A middle way for Brexit

So the polls were wrong about the election then. Erm, no, that’s an overly simplistic interpretation. Some polls (ICM for example) were very wrong, some polls (Survation, Yougov, Ipsos Mori to an extent) were right within the margin of error. The issue was that people expected the result to be a certain way and for the polling companies to repeat their 2015 error so they ignored polls that disagreed with those narratives as outliers. The election also didn’t fit another of the expected narratives, that it would be a battle between those wanting hard Brexit and “the sabateurs”.

The election started out as May saying “Give me a mandate to negotiate Brexit”. This put Labour in a tricky position, mostly because Labour’s position on Brexit is hard to communicate to the electorate. The Tories are in favour of close to the hardest possible Brexit, outside the single market with some sort of vague access to the customs union. Labour’s position is more subtle, there’s a promise to end freedom of movement (an idea supported by the Conservatives and some LibDems like Vince Cable) but the party is in favour of remaining in the customs union. This is often put across as “OMG, they say we must leave the single market”, but this position could be close to an interesting idea emerging from some in the EU, a Continental Partnership.

The Continental Partnership has been championed by the Bruegel Institute, a think tank with close links to Emmanuel Macron. The basic idea is for a group of non-member states participating in the single market but outside the political structures of the EU. Crucially this looser membership would also include a less stringent commitment to free movement, perhaps allowing a quota of workers to move either way each year. Others, such as William Hague, have suggested such a commitment could mean people would need to have a job lined up before moving. This Continental Partnership (CP) would be a good place for nations unhappy with deep political integration with the EU (UK, Switzerland) and also could incorporate EFTA members like Norway as the Bruegel proposal suggests a less one-sided relationship that the “do what we tell you for single market access” EEA deal that currently exists.

The EU’s “Brexit cannot be a success” position is not a vindictive statement about punishing the UK, but common sense. The EU can’t give the UK a better deal than current membership or other members may leave. However so long as it’s clear the CP would come with a possibly unattractive price, perhaps extracts a price in terms of contributions with little direct funding in return, limiting single market access for agricultural products and taking Euro clearing away from the City, then that requirement is fullfilled. The CP also has the advantage of a framework for formalising the UK’s relationship with Europe in a less awkward manner than the current Swiss set-up. It could also simplify the bundle of complex bilateral treaties with Switzerland if they were to also join the CP. Finally it would free the EU of UK influence on subjects where the UK is deeply irritating (integration, asylum) but keep economic links and security cooperation.

Domestically it would mean both parties giving up something they want from leaving the EU. The Tories would need to accept some EU regulations on products, Labour would need to dil back its plans for state aid.

This position, as you can see, doesn’t translate well to the side of a bus. It could however strike a chord with a large fraction of the UK population.

I am a freak. I went into the EU referendum strongly favouring Remain largely on the basis of European identity. The problem is, not many people agreed with me. Since the referendum, there’s been a move by people with similar beliefs to me to transpose their own identity on to all of “the 48%”. This is problematic, only half of remain voters in a recent YouGov survey supported resisting Brexit and fighting a second referendum. The other half grudgingly want to get on with it. Given how arguing for second independence referendum has undoubtedly harmed the SNP in Scotland I’m not sure arguing for another referendum is such a good idea at the moment. Also, the public are a bit sick of elections, as Brenda from Bristol memorably said “their’s too much politics going on at the moment”.

The YouGov survey however has a subtle bias, it assumes all Leave voters are hard Leave voters. I’m not so sure that’s the case. When presented with the prospect of a soft Brexit many will be receptive to the idea. Around a quarter of Leave voters prioritise trade over immigration and only 16% say immigration is their hard priority for a deal. That’s why I suspect a soft, Continental Partnership style deal could be a possible middle way between ignoring the referendum result and marching into the Atlantic yelling “No deal is better than a bad deal!”.

