picture of expected damages if the international community failed to take early energetic action. Tol’s analysis, which is thorough, explores the implications of these problems in detail.

What are we to make of all of this? It is simple – we are being asked to place a bet with a high level of risk that it may have the opposite impact to that intended (see Spain). The bet will involve a massive new tax, cap and trade regime and lifestyle changes in the hope that a large number of new green jobs will be created. Don’t you thin we should demand better evidence that it will work? Don’t you think we should know about the assumptions being made. All of the evidence suggests that it is not a simple equation – green policies don’t equal green jobs. Time for a real debate.

Brown versus Cameron - Game On!

This time last year the Conservative Party in Britain was thirteen points ahead of Labour in the opinion polls. Now it is just six points ahead and falling like a stone. What is going wrong?

David Cameron, the Conservative Party leader, modelled a lot of his campaign strategy on Obama’s successful bid for the US Presidency. Outlining the need for change, being general about what change meant and decrying the failures of the party in power were, he thought, enough to unseat an unpopular Labour government. What he failed to notice, until recently, was that the disappointment with Obama’s performance and the emptiness of the mantra “yes we can” is palpable. Over a year after starting health reform, Obama is still stuck in the mud. Climate change and energy security has not even started the torturous journey through the Senate. The US economy is still not mending. People demand more than a mantra. They want specifics. Cameron has to start talking action plans and detail.

The second thing that Cameron’s team has failed to do is be consistent and coherent. On the family and the tax benefits he intends to provide for married couples, but not others, he is vague. Different Conservative spokesmen have said different things about where the needed cuts to public spending would come and what the impact would be. Some potential cabinet ministers are briefing against their colleagues as they jockey for position and power.

Some of the policies – on education, for example – are not easily explained. While creating more independence for schools and freeing them of many of the centrally imposed administrative constraints may be helpful, Cameron and his team have said little about what they will do with high stakes testing or what changes they see in the curriculum. Given that the curriculum and testing are the central issues affecting performance, the policy position seems interesting, but hardly relevant.

On the National Health Service (NHS), the worlds third largest employer after the Chinese Red Army and the Indian Railway system, Cameron has made clear that they will focus on outsourcing services and improving productivity. Despite a fifty page policy document, most voters don’t see much difference on this crucial policy area between the political parties.

The most critical failure, to date at least, is the apparent inability for Cameron to show a consistent style of leadership which connects to the British people. Like Blair before him, Cameron is a master of rhetoric and the poignant phrase. He is also a chameleon. Lizards don’t do well in appealing to a cynical, disengaged British public who think all politicians are snakes. Still angry at the expenses scandal, which milked millions out of the public purse to support the fancies of elected officials, the public are looking for someone with moral authority who can inspire a generation. So far they are disappointed. Cameron is seen by many as from an elite background, he is a multi millionaire and appears somewhat aloof. He is disconnected from the day to day struggles of the electors and speaks a language which many find “high falutin” – the kind of language one expects from a “toff”.

Gordon Brown, not exactly a poet or sensitive touchy-feely kind of man, is someone Britain knows. He is volatile, relentless and very focused. He and his team have done a lot to position the Conservative party as a reckless, cost cutting bunch of over educated stuffed shirts who, given the chance, will wreck the carefully built social and economic structure of Britain. Despite evidence that none of this is true, the public are beginning to believe it. Brown is painting the Conservatives into a corner. A hung parliament or Brown clinging to power by a small majority looks increasingly likely.

Given what is happening in Europe – the precarious state of the Eurozone, confusion over the future of the European Union’s future, lacklustre economic recovery and strains between the traditional powers of France and Germany versus Spain, Portugal, Greece and Ireland – the outcome of the British election has broad significance for the EU. Brown will be a supporter of fiscal responsibility in the EU and Cameron is, at best, lukewarm about many aspects of the Union and its policies. The quiet hand of Europe will be rooting for Gordon Brown.

There are just eight and a half weeks to go before the expected poll date in Britain. It will be an interesting period in British political history – well worth keeping an eye on.

Making a Difference - Real Learning

I used to teach learners we then called “special needs”. They were not physically challenged. They were not mentally challenged in the sense of having a disorder within the real of DSM III (as it then was). They were challenged by the education system which did not suite them and, in most cases, by parents who were not always sure they liked them.

There were sixteen of them. They came from what we may call distressed and dysfunctional families, but they called their parents mum and dad and their place “home”. They didn’t take drugs and we didn’t give them drugs – Ritalin was not available when I began teaching, though beer was in widespread use (even in the staff room). I did not hit them, though other teachers routinely did – it was a different time, one where physical punishment was metered out by Assistant Principals, some of whom were bullies.

There was not a national curriculum or key stages which these young people had to pass through. I was simply asked, as a teacher who had a degree in psychology, to work with them “and see where I could take them”. I was expected to enhance their reading, writing, number and social skills, but targets were not set and I was not subject to high stakes testing. I did, however, report on progress to my Principal and all parents every two weeks.

