Electoral reform – now! and the stock market as an inverse indicator of progressive activity

I did wonder if the world (or this corner of it) really needs another commentator on the election right now, but surely it must be worth any progressive organisation adding its voice to the call for electoral reform as this huge opportunity arises.  In answer to the Conservative claim that Labour have lost their right to govern, I’d say so have all the other parties in a first-past-the-post system. Electoral reform for some form of proportional representation will enable less adversorial, more co-operative policymaking and better representation of the electorate’s opinions. It is one of several changes that LWM believes is needed to address our various democratic deficits.

Secondly - why do we allow a panicking herd of cattle so much influence over our economy? I’m referring not to a political party (tempting though that might be) but to the exasperating news that the stock market is taking a plunge as investors show they ‘lack confidence’ in a hung parliament. Have you ever noticed how the stock market seems to lack confidence in everything that most of us see as positive? Obama brings in proposals for risk-reducing banking reform; share prices plummet. The new Indian government budgets for public infrastructure spending; Indian stocks get hammered. A company sheds loads of jobs; share prices rise.  A country has a once in a generation opportunity for electoral reform, and those poor boys in the City don’t like it at all.

Whilst socially and environmentally responsible corporate behaviour often leads to long term value gain, short-term investment is governed by hysteria and herd mentality that would be laughable if it didn’t have more power over our economy and society than our votes do. That has to change too. Economic democracy is needed.

Karen Leach

Who's afraid of democracy? – from Avaaz

If like me you’re sick of hung parliament scaremongering, you may like the following from Avaaz…

Karen

With the election contest hotting up, there is now a real chance that no one party will get an overall majority in Parliament. Polling suggests that given the choices, most of the public would prefer this outcome.

But scaremongering by the tabloid media and the City about a “hung parliament” has whipped up fear and doubt, threatening to tip voters’ minds and drag the country down.

The first step is to get the facts, and to share them with all our friends and family. WE are the media now — if each of us sends this message on to just two people we could reach over a million voters this week (more than most newspapers!)

This email is based on ideas, facts and references contributed by thousands of us across the UK. Let’s all forward this email to ten friends right now so everyone can make up their own minds!


SCARE #1: The markets would crash, wrecking our economy, if no one party won an overall majority in these elections.

THE FACTS: The markets seem to be neutral (maybe even positive!) about the possibility of a balanced election outcome in which parties would work together. A hung parliament “could help rather than hinder the UK” according to Moody’s, the rating agency for government debt. Currency markets “are getting comfortable” with the prospect, say investment banks.1

SCARE #2: A hung parliament means no decision — it will collapse within months, leading to new elections.

THE FACTS: The negative term “hung parliament” was only coined in the 1970s. It gives the false impression that, like a hung jury, no overall majority means failure and having to start all over again. But parliaments are not juries. If voters elect a balanced parliament, that’s our decision: parties can work together sensibly in coalition, and most say they’re ready to.2

SCARE #3: Britain has no tradition of parties working together successfully in coalitions. There will be bickering and chaos unless one party runs the country on its own.

THE FACTS: Parliaments with coalitions or no overall majority were the norm in UK politics before 1945, and recently the trend is away from single-party dominance. Since it was established, the Scottish Parliament has had good experience of stable coalition and minority governments, as have dozens of other mature democracies in Europe and round the world.2

SCARE #4: A hung parliament will mean that nothing changes and we are stuck with the same old politics.

THE FACTS: A balanced parliament could be more likely to deliver serious change and substantial long-term reforms to our political system, instead of just shuffling the deckchairs!3

With many people unexcited by the two main parties, 53% preferred a hung parliament. The options for single-party government each receive the support of much less of the electorate.4

Awareness has grown that a hung parliament could be a great Reform Parliament, taking better decisions on the challenges we face. But the campaign of fear is making many of us waver and question ourselves. Who’s afraid of democracy? It’s time to stop the scaremongering and make up our own minds.

WE decide the outcome of our elections, so let’s share the facts with everyone in the UK — forward this email far and wide right now!

With hope,

Paul, Alice, Iain, Ricken and the whole Avaaz team

SOURCES:

1. The markets won’t crash
Financial Times: http://www.ft.com/cms/s/0/93eeac2c-4e16-11df-b437-00144feab49a.html

http://www.guardian.co.uk/business/marketforceslive/2010/apr/22/currencies

2. A hung parliament needn’t collapse, and coalitions work fine:

http://www.democraticaudit.com/

http://www.centreforum.org/assets/pubs/in-the-balance-web.pdf

3. A balanced parliament would be more likely to lead to big reforms to shake up the system: http://www.electoral-reform.org.uk/news.php?ex=0&nid=463

4. The public prefer a hung parliament to either of the two main parties gaining an overall majority: http://www.timesonline.co.uk/tol/news/politics/article7100966.ece

The Pound after the election of a hung Parliament – lessons from the WM

Last time we elected supposedly strong governments both in 1979 and 1997, the following few years saw the Pound go up in value and it was a disaster for the West Midlands.

The Pound went up most especially against the Deutsche Mark currency of our most important industrial competitor.

At the start of the 1980s and at the start of the 2000s WM manufacturing was seriously undermined by the consequent loss of price competitiveness. The 2 episodes are far more alike when now looked back upon than they seemed at the time.

When the Pound went up in the early years of Mrs Thatcher it displaced the British Leyland based Midland car industry from its dominance of the UK car market. Ford and General Motors came to dominate the UK car industry with vehicles that were imported from the continent and especially Spain and Germany.

The spectacular rise of the Pound in the early years of Tony Blair finished off Rover.

With a hung Parliament the most likely outcome of the election and the ‘city’ suggesting that this will see a potential fall in the Pound, one has to ask is this necessarily worse than the few years following 1979 and 1997 ? Maybe it would even be better for the West Midlands ?

However despite all the speculation the slide in the Pound does not seem to be even beginning to happen. While the Dollar and Euro rate move from day to day, the broader basket of relevant currencies in the Bank of England’s Sterling index (The Effective Exchange Rate) is holding steady.

Andrew Lydon