Parliamentary Connections

Every time the (relatively) new Economic Secretary to the Treasury Ed Balls speaks to an industry event he impresses. His latest platform was yesterday's Institute of Insurance Brokers annual Parliamentary Reception.
He spoke with authority on a range of issues that are of concern to insurers and brokers, including the regulation of travel agents, the shortcomings of non-advised sales and the role of the Financial Services Authority. It is, of course, easy to sound knowlegeable when a team of officials write your speech – but he didn't have a script or any notes. He knew what he was talking about and spoke in terms that showed he had an instinctive appreciation of the role the insurance industry plays in modern society and economic life.
Guests at the reception were left struggling to remember the last time the insurance industry had a minister responsible for it who seemed to have such a genuine interest in them and a real sympathy for some of their concerns. One or two with longer memories and involvement with our political masters suggested that you had to go right back to the mid-1990s and the last Conservative government when the insurance industry was still looked after by the Department of Trade and Industry and Jonathan Evans was the minister in charge of the industry. He, of course, exited the Commons in the 1997 Labour landslide but found his way into the European Parliament where he is now an influential figure on many of the economic committees.

I ask this question becasue the full extent of the proposed changes to constituency boundaries for the next General Election has just been analysed. Among the many consequencies – including the loss of John Greenway's Ryedale seat – is that the number of MPs will increase from 646 to 650. Can this be justified? I believe the answer is no.
Just look at the trends.
After the post-war abolition of the university seats the House of Commons had 625 MPs: this steadily increased over the next 50 years until it reached 659 in 1997 and 2001. Amazingly, the first tranche of post-devolution changes actually reduced the number of MPs elected at the last General Election to 646 but this was too good to last so the trend is back on an upward curve.
There are still huge anomalies which the Boundary Commission has failed to address this time round. For instance, why does the average English constituency have 69,934 electors while the average Welsh constitutency only have 55,640? And they have their own Assembly. I would use this as a lever to reduce the number of Welsh MPs but it could, of course, just as easily be used as an argument for increasing the number of English MPs.
The real shortcoming of this whole boundary review exercise is that it appears no-one has ever sat down and asked the obvious question: how many MPs do we need to create an efficient, modern political assembly that is effective in holding the government of the day to account? I don't know the answer to that question but it is likely to be nearer to 300 than 700. Could you imagine the huge rows if the number of seats was slashed by half?

The vote by the House of Commons for a 100% elected House of Lords came as a complete surprise to most commentators as well as the majority of the cabinet. Tony Blair showed just how far out of touch he is with the prevailing mood by voting for the 50% appointed/50% elected House of Lords – the option that was defeated by the biggest majority.
I can't see the 100% elected option getting much further, however. A significant number of MPs who voted for it actually don't support radical reform of the Lords. They voted for this option because they think that it has little chance of progressing, playing just the sort of political games that most of the public don't understand and certainly don't like. There was, however, a real majority for the option of having an 80% elected House of Lords and this would seem to be where we are heading.
There are still big issues to be addressed, not least getting the ermine clad turkeys to vote for Christmas. Also high up the agenda must be the size of the reformed House and its role: these already seem to be getting lost in a largely irrelevant debate about what is should be called. Just as with the House of Commons (see below), we should first look at the functions of the new upper house and then properly analyse how many people are needed to carry out those functions effectively.
As to the key question: should there be any appointed members? I think that 20% is about right so long as it is kept away from the Prime Minister of the day. We need to create a system where people who would never stand for election but who can make a major contribution to the legislative process can be appointed for a fixed term.