With the government depending on DUP votes, and thus being tied to a party that has a policy opposing a hard border in Ireland, no deal is dead. There isn’t the public appetite for another referendum. The threat of EU disintegration has also subsided, the Eurozone is growing, Macron and Rutte have dealt blows to the far right and Merkel looks on course to stay in power with either a Jamaica or Grand Coalition. Only Five Star in Italy look like a possible threat to the EU at the moment and they just got thumped in local elections. Perhaps now is the time to look for a middle way on Brexit that will satisfy as many as possible.

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A middle way for Brexit

Labour needs to win over Tory voters, not Labour to UKIP switchers

I’ve seen this visualisation a lot on Twitter recently,

yougov_chart1
Voter flows in and out of the 2015 UKIP vote. Source Yougov

 

The response has typically been ‘OMG Labour voters from 2010 are being turned into 2017 voters by the “gateway drug” of UKIP’.

There’s a problem with this common claim, while Labour have undoubtedly lost voters to the Tories via UKIP, it’s a small number, and it’s a smaller number than Labour have lost directly to the Tories. The article this graphic is taken from actually says this, it says that Labour have lost seven times as many voters directly to the Tories than they have via UKIP. Going back to the 2005, it’s the Tories who lost far more of their voters to UKIP than Labour did,

Screen-Shot-2014-12-16-at-15.14.43

But we still see the “Labour core vote went UKIP” nonsense. I suspect some of this is due to the fact that the UKIP vote was a bit more working class than middle class and the assumption that working class people used to always vote Labour. This is nonsense, there’s been a strong working class Conservative vote going back to Disraeli.

What we do have is a situation where Labour have lost a lot of votes since 1997, 2001 & 2005. Scotland excluded, these have overwhelmingly been directly to the Tories. If you want a Labour government then get to work winning over 3 million people who are currently planning to vote Tory. These are not the uncaring, hateful people as the far-left often portray them, and shouting about how horrible they must be for supporting the Tories won’t work. These are people who think that a Labour government will raise their taxes, put their job at risk and make a mess of the Brexit negotiations. Convince them otherwise, convince them their life will be better and their country more prosperous under Labour.

Labour needs to win over Tory voters, not Labour to UKIP switchers

What if the US Presidential Election was proportional

It’s 4 weeks since Donald Trump won the US Electoral College despite losing the popular vote convincingly. This got me thinking about how other electoral systems could be applied to the Electoral College.

The US Electoral College employs what is known as First Past the Post in the UK (Winner Takes All in American English). That means that in 48 states (and DC) the candidate with the most votes wins all the state’s electoral votes. In two states (Nebraska and Maine) the candidate with the most votes statewide gets 2 electoral votes and candidates also get one electoral vote for each congressional district they win. Even in these exceptions it’s First Past the Post with the by-district method leaving itself open to gerrymandering.

In some parts of the world representation is decided proportionally. Take the assignment of European Parliament seats from the UK. The country is divided into 12 electoral districts electing between 3 and 10 MEPs. The MPs are alloctated by what is called the D’Hondt system (similar in results to the Jefferson system). Put simply, you take each party’s number of votes and divide by the number of seats that party already has plus 1. You then give the next seat to the party with the most votes and then repeat the process till you run out of seats.

The same process could be applied to electoral votes from each US state. Let’s look at the allocation of seats in Alaska (McMullin was not on the ballot),

Clinton Trump Johnson Stein
First seat 116,256 163,199 18,782 5751.00
Second seat 116,256 81,599.5 18,782 5751.00
Third seat 58,128 81,599.5 18,782 5751.00

So Trump wins Electoral Vote 1, Clinton vote 2, Trump vote 3.

