Ed Miliband must introduce some passion into his politics. Photo: Getty
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Ed Miliband must realise that next year’s election will be won on emotion

The Labour leader needs to appeal to human feeling to truly unite the United Kingdom, and be in with a chance of electoral success.

The picture for Labour in Scotland is looking bleak. Latest polling from Ipsos Mori has found that 52 per cent of Scots will be voting for the SNP in next year’s general election, with only 23% intending to back Labour. No fewer than 12 Labour constituencies voted Yes in September’s Scottish independence referendum and Nicola Sturgeon has taken the reigns as First Minister with renewed vigor, with SNP membership tripling since the vote.

Last week, it was estimated that Labour would lose 15 seats to the SNP. Now it could be as many as 36 of their 41 seats – a historic moment of major catastrophe in British politics. Without strong support in Scotland, Labour will face a humiliating defeat come May. The Scottish issue should be of concern to the entire party, not just those in the region, as it could very well lose Labour the election.

We know that modern-day politics is all about emotion. The surge of support for the SNP is evidence of this. Next year’s election will be won on human feelings. The emotional momentum that used to be the domain of the left has now seeped into the whole of mainstream politics.

The No contingent in the referendum campaign realised this only at the last moment, saving the Union by the skin of their teeth. The Yes had all the good songs, all the best soundbites, until the usually-sullen Gordon Brown erupted into righteous, Calvinistic anger at the prospect of the Union being torn asunder. Finally, here was a rhetoric that is at the level of the issues at stake. This is what Labour needs to do to give itself a chance of victory in May.

Making a last-dash attempt to squeeze over the 35 per cent line is a suicidal strategy, one which will alienate much of the electorate and even the party faithful. Politics is about emotion and the performance of emotion. Labour must pull out all the stops to appeal to the emotions of the electorate, not through any kind of manipulation or sentimentalism, but through talking clearly, coherently, accurately and passionately about the issues at stake.

It is a myth that London doesn’t care about Glasgow and that the Labour Party in Westminster treat Scottish Labour as nothing more than a branch office. But this is a dangerous myth, one that many people across the UK believe to be true. The reason why so many people put stock in this myth is because it echoes a deep-seated belief that the political ‘centre’ or elite are cavalier or even apathetic to the fringes.

The only way to counter damaging myths is with strong performance. You do not allow anyone to suspect that you may go back on promises already made (for example, on devolution), another powerful and damaging myth, or that you do not listen to those outside London. Ed Miliband has defended against leadership attacks within his own party by developing a narrative of a party united. He now needs to do more to make this a national narrative of a country united, one that includes Scotland and persuades the electorate and party supporters that they are and will be listened to by Labour. As leader of the Labour Party, Miliband must be a strong, rallying figure and get on stage and perform this, alongside a renewed and preferably federal Scottish Labour Party and some real policies about reducing poverty and income disparity and involving people in politics.

The United Kingdom is our national story, one which has emotional resonance with us all. My mother – a Glaswegian – and my father – a Dubliner – met in London as young British workers. This emotional appeal of Britishness must be used by Miliband to illustrate the essence of a properly United Kingdom. Miliband must make the Scots want to elect a Labour government in 2015. Without Scotland, Labour will fail in May. Miliband must tell the Scots why those 40 MPs are needed, both for Scotland and for us all.

John Gaffney is professor of politics at Aston University and co-director of the Aston Centre for Europe. He is currently completing a two-year study of UK political leadership, with a focus on the narrative of Ed Miliband’s leadership.

John Gaffney is the co-director of the Aston Centre for Europe, specialising in French politics and the discourse of leadership.

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The global shipping slowdown hints at a recession around the corner

Instability in China and tumbling commodity prices have devastated the world’s freight providers – a strong indicator of trouble to come.

This is beginning to have the feel of 2008 all over again. Policy makers around the world are in denial once again as global stock markets dive. In 2008, the slowing of the world's biggest economy – the US – sent the global economy into a tailspin. The concern now is that the slowing of the second-largest economy, China, may well have similar global effects. Chinese growth, which averaged 10 per cent for three decades through to 2010, has decelerated for five straight years and in 2015 slowed to 6.9 per cent, its lowest rate in a quarter of a century. The IMF is forecasting that Chinese growth will slow further to 6.3 per cent in 2016 and 6 per cent in 2017, which may well be overly optimistic. There is already speculation that China’s banking system may see losses even larger than those suffered by US banks during the last crisis.