There now seems very little chance of a General Election taking place in 2008 such has been the huge shift in the political landscape over the last few months.
Gordon Brown's premiership is, at the very least, in dangerous waters even if it hasn't quite hit the rocks yet. Crisis after crisis has battered him since taking over from Tony Blair, leaving the public with the feeling that this is a government lacking the competence to manage the country. That gnaws away at public support and, unless Mr Brown can counter that soon, his government could be doomed.
The parallels with when Labour last changed leader while in government are becoming more numerous by the day. Thirty years ago, Harold Wilson stood down and was succeeded by Jim Callaghan. The Tories had a new leader in Margaret Thatcher, slowly finding her feet after succeeding the defeated Ted Heath. As for the Liberals, they were forced to replace their leader, Jeremy Thorpe when he became embroilled in allegations of bribery, homosexuality and attempted murder. He was succeeded by David Steel who, like the recently elected Nick Clegg came from the right of his party.
Three new leaders, economic crisis, government not in control of events, delayed General Election – the parallels are there. When the election did eventually come in 1979 Labour was swept from power for 18 long years. One significant difference is that in 1977-79 Labour had to hang on in Parliament by its fingertips, eventually relying on a pact with the Liberals to secure majorities in key votes. This time. it has the cushion of a comfortable majority so shouldn't be forced to the country because it loses a vote of confidence in Parliament as happened thirty years ago.
Labour may have a mountain to climb to recover over the next 18 months but we should all remember that they are still the government and could still be the government after the next General Election. The financial services sector musn't make the mistake of thinking that change is just around the corner and therefore spend all its time getting close to the Tories: they need to be taken seriously and this is a good time to influence their policy formation but they are not making any decisions. We probably have two budgets and one hell of alot of legislation to go before the election and any prospect of a change in government.

For the first time in a decade there is a realistic prospect of a change of government at the next General Election, now certain to be in the first half of 2010. Regardless of one's personal political persuasion, this has to be good for the country as governments without a serious opposition tend to become arrogant and detached. This is almost always the inevitable fate of governments and Prime Ministers who win three elections in a row: it has happened to Tony Blair and Labour, just as it happened to Margaret Thatcher and the Tories 20 years earlier. Blair went according to his own timetable while Thatcher had to be forced out. The aftermath was remarkably similar, however: Chancellor succeeds to premiership, party suffers divisions and gets caned in the local elections. Then what?
The City, of course, is excited by the prospect of a Conservative government and suddenly Conservative spokesmen are in demand and speaking to large and engaged audiences in the financial services sector. They don't appear to have much of substance to say but they are being listened to and taken seriously. But are you really listening to the next cabinet or will we still have a Labour government well into the next decade?
John Major was in the same position as Gordon Brown in 1990 and 1991 but by the middle of 1992 he was able to fashion a General Election victory in the last ten days of a campaign that had previously looked to have only one winner, and it wasn't the Tories. This proves nothing beyond the huge uncertainty and unpredictability of politics but it should serve as a cautionary reminder to City firms, financial institutions and their lobbyists not to get too excited about the prospect of having their 'friends' in government and certainly not to the extent of forgetting to engage with the current ministers. Labour will be running the country for another two years which is a very, very long time in politics.

The steady flow of stories about MPs, MEPs and Peers abusing expenses are doing huge damage to their credibility, standing and support among the general public. This, in turn, damages and undermines the entire political system.
I know many senior people in business who scornfully dismiss the idea of engaging with politicians on the grounds that "they are all in it for what they can get out of it". Like most sweeping generalisations this does not tell the whole truth and it is a dangerous assumption to make for anyone with an interest in influencing how our laws are made. Every business leader should have an interest in this area as it shapes - or distorts depending on your point or view - the markets in which business operates.
Politicians, of course, deserve alot of the criticism that is currently coming their way. It seems to me desperately naive of them not to think that the last decade of demanding ever more transparency across the rest of society wouldn't eventually see the spotlight of scrutiny turned on them. It wouldn't have taken much to get the system of parliamentary allowances cleaned up so that it was capable of being judged favourably against today's standards.
All that said, it is important that we recognise that the majority of MPs are not there to make their fortunes: in my experience they genuinely want to serve the country, however pompous that aspiration might sound in today's cynincal world. This means that people must look beyond today's headlines and continue to engage with the democratic and political processes. This is never easy at the best of times because finding out where to start can be difficult. This remains one of the over-riding reasons why we – by which I mean Incisive Media – continues to work with the All Party Parliamentary Group on Insurance & Financial Services to provide that starting point. They genuinely want to hear from you and many people who meet the senior members for the first time will tell you how taken aback they are by their knowledge of the financial services sector: proof alone that some of that cynicism is miss-placed.