Europe’s debt mountains, Osborne’s Plan B and turning Greece into a debtors’ prison

Vicky Pryce on UKIP's respectable friends and Prisonomics.

Ukip’s respectable friends

Debates on whether the UK should leave the European Union are a growth industry. Of course we shouldn’t – and there shouldn’t be a referendum either, unless other like-minded countries ask to have powers given back to them, too, so that a new treaty would then need to be voted on.
Withdrawal makes no economic sense, given our trade and other ties with 500 million fellow Europeans and the EU’s £11trn market. That didn’t stop more than a thousand people meeting at the Guildhall for the in/out debate co-hosted by the Evening Standardand the Centre for London on 9 September. On the pro-Europe side were Vince Cable, Martin Sorrell of the advertising company WPP and me. The antis were the Labour MP Gisela Stuart, the businessman Luke Johnson and Jesse Norman, the last of these recently sacked as a government adviser by David Cameron for showing independence on the Syria vote.
I was shocked at the number of people who declared they were pro-Ukip. Still, I think the majority wanted us to stay in.


Choppy waters ahead

On the subject of the eurozone, I recently attended a conference organised by Professors Richard Portes and Hélène Rey at the London Business School to discuss how sustainable current debt levels are. Yes, a number of the periphery countries of Europe have managed to improve their current account balances and to move to primary surpluses in their public finances. However, the reason is mainly that they have stopped spending. Growth is minimal and debts of 120 per centplus of GDP are unsustainable.
The crisis has not gone away – many of the banks are in deep trouble and the latest data suggests that lending has been declining in most countries. There are some tentative signs of a pick-up but the debt overhang is bound to bring in more crises soon.
Steering the eurozone through the continuing turbulence will require a master helmsman or helmswoman. 


Ignoring our neighbours

The most important political event of the year is coming later this month. Yet if you read most newspapers, you would not know that there will be an election in Germany. Compare this to the year-long, day-by-day coverage of any US election and our indifference to politics across the Channel seems almost 1930s-esque in its frivolousness.
The only story here seems to be whether Angela Merkel will back the Prime Minister’s wish for a massive renegotiation and repatriation deal with the EU. My German friends say Keine Chance – “no way”. At the Guildhall debate, Cable said that the Lib Dems would support a referendum if it was warranted by a substantial change in our relationship with Europe. It didn’t sound like backing for a referendum come what may.


Balancing act

George Osborne has proclaimed that the UK’s cuts strategy was right after all and that he has been vindicated. In my view, the reason for any success is not austerity – the government has already implemented Plan B, as it has acknowledged some growth is better than none. Target dates for fiscal consolidation have been pushed back. The governor of the Bank of England, Mark Carney, indicates interest rates will stay low as long as possible. A huge injection of cash into the banking system through what is known as “Funding for Lending” and the additional increase in taxpayer-funded mortgage availability are boosting demand and construction. Growth is sustained by consumers borrowing more and more government spending. Nothing wrong with that – but where’s the rebalancing?

Greek encounter

Great relief. My forthcoming book, Prisonomics, looking at the costs and benefits of the prison system in England and Wales, has just gone through the last of its many edits with my editors and will be out in a few weeks’ time. Iain Dale of Biteback has revolutionised political publishing by cutting the year-long delays between writing and publication. I have also been updating Greekonomics, my book from last year on the eurozone crisis.
My research included a wonderful fish dinner near Athens recently with, among others, Mark Lowen, the BBC correspondent there. His lineage is amazing. One grandmother was a Jewish concert pianist in wartime Poland who played for Nazi brutes and lived for another day. His grandfather George Lowen was a young Jewish left-wing barrister in Berlin who worked in the defence team in the Reichstag trial in 1933. He fled to South Africa, where he had to learn English. He requalified and became a well-known QC and defended anti-apartheid militants at the Rivonia trial, in which Nelson Mandela was imprisoned. The Reichstag and Rivonia trials were two of the 20th century’s greatest court cases. The grandson is now reporting on extremist right-wingers in Athens.
Greece remains weak, if resilient, and urgently needs more of its debt written off. Unemployment is at record levels and tensions are high. Yet we prefer to keep entire nations in a kind of debtors’ prison. It’s not so much 1930s politics but the return of 19thcentury economics that is worrying.

Milk moustache

Back from my parents’ home near Athens to chilly Clapham. I spent most of my holiday in front of a computer at the wonderfully named Everyday Café in Varkiza, a seaside suburb outside Athens. My chief writing aids were countless café frappés – a glamorous name given to Nescafé mixed with cold water from the fridge and ice cubes, shaken like a cocktail until a thick layer of froth comes out on top and then poured into a tall glass.
It looks like a pint of Guinness but it’s spoiled by how you have to drink it through a straw – unless you don’t mind the ignominy of having a thick layer of froth settling around your mouth like a moustache.
Vicky Pryce is a former joint head of the Government Economic Service. Her books “Prisonomics” (£16.99) and an updated edition of “Greekonomics” (£12.99) will be published by Biteback later this month 
UKIP party posters for a local election. Image: Getty

This article first appeared in the 16 September 2013 issue of the New Statesman, Syria: The deadly stalemate

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Caroline Lucas and Jonathan Bartley: "The Greens can win over Ukip voters too"

The party co-leaders condemned Labour's "witch hunt" of Green-supporting members. 

“You only have to cast your eyes along those green benches to think this place doesn't really represent modern Britain,” said Caroline Lucas, the UK’s only Green MP, of the House of Commons. “There are lots of things you could do about it, and one is say: ‘Why not have job share MPs?’”

Politics is full of partnerships and rivalries, but not job shares. When Lucas and Jonathan Bartley were elected co-leaders of the Green party in September, they made history. 

“I don't think any week's been typical so far,” said Bartley, when I met the co-leaders in Westminster’s Portcullis House. During the debate on the Hinkley power plant, he said, Lucas was in her constituency: “I was in Westminster, so I could pop over to do the interviews.”

Other times, it’s Bartley who travels: “I’ve been over to Calais already, and I was up in Morecambe and Lancaster. It means we’re not left without a leader.”

The two Green leaders have had varied careers. Lucas has become a familiar face in Parliament since 2010, whereas Bartley has spent most of his career in political backrooms and wonkish circles (he co-founded the think tank Ekklesia). In the six weeks since being elected, though, they seem to have mastered the knack of backing each other up. After Lucas, who represents Brighton Pavilion, made her point about the green benches, Bartley chimed in. “My son is a wheelchair user. He is now 14," he said. "I just spent a month with him, because he had to have a major operation and he was in the recovery period. The job share allows that opportunity.”

It’s hard enough for Labour’s shadow cabinet to stay on message. So how will the Greens do it? “We basically said that although we've got two leaders, we've got one set of policies,” said Lucas. She smiled. “Whereas Labour kind of has the opposite.”

The ranks of the Greens, like Labour, have swelled since the referendum. Many are the usual suspects - Remainers still distressed about Brexit. But Lucas and Bartley believe they can tap into some of the discontent driving the Ukip vote in northern England.

“In Morecambe, I was chatting to someone who was deciding whether to vote Ukip or Green,” said Bartley. “He was really distrustful of the big political parties, and he wanted to send a clear message.”

Bartley points to an Ashcroft poll showing roughly half of Leave voters believed capitalism was a force for ill (a larger proportion nevertheless was deeply suspicious of the green movement). Nevertheless, the idea of voters moving from a party defined by border control to one that is against open borders “for now” seems counterintuitive. 

“This issue in the local election wasn’t about migration,” Bartley said. “This voter was talking about power and control, and he recognised the Greens could give him that.

“He was remarking it was the first time anyone had knocked on his door.”

According to a 2015 study by the LSE researcher James Dennison, Greens and Kippers stand out almost equally for their mistrust in politicians, and their dissatisfaction with British democracy. 

Lucas believes Ukip voters want to give “the system” a “bloody big kick” and “people who vote Green are sometimes doing that too”. 

She said: “We’re standing up against the system in a very different way from Ukip, but to that extent there is a commonality.”

The Greens say what they believe, she added: “We’re not going to limit our ambitions to the social liberal.”

A more reliable source of support may be the young. A May 2015 YouGov poll found 7 per cent of voters aged 18 to 29 intended to vote Green, compared to just 2 per cent of those aged 60+. 

Bartley is cautious about inflaming a generational divide, but Lucas acknowledges that young people feel “massively let down”.

She said: “They are certainly let down by our housing market, they are let down by universities. 

“The Greens are still against tuition fees - we want a small tax for the biggest businesses to fund education because for us education is a public good, not a private commodity.”

Of course, it’s all very well telling young people what they want to hear, but in the meantime the Tory government is moving towards a hard Brexit and scrapping maintenance grants. Lucas and Bartley are some of the biggest cheerleaders for a progressive alliance, and Lucas co-authored a book with rising Labour star Lisa Nandy on the subject. On the book tour, she was “amazed” by how many people turned up “on wet Friday evenings” to hear about “how we choose a less tribal politics”. 

Nevertheless, the idea is still controversial, not least among many in Nandy's own party. The recent leadership contest saw a spate of members ejected for publicly supporting the Greens, among other parties. 

“It was like a witch hunt,” said Lucas. “Some of those tweets were from a year or two ago. They might have retweeted something that happened to be from me saying ‘come join us in opposing fracking’, which is now a Labour policy. To kick someone out for that is deeply shocking.”

By contrast, the Greens have recently launched a friends scheme for supporters, including those who are already a member of another party. “The idea that one party is going to know it all is nonsense,” said Bartley. “That isn’t reality.”

Lucas and Bartley believe the biggest potential for a progressive alliance is at constituency level, where local people feel empowered, not disenfranchised, by brokering deals. They recall the 1997 election, when voters rallied around the independent candidate Martin Bell to trounce the supposedly safe Tory MP Neil Hamilton. Citing a recent letter co-signed by the Greens, the Scottish National Party and Plaid Cymru condemning Tory rhetoric on immigrants, Bartley points out that smaller parties are already finding ways to magnify their voice. The fact the party backed down on listing foreign workers was, he argued, “a significant win”. 

As for true electoral reform, in 2011, a referendum on changing Britain's rigid first past the post system failed miserably. But the dismal polls for the Labour party, could, Lucas thinks, open up a fresh debate.

“More and more people in the Labour party recognise now that no matter who their leader is, their chance of getting an outright majority at the next election is actually vanishingly small,” she said. “It’s in their interests to support electoral reform. That's the game changer.” 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.