I had few resources. I had a book allowance, a radio and a TV set and I begged, borrowed and occasionally land-leased things I needed. These included a dartboard – if you want to get 15 years olds manipulating numbers fast, play darts; seven sets of domino's, used to teach life skills; packs of playing cards to help them understand the power of memory and learning; literally hundreds of magazines, newspapers, old photographs and like resources we used for building our idea and challenge collages; a reel-to reel tape recorder for our weekly radio broadcast to the whole school and dress up clothes for our fortnightly plays.

We had fun. Laughter was the order of the day. We also did a lot of work. Writing scripts, creating news collages, telling stories of families, learning how the horse racing and betting game really worked (four of the kids in the class had to put their parents bets on the horses at lunch time and over the week-end: a great opportunity to teach about risk, probability and the management of uncertainty).

By the time we finished our year together, each of the young persons in this class had a reading age equal to their actual age – a real achievement. Each of them secured 85% or higher on a “maths you need every day” test we devised. Each of them had made a public presentation, participated in a great deal of team activity and would be assessed by the school psychologist as having a high emotional intelligence quotient, despite their lack of IQ.

When we were leaving the school – me to take up a Research Fellowship and some of them to start their apprenticeships or go into the world of work – we were pleased to have worked together. Several stayed in touch.

Over twenty five years later we had a reunion. All but one showed up – he had died in action in the Falklands war (“he was always a bit of a nutter, that Ken” said his best friend, Angela). All were or had been married and all had daughters or sons, many of whom they brought to meet some of their old teachers. There were four of us they made a b-line for. We had, according to them, given them the spirit and the support to at least try to be something “out there”, they said.
One was now a local Councilor, Chairman of the Public Works Committee. Not a brilliant young man, but street smart and very focused. Two owned pubs and were quite wealthy. Several were self employed and, seemingly doing ok (“but don’t ask too many questions”, said Blethyn-the Blond Bombshell, as she was known in class). All were in cars much better than mine, though it was not always clear whether legal ownership was a matter still in dispute.

What mattered most to them, they said, was that the four of us teachers cared about them as people. They weren’t numbers, not check marks, not accountability statistics – they were Aiden, Angharrad, Blethyn, Mike, Sandy, Glyn, Wyn-Wynne and their friends. We showed respect. We also, they said, made them work hard, even though it didn’t always feel like work.

I had kept some of the tapes of our weekly newscast to the school and played them for them. They fell about laughing at how they sounded and at what they felt was important. They also started correcting each others grammar as we sat with a pint in the room at the back of the Craven Arms.

It was a year in my life. But these young men and women have shaped my life. They showed me that, even amidst hardship and stress, one can learn, be inspired and engage with others in pursuit of a project that matters or an activity where you can feel oneself learning. It also taught me the importance of the nimble professional, able to craft activities appropriate to the moment, the people and the goal. We weren’t told what to teach when, we had to work that out. We earned the respect of the community through our inventiveness, creativity and passion for learning.

I spend some time in schools now. I see many teachers doing remarkable things and young people responding as they have always done to genuineness, warmth and empathy. Our learners constantly surprise us.

But I also find a temerity amongst teachers, a fear of risk. I sometimes find fear of accountability – the stress of Provincial Achievement Tests. I often find a sense of despair that they cant do all that is expected of them by the Provincial curriculum – not quite the bible, but certainly regarded by many as the handbook to the holy land. Some cherish their professionalism, but many feel that it has been lost – certainly in the eyes of the community.

I wrote some time ago that it is time to give schools back to teachers – to trust them again and to give them room in the curriculum at all levels to invent, create, inspire, challenge and take risks with ideas. It is also time to rethink accountability and to focus on the teachers accountability for the work of each student in real time. It is time for real learning. It is time to recognize that, as far as learning outcomes are concerned, less is more. Less curriculum demands and more learning; less standardized testing and more person to person accountability; less fear and more inspiration.

Ironically, we were doing real learning in my class with the sixteen young men and women I taught in 1972-3. It was certainly real and life-long for them when I met them in 1999 in a pub in Cwmbran. They cared about their learning some twenty six years later.

I followed up with ten of my class last year. Two more of the sixteen had died – cancer. Six had the experience of seeing their sons or daughters graduate from university with a degree – the first in their families long history ever to do so. One, a car dealer, was now a multi-millionaire – when I knew him he survived by stealing from his mothers purse. All but one have grandchildren and they spend their grand parent time teaching them to read, write and do math. They know, first hand, the transformative power of learning.

Schools shape generations and can be inspiring places. To inspire learning, we need space and time. Space in the curriculum and time to customize that learning for every child. Now is the time for us to show just what we in Alberta can do when we set our minds to it.

One place we can learn from is from our special needs community and the teachers and staff who serve them. They are and have always been pioneers and I am proud to have once being a part of this cadre of innovators and imagineers.

Innovation Watch

The Government of Canada looks likely to focus a key part of its budget this week on investments related to productivity and innovation. The concern is that Canada has “lost the plot” with innovation – rather than being number one in the world, which was the plan, we are fourteenth amongst seventeen nations as measured by the Conference Board of Canada. What should the budget contain?

What we have done in the past is to invest in university research, development and commercialization activities in the vain hope that this would produce great commercial outcomes. The reality, plain for all to see, is that it has yet to do so. The roughly $14 billion annual investment in R&D at our universities produces but modest returns. In part this is because universities, by and large, are simply not designed to create commercial value from ideas and in part because they lack incentives to do so.

Is the solution to spend even more on our universities to try and fix the path to commercialization? No. The real solution is to focus energy on where innovation really takes place – in firms. Rather than boost spending on R&D, the government should use any new funds to significantly boost IRAP – the Industrial Research Assistance Program – and to create incentives for private and public partnerships. More specifically, it should seek to make focused and strategic investments in key industry sectors we want to grow and minimize investments in dying industry sectors.

A second investment we need to see is a massive boost to funding for post-graduate student places, especially those with a co-op component or post doctoral positions in firms. Increasing the ability of firms to leverage ideas and innovation is key. Those countries ahead of us in the league table have more post-grads in the workforce in real firms than Canada does.

Third, the Government of Canada, working in partnership with the Colleges and Polytechnic institutions, should invest in the applied research they are engaged in. These institutions are close to industry, provide them with skilled people and do critical (and relatively inexpensive) applied work. Their work on the innovation agenda should be recognized and funded accordingly.

Finally, we should address the real lack of tier one venture capital in this country. Whether its Ontario, BC or Alberta, companies need to be “fed” two things – risk capital supported by expert managerial talent and realistic, current market intelligence. Tier one venture firms do this – banks and angel investors do not.

There are some other things that matter. The Federal Government needs to partner closely with the Provinces in developing appropriate local innovation strategies; it needs to simplify the processes it uses for securing IRAP funds; it needs to start pooling its intelligence; it needs to stop believing its own press releases and start getting realistic about the challenges facing Canada over the next twenty five years. Its time for some leadership and courage on the innovation file.


The Government of Canada also needs to stand firm in the interests of Canadian firms and researchers against the persistent demands of the WTO and the US as they relate to intellectual property. The demands from these organization represent an attempt to behave as a colonial power as far as knowledge is concerned. Canada should, in partnership with other countries who are also balking at the hegemony of intellectual property law demands of the US, show what a twenty first century collaborative intellectual property regime could look like.

There is a lot to do. We will see this week whether or not the Government of Canada understands the challenge and has the courage to act. Don’t hold your breath.

Being Fiscally Responsible - A Progressive Alberta Perspective

The term “fiscal responsibility” in Alberta has come to have, within the Progressive Conservative Party, one meaning: debt free. This has always been seen to be a desirable state, but not an essential one in most countries. Yet, in Alberta the idea of being debt free is almost religious. Yet the debt owed to the environment, to those in need of our help and to future generations is not being “accounted” for in the thrust to a debt free Alberta.

There is another approach to fiscal responsibility, one which seeks to balance the obligations for responsible finance with the social and economic obligations of government, acting on behalf of the people. This approach has these requirements:

1. Spend intelligently. Government spending should be focused on securing outcomes linked to a vision and strategy for the Province. This requires the balancing of investment in the future (education and environmental policies, for example) with consumption based spending (a significant proportion of health spending is consumptive). It also requires the government to ensure that it is safeguarding the well-being and interests of the vulnerable, supporting innovation and enabling cultural institutions, which shape our experience of Alberta.

2. Tax appropriately. Alberta has pursued a strategy of being a low tax jurisdiction. That strategy is now failing – at least as far as corporate taxation is concerned. It is also failing in another way. As the public see cuts to education, school closures, non profits who deliver social services being starved of cash and other developments, they know something is out of place. Alberta should tax according to the revenue requirements of the vision and strategy for the Province. It should be committed to accessible and affordable education, for example, and tax appropriately. There is something wrong with a jurisdiction that makes it more difficult for students to study at College or University while at the same time encouraging gambling – gambling and sin taxes produce more revenue for the Government than oil.

3. Borrow responsibility. There is nothing wrong with debt. Almost every Albertan has some. The question is at what risk and at what cost. Imagine if the Province had a debt limit of 10% of the entire revenue from other sources – what could we invest that money in?

4. Be accountable. Show the planned intent of an expenditure, show the outcome and tell us whether the outcome is in line with what was intended when the expenditure was made. There is still too much that is “hidden” and has to be dug for. There is also a need to show the risk associated with an expenditure – for example, what is the risk associated with the significant reduction in funding to Alberta’s post-secondary system announced in the recent budget? Do we know?

5. Be transparent. Accountability and transparency are close cousins, but not the same thing. For example, what is the rationale for the Premiers decision that, while he is Premier, there will be no new taxes and no increases in taxes. Showing us the rationale for this and sharing the debate that must have taken place in Treasury Board would be transparency. Show us the full costs to the environment of the current policy towards oil and gas exploration and mining. Be transparent about intent as well as the actual flow of money.


If these were the foundations of fiscal responsibility for a progressive jurisdiction, then Alberta may become a better place.