The British Crisis and the ‘End of Neoliberalism’

By Pia Riggirozzi and Jean Grugel. Pia Riggirozzi is Senior Lecturer in Global Politics at University of Southampton ( and Jean Grugel is Professor of International Development at University of Sheffield. You can find more posts by Pia here.

There are many useful lessons to be learnt from the Latin American debate about ‘post-neoliberal’ political economy.

The crisis in British politics, from the slow, partial and uneven economic recovery to the exhaustion of the Westminster model in the wake of the Scottish referendum, is in the news. Academic commentary following the financial crisis in 2007-8 has focused on political disaffection, anti-politics and the disintegration of apparently established political allegiances and the emergence of new protest parties.  But, in order to understand fully the crisis in British politics, we need to put it into a global context.  Observers of British politics would benefit from looking outwards, and reflecting on experiences elsewhere.

Tony Payne’s recent SPERI blog sets out an argument that traditional patterns of governance in Britain are collapsing due to a combination of citizen frustration with an insulated and arrogant ruling elite and insensitive political leadership and, more profoundly, a political-economic project that not only fails most families but seems to be cutting away, wilfully and needlessly, at the welfare system and social contract that have hitherto guaranteed social peace in Britain.

Payne asks why it is so difficult for British leaders to manage the structural changes reshaping Britain and wonders whether we are in the midst of a political economy that could, as he boldly puts it, lead to ‘the unravelling of neoliberalism’: the Right is failing to impose an economic model based on rising inequality and the Left unable or unwilling to refashion a social contract of ‘caring capitalism’ or ‘capitalism with a human face’.

We agree with Tony Payne that the British political debate urgently needs to go beyond narrow discussion of partisan politics and short-term election strategies to embrace a more profound engagement with political economy.  But, as already indicated, we also suggest that there is much to be learned about the British crisis by putting it in the context of what has happened elsewhere or, put differently, by looking at it through the lens of a genuinely global political economic analysis.  What this might reveal are interesting and unexpected points of comparison with the politics and the economics of middle-income countries in the global South, where demands for better management of neoliberalism and calls for a ‘more intelligent state’, as the late President of Argentina, Nestor Kirchner, put it, are the stuff of everyday political debate.

One place to start would be the rich debate in and on Latin America about whether a ‘post-neoliberal’ political economy is possible.  The political-economic crisis in Latin America in the early 2000s led to calls for an end to neoliberal rollback, a new social contract negotiated and managed by a more active state, and the construction of a social consensus that was both respectful of economic growth and sensitive to urgent need to address the poverty legacy, invest in education and create welfare.  As we have ourselves shown, so-called ‘post-neoliberal experiments’ have combined a pragmatic attempt to refocus the direction and the purpose of the economy through state spending, increased taxation and management of exports with a project of enhancing citizenship through a new politics of cultural recognition in Bolivia and Ecuador and attempts to recreate the state-sponsored pact between business and labour in Argentina and Brazil.

Of course, post-neoliberal governance in Latin America is not problem-free.  Inadequate state capacity, the scale of inequality, personalist political leadership and a worrying lack of institutionalisation of reform – plus the threat of external discipline from creditors – all undermine some of the early gains achieved by new left governments.  But, despite their problems, and in the face of often profound criticism from international organisations, ‘post-neoliberal’ governments have proved remarkably durable at the polls, as the recent re-elections of Dilma Rousseff in Brazil and Evo Morales in Bolivia and the support for the re-election of Tabaré Vázquez in Uruguay show.

What’s more, these governments draw support not only from the rural and urban poor but also from the middle classes.  Indeed, the key to understanding calls for an end to a governance model subject entirely to the uncertainties of the global economy in Latin America has been the impact of unregulated markets on private and public sector middle-income groups.  Put simply, the absence of a proper social pact able to balance private profitability with welfare and public investments in the 1980s and 1990s led to immiseration of the middle classes, most dramatically in Argentina where the ‘new poor’ were the motor of the 2001 protest movement and factory take-overs.

There is surely much to reflect on here for analysts of the current crisis in Britain and indeed in Europe more widely.  Despite the difficulties so many people face simply in getting by, set out clearly in the recent Resolution Foundation’s recent report on Low Pay, the political parties in Britain seem unable to take their concerns and needs seriously enough.  One of the lessons from Latin America is that political leaders need to fashion an alternative to neoliberalism as part of their offer to the electorate if they want to win.

So, to go back to Payne’s question: are we in a situation of electoral rebellion, crisis and rising inequality on a scale that could lead to the unravelling of neoliberalism in Britain?  Despite the evident problems, we are sceptical as to whether the current crisis is really the prelude to collapse. Markets are deeply embedded as mechanisms of implementation (even in universities, schools and hospitals); and there are scapegoats that are, worryingly, being forced to carry the blame – immigrants most notably.  British citizens may not yet be ready to turn fully on their political leaders.  In Latin America, the challenge to neoliberalism came from electorates that refused to accept parties committed to free markets but did so in the context of a global political economy that gave Latin American citizens some hope for the future.  Whilst Latin America is part of the ‘rising rest’, Britain, however, is struggling with relative decline.

These important similarities and differences help put the British crisis in context.  Our key point is that the debate Tony Payne has opened about the future of neoliberalism is to be welcomed and we call now for genuinely comparative and global consideration of what ‘post-neoliberal’ political economies might look like, in Britain and elsewhere, and what might be needed to bring them into existence.

Polling Observatory #42: Sharp drop in Labour support adds further confusion to the most chaotic election in living memory

DipticBy The Polling Observatory (Robert FordWill JenningsMark Pickup and Christopher Wlezien). The homepage of The Polling Observatory can be found here, and you can read more posts by The Polling Observatory here.

This is the forty-second in a series of posts that report on the state of the parties as measured by opinion polls. By pooling together all the available polling evidence we can reduce the impact of the random variation each individual survey inevitably produces. Most of the short term advances and setbacks in party polling fortunes are nothing more than random noise; the underlying trends – in which we are interested and which best assess the parties’ standings – are relatively stable and little influenced by day-to-day events. If there can ever be a definitive assessment of the parties’ standings, this is it. Further details of the method we use to build our estimates of public opinion can be found here.

UK 01-11-14 anchor on average

In last month’s Polling Observatory we noted remarkable stability in the polls despite a hugely eventful political month. This month we find the opposite pattern. A relatively subdued political month has been accompanied by one of the largest shifts in opinion we have observed since the beginning of this parliament. Labour’s vote share, at 31.6%, is down 2.8 points in just a month, erasing nearly all of the fragile lead over the Conservatives that the party have been clinging to over the past six months. This plunge in support is among  the largest shifts in opinion we have recorded since 2010, and implies that about one in twelve Labour voters has drifted away from the party in the past few weeks. A significant part of this drop may be the result of the seismic shift in opinion north of the border, where support for the Scottish National Party has surged dramatically, threatening Labour’s long hegemony in Scottish Westminster polls and votes. The Conservatives, by contrast, have recovered some of the ground they lost last month, rising 0.6 points to 30.7%. The top two parties are now within just a single percentage point of each other, pointing to a tightening race with just six months to go to the general election.

Meanwhile UKIP have consolidated their large gain last month, and are stable on 15.2%. However, as the widening dashed lines around our latest UKIP estimate indicate, there is an unusually high degree of uncertainty about UKIP support at the moment. This reflects the substantial spread in UKIP support in the polls. Some pollsters are showing the party at 20% or higher, and indeed in the aftermath of the Clacton by-election one Survation poll reported UKIP as high as 25% (and another ComRes poll put them on 24% around the same period). In contrast, other pollsters have them stable in the mid-teens, for example with both Populus and YouGov often finding UKIP support in the 13% to 15% range.

As we have discussed previously, our method makes it possible to estimate the ‘house effect’ for each polling company for each party, relative to the vote intention figures we expect from the average pollster. That is, it tells us simply whether the reported vote intention for a given pollster is above or below the industry average. This does not indicate ‘accuracy’, since there is no election to benchmark the accuracy of the polls against. It could be, in fact, that pollsters at one end of the extreme or the other are giving a more accurate picture of voters’ intentions. In the table below we report the ‘bias’ towards or against each of the parties for all current polling companies. From this, it is quickly apparent that the largest range of house effects are found in the estimation of UKIP support, with Survation’s figures 4.3 points higher than the average pollster, followed by Opinium at 2.8 points higher and Lord Ashcroft at 2.1 points higher. In contrast, ICM put UKIP 2.6 points lower, ComRes (telephone) 2.5 points lower and Ipsos-MORI 1.8 points lower. As when we reported on this previously, the uncertainty seems to be associated with the method a pollster employs to field a survey. All the companies who poll by telephone (except Lord Ashcroft’s weekly poll) tend to give lower scores to UKIP. By contrast, three of the five companies which poll using internet panels give higher than average estimates for UKIP. The diversity of estimates indicates the continued uncertainty about the extent to which UKIP is reshaping the political landscape at the present time, where the lack of a clear precedent means that pollsters have little previous information to use to calibrate their estimates.

With the top two parties effectively tied, and the pollsters divided about the performance of the surging insurgents who may decide their fates, the outcome of the 2015 election has never been less certain.