The bad news from China appears to have already spread to the US, which has seen GDP growth slowing sharply in the last quarter of 2015. US industrial production and core retail sales are both falling, and there have been marked contractions in core capital goods shipments and private non-residential construction. Business fixed investment declined nearly 2 per cent last quarter. Despite the bad news, last week Federal Reserve chair Janet Yellen astonishingly claimed that “the US economy is in many ways close to normal”. By contrast, Ruslan Bikbov from Bank of America Merrill Lynch calculates that there is a 64 per cent probability the US is already in recession. My expectation is the next move by the Fed will be to cut rates.

Company profits are tumbling as commodity and oil prices decline. BP reported a $3.3bn fourth-quarter loss last year while Exxon Mobil reported a 58 per cent fall in its quarterly profit. It isn’t just oil companies. Last week, Rio Tinto – the world's second biggest mining company – reported profits down 51 per cent after commodity prices collapsed amid slowing growth from China. Company profits are also suffering due to a big decline in the amount of freight being moved, especially to and from China. Moeller-Maersk, the Danish conglomerate and the world’s biggest container-ship operator by capacity, last week reported a fourth-quarter net loss of $2.51bn.  

DP World, one of the world’s biggest port operators, also says that global volume has slowed sharply. It reported that volumes at its ports rose by 2.4 per cent last year, compared with 8 per cent growth in 2014. Data provider Container Trades Statistics said this week that Asia-to-Europe trade fell nearly 4 per cent last year. Freight rates in 2015 averaged $620 per container on the Asia-to-Europe trade route. Typically, ship operators need more than $1,000 to break even. In February, the cost of moving a container from Shanghai to Rotterdam fell to $431, barely covering fuel costs. Figures released by the Shanghai Shipping Exchange show that the country’s 20 largest container ports grew by 3.7 per cent over 2014, compared to 5.5 per cent the previous year. The Hong Kong Port Development Council reported that throughput at the port of Hong Kong fell by 9.5 per cent in 2015.  

The Baltic Dry Index (BDIY) – an index of the price for shipping dry goods such as iron ore and coal (oil is wet) as shown in the chart below – is at a record low of 290. It is down 75 per cent since its recent peak in 2015 and down 98 per cent from its peak of 11,793 points in May 2008. The collapse to 772 by 5 September 2008 (a week before Lehman Brothers failed) presaged the global recession and it is falling again. Capesize vessels, which are too big to get through the Suez or Panama canals, had an average daily hire last week of $1,484, compared with a peak of $233,988 in June 2008. Even though there is an oversupply of ships, global demand is collapsing.

The International Air Transport Association (IATA) released figures for global air freight, showing cargo volumes expanded 2.2 per cent in 2015 compared to 2014. This was a slower pace of growth than the 5 per cent recorded in 2014. This weakness apparently reflects sluggish trade growth in Europe and Asia-Pacific. “2015 was another very difficult year for air cargo,” said Tony Tyler, IATA’s Director General and CEO. “Growth has slowed and revenue is falling. In 2011 air cargo revenue peaked at $67bn. In 2016 we are not expecting revenue to exceed $51bn.”

The current contraction in rail freight is apparently reminiscent of the drop that started at the end of 2008 and carried on into 2009. China's rail freight volumes fell by a significant amount last year. According to the National Development and Reform Commission (NDRC), volumes fell by 11.9 per cent, a further increase on the 2014 slowdown, when traffic declined by 3.9 per cent.

In the western US farm belt, grain trains are so abundant you can’t give one away. Since the middle of last March, carloads of agricultural products, chemicals, coal, metals, autos and other goods have declined every week. Shipments of US coal, the biggest commodity moved by rail, declined 12 per cent in 2015, according to the Association of American Railroads. The cost of carrying spring wheat from North Dakota to the Pacific coast has dropped by a third in the past two years. In early 2014, grain companies with a train to spare could command $6,000 per car above the official railway tariff, traders say. Today, to avoid hefty contract cancellation fees, they are paying others to use their unwanted trains.

Manufacturing output in the UK fell for each of the last three months and is down 1.7 per cent over the year. The overly optimistic Monetary Policy Committee is forecasting GDP growth of 2.2 per cent (2.4 per cent) in 2016; 2.4 per cent (2.5 per cent) in 2017 and 2.5 per cent (2.4 per cent) in 2018 (the latest, broadly similar, OBR forecasts in parentheses).

So all is well then? Probably not. Mark Carney has run out of ammunition with the Bank Rate at 0.5 per cent, compared with 5.5 per cent in 2008, and has little room to manoeuvre. Negative rates and more quantitative easing, here we come. George Osborne has never explained what he would have done differently in 2008 – his plans for a budget surplus are already in disarray as the economy slows. I am not saying a recession is going to happen any time soon, but it well might.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire