VOTERS are very, very angry, as the political establishment is about to find out at its great cost. If the opinion polls are to be believed, Ukip will do remarkably well and could even triumph in today’s European elections, and the Greens will also outperform. It will be a political earthquake and the day that the electorate finally lost patience with the established parties.
The latest YouGov/Sun/Times poll puts Ukip on 27 per cent, Labour on 26 per cent, the Tories on 22 per cent, the Greens on 10 per cent and the Lib Dems on 9 per cent. If these figures materialise, it will be the first time in a hundred years that neither Labour nor the Tories win an election, and the first time ever that the Tories come third in an election. It will also be a complete humiliation for the Lib Dems.
It is easy to sympathise with the electorate’s frustration: the parties are broken, their membership has collapsed, Westminster is dominated by apparatchiks divorced from the real commercial economy, the UK constitution is in tatters, with huge powers vested either in Brussels or in domestic bureaucracies, and our bloated, centralised and technophobic welfare state is in crisis, with the politicians making promises they cannot deliver. The polls also show that very large numbers of voters believe the main parties to be very similar, and that politicians lie all the time; the breakdown in trust is extreme and dangerous.
We need a political and economic revolution – but crucially that doesn’t mean that we should reject modernity or turn our back on the openness that has become so essential to the prosperity of our economy. The changes must be inspired by optimism, not pessimism and by hope rather than fear; we need, in time, a new generation of political leaders that can fix our broken system of government, find new ways of delivering services and harness capitalism to deliver prosperity for all in a global economy.
Today, and unusually so, we won’t be endorsing any of the parties. Instead, we would urge you to do two things: first, do take the time to vote; and secondly, choose the party or candidates (in the case of the local elections) that you believe are the most likely to support free markets, low taxes, economic growth, individual responsibility and to loosen the relationship between the EU and the UK while preserving the free movement of goods, services, capital and, if at all possible, of people. Britain needs to change – but in the right way.
LOW RATE OBSESSION
RIGHT, that makes sense. Retail sales are booming, growing at an annual rate of 6.9 per cent, the strongest result since 2004. Mortgage lending is surging, confidence is rising and the economy is powering ahead – and yet the Bank of England still doesn’t want to raise interest rates.
Ten years ago, when retail sales were last growing this fast, the Bank’s base rate was at 4.25 per cent; today, calls for higher rates almost inevitably elicit a mixture of bafflement and defensive rejection. Don’t you know that we are in a new normal of permanently lower interest rates, we are told? It doesn’t matter what happens to the economy – as long as consumer prices don’t explode, rates can stay on hold – an astonishingly complacent viewpoint if ever there were one, but now the mainstream view in the City and elsewhere.
As Andrew Lilico of Europe Economics puts it, if the evolution of the economy over the past two years hasn’t convinced people rates should rise, what would? As ever, we will wait until asset prices and/or consumer prices rise too fast before acting, and the results will be catastrophic. Economic laws don’t change, Gordon Brown didn’t abolish boom and bust, and it is madness to believe that such low rates can coexist with such rapid growth for so long with put any side-effects. Britain has once again fallen victim to a bout of collective delusion.