House Mode Adjustment Prompt Con Lab Lib Dem UKIP
ICM Telephone Past vote, likelihood to vote UKIP prompted if ‘other’ 1.3 -0.8 2.7 -2.6
Ipsos-MORI Telephone Likelihood (certain) to vote Unprompted 0.5 0.3 0.5 -1.8
Lord Ashcroft Telephone Likelihood to vote, past vote (2010) UKIP prompted if ‘other’ -0.9 -0.6 -1.0 2.1
ComRes (1) Telephone Past vote, squeeze, party identification UKIP prompted if ‘other’ 0.3 -0.1 0.1 -2.5
ComRes (2) Internet Past vote, squeeze, party identification UKIP prompted if ‘other’ 0.3 -0.7 -1.0 1.8
YouGov Internet Newspaper readership, party identification (2010) UKIP prompted if ‘other’ 1.9 2.1 -1.3 -0.4
Opinium Internet Likelihood to vote UKIP prompted if ‘other’ -0.8 -0.8 -2.2 2.8
Survation Internet Likelihood to vote, past vote (2010) UKIP prompted -1.7 -1.4 -0.3 4.3
Populus Internet Likelihood to vote, party identification (2010) UKIP prompted if ‘other’ 2.4 1.7 0.1 -2.1

Another polling sub-plot which emerged this past month has been the emergence of the Greens as yet another potent force in the fragmenting political landscape. A number of polls have put their support at 6% or 7%, a massive increase on their 2010 showing of less than 1% (though this is artificially deflated as the party stood candidates in less than 50% of constituencies), and close to or even above the struggling Liberal Democrats. We do not currently estimate support for the Greens, but will investigate adding them to our model if the current surge in support is sustained. Currently, we have the Lib Dems at 8.5%, up 0.3 points on last month. Although falling behind the Greens is symbolically bad for the party, and provides seasoned poll watchers with an exciting new story, the substantive impact of this new twist is likely to be limited. The Lib Dems’ fate still depends on how well they can hold on to votes in their traditional constituency strongholds.

Despite the sharp fall in their support this month, Labour still hold important structural advantages thanks to the biases in the electoral system, which mean their votes translate more effectively into seats. Lord Ashcroft has been doing the psephological community a huge service by systematically polling the individual marginal seats which will decide the result next year. Using this method, he has already identified enough prospective Labour gains to put the party ahead on seats next year, and he still has many more strong prospects to poll. However, as Lord Ashcroft’s himself wisely reminds us, polls are a snapshot not a prediction, and Labour’s leads in many key marginals look awfully fragile. The opposition remains, slightly, in front for one more month. But there are six more to go, and if just one of these looks like October, the contest will be thrown wide open.

Robert FordWill JenningsMark Pickup and Christopher Wlezien

In Defence of Revolution

By Meg Sherman, a student of Modern History and Politics at University of Southampton. Meg also has a personal blog.

(Cross-posted from

Revolution, Russell Brand’s new book, is devoted to asking how we build an egalitarian society and awaken our higher skills, a trunk full of hot thoughts about spirituality, spectacle and cultural politics in late capitalist modernity – the age of made-up FTSE symbols as he inimitably puts it. Traversing an ocean of anecdotal evidence spanning the democratic proto-panacea of Occupy to the kangaroo court of Newsnight, the clown-cum-inquisitor gives short shrift to dominant political orthodoxies. It’s not a typical manifesto, although, like in Marx, the cadences matter. Revolution sings to our minds, Brand playing on his lexical flute and telling a true story of how human lives were entombed in bad rule and a deadly consumer culture sacralising destruction. It is the ultimate fantasy of mindlessness. All in all he gives us a bright light for seeing with in gloomy times.

There’s the urge to spring to attack like Murdoch’s rotweiler and do a hatchet job. Of late, the self-styled comic philanderer has turned heads trying to carve out a new reputation for seriousness, undercutting old privilege networks in his spare time with eloquent whimsy and panache, all stylish and rumbustious in conch calls for change in The Trews. It’s precisely because he’s been accused of being a demagogue that his ideas ought to be contested, but a tranche of abusive rebuttals seem only to reiterate an astute claim made throughout his prose and performance comedy: modern media ceremonies of iconoclasm are hurtful, a fruitless spectacle distracting us from collective issues the whole Earth faces as industrial civilization surges humanity to a doom-laden precipice. Is now time to expend energy on hatred? Only if you’ve lost course. It’s time to attain understanding, quickly.

It should seem conspicuous how by focusing attention negatively on a singular comic persona, press machinery conveniently relieves itself of acknowledging or meaningfully contemplating the many and varied ideas on politics and IR, self and the world, derived from solid research and joyfully drenched in iridescent prose in the wave-making books and videos. Their value is the range of their sympathy; forget celebrity.

Hardly anyone in the reviews is calling Revolution’s argument profound, despite the fact the main argument spiralling through the text, although not all Brand’s own, is genius still: if we began thinking and living as communities in harmony with one another’s fundamental needs, the amount of energy necessary to transform the governance of our society would be of an order of magnitude smaller than that which we put in to keeping up a rotten orthodoxy, predicated on corporate power, materialism and possessive individualism, which makes more people dead and depressed quicker, meanwhile emancipating corporations and the exponentially rich from social obligation, and – the apocalyptic icing on the anthropogenic cake – senselessly accelerates ecocide.

On Earth the collective daily lot is human and ecological disaster fixed by an elaborate system of hoarded wealth and power, as concurrently people born in to low-paid lives, ever more restricted by government policy, are in want of facilities to feed, house and take care of themselves. Cruel world that Brand accuses “the bejewelled fun-bus”, the 85 people who have as much wealth as half the world of wanting the ogre system in the heart of the gumdrop gingerbread village to stay cosy, to stop us from realizing our common cosmic plight.

We know liberal democratic governments are plutocracies and that candidacies tend to be sponsored by financial elites and that these states have become more authoritarian in time. The topsy-turvy reality of politics is tucked out of sight and censored from narrow and selective narratives of mainstream media. Establishment forces, although having broad, complex and diffuse strategies, all have tendencies for managing information, eliding from the public knowledge which might cast hegemonic discourse in a dubious light and topple methods of control (see: Manufacturing Consent.) Far from being assemblies embodying a transcendent collective will, our governments are intricately entangled with big businesses and unaccountable multinational corporations, systems which irrationally let profiteers expand margins and extract more labour by practices only legally differential from slavery, proven to have brutally deleterious effects on human lives, animals and planetary ecosystems. That’s the problematic, not just for Brand but for everyone.

Much of what is said about politics in the public sphere today is still governed by the erroneous belief that there is no alternative to capitalism and that we have less in common with the migrant labourer on our street than members of parliament dressed in privilege. With that in mind a lot of people have told a lot of lies and we have put faith in those lies. Today the real demon doesn’t live within overseas people in desperation of survival and happiness, but inside the premeditated, segregationist idea that immigration has been making citizens worse off. Inequity is the real source of destitution – a manipulation of truth generated from the heart of the establishment itself. Yet despite differing views of self-interest in separate echelons of society, based on grinding materialism and individualism, the outcomes of our behaviour are converging and getting worse for everyone (see: Tragedy of the Commons.) Climate change has no romantic attachment to nationality or class, and it will get us all somehow; unless you have a moon-rocket and have sussed the physics of living in an airless, frozen mass. The barriers and cliff-edges making a gulf between us in society aren’t true in nature; that is to say they are artificial, man-made. The sooner we realise it the sooner we can put our minds to creating beneficial, joyful ways of living together.

Expounding on these themes Brand affirms:

Chomsky says that at this point history alternative visions for society are vital and those based on cardinal human values of sharing and being ecologically minded deserve serious consideration.

In the same breath he quotes his friend Daniel:

“We can create a peaceful planetary civilisation, entirely powered by renewable sources of energy, based on cradle-to-cradle practices, where everyone on earth enjoys a high quality of life… The transition is from a paradigm of competition and domination to one of symbiosis and cooperation, from greed to altruism. It begins with the realisation of our shared responsibility for the future of the earth, and our inherent unity with each other ad with all of life.”

It’d be hard to find a practitioner worth their salt who seriously disagreed with that. The facts in Revolution are not inaccurate or invented. So you have to wonder why a lot of high-minded criticism is spiteful in tone and neglects to mention the book’s key points.

Brand’s audience isn’t a tiny anglophone elite, and he speaks to our times. His scheme is to subvert sensationalist journalism and swivel our minds towards the thoughtful critique of Noam Chomsky and soaring poetry of Buckminster Fuller, to get us all sentient and soul-deep in the truth. The unrelenting media claw has been clenched round his waist since he sprung up on telly as Paxman’s adversary, rafting the sensible idea that when “democracy” is tantamount to a singular act of voting for a corporate, elitist party on one day in every 1826.21 – concurrently we possess the technological and informational capacity to comprehensively include people in policy making, just look the voting stats for X Factor – it leads one to question if the status quo is behaving for common purposes. Sound reasoning.

His emphases on channelling non-violent spirituality in to revolution, a theory of moral action, echoes his hero Gandhi, who personified a supreme opposition to British imperial rule through the attainment of understanding and co-ordinated civil disobedience, as opposed to violence, and said:

“Non-cooperation is not a passive state, it is an intensely active state – more active than physical resistance or violence. Passive resistance is a misnomer. Non co-operation in the sense used by me must be non-violent and therefore neither punitive nor vindictive nor based on malice, ill-will or hatred.”

There’s a whole world with ears for Revolution’s truth and proto-communist sentiments. Its greeting started a sparked rebellion in my own mind anyway. There’s a sunrise of hope risen above the gnarly mountain ranges of consumerism, a renewed faith that self-sufficient communities where lives and the environment are more sacred than profit are plausible are growing now. Don’t underestimate the strength of the message. It’s not for nothing that the media cloud that view. The ogre of selfishness and acquisition has been gobbling up the planet in one long cosmic breath for a lot longer than it should’ve. Russell Brand is at heart still a rainbow-headed kid who wants what’s best for the world. And why can’t that be an ocean of strength and prominent in the universe?

Political disaffection is not new, but it is rising and driving UKIP support



By Will Jennings and Gerry Stoker. Will Jennings is Professor of Political Science and Public Policy at University of Southampton (, Twitter) and Gerry Stoker is Professor of Governance at University of Southampton (Twitter). You can read more posts by Will Jennings here and more posts by Gerry Stoker here.

Some argue that the current anti-politics mood is just a contemporary manifestation of a timeless phenomenon: that people don’t much like politics or politicians. It probably true that politicians have never been greatly popular in the history of British democracy but there is now clear evidence of decline and more than that it appears that anti-politics is having a big effect on politics by driving  support for UKIP.

Good longitudinal data on public attitudes towards politics and politicians is difficult to come by. To address this, we have replicated a poll question that was first asked by Gallup in July 1944: “Do you think that British politicians are out merely for themselves, for their party, or to do their best for their country?” To mark the 70th anniversary of the original poll, and the launch of a new ESRC project that looks at popular understandings of politics between 1937 and 2014, YouGov carried out a survey for us asking precisely the same question as was asked to the British public in 1944 and 1972.

The results (see Figure 1) show that there has been a clear shift in public attitudes seeing politicians as self-serving, with some 48% of respondents now considering that they are ‘out for themselves’, a further 30% believing they are out for their party, and just 10% thinking they want to do what is right for the country. The fact that only 1 in 10 of us think politicians try to their best for the country now represents a large drop, both from the wartime poll (where 36% were willing to see politicians as trying to do their best for the country) and from the 1970s poll (where 28% felt that politicians were out to do their best for us). The data tells us that people are noticeably more negative about politics today than they were seventy years ago. Indeed, the fact that public opinion moved only slightly between 1944 and 1972 but much more negatively since then indicates that recent disenchantment with politics is an issue that is of serious consequence.

Figure 1. What Motivates Politicians? 


It is also clear from our data that disaffection with politics and politicians is fuelling the drift of voters away from the main parties to UKIP. UKIP voters are steadfastly negative about the political class. Some 74% of them believe that politicians are out for themselves and 19% for their party, with a paltry 3% thinking they are out to do their best for their country. This view of self-serving politicians is the unifying feature of attitudes of UKIP supporters.

Arguably political disaffection unifies UKIP supporters at least as much as either opposition to the EU or concern about immigration. If we model the likelihood of voting UKIP as a function of those answering that politicians are out for ‘themselves’, as much variance is explained as typical social predictors of UKIP support (those predictors in our dataset being respondents who are male, over-54 and working class). UKIP voters are not necessarily the ‘left behind’, but are people holding unambiguously and intensely negative views of politics and politicians. UKIP supporters are also much more firm-minded on this issue, with just 4% indicating ‘don’t know’ (a much lower figure than the average of 12% for the other parties). Not only are UKIP supporters more negative, they are surer of their views. They “know” that establishment politicians are serving themselves or their parties not the country.

Another notable finding, given the conventional wisdom about anti-politics, is that younger respondents (18-24) are in fact much less likely to think politicians are out for themselves. This is despite the popular claim that young voters are unengaged. It is older voters who are more cynical about the motivations of politicians.  So the decline in citizens’ willingness to back politicians to do the right thing by their country cannot easily be explained by a generational shift to more challenging, critical or cynical voters. It has got something to do with citizens’ judgement about how politicians and politics are presented and appear to them.

In that light it is worth noting that if your party is in power you might be more willing to give its politicians the benefit of the doubt. In our results, Conservative voters are most positive, with ‘just’ 34% thinking politicians are out for themselves, while 21% think they are out for their country (more than double the average). Curiously, Lib Dem voters tend not to think politicians are out for themselves (just 26% do), but 44% think they are out to do what is best for their party. This is perhaps a function of the party being in a coalition as well as the fact that Lib Dem voters are now something of a rump. Despite much celebration of the quality of Scotland’s democratic debate over independence, respondents from Scotland are more likely to see politicians as being self-serving than any other part of the country (with London and the South being more positive than the rest of the country).

Finally let us return to the original 1944 Gallup results. Remarkably, as war continued to rage across the globe, some 35% of respondents still believed that Britain’s politicians were out for themselves, 22% for their party, and 36% for their country. A healthy scepticism appears to have been ingrained in British citizens for a long time and will never be rooted out. But with only 10% of citizens now thinking that politicians try to act in the public interest it suggests that governing in a time of real crisis would be even more difficult. And those crises are potentially upon us, whether they are forging economic recovery, dealing with global warming or funding health care for an aging population. As David Runciman argues in his historical review The Confidence Trap, democracies have muddled through crises in the past but they may be losing the capacity to do so in the future. Our survey findings should give further reason for sounding alarm bells: if no one believes in elected politicians our ability to take effective collective action on issues that matter may be diminishing or disappearing.


Technical note: Total sample size was 2,103 adults. Fieldwork was undertaken between 20th – 21st October 2014.  The survey was carried out online. Figures have been weighted and are representative of all GB adults (aged 18+). Full cross-tabs of the survey can be found here.

Details of the logistic regression of UKIP vote intention comparing the effects of social predictors with political disaffection can be found here.

Alternatives to Fixed-Term Elections

By Ben Saunders, Senior Lecturer in Political Philosophy at University of Southampton (@DrBenSaunders,

Until the present coalition government introduced the Fixed-term Parliaments Act, in 2011, the UK Prime Minister had discretion to call elections at will, a power often used for partisan advantage. As Petra Schleiter reports in her post on OpenDemocracy, 60% of the UK’s post-war elections were called early (i.e. more than six months before required). Further, her analysis suggests that this gave incumbents a 6% vote gain, roughly doubling the PM’s chances of remaining in office.

The Fixed-term Parliaments Act allows early elections to be called only in very restricted circumstances (either with support of two-thirds of the House of Commons or following a vote of no confidence after which no alternative government is approved by the Commons within 14 days). Schleiter points to a number of advantages of this; not only does it stop PMs from calling elections opportunistically, in order to increase their chances of victory, but depriving them of this power also prevents them from using the threat of an election to bully backbench MPs or coalition partners, thereby making the government more accountable to parliament.

However, in focusing on the advantages of fixed-term elections, Schleiter does not consider whether there are certain advantages to the old system, in which an election could be called at any moment. Alan Hamlin has previously argued that fixed-term elections will not eliminate a bias in favour of the incumbent. Though governments will not be able to call an election at a moment that happens to be favourable to them, they will be able to pursue policies designed to produce favourable circumstances at the time an election is scheduled to take place.

Further, Hamlin argues that the constant threat of a surprise election requires opposition parties to maintain a certain level of campaign-readiness and to be active in holding the government to account. Where is it known that there will not be another election for 4-5 years, opposition parties may have little incentive to provide opposition to the government, being focused on their long-term electoral strategy. Knowing that there may be an election at any time, however, forces these parties to hold the government to account. Thus, while the PM’s prerogative to call elections at will may give them greater control over their own party, this same arrangement may result in more effective opposition.

Though one stated aim of the Fixed-term Parliaments Act was to reduce instability and short-termism, unpredictability does have some benefits, preventing both incumbents and opposition parties from attempting to ‘game’ the electoral cycle. While giving power to call elections to the PM is undesirable, since it will predictably be used for partisan advantage, fixed-term parliaments are not the only alternative. One possibility would be to return the power to dissolve parliaments to the monarch, who is supposedly impartial, but this would doubtless be undesirable too. Indeed, giving anyone the power to call elections will raise the possibility of favouritism or corruption, since no one can be guaranteed to be impartial.

There are, however, alternative arrangements that do not rely on giving any individual the power to call an election. Hamlin also touches on the possibility of random election cycles. There are various ways that such an idea might be implemented. One would be for a random period of time to be set after (or just before) each election, so it was known when the next election would be. This would, in effect, amount to a fixed-term, albeit that the length of term might vary from one government to the next. There seems little advantage to this.

Another possibility, however, would be to have a random device to determine whether an election should occur at a given moment in time. For instance, at the start of each year we might generate a number from one to ten and, if it is a one then an election must be held that year. There would, of course, be a chance (10% given these figures) that some governments could last little more than a year. There is also a chance that some may last a significant period of time; the chance of five random draws, without a one occurring, is almost 60%. The exact numbers, however, are not my concern here, but rather the principle, that we can avoid discretionary power without adopting fixed-term parliaments.

This is not necessarily to say that fixed-term parliaments are a bad thing. Perhaps, after due reflection, we may think it is good to allow parties – both in government and opposition – chance to step-down from constant election readiness and to implement (or devise) policy programmes. If so, then we may favour fixed-term parliaments because they allow for predictability and long-term planning, but these reasons are distinct from objections to the partisan effects of PM discretion. But if, like Hamlin, we value unpredictability as a means to ensure government accountability, and our only objection is to giving the PM power to call elections, then we may favour random elections rather than fixed terms. Thus, we need to decide whether predictable electoral cycles are a good thing or not, independently of any objections to PM’s discretion.

England’s Great Illusion (about the EU)

By Dr Kamil Zwolski, Lecturer in Global Politics and Policy at University of Southampton ( You can find more posts by Kamil here.

On Monday, 20 October, the outgoing European Commission President Jose Manuel Barroso responded to English nationalists in a speech delivered at the Chatham House think tank in London. Here is the part of this speech directly countering some Europhobe arguments.

That is why I do not underestimate the very real concerns UK citizens are expressing about Europe. These merit a substantive response.

You don’t like the idea of a huge EU budget. I get that. By the way, it’s not – and with just 1% of Europe’s GDP we will need to fully use the agreed flexibility if we are pay our bills to those we are committed to invest in. Like Cambridge University for example, which consistently tops the tables for winning EU research funding.

But it’s a shame that the political debate here focuses only on absolute figures, when quality of spending is so much more important. This Commission has reformed the budget to focus on providing funding in countries and regions for the things that really matter – investment in research, in young people, in a more connected Europe.

You don’t want to be paying for armies of Eurocrats. I get that. We are cutting one in twenty staff across all EU institutions and agencies. The reforms we have introduced will save €2.7 billion by 2020 and €1.5 billion per year in the long run.

Personally I support the government’s aim to get more of Britain’s best and brightest to work in our institutions. The number of British officials is less than half of what it should be and falling quickly. Constant criticism and a pending existentialist debate do not make us the most attractive employer for young British graduates.

You don’t want Europe to meddle where it should not. I get that. Since 2004, the Commission has cut red tape worth €41 billion to European business. We have not interfered with the height of hairdressers’ heels, or the ergonomic design of office chairs.

We have scrapped legislation on bendy cucumbers – although the supermarkets were the first to complain. We have introduced evidence-based policy-making, consultation and impact assessment as the norm.

There are wide-spread concerns in the UK and elsewhere about abuse of free movement rights. I get that. Already in 2011, after constructive dialogue with the British Government, the Commission took forward changes to the way income support is dealt with under European social security rules. This benefit is now only due to those who have already worked and paid into the UK system. Since then we have undertaken concrete actions to support Member States as they apply the anti-abuse rules, for example on sham marriages.

I believe that any further changes to address some of the concerns raised should not put into question this basic right, which cannot be decoupled from other single market freedoms.

The Commission has always been ready to engage constructively in this discussion. But changes to these rules need all countries to agree.

And it is an illusion to believe that space for dialogue can be created if the tone and substance of the arguments you put forward question the very principle at stake and offend fellow Member States. It would be an historic mistake if on these issues Britain were to continue to alienate its natural allies in Central and Eastern Europe, when you were one of the strongest advocates for their accession.

[Emphases added]. Full speech available here.

USS Pension Reform: On Prudence, Fairness and Trust

By David Owen, Professor of Social and Political Philosophy at University of Southampton (@rdavidowen, You can find more posts by David here.

Recently proposals have been advanced for reform of the USS Pension which will have very considerable effects on both those who has been in the Final Salary Scheme and those who only been in the Career-Average Defined Benefits Scheme. Claims and counter-claims have flown about so it worth stepping back to review the position by recalling principles for guiding pension reform and looking at the current dispute in the light of these principles. There are three main kinds of principles involved here:

  1. Principle of prudence in guiding the evaluation of the assets and deficit of a pension fund, where this judgment will be informed by the kind of fund in question (for example, a one-firm fund or a fund supported by multiple corporations).
  2. Principles of prudent fairness in proposing reforms to the fund, where issues of fairness pertain particularly to the legitimate expectation of fund members and to the distribution of risks and benefits.
  3. Principle of trust in the communication of the fund evaluation and the rationale for, and consequences, of proposed reforms.

Let us take each in turn.

Prudence and the calculation of assets and deficit.

Guidance from the Pensions Regulator suggests that valuations should not be based on only worst-case assumptions in every issue as “an appropriate overall level of prudence in the technical provisions should be the paramount objective” of a valuation. But this is precisely what appears to have been done on calculating the USS fund deficit as a recent letter to the THE points out:

False assumptions of the USS

23 OCTOBER 2014

Last week, the Employers Pension Forum published “Proposed Changes to USS – Myths, Misconceptions and Misunderstandings”. The document contains misinformation and a mistake. We focus on the section “M7: The assumptions used to value the fund have been chosen to artificially create a large deficit”.

Having reviewed the assumptions given in the 2013 annual report, we believe, as statisticians and financial mathematicians, that each assumption is inadequately justified and that cumulatively they are unreasonably pessimistic and incoherent. The predicted salary increases assume a buoyant economy while investment returns assume a recession.

For example, the average annual rate of return on assets achieved by the Universities Superannuation Scheme over the past 10 years was about 7 per cent and over the past five years about 11 per cent. It is therefore difficult to understand the EPF’s assertion that “since 2011…the continuing global economic challenges…have had a detrimental impact on the value of USS’ assets”.

Meanwhile, members’ wages are assumed to grow by the retail price index plus 1 per cent (taken to be 4.4 per cent) plus incremental increases. Over the past 20 years the actual rate was about 2.7 per cent, with similar growth over the past 10 years. Post-2008 rates show negative real-pay growth. The age-related assumption is wage growth (1 per cent to 4 per cent) by progress up the salary scale: anecdotally this assumption leads to higher pay growth rates than the majority of academics have experienced over the past 10 or 20 years. As the fund’s actual experience was used to give a mean retirement age of 62 years at the last valuation, it seems odd that salary assumptions do not also reflect actual experience.

The assumptions on mortality appear to be unchanged from the 2011 valuation, yet the EPF archly advances the statement that “members of the USS are living longer so the pension scheme has to pay pensions in retirement for longer than planned” as a reason for deterioration in the fund’s position since 2011.

A reasonable change in any one of these assumptions would give a lower estimated deficit. The EPF states that although changing the assumptions in this instance could affect the size of the deficit, “it cannot change a deficit into a surplus”. It takes little mathematical knowledge to recognise that this statement is wrong.

In other words, the valuation is performed on the basis of various assumptions about likely future experience and each assumption is inadequately justified and that cumulatively they are unreasonably pessimistic.

This letter provides strong prima facie grounds for believing that the calculations involved do not respect the principle of prudence. This is reinforced by a much earlier pre-emptive counter to such reforms of the USS scheme by the pensions expert and LSE governor Ros Altman makes a number of additional points where the headlines are:

  • Universities Pension Scheme scaremongering is overdone.
  • Classic example of damage to pensions from QE
  • USS is not a closed scheme, so it is unfair to compare it with most other UK schemes
  • Its funding position is being well managed and it should not be panicked by exceptional interest rate environment.

Prudent fairness and proposals for reform

Consider the claim invoked in the current proposals is that combined (employer plus employee) contribution rates are projected to rise from 23.5% after the 2011 valuation to around 35% and this, USS claims, is “unaffordable”. It has long been a principle of actuarial valuations of pension funds that valuations should ensure gentle changes in funding rates. This large increase would represent a failure by the fund or its actuaries to observe that principle. There is a reason for the principle of gentle increases, namely, ensuring that the legitimate expectations of members of the pension scheme are not radically breached and this informs the more general principle of prudent fairness that is central here. Professor Mike Otsuka at the LSE has drawn my attention to a related case in which the salient principle is exhibited:

How to close a final salary scheme properly. It’s very simple:

“For all scheme members, any benefits built up in the final salary scheme [up until the date of closure] will be protected and remain in that scheme. When benefits are calculated at retirement, they will be linked to the member’s most recent pensionable earnings (but using the final salary scheme rules).”

That’s what the Teachers Pension Scheme did when they moved everyone in the post-92 higher education sector over from final salary to career average salary defined benefits.

Why did they do that? Because an Independent Commission said that the “Government must honour in full the pension promises that have been accrued by scheme members: their accrued rights. In doing so, the Commission recommends maintaining the final salary link for past service for current members.”

The principle of prudent fairness does not, however, simply concern the transition to a new scheme but also the character of the new scheme. Thus it is proposed that the new scheme would combine a Defined Benefit (DB) element and a Defined Contribution (DC) element with the switch from one to another happening at a given salary level. Yet, as a large scale Canadian study has comprehensively demonstrated (, DC schemes are much more inefficient than DB schemes and off-load greater levels of risk onto individuals. Dennis Leech at the University of Warwick has also stressed this point here ( Prudent fairness supports maintaining an efficient collective scheme in which risks and benefits are shared fairly among members – such as a Career-Average Defined Benefits Scheme.

Trust in the communication of the fund evaluation and the rationale for, and consequences, of proposed reforms

The final principle concerns how communication is carried out concerning the evaluation and the proposed changes. It is important that whose involved in the process need to be able to trust the communications that they receive if these communications purport to provide neutral and impartial information. On the evaluation side, it is apposite here to note an earlier letter to the THE by Professor Jane Hutton (also one of the signatories of the THE letter cited above):

The Employers Pension Forum published a Q&A purporting to explain the reasons for the proposed changes in the Universities Superannuation Scheme with the date 11 August 2014. I read it in early September, and realised that the life expectancies given under question nine were completely implausible. I did not know whether this was incompetence or an attempt to mislead.

I wrote to the EPF on 9 September, raising questions about this. I have not received a reply. However, when accessed on 2 October, the Q&A had been changed to omit the incorrect life expectancies, but still bore the date 11 August 2014. There was no indication that the change had been made, and the conclusions drawn remained.

As the EPF Q&A claims to provide information, with the implication that the advice is impartial, it is more than disingenuous not to alert readers to the change. The balance of my opinion as to whether the inaccuracy arose from incompetence or dishonesty has altered.

If we turn to consider the issue of the rationale for the reforms, the most obvious concern is that no information is provided on what alternative possible reforms have been considered and why they have been rejected. This is a central element of the response by Oxford University to the consultation and their response is worth reading in full. Oxford’s response also draws attention to the limited timeframe that has been made available for this consultation – a point that is also salient to the issue of trust.

It appears then that members of the USS scheme have prima facie reasons to be mistrustful of the good faith in which the necessity of just these reforms is represented to them. To restore trust requires that the issues raised here are fully and properly addressed.