This process can be done for all states yielding the following results,

State Clinton Trump Johnson Stein McMullin
Alabama 3 6 0 0 0
Alaska 1 2 0 0 0
Arizona 5 6 0 0 0
Arkansas 2 4 0 0 0
California 35 18 1 1 0
Colorado 5 4 0 0 0
Connecticut 4 3 0 0 0
Delaware 2 1 0 0 0
District of Columbia 3 0 0 0 0
Florida 14 15 0 0 0
Georgia 8 8 0 0 0
Hawaii 3 1 0 0 0
Idaho 1 3 0 0 0
Illinois 12 8 0 0 0
Indiana 4 7 0 0 0
Iowa 3 3 0 0 0
Kansas 2 4 0 0 0
Kentucky 3 5 0 0 0
Louisiana 3 5 0 0 0
Maine 2 2 0 0 0
Maryland 6 4 0 0 0
Massachusetts 7 4 0 0 0
Michigan 8 8 0 0 0
Minnesota 5 5 0 0 0
Mississippi 2 4 0 0 0
Missouri 4 6 0 0 0
Montana 1 2 0 0 0
Nebraska 2 3 0 0 0
Nevada 3 3 0 0 0
New Hampshire 2 2 0 0 0
New Jersey 8 6 0 0 0
New Mexico 3 2 0 0 0
New York 18 11 0 0 0
North Carolina 7 8 0 0 0
North Dakota 1 2 0 0 0
Ohio 8 10 0 0 0
Oklahoma 2 5 0 0 0
Oregon 4 3 0 0 0
Pennsylvania 10 10 0 0 0
Rhode Island 2 2 0 0 0
South Carolina 4 5 0 0 0
South Dakota 1 2 0 0 0
Tennessee 4 7 0 0 0
Texas 17 20 1 0 0
Utah 2 3 0 0 1
Vermont 2 1 0 0 0
Virginia 7 6 0 0 0
Washington 7 5 0 0 0
West Virginia 1 4 0 0 0
Wisconsin 5 5 0 0 0
Wyoming 0 3 0 0 0
Total 268 266 2 1 1

So we get an inconclusive Electoral College, because neither candidate got close enough to 50% to edge the result. The plots below show the number of electoral votes gained in each state (left) and the fraction of the EV in each state (right) for Clinton, Trump, Johnson, Stein and McMullin. Note only two places (Wyoming and DC) give all their votes to one candidate and that Hawai`i is 3-1 for Clinton and Alaska 2-1 for Trump. Also note that Stein and Johnson only get EVs in larger states. This is because there is a hidden threshold in each state due to a finite number of electoral votes. Bigger states have more votes to give so need a lower percentage to gain one seat.

We can also rerun for other recent elections. For 2012 Obama wins relatively comfortably 274 to 264. In 2000, the last time the popular vote winner didn’t win the Electoral College, it would have been Gore 268, Bush 267, Nader 3 so again tied.

So does this system favour one party or another. Well we can simulate a 50/50 election ignoring 3rd parties) using the R-D partisan bias each state returned in the 2016 election. It comes out 269/269 with Clinton adding an EV in California (from Stein/Johnson) and Trump gaining in California (from Stein/Johnson), Texas (from Johnson) and Utah (from McMullin).

This system opens every state up for campaigning meaning less focus on a handful of swing states. We can also look at how many more votes a candidate would need to flip one vote in each state. From this we can work out which state a campaign would most easily get one extra vote from. This gives the interesting result that the best state to campaign in under this system for Clinton would be Wyoming, needing only a 2167 votes to flip one EV. Trump’s best campaigning location would be Georgia where he’d need 23,604 votes to flip one EV.

So could this ever work? Well it’s not going to be done on a national level but is could be done by red and blue states pairing up so the net effect on the EV numbers would cancel out. This would be pretty good for these safe states as they would suddenly start to matter in presidential elections. However it wouldn’t be in the interests of sqing states to dilute their influence. Unlike the National Popular Vote Compact it would only need to start with two states rather than requiring 270 votes worth of states to sign up.

What if the US Presidential Election was proportional

Why the UK tells us little about the US election

Brexit was a shock, the Tory election victory was a shock, hence the US election will be a shock. Not so fast, this is based on misinterpretations of both the Brexit and general election results and also misses crucial differences between the situations.

Firstly let’s deal with Brexit. People were angry with loss of national power and immigration and voted to rip things up in the hope that things would get better. This would point towards parallels with Trump’s support, there are some, but it’s not totally the same. Compare the detailed demographics of Trump’s support with polls of who voted for Brexit. Older voters support Trump and Brexit as do white voters. On the other hand Trump’s misogyny has led to a big gender gap, one which didn’t exist in the Brexit vote. There’s also the narrative that Trump gives a voice to the ignored white working class. The evidence for this is patchy, the voters earning the least break heavily for Clinton but that will include a larger number of African-American and Latino/a voters due to racial wage disparity. Trump does best amongst middle class voters, however when the vote of the white cohort is broken down by education level those without a tertiary education skew strongly to Trump. This is very similar to what was seen in the Brexit vote. The Brexit Leave vote however had a significant advantage amongst those disengaged with politics. This narrative is constantly applied to Trump by self-flagginating liberal journalists. However most of his support in the primaries came from the Republican base, not new voters.

There is one important thing to say about the Brexit surprise, it wasn’t a surprise, not for the polls. In the two weeks before the referendum equal numbers of polls had Leave and Remain ahead. Given that so many votes were made by post (partly due to the timing around summer holidays) it’s important to take into account the polling over an extended period leading up to the vote. This presents another interesting, yet overlooked parallel, between Brexit and the US election. While some US states like North Carolina have attempted to curtail early voting others such as Colorado have made it much easier. This year Colorado, the most likely pivot state for a Clinton victory, has given almost all voters a postal vote. By the 1st of November 1 million people in Colorado had voted already with plurality being registered Democrats. That’s 40% of the number of votes cast at the last presidential election. Hence for ~40% of votes cast in Colorado the relevant polling data will be from last week, not the final election poll.

It shouldn’t be a big surprise that referendum with no real polling precedent and with polling showing roughly a 50/50 split ended up with a 52/48 result. What was a surprise was that it was assumed that there would be a late swing to Remain, there probably was but it wasn’t enough and a large enough number of postal votes had been cast that the effect was diluted. Brexit was a coin toss, it landed on tails, Leave.

Next there’s the matter of the polling disaster in the 2015 UK general election. Going into polling day the expected result was a 35%/35% tie between Labour and the Conservatives. It ended up with the Conservatives winning 38%/31%. After this the UK pollsters got together and held an inquiry to find out why they hadn’t got the result right. They dismissed the “late swing”, the “shy Tories” and the idea that better favourability ratings for Cameron over Miliband suggested people were going to vote Tory in the end. The issue was that the samples the pollsters were taking had too many Labour voters. One big reason for this was the way the polls were done, by sample quotas. The pollsters would poll a bunch of people and once they had responses from enough people in a particular demographic group they stopped looking for people from that group in their surveys. This meant that demographic cells in a pollster’s table would fill up with the easiest voters to contact. The away from the main polling companies the academic British Election Survey and the British Social Attitudes Survey both attempt to survey the UK population and their views using repeated calls. This means that they should correctly sample harder to reach voters. These surveys also keep track of how easy each voter was to contact. They found that Labour voters were much more likely to respond to the first or second call than Conservative voters. This meant that quota-based systems were intrinsically biased towards easier to reach Labour voters.

So how does this link in with the American election. Well there is the possibility that the polls are similarly biased. However why would Trump’s white, less likely to have tertiary education base be less likely to respond to polls? Even if they were the US elections provide a much richer data environment than UK elections. That’s because there are party primaries which have both opinion polls and published results. Turns out once you take into account undecided voters in the polls Trump didn’t outperform his polls during the primaries. Now could the general election polls be biased in other ways? Yes, but it would have to be some sort of effect not present in the primary polling (such as suppression of the African-American vote for Clinton).

So what does this mean? Well firstly stop saying the shock of Brexit means Trump will win, because it doesn’t. There are some parallels but there’s no evidence this leads to an anti-Trump polling bias. There’s also no evidence that the bias in UK polls in 2015 will be replicated in the US and it didn’t appear during the primary polling. There is however a parallel in early and postal voting meaning that late swings in the polls are less significant (and this is probably positive for Clinton). If she can win all the states that have voted Democratic in the last 6 elections, plus New Mexico (where she’s 12 points up), plus her running mate’s state of Virginia and two of New Hampshire, Colorado and Nevada (the latter two where she is doing well in early voting numbers) then she wins. Florida and Ohio are big prizes but in the end they are unlikely to be anything but a cherry on top.

Some sort of polling surprise may happen and Trump may win, but it’s unlikely to be due similar effects to Brexit.

Why the UK tells us little about the US election

Are you patriotic?

Today the Prime Minister gave a speech where she criticised a “liberal elite” for sneering at voters’ patriotism. I find this accusation deeply troubling, because it implies that liberal people can’t be patriots and that patriotism is the exclusive preserve of the right. Does anyone really think that people with liberal social views tut with distaste when Jason Kenny or Laura Trott win gold medals, remain-voting Oxford, Cambridge and St Albans resound with cheers at each wicket Australia take in the ashes or that because I’m Scottish and fine with gay marriage and the current immigration set-up that I felt Craig Jubert was perfectly correct to give THAT “penalty”?

Patriotism is in the political sense is simply caring enough about your country that you want the best for it. That means praising the good things, criticising the bad things and suggesting how you would make things better. Is Jeremy Corbyn unpatriotic because he is proud of some parts of British history but not others? Is Nigel Farage unpatriotic because he supported what I consider the massively destructive Brexit vote? Is Nick Clegg unpatriotic because he opposed it? Is Kezia Dugdale unpatriotic for opposing independence? Is Nicola Sturgeon unpatriotic for supporting a possibly costly divorce from the UK? In all cases no. Why? Because in all cases they care enough about their country to propose policy positions that they believe are in the best interests of the country.

Liberals (and conservatives) are patriotic precisely because they do care about their country and the lives of their fellow citizens and want to make things better.

Are you patriotic?

Does Labour have a UKIP problem?

It’s one of the most discussed topics in UK politics, the threat that UKIP poses to Labour in the north of England. The idea is that if Labour don’t tack to the right on immigration then they will lose a large number of seats. It is possible that many Labour voters disagree with the party on immigration. However UKIP are strongest in Tory seats and tracing UKIP voters back to 2005 shows.

The 2015 General Election marked a surge in UKIP support at a Westminster election and the EU referendum showed that working class people and many traditionally Labour areas were strongly for Leave. This would make you think that Labour are about to lose a large number of seats to UKIP at the next election. Well, let’s compare Labour with other parties. Labour voters were roughly 65/35 for Remain, the Lib Dems 68/32 and the SNP 64/36. So Labour voters were the same as other centre-left parties within the typical sampling errors of polls. Hence we can say that current Labour voters aren’t significantly more eurosceptic (and thus vulnerable to switch to UKIP).

So are Labour as a party more vulnerable to UKIP in the seats they hold. Well, in a word no. Of the 8 seats where UKIP got over 30% of the vote only 2 are held by Labour (one is UKIP held, five are Tory seats). In fact UKIP came second in 75 Tory seats and only 44 Labour seats. UKIP tends to come second in seats which have larger than normal majorities so they are generally a long way off being competitive.

So Labour aren’t under huge threat from UKIP in the seats they are in, but do they need to regain a large number of UKIP voters who previously voted Labour? Well in 2015 fewer than one in 40 2010 Labour voters voted for UKIP, UKIP gained more votes from each of the Tories, the Lib Dems and other parties (i.e. the BNP). But could these be 2005 Labour voters that the party needs back? Well some may be but British Election Survey tracking of voters from 2005 shows that again the party that loses most voters to UKIP are the Tories.

So in summary, UKIP draw more votes from the Tories than Labour, are second in more Tory seats than Labour seats and Labour voters are no more eurosceptic than SNP voters.

 

 

 

 

Does Labour have a UKIP problem?

I want a New Deal and I want someone who can sell it to the nation

One frequent line we hear about Jeremy Corbyn and the Labour Party is that Corbyn will end the cosy neo-liberal consensus and vocally oppose austerity. So it was a bit of a shock when John McDonnell announced at last year’s Labour party conference that Labour would back George Osborne’s plan to balance budgets during periods of reasonable economic growth. This was soon followed by a U-turn when it was announced that Labour would not vote for the plan. This was further crystalised in March when McDonnell laid out a fiscal guarantee, Labour would balance the day-to-day budget but borrow to invest. So after a year of setting out clear red water between the parties, vocally opposing austerity, not like all the “Blairites” in control of the party before, Labour had arrived back at the policy it had a year before under Ed Milliband. McDonnell’s stance was described by the economist Richard Murphy (from whom Corbyn borrowed heavily during his leadership campaign) as “re-heated neoliberal Balls at best”

You might think that opposing austerity is a fringe, extreme view, it’s not.  Since the financial crisis central banks around the world have led the efforts to stabilise the economy. First they cut interest rates to almost zero, the idea was to make credit freely available so businesses could borrow and wouldn’t go bust because of an inability to raise funding (like Woolworths did). Next they instigated something called Quantitative Easing (QE). This means that central banks like the Bank of England would print money and then use it to buy government bonds. When times are bad investors flock to bonds of rich countries like the US, UK, Germany and Japan because they are regarded as relatively safe. However if everyone is piling into government bonds due to fear this means it is hard for companies to raise financing. So the central banks bought bonds, pushed down their yields and made them less attractive investments. Hence investors started to look for yield in stocks and corporate bonds allowing companies to raise financing. As this pushes down real interest rates it also weakens the currency.

This meant that the world did not collapse into a spiral of decreasing liquidity like in the early 1930s. However most of the developed world is stuck with anemic growth and low interest rates. Central banks are out of ammo, in some cases bonds are so popular that they have negative rates. Today if you lend the German government €100 in 10 years time you’ll get repaid €99.89. There is another problem, loose monetary policy can blow up bubbles. In the 90s there was what was called the “Greenspan Put”, the idea that an economic slowdown would lead to falling asset prices but these would be supported by a cut in interest rates from the Federal Reserve (chaired by Alan Greenspan). Now we have the Yellen or Draghi Put, a faltering economy will be supported by more QE which will again push up asset prices.

One of the slightly nerdy things I do is watch the Bloomberg business network from time to time (all that data). It’s a business network so you don’t expect to find Marxist economists on there. What you do find is people discussing that central banks have run out of ammo, that countries are using currency devaluation to boost exports and most importantly “how do we get the growth and inflation needed to get back to normal monetary policy?” Well one obvious way is to go back to the old Keynesian idea of stimulus. This could be cutting taxes (VAT is a horribly regressive tax) to give people more money in their pocket or it could be investing in infrastructure.

The UK has a housing crisis, not enough homes are being built and this has led to overcrowding and social cleansing. Let’s look at how housebuilding has evolved,

housebuilding_464
Housebuilding by sector. Source:BBC

Private housebuilders have continued to build a similar number of houses over the last 60 years. The difference has been the collapse of council house construction. Building 100,000 council houses a year in places with housing access problems would reduce inequality, reduce government benefit bills and provide accomodation primarily for local people over wealthy incomers. A surge in building infrastructure such as council houses would also provide a kick-start to the economy, increasing demand for labour and goods and driving up wages and prices. This would mean the Bank of England would need to raise interest rates, allowing the normalisation of economic policy.

Now of course McDonnell’s proposal would allow spending on infrastructure for investment and here’s the thing, building 100,000 council houses a year was actually a Corbyn policy. Looking through the Corbyn manifesto one finds some seeds of a vision to improve Britain. However Corbyn has had 9 months to build the core of a coherent narrative to tie together stimulus and improving infrastructure and housing, he hasn’t. There have been many statements of being “anti-austerity”, statements about a National Investment bank (but no clear plan about how to fund it) but no overarching theme and as I mentioned earlier mixed messaging on deficits. Owen Smith by contrast summed it up perfectly in one phrase “a New Deal for Britain”. This may seem superficial but politics is about communication, about leadership and building a coherent vision of the future to sell to the public. I want a New Deal for Britain, a way to galvanise our economy, to provide houses for citizens and infrastructure to drive business growth.

This why I don’t think Jeremy Corbyn should be Labour leader, not because I disagree fundamentally with his domestic policy, but because I do not believe he has the political skill to build a coherent vision of a better Britain which 13 million voters will buy.

I want a New Deal and I want someone who can sell it to